Affordable real estate…

 

Faced with slow demand as well as changing consumers’ preferences, who have varied budgets at their disposable in addition to their ability to avail bank loans, real estate developers are increasingly offering multiple variants of apartment formats. It ensures there are houses for every budget in the country. It also gives them the chance to not lose out on valued customers in an increasingly competitive and more importantly, stagnant market.

Developers are offering multiple sizes of two-bedroom apartments or three to four different three-bedroom formats in single residential projects unlike the earlier standard one, two, three or four bedroom-hall-kitchen (BHK) configurations both in the mid-segment as well as in the luxury category.

“Our residential projects are innovated and customised to suit customer requirements. One of our significant efforts is focused on offering a wide variety of apartments in different sizes and formats,” says Ashish Puravankara, managing director at Puravankara Projects.

Witness the variety. Purvankar’s Bangalore-based company has witnessed many takers for 3 BHK apartments with various specifications. To cater to their varied needs, the firm’s Purva Westend, Hosur Road, Bangalore, is offering 3 BHK homes of sizes ranging from 1,427 sq ft to 1,907 sq ft in the price range of Rs 1 crore – Rs 1.4 crore. Its Purva Palm Beach, off Hennur Road, Bangalore, also offers the same format and sizes ranging from 1,482 sq ft to 1,846 sq ft in the price range of Rs 99 lakh to Rs 1.4 crore.

The company, in fact, offers four different sizes and formats in the above projects: a 3BHK Comfort: smaller sized 3BHK apartments with two toilets, a 3BHK Grand with spacious rooms and three toilets, a 3BHK Luxe, largest in the 3BHK category with staff room and a 3 BHK Penthouse with larger terraces and staff room.

The Purva Sunflower project, also in the garden city, offers Limousine Homes, large 3, 4 ad 5 BHK apartments along with the normal 2 and 3 BHK homes. The unit sizes range from 1,216 sq ft to as large as 2,849 sq ft with prices between about Rs 1.2 crore to Rs 3 crore. “There is also an increasing demand for larger-sized apartments and hence we are offering our clients the choice,” Puravankara explains.

Mumbai-based JP Infra has put on display varied sizes of 1, 2, 3 and 4 BHK apartments ranging from 400-500 sq ft for 1 BHK and 400 – 800 sq ft for 2 BHK at its various projects. “There is increasing demand for variants of various sizes of apartments right from 1, 2 BHK to 3 and 4 BHK apartments with a price tag of Rs 40 lakh for the 1 BHK to Rs 5 crore for the 3 BHK house,” said Shubham Jain, director at JP Infra.

He said such wide choices – unlike in the past – have opened up the basket for all target groups. “Builders have started shifting from a big sized flat to well-proportioned small sized apartments as it has reduced ticket prices, making it a more affordable proposition,” Jain says. In addition, with women joining the work force, family sizes themselves are undergoing change.

Most developers, apparently, think alike. Mumbai’s House of Hiranandani is also building a wider range of apartment sizes across various price points. “We have attracted a large number of buyers on account of multiple options available at our five residential projects such as Queensgate, Kingston, Club Meadows, Glen Classic and Chancery in Bangalore,” said Prashant Mirkar, vice president, marketing and sales at, House of Hiranandani.

He adds: “Earlier developers had fixed plans for 2, 3 and 4 BHK flats and customers were left with no choice. However, many urban buyers are willing to live in newer and smaller sized apartment that are nearer to their workplaces and less expensive.” This helps them avoid long commuting hours and presumably, less physical exertion.

Mirkar believes market response has been the tops. Youngsters are comfortable buying a 1 or 2 BHK with smaller size to suit their needs and pocket, while a family moving in will look at higher carpet area, naturally, with a higher budget.

The Nahar Group too is part of this trend. On its offer list are 2BHK apartments in the 778 – 792 sq ft range, 3 BHK in 874-1,502 sq ft area and 4 BHK (Villaments) in the 1,695 – 2,031 sq ft range in all their current projects. The ticket size varies between Rs 2.25 crore to Rs 12.5 crore. “The real estate market in Mumbai is buoyant and evolving with rapidly changing demands. There has been a shift in customer preference and developers are customising their projects to cater to current market expectations,” said Manju Yagnik, vice chairperson at Nahar Group.

Yagnik reckons “this trend is being driven by property prices shooting northward beyond the reach of most home buyers. Also, as society moves towards nucleur families, there is a growing need for smaller homes, which are more affordable and manageable.’’

Bangalore-based VBHC Value Homes, promoted by entrepreneur Jaithirth Rao, is also constructing an affordable housing project called Palmhaven near garden city, offering four types of 2BHKs in the 600-900 sq ft range. The houses are priced between Rs 17-18.50 lakh, giving the buyers a range of options to chose from.

Points out Shveta Jain, managing director-residential at Cushman & Wakefield: “The varied configuration is not entirely a new trend in the market, but we have started to see a diversity in gated community projects that are now catering to more than two or three kinds of flat sizes, or apartment configurations.”

This varied configuration in seen mostly in 2 and 3 BHK formats targeted towards the end user – after all, the difference of a few lakhs for the mid-segment buyer could be a deal breaker. “For developers to construct multiple formats assures better sales, or in other words, helps spread out their customer base to incorporate a larger band of budgets. Smaller apartments generally sell faster providing the developer with the working capital while larger sizes take their own time,” Jain explains.

She points out to instances where buyers want to upgrade to 2 BHK, say in the range of 800-1000 sq ft, but since there are rigid configurations, the gap becomes too large for them to bridge. The way around this is to break this band of 800-1,000 sq ft in multiple options so that the customer gets an option to upgrade without breaching his budget, she said.

Anuj Puri, chairman and country head at JLL India, concurs that while it is not yet a trend evidently visible in all markets, developers who are exercising these options are doing so in order to address buyers whose space requirements lie somewhere between or above the traditional configurations. “Such buyers may be looking for more than a traditional configuration, but hesitate to buy more than they need,” he explains.

Puri also believes that this new stratagem has come to light only fairly recently, making it a little premature to conclude any definitive successful trend. What is certain, however, is that it is a differentiated approach, one which has a good chance of succeeding if the developers have studied their markets well and have obtained feedback from their clientele, he said.

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