Retaining standard configurations, developers tweak apartment sizes and price them differently to position them as value-for-money options
Bengaluru: Real estate developers are increasingly offering multiple variants of apartment formats to ensure there is something for every budget, and are customizing them as they fight to win customers in a stagnant market.
A single residential project today can have as many as four to five different sizes of two-bedroom apartments or three to four different three-bedroom formats, unlike some time ago when there were standard one-, two-, three- or four-bedroom-hall-kitchen (BHK) configurations.
Developers keep standard configurations the same but tweak apartment sizes and price them differently to position them as value-for-money options.
Last week, VBHC Value Homes Pvt. Ltd, promoted by entrepreneur Jaithirth Rao, pre-launched an affordable housing project called Palmhaven near Bengaluru, which has four types of 2BHKs and two types of 1BHKs, with 430-900 sq. ft in super built-up area.
Super built-up area includes the usable area within the house plus space taken by walls, and common areas like corridors, lifts and lobbies. Two-bedroom homes here range from 600 to 900 sq. ft and cost ₹ 17-18.5 lakh, giving the customer different choices to buy slightly larger homes. VBHC introduced these variants in its projects recently, after it felt buyers wanted more options.
“A couple of our projects met with some issues due to the lack of options, and we have slowly started offering these in our new projects. In our project segment, where budget is critical, sometimes loans do not get sanctioned and buyers come back tosettle for smaller-sized homes too," said Vivekanand Babu, president, sales and marketing, VBHC.
Developers seeking to maintain margins are reducing the size of their apartments to make up for lower prices. One-bedroom homes, which would earlier start from 550-600 sq. ft, are now being shrunk to 400 sq. ft.
In the past year or so, the sizes of apartments in the Mumbai metropolitan region saw the sharpest fall—5% on an annualized basis—followed by Bengaluru and Chennai at 4%, and Pune at 1%, real estate consultancy firm JLL India said in an August note.
“Right now, since sales take a longer time, a developer wants to get hold of each and every customer and not leave out anybody. Customers being so valuable today, companies want to offer everything that is on their wishlist," said architect Hafeez Contractor.
“A customer may say he wants a three-bedroom apartment, a lower-priced one, and so developer wants to ensure he has that product unlike earlier times, when you only had standard types," he said.
To be sure, the price-sensitive customer predominates the mid-segment category of homes, where affordability is key. But even in premium and luxury projects, developers are being pushed to rethink their product offerings.
Real estate firm SARE Homes—part of London-based asset management firm Duet Group—which launched its Olympia housing project in Gurgaon recently launched compact 3BHKs of 1,295 sq. ft for ₹ 90 lakh, apart from including large-sized three-bedroom homes with servant quarters in the project.
SARE managing director Vineet Relia points out that as a large market such as the national capital region gears up to cater to more of actual users rather than investors, homes are also being designed accordingly.
“We wanted to do 2BHKs in this project for instance, but decided to add another room and make compact three-bedrooms instead, because that’s what a family would prefer. Earlier, when projects were being marketed and sold to investors, no one thought about this and went on to build snobbish, large homes where budgets didn’t matter much," said Relia.
Another project in north Bengaluru, Chowriappa Constellation, has about six variants of 3BHKs (from 1,586 to 2,050 sq ft) and about three different sizes of four bedrooms too.
In Mumbai, Omkar Realtors and Developers Ltd is developing 1973 Worli, a luxury project. Buyers can choose an apartment from a price range of ₹ 12-100 crore and 3,000-9,000 sq. ft in size.
“In this segment, buyers are extremely choosy and exactly know what they want. In this project, buyers appoint their own design team and decide the plan, design and even room sizes," said Bharat Dhuppar, chief marketing officer, Omkar Realtors.
However, a few think that so many variants can actually lead to confusing the customer and somehow shows that the developer is not entirely sure of his product.
“Companies focusing on mid-market projects are mostly providing these multiple choices, but not all of them are entirely necessary. Developers can just provide different configurations instead of further breaking them down by size," said Ashutosh Limaye, head of research at JLL India.