From ET Realty
NEW DELHI: Godrej Properties has signed a new development management agreement with NCR-based builder Lotus Greens to build a housing project in Noida, highlighting the trend of local builders tying up with pedigreed corporate real estate players in a bid to shore up sales in the current slow market.
In Gurgaon, builder Ramprastha too has signed a joint development agreement with Godrej Properties while builder Lotus Greens is also in talks with Tata Housing for a partnership in Noida.
In Mumbai, Tata Housing had recently signed an agreement similar to the one with Lotus Greens with Mumbai-based builder Neptune Group to develop a 10-acre housing project in the eastern suburb of Bhandup.
“In this trust deficit market, for end users, it is important to understand who the developer is. End users are today more trusting of these corporate brands, which have been able to deliver,” said Shveta Jain, executive director-residential services at property consultancy Cushman & Wakefield.
For Godrej Properties, the tie up with Lotus Greens is a first in Noida. This project on 36 acres is part of the 300 acre sports township in sector 150 of Noida that Lotus Greens had acquired in late 2014 with the backing of private equity funds Clearwater Capital (now called Altico Capital) and SSG Capital Management.
Nirmal Singh, founder of Lotus Greens, said trust is important, especially in the current market.
“Their systems are robust to deliver on time, they have a professional outlook and people have trust in these old corporate houses, so they have been able to sell in this market too,” he said. Singh confirmed that his company is in talks with Tata Housing for a tie up in Noida, but did not share the details.
Sanjay Grewal, chief executive officer of Altico Capital India, said this trend of consolidation in the residential space is expected to continue with existing land owners and builders entering into development management agreements and joint development agreements with large corporate players. “This brings in additional credibility to projects,” he said.
While it has been difficult for most developers to sell homes in the current slow market, leading to an inventory overhang, projects backed by corporate houses like Godrej and Tata have seen decent traction, say industry experts.
“As a developer, we have been doing consumer studies regularly, based on which, we tweak the project. That has helped us sell in the current slow market as well,” said Brotin Banerjee, MD and CEO of Tata Housing Development Company. “In this market, builders are looking for a brand that will deliver on time.”
Pirojsha Godrej, managing director and chief executive officer of Godrej Properties, said the company has seen strong growth in the scale of its operations in NCR. “We look forward to building on this momentum through our entry into Noida,” he said.
Nikhil Jain, CEO of Gurgaon-based builder Ramprastha, confirmed that the company has signed a joint development agreement with Godrej Properties for a project in Sector 89 of Gurgaon.