Builders offering brokerage, house maintenance services

From offering assistance in selling and renting out homes to maintaining unoccupied property, realtors seek additional cash to beat the blues

BANGALORE: When 37-year-old Ram Adapala wanted to sell the 50 exclusive villas his company Indaus Construction had in Bangalore, he didn’t bother approaching any property agent. What he did instead was head for Propmart, a real estate consultancy in which Bangalore-based developer Puravankara Projects has a 32% stake.

The reason was simple: Adapala wanted a little more than what property agents were offering. “Propmart gave me a comprehensive solution for marketing my villas,” he said.

Advertising, management of enquiries, site visits and property management services were all covered under this ‘comprehensive solution’. Yes, Adapala did pay more than he would have property agents-3-4% commission against 2% that agents charge-but not an iota of regret has entered his mind. “I can sleep peacefully because I am assured of better returns through Propmart,” he says.

True enough, since February 2007, he’s already sold 47 of the villas at the cost of Rs 1.7 crore each. The deal’s as good as it gets. Being in the real estate business, Puravankara could put the right price tag to the property, thereby avoiding under or overselling.

While in Adapala’s case, it was a business to business deal, many home owners too are skipping regular agents and heading for builders to sell or rent out their houses.
A slowdown in the real estate market and the growing rentals space has made developers look at ancillary services to boost their revenues.

These days, your association with a property developer isn’t restricted to closing a home deal with it. From scouting for tenants to managing your property, they’re going that extra mile to build a loyal customer base.

For instance, Mumbai-based Nahar Group has helped customers lease out as many as 300 apartments in the last seven-eight months. Clients who have bought flats but left them unoccupied too can look to Nahar to maintain their homes at a nominal cost.

Nahar Group vice chairman Manju Yagnik says the company has set up a separate division only for these services. “The income from these services is enough to sustain the division. The service also gives our customers good returns as we are able to assess the value of the property better than agents,” Yagnik says.

Nahar Group’s service is pretty new but others such as Puravankara and Vakil Housing Development Corporation have been offering rental services since 2000.

Propmart, for one, has been around since 2000 but it is only now that its services have gained traction in the market. “It makes sense to get into allied property services as we have expertise in it. Frankly, the net income from it has been insignificant, though it (ancillary services) has done very well. Lately, we are seeing a surge in the income from these services,” says Puravankara Projects director (finance) Ravi Ramu.

It’s value addition that is on developers’ minds when they enter this segment. Ramesh Kumar, the business development manager at Vakil Housing, says that for Rs 1,000 a month, customers seeking tenants or buyers can advertise on Vakil website. “We have a section-For Sale-on our website where we put the ads from our customers,” says Kumar.

Property maintenance in the absence of owners is another service that has takers. Pune-based property consultant Sunil Bajaj says that today, most flat owners are double income couples that don’t have time to manage their property. “Earlier, most property projects had 10-20 flats. That is fast changing with builders launching township projects with 100-200 flats. With this kind of scale, it is better to bring such allied services under their roof,” says Bajaj.

Among some who offer this service are Kalpataru Properties and Magarpatta Township Development and Construction Company, which has developed Magarpatta City in Pune. “Realtors such as Kalpataru are charging Rs 2-4 per sq feet for property maintenance in their projects on the outskirts of Mumbai. This is a big source of income for builders as they get into township projects. These incomes will help boost profits,” Bajaj adds.

Some like Bangalore-based Sobha Developers, however, have yet to tap the ancillary services segment. “We are not offering such services but we may do so in the future,” says Sobha Developer chief financial officer Pradumna Kanodia.