5 Lessons Realty Developers Learnt From Slowdown

Bangalore: Over the past years, the real estate markets around India are witnessing sluggish movement with the increasing number of unsold units and less home sales. Developers are facing problem to earn revenues and also they are struggling with slow growth in their volume sale and liquidity pressure. Therefore, many companies have changed their business model and adapted strategies to survive in the present market situation. Below are few lessons which real estate developers have learnt from this market, reports Kiran Kabtta Somvanshi of Economic Times.

1. Concentrate on local market

Real estate developers are now concentrating on local market that is still earning revenues apart from their presence in other cities. For instance, real estate players like DLF earning about 30 percent revenues from Gurgaon, even though they have expanded their presence in more than 20 cities and to reduce their debt rate, they have sold prime land in Mumbai area. Similarly, Godrej properties receive almost 60 to 70 percent revenues from areas like Mumbai and Ahmedabad, despite of their expanded business in over 12 cities.

Whereas, Pan-India development plans of real estate players like DLF, Unitech and Indiabull Real Estate have been diluted by hefty leveraged balance sheets, high borrowing costs and sluggish absorption of their projects.