Developers Turn to Technology to Balance Rising Input Costs

Bangalore: High cost of construction has motivated developers to adopt different technology in India. To offset the increasing construction cost, several developers are spending in plants to make pre-fabricated walls and ceilings, whereas some developers are roped in the methods to speed up construction as well as to diminish the requirement of steel which is costly in today’s market, reports Ravi Teja Sharma of Economic Times.

Such technological innovation happened to developers when they are struggling with slump in margins over the last few quarters. According to Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, developers are seeking different ways to reduce construction cost.

Over the last two years, the inputs cost like cement and steel rose to 35-40 percent followed by labour charges, which has double than earlier. "Margins are down by 50% for us because of higher commodity prices and slower home sales," said RK Arora, Managing Director of Noida-based builder Supertech. The group has invested around 200 crore to set-up a plant to manufacture standardized pre-fabricated walls and slabs.

Harleen Oberoi, Executive Director, Project and Construction Management at construction services firm AECOM stated that "Pre-fabrication is done in a controlled environment, so quality and finishing are better," reports Economic Times.

With pre-fabrication technology, developers can save up to 15-20 percent of construction cost and nearly 40 percent of the time. "If we can manage to finish on time, we will be able to maintain our margins," said Shaishav Dharia, Head of strategy at the Lodha Group.

"The cost of procuring the technology might be high initially, but it pays back by way of huge savings," added Arora.

Bangalore-based Puravankara Projects has started using foam-based concrete to build its interior walls, which is efficient and reduces labour cost, said Jack Bastian Nazareth, chief operating officer of Puravankara Projects. Using this technology, the group is saving almost 120 per square feet, which is giving a better finish, reduces the requirement of plastering and can be done with one coat of paint. "Value engineering at the beginning of a project increases the speed of construction," added Nazareth.