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Realtors throng global research firms as funds dry up

Wednesday, 25 May 2011 - 3:10am IST | Place: Mumbai | Agency: DNA
With domestic fundraising avenues getting scarce, real estate developers are now increasingly seeking their help to access foreign investors and also to understand the target audience better.

Foreign research firms that advise to the real estate sector are finally seeing some concrete gains in India.

With domestic fundraising avenues getting scarce, real estate developers are now increasingly seeking their help to access foreign investors and also to understand the target audience better.

While these firms set up shops in India long time back, some point “discussions are now materialising into actual deals”.

London-headquartered Knight Frank, US-based CB Richards Ellis and Jones Lang LaSalle are some of the main players in the segment.

Most of these firms offer various services, but it’s easy access to foreign funds that has proved to be a major attraction.

These firms offer help with project feasibility, market research, investment assistance, construction management, project marketing and also property management under various verticals.

Anshuman Magazine, chairman & managing director, South Asia, CBRE, attributes the change to growing awareness and a competitive market. “In the last couple of years, a lot of developers have been going to firms like ours for marketing their projects,” he said at Credai’s (Confederation of Real Estate Developers’ Association of India) 11th National Convention in Singapore last month.

He said that marketing has traditionally been indistinguishable from sales for developers, though it’s changing.

For players like Hyderabad-based Manjeera Constructions, seeking professional assistance means unity of command and an added benefit to qualify for venture capital funding. “Equity partners like venture capitalists prefer to hire such professional firms and it brings in some unity of command and more uniformity,” said G Yoganand, chairman, Manjeera.

Anand Gupta, general secretary, Builders Association of India, said hiring such firms also means better access to foreign investment.

“All the big players who wish to have a foreign investor generally hire such firms. Such firms have a good network from the investment point of view. It also helps in improving credibility of such projects, as most research firms study the project carefully,” he said.

Piyush Gandhi, associate director and regional manager, Western India, project and development services, JLLM, said foreign investment is an attraction for clients, but it also means assistance for large-scale projects.

“The scale of projects that developers are now looking at is huge and requires profession approach. In addition, developers are now more quality focused. It also helps them cater to the demand for a value-added product,” he said.

Dharmesh Jain, vice-president, MCHI, the builders association, said developers have always hired such professional firms, but their services would be important in entering a new market.

“Such firms help understand the market and demand situation better. Developers looking at entering a new market might hire such research firms to understand it. Those who have been in the same market for long time might not need such help,” he said.

Some cite maturity in the market as a demand driver for professional help. “We have seen an increase in demand across retail, residential, IT and office spaces. However, it is slightly lower in residential as it is yet to reach a certain maturity level. Further, this demand is more at the research level than the construction point,” said Naushad Panjwani, executive director, Knight Frank India.


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