Track2Realty Exclusive: In its quest for getting professional and have a facelift, the real estate hired professionals from very many other industries. When the going was good some of these companies even shifted management control at the operational level to these professionals. And just when it seemed that the Indian realty is fast maturing from promoter-driven to professional-driven, the downturn in the last few years exposed the sector to an altogether new reality. Track2Realty noted that churn out at the top of these realty companies has been very high and professional-driven management is not a panacea to the woes of the sector.
Traditionally a family business, the manifold growth of real estate in the last decade and the emerging realities forced many companies to change their outlook. With realtors increasing their scale of operations from doing just one or two projects to multiple projects in many cities, and looking for foreign investment, most of the real estate companies went on a hiring spree of professionals.
The downturn, however, made them question the role of many of these strategists on board who made the best of it when the market sentiments were bullish. The bearish market brought to the fore yet again the debate whether real estate is better run by promoters or professionals.
Sachin Sandhir, South Asia Managing Director of RICS says historically real estate business in the country has been promoter led and has served the sector in good stead until this point. However, the real estate industry is in a constant state of evolution and subject to ‘change’ with the advent of new technology, regulatory reforms, and economic challenges. Some of these aspects have seldom been experienced by practitioners and entrepreneurs during their tenures, resulting in some resistance to adopting these new facets of real estate business.
“Therefore, there is a pressing need to adapt and learn new ways to do business and move towards greater transparency in the sector. Thus, the starting point for an image ‘make over’ lies in the ability of raising the bar of ‘professionalism’ and moving to a more corporatized and organised structure of conducting real estate business. Realty businesses are now increasingly turning towards professionals across functions such as valuations, quantity surveying, project management, facilities management, cost management etc., who are capable of staying abreast of the knowledge curve and strengthening their ability to survive the paradigm shifts taking place in global realty markets in order to win the confidence of consumers, regulators and investors alike,” says Sandhir.
By and large the professionals are taken on board for the sector to compete in an increasingly global marketplace. It is believed that real estate markets are to a large extent intrinsically linked and interrelated, and hence there is little choice but to embrace such changes.
This is all the more relevant for India, where even today the realty sector continues to be characterised by lack of regulation, transparency and a high degree of fragmentation.
Experts believe the lax in specialised education, has contributed significantly to the near absence of professionalism leading to a high degree of consumer dissatisfaction and a lacklustre image for the sector at large. These factors also affect the ability of the industry to perform in the future, in comparison to its peers.
…..to be continued
