BackTata Housing to buy 15 mn sq ft, plans ambitious online sales
Firm will devote at least 8-9 mn sq. ft of the new projects under Tata Value Homes, priced around `12-50 lakh
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Bengaluru: Tata Housing Development Co. Ltd, which sells homes both in affordable and high-end price segments, is planning to acquire around 15 million sq. ft for new projects this year across cities and also aggressively market and sell homes online, a top company executive said.
The company, which has moved away from being just an affordable housing developer since 2011-12, and now maintains a balanced portfolio of value and premium homes, will devote at least 8-9 million sq. ft of the new projects under Tata Value Homes, priced around ₹ 12-50 lakh. The rest will go into projects under the Tata Housing brand, to build homes for ₹ 75 lakh to ₹ 10 crore and above.
Some of the land will be acquired through outright purchases, while joint development and joint ventures will be explored in the rest.
“Given the kind of explosive growth we saw before the end of 2013, since then, sales have been relatively muted and conversion time to close homes buying transactions has become much longer than it used to be 15 months ago," said Tata Housing managing director and chief executive Brotin Banerjee in an interview. “We are hopeful this year will be better and will launch at least 6-7 projects."
Tata Housing currently has two projects, in Mumbai and Kolkata, in the role of a development manager.
Typically, a development manager works on the design, sales, marketing of a project and gets a fee out of the revenue generated from the development. Godrej Properties Ltd already uses a similar model.
In a depressed real estate market, online sales have given the company’s overall sales a very big push and the plan is to focus on it going forward, said Banerjee.
Having sold nearly 1,000 apartments online in the last 18-20 months through various online platforms—participation in Google’s Great Online Shopping Festival and partnering with Snapdeal and Housing.com—Tata Housing launched its second edition of the National Home Buying Week starting Wednesday.
Unlike last year, when it mainly sold its value category homes, this time, it has put all its 25 projects in eight cities up for online booking till 22 February. An applicant can book a home for ₹ 30,000, for which she gets an interest rate deduction and pays a home loan at 7.99% for five years. The company bears the difference in interest rate during this period.
“Online home sales form a decent portion of the total sales for Tata Housing and 15-20% of the buyer profile is non-resident Indians. Interestingly, we are seeing some homebuyers who are not even visiting the project site or apartment before actually booking it," said a Tata Housing spokesperson.
Not just Tata Housing, a slew of developers such as Bengaluru-based Puravankara Projects Ltd and Pune-based Kolte-Patil Developers Ltd are looking at online home sales as a robust source of revenues. Property analysts, however, think that it is too early to consider the online medium as a channel that will generate a steady stream of revenue for real estate companies.
“Primary home buyers may want to gather all information on a specific project online or in certain cases, avail the discounts available during a time when developers are offering them a value for buying online," said Badal Yagnik, managing director-Delhi NCR, Jones Lang La Salle India, a property advisory.
However, Yagnik thinks one has to wait and watch how online property sales shape up in the days to come.
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