Falling sales and rising numbers of units have forced many real estate developers in India to work with each other – sharing land, labour, investment, as well as other resources, to bring down costs and manage stocks of Indian property.

Developers sharing
As developers struggle to sell property in India While a few have decided to build joint projects using one builder’s land and another builder’s development and marketing skills, others are sharing capital reports the Economic Times.

Chennai real estate developers join forces
Unitech recently tied up with Chennai real estate developer Arihant to build a residential project on Arihant’s land in the city. Arihant is one of Chennai’s biggest builders selling property in Chennai. “But the two of us saw value in coming together and use our existing resources,” says Unitech managing director, Ajay Chandra.

Indian developers struggling to service loans
Many builders are finding it difficult to service loans-the combined debt of the top eleven listed real estate firms is 38,500 crore. In such a gloomy scenario, builders sharing resources-man, machine, land and finances-would help control costs and keep a check on inventory. Others are turning to advertising and selling property and real estate in India to NRI’s online to attract more affluent investors from abroad.

Mumbai real estate – sustainability an issue
In Mumbai, real estate developers have been concerned about sustainability of their plans in the backdrop of record land prices. Since land accounts for over 70% of the total projects expenditure here, Mumbai builders have worked around this by using the joint development model, many a times with local developers who have aggregated land over the years.

Through this model, the developer manages to control cost as well as landowners’ expectation by sharing project revenue as against an upfront cash outflow.

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This entry was posted on Wednesday, September 7th, 2011 and is filed under Selling property and real estate in India. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.