Early adoption of technology kept us ahead of the curve and helped address the operational issues that arose due to covid-19, says Ashish Puravankara, managing director, Puravankara
India’s residential real estate sector has faced huge challenges in recent years because of poor liquidity, slow sales and delayed project construction. As the covid-19 pandemic worsened the slowdown, many developers froze project launches and offered easy financing schemes to win back customers. Bengaluru-based Puravankara Ltd launched projects virtually and saw sales traction across its affordable housing arm Provident Housing and premium homes under the main brand. As part of Mint’s ongoing ‘Pivot or Perish’ series, Ashish Puravankara, managing director, Puravankara spoke about the launch pipeline, customer behaviour, and opportunities in the crisis. Edited excerpts:
Why didn’t Puravankara slow down on launches given that many developers have pushed fresh launches to 2021?
We are committed to our launch pipeline given the kind of demand comeback that we have seen, though overall launches have come down for most developers. We are launching 11 projects spread over 10.5 million sq ft across premium and affordable housing categories. Out of these 11 projects, six will be under the Puravankara brand and five under Provident.
In 2020-21, we are investing nearly ₹3,000 crore and anticipating revenue of more than ₹6,000 crore. We have already launched Provident Woodfield, Purva Atmosphere in Bengaluru and Purva Aspire in Pune. We are launching Emerald Bay in Pune, as well as projects in Thane and Mumbai.
Given the pandemic-led crisis, how have Provident and Puravankara performed this year in terms of sales?
Sales of Provident projects have been stable but premium homes under the Puravankara brand have witnessed better uptick. Post-covid, we find that homebuyers looking for larger homes, more amenities and modern projects that are designed well. Provident homes are sold at a price range of ₹35-65 lakh, while Puravankara homes are around ₹75 lakh- 2 crore. In a ready premium villa project in Bengaluru, priced at ₹2-3 crore, we sold twice the number in September compared to sales in the past year. Two things played a role. Customers saw what we are eventually offering and they are also looking at villas and standalone homes.
Puravankara launched projects virtually during the pandemic. Was the digital transition smooth?
Early adoption of technology kept us ahead of the curve and helped address the operational issues that arose because of covid-19. We did three virtual residential project launches in June and July. The virtual launches generated immense interest and saw the participation of more than 30,000 attendees for the three projects.
Data-driven (digital) marketing has an edge over traditional marketing tools as it creates performance-based campaigns through better analysis of consumer data. It also assists on the efficient utilization of data enabling us to target the right audience group for a particular project, through tailor-made content that narrates a story relatable to the customers. We allocate 1-3% of project costs to software technologies creating cost and time efficiencies across enterprise resource planning, project management and customer service.
What are the plans on commercial real estate?
For our commercial real estate portfolio, we plan to invest ₹7,000 crore over the next seven years to build 12 million sq ft of assets. We have identified Bengaluru, Hyderabad, Mumbai, and Pune for commercial real estate.
We are also focusing on expanding our product offerings in commercial/industrial asset classes to cater to increased long-term needs for office space, logistics hubs and other industrial facilities. We will also leverage strategic partnerships such as our joint venture with Morgan Stanley to develop warehouses in south India.
At present, residential projects comprise 90-95% our portfolio, but that will decrease once the office and logistics projects take off.
Has the crisis thrown up opportunities for some developers?
I believe strong developer brands who have executed well are finding buyers and are looking at opportunities across cities. We have had deals come our way in terms of joint development proposals from land owners and other developers. Land is raw material for us and we are constantly evaluating proposals primarily in Mumbai, Pune, Hyderabad, Chennai, and Bengaluru.
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