By: Ravi Sinha
Track2Realty Exclusive
Newspaper advertisements and other branding collaterals of some of the real estate projects across the country attract the eye balls for what Indians have always aspired for—International living. Well, the given property may not give the amenities like their rich global counterparts, but the very tag of foreign hands definitely is a big crowd puller. No wonder, while the international tie-up was the USP of a select super luxury project not very long ago, it has gradually made inroads into mid segment housing as well.
The market crash in Gulf has also brought in the Indian market lot many architects and consultants who find the Indian realty as the safest happy hunting ground for their expertise. Design, execution, architecture and business advisory are the four spheres where international expertise adds value to an Indian real estate project. The general perception is that if a project does get an international tie-up, there is value and differentiator of brand positioning. This is seen as having a direct forbearance on the sale.
Facts speak for themselves as to how there has been a rush for the global spice, of late. International hotel chains such as Ritz-Carlton, Four Seasons, Starwood Group, Carlson Hotels and a host of Indian developers such as Nitesh Estates and Oberoi Realty are betting big on branded residences in the country. Recently Rohan Lifescapes has been in news for their tie-up with Donald Trump. Supertech also has signed Benoy for one of the projects, they also have WSP as MEP consultants and Bureau Happold as their structural constants. The big question, however, remains—how far Indian realtors wish to benefit from the global lineage and how much this is a branding mechanism to showcase the property as really big.
Vigneshwara Developers have done exclusive marketing tie-ups with Re-Max (the largest brokerage firm in the world) and Ray & White, Australia’s largest brokerage firm for marketing. In the design arena, they have signed up with world class technology operators like Siemens, Cisco & Honywell for product refining. To augment the execution capability, they have recently signed an MoU with Spain’s largest consortium of builder companies’ FEVEC for FDI based projects in joint venture on a pan India basis.
Sunil Dahiya, Managing Director of Vigneshwara Developers justifies this power packed marketing strategy, “The Indian consumer is today getting exposed to global brands of watches, automobile, clothing and hence real estate cannot be far behind. Sensing this demand, Indian realtors have sought international tie-ups, like world class engineering designs with the perspective to attract the Indian consumer. Indian realtors can benefit from the execution capabilities, design and business advisory that an international tie up brings into. When the entire global construction and real estate industry is reeling under the recessionary trend as against this the Indian scenario is being blessed with the sunshine period so there is a good opportunity of utilizing their unused lines of credit, equipment and execution bandwidths.”
Mohit Arora, Director, Supertech says, “Hiring an international consultant is not just branding, the component of branding is there of course, but tying up with international consultants is more about tapping their experience because they have it. Different new type of projects coming up in India where you have mixed use developments where everything is integrated, retail, offices, hotels and all that. In India, very few people have designed those kind of developments.”
“The second reason is, people overseas do a lot of research and development which is not happening in India. So these consultants stay updated with new technologies and designs and everything. So one of the major reasons is to bring in those experiences as it raises the standard of Indian developments to the international levels,” Arora adds.
Ashwani Prakash, Executive Director, Paramount Group agrees that with opening of the doors for foreign collaboration and increasing trend of global tie-ups, the FDIs are also floating into the Indian real estate sector. However, he believes that international tie-up is more of a brand differentiator. “The foreign companies collaborating in India are mostly the known brands with vast experience in real estate. While these foreign companies collaborate with established Indian company that definitely helps in improving the brand image, which is a win-win situation for both the parties,” he says.
Raheja Developers have tied up with international architects, engineering service providing companies for their projects. However, so far they have not entered into any JV/Collaboration with international players. Navin Raheja, Managing Director of Raheja Developers believes the involvement of international architects in most of projects is only up to concept designing stage. The developer gives all necessary inputs based on market conditions positioning of product and consumption pattern. There role is to design the concept which covers all these aspects. However, there are few international architects who have established their offices in India and are working for long time, understand the need of Indian home buyer to some extent.
“It does not make much difference for the brand to have foreign hand in reality business. It all depends upon the concept, specifications, transparency, governance, delivery and quality. We agree if the foreign player is known international brand then it becomes easier to market the product. However, at the end of the day, what the developer has delivered is very important and is also a deciding factor,” Raheja says.
Agrees Atul Modak, Head of Kohinoor City, “FDI is only reason for such a marketing gimmick and I see no substantial benefit other than money inflow at a cheaper interest rate. Unless the brand is established in India, it has no relevance. After all, international player only lends its name, execution is done by the local players only.”
Vivek Seth, Managing partner of V Square, an Indian company that specializes in outsourced realty projects also outrightly rejects that such fancy marketing gimmick actually translates into project facelift. He believes when it comes to project execution, it is important to have someone who has exposure to Indian real estate market.
He says, “You need the local core competence. Of course, it creates value if you are bringing in some new technology from there, then it helps. It’s more like a JV tie up, rather than getting the technology transfer which is not happening. People are trying various models but none of them are successful. There have been a couple of technology transfers, but in Indian system it doesn’t work. In Indian system your entry has to be according to vastu, your kitchen has to be according to vastu etc.”
