Property sales in Bangalore are forced by Airline, capital market models.
The strategy of City-based developers to market large-scale housing projects is seemed to be working.
A theme-based project Purva Palm Beach in Hennur is launched by Puravankara Projects through an IPO-like book building mechanism.
To sell its inventory of over 1,400 apartments in the Republic of Whitefield project, an Air Asia-like seat pricing method is been used by Divya Sree Developers.
Amit Bagaria, chairman of Asipac Group, the marketing consultant to the project alleged “We review sales on a daily basis and only revise prices of fast-selling units. The more popular a certain type of apartment or a block of apartments is the higher will be its price.”
In the real estate industry the norm is to increase the per sq ft price of a project as a whole. The sales in the Republic of Whitefield happen like the way low-cost airlines sell their front row, exit row, window and aisle seats.
In Puravankara’s case, over a period of 30 to 45 days, it first got expressions of interest from buyers including their preferred price. Jackbastian Nazareth, CEO, Puravankara Projects said, a certain number of units were released with a specified price band depending upon the expressions of interest. Hence a buyer was guaranteed that he is paying a price that is market-determined.
Nazareth said, initially the developers release the product in the market and then respond to the demand as per the traditional way. The book building method gauges customers’ interest upfront. Due to this uncertainty is eliminated and the sales undergo momentum.
DivyaSree is setting real estate benchmarks, with over Rs 400 crore in sales in less than five months, whereas Puravankara’s customized Palm Beach IPO was oversubscribed three times.
A buyer bid campaign was run for a residential project Tivoli in Whitefield by L J Hooker India. Alexander Moore, CEO, L J Hooker India mentioned that a reserve price is set by the builder and the buyer had a fixed period to make a sealed bid. The highest bids above reserve bought the apartments.
MD of real estate research firm Liases Foras, Pankaj Kapoor alleged, the importance of sales velocity is understood the developers. They are no more obstinate about their prices. According to their plans focus is on generating higher cash-flows.
Source: Times of India
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