On one hand the demand for residential and commercial properties is constantly moving up, and on the other hand, in the last one year, the cost of construction has also gone up by 10-12 per cent. The cost of material like steel and cement have gone up by more than 20 per cent, copper by 40 per cent and aluminium by 44 per cent. The construction material accounts for 2/3rd of the total cost of construction and any upward change in cost either reduces the margins of developers or compels them to increase the prices. The cost fluctuation can be seen more in luxury segment.
Pankaj Bansal, Director M3M India, one of the most prominent developer in the luxury space in India, says: “There is no doubt that the businesses across the world had slowed down since outbreak of Covid pandemic. But the year 2022 has started with renewed hope and rise in demand in the real-estate sector. Though the prices of raw material is constantly seeing an upward trend, the demand is also increasing for both residential and commercial properties. The only other way to somehow stabilize this fluctuation and manage costs is through timely delivery of the projects. Delay in delivery generally escalates the cost as besides raw material costs, the service costs also increases. Since M3M India’s strength lies in timely delivery of the projects, we are better placed in managing such price fluctuation.”
“M3M India operates on integrated business-model or we call it as end-to-end built-in business model, which means, from owning land to monetising, licensing, launching, marketing, delivery and after-sales; the complete value chain is managed directly by M3M India. Managing these factors directly also saves time, costs, and projects are better integrated in terms of facilities and monitoring” adds Pankaj Bansal.
Keeping up to its reputation of timely delivery of all residential and commercial projects, the Company had launched 27 projects prior 2018 and 25 projects have already been delivered. The construction in two projects, the iconic Trump Towers and M3M Heights, is in full swing and these projects are expected to be delivered soon. These delivered projects account for about 4 million square feet of retail space and 20 million square feet of overall space. The faith of the customers is reflecting in the bookings and sales for M3M India. M3M Capital clocked Rs. 800 crore booking in just 3-days. M3M India’s another project M3M Soulitude had sold 1000+ units in the very first week of its launch. The Company had also clocked Rs 1000 crore sales within the first week itself in M3M Soulitude project.
To its credit, the five new projects launched my M3M India post 2018, including M3M Marina, M3M Prive and M3M Natura have already been delivered successfully to the customers. The construction is in full swing in 5 newly launched projects including M3M Soulitude, M3M Capital and M3M Atrium57.
M3M Capital project is part of 3.0 vision of M3M India. It is a new high-end luxury golf styled residential project in sector 113 Gurugram, right on the Dwarka Expressway. Initially 5 residential towers of M3M Capital, being built in about 16 acres with 644 apartments, were opened for booking which had 294 apartments of 2.5 bedrooms and 350 apartments of 3.5 bedrooms. The project has close proximity to Aerocity and Delhi International Airport, and is a part of larger vision for Smart City Delhi Airport.
Pankaj Bansal says: “Uniquely, M3M India has a bank of over 2200 acres of land parcels that has given the Company a well-defined advantage. The company is also destined to enter FY 2023 as a debt free company. Gurugram also has the third highest per-capita income in India and has contributed significantly to the Indian entrepreneurial ecosystem. Not just startups and unicorns, even the NRIs are aggressively driving realty market in India. Today, Gurugram is home for more than 250 Fortune-500 companies and over 1500 startups. Delhi NCR has also replaced Bangalore as the start-up capital of India. So what we see is a consistent growing demand for both residential and commercial space and the advantage would remain with those developers who would deliver projects on time.”
The realty market is all set to boom in coming years with startups looking to lease out about 30 million sq. ft. of space during 2022-24, and majority of it is going to be commercial. The demand in residential accommodation is also all set to increase by 8-10 percent. On the other hand, FDIs in real estate have also jumped three times during 2017-2021, growing to about 82 per cent. The young Indian population is also on the move, with 66 per cent young Indians below the age of 35 years, emerging as young millennials borrowers of home loans. The cumulative active home loan base of these borrowers has continuously grown over the last 3 years at a CAGR of 3.5 per cent. Timely possession, corporate governance, transparency, sustainability and cost competitiveness will play a decisive game in realty in coming years, and it seems end-to-end built-in business model in the real-estate sector will change the game for customers and investors.