- New housing supply by branded players rises in last 4 years – 56% share of overall new supply in 2018 (against 41% in 2015)
- Affordable supply by a leading brand increased 60% in Q4 2018 against previous year
- Significant rise in consolidated net profit of listed realty players; goes as high as 76% in Q4 FY19
What’s in a name? For Indian homebuyers and investors today – a lot. In metros as well as tier 2 and tier 3 cities, a real estate developer’s brand name wields considerable clout.
Real estate players with high-recall brands have upped their game and accounted for a whopping 56% share of the total housing supply in 2018. There has been a y-o-y rise in their share since 2015, when their share of the supply stood at 41%.
‘Branded’ developers are not necessarily only listed players. Real estate developers who have been operating for a decade and more, newly-formed entities of large conglomerates, and also those with sizeable areas under development either locally or Pan-India, are now recognized as branded developers.
Most of these companies’ new supply is no longer limited to the premium and luxury segments. They have spread themselves across the high-demand affordable and mid segments (comfortably priced within a budget not exceeding INR 80 lakh).
In retail, we now see several high-value designer clothing brands launching relatively more affordable apparel lines for ‘non-elite’ customers. In real estate, the middle class – that fairly wide bandwidth between the upper and working classes – is calling the shots. This is where end-user demand is thickest, investors follow end-user demand, and developers are falling in line.
Several factors are involved in the increasing prominence of branded developers:
- Indian Brand Consciousness
India is among the top 3 most brand-conscious nations globally. No longer restricted to the super-affluent class, brands have found resonance across the Indian consumer value chain. The Indian consumer’s quest for branded products spans almost all products from fashion, gadgets, cosmetics and toiletries – and now even homes.
The aspirational value attached to high-recall brands is not merely a quest for status. As with clothing and gadgets, well-known developer brands are known to deliver much more in terms of design, specifications, overall quality and after-sales service than their generic counterparts.
Homes built by such branded developers convey the assurance of having invested in the right product. Not only do they provide better durability and a superior living experience, they also yield better returns in terms of rental income as well as capital appreciation.