Reality of NRIs interest in Indian realty-I

By: Prameet Narula

Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF,, ndtv, aajtak, zee news, india news, property news, real estate news,, 99 acres,,, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyTrack2Realty Exclusive: At a time when the clouds hovered all around the realty sector ranging from the policy bottlenecks to dried finance and inventory overhang, the depreciating value of rupee vis-à-vis US dollar was seen to be the only silver lining. The sector went euphoric with the increase in NRI enquiries all through the year 2013.

Track2Realty Focus 2014 wonders whether the sectors’ celebration over the sharp decline in the Indian currency will also lead to the much awaited NRI money actually flowing into the sector when the market is expected to remain flat for quite some time and the absence of policy clarity in an election year makes the ROI and the right time of exit even more vague.

All through the year 2013 the developers made the best of efforts to project as if the depreciating value of rupee vis-à-vis dollar will bring the NRI money into the sector. To support the claim rising NRI enquiries were cited which, of course, went up to 20-25 per cent. Some brokers like Investors Clinic claims the number of calls from NRIs has gone up to 800 per month from 200 earlier. Similarly, realty portal claims to receive around 1 million visits a month, which is double the number compared with few months before. “The rupee has depreciated nearly 18-20 per cent in the last two years. Enquiries from NRIs have gone up lately as they are keen to make the most of this situation,” Anuj Puri, Chairman and Country Head, Jones Lang Lasalle India, says.

But what the statistics fail to answer is the fact that hardly the sales figure supported the enthusiasm and it is not clear whether it will do so in the year ahead. The developers, however, are going all out to hard sell their properties by offering several freebies, discounts and gifts. The depreciating rupee is being seen to be a blessing in disguise for big-ticket properties across India.

For instance, Bangalore’s Sobha Developers is hard selling its properties to NRIs with promos like ‘Invest in homes now and save Rs 34 lakhs’, on account of rupee depreciation. Godrej Properties had proactively activated its rupee depreciation campaign much before it became news. Others like Nitesh Estates, Amrapali Group, Supertech and Unitech participated in home exhibitions in Dubai and the UK. Some others got active on social media and marketing premium deals to net-savvy NRI customers.

Leading realty developers are now using Facebook, Twitter and YouTube to reach prospective NRI buyers, helping them identify the right property, negotiate a deal, and help repatriate large sum of money home.

As R. Karthik, Chief Marketing Officer of the Lodha Group says, “Given that the cost of reaching out to non resident Indian clients is quite high, it makes sense to tap the social media route. We are planning different initiatives for our new projects, since about 15 to 20 per cent of our sales come from NRI customers.”

Godrej Properties claims to have approximately 16 per cent of the total customer base among NRIs. “Considering that we are a pan-India player, the percentages are skewed on the location of the project. However, the rupee depreciation has definitely shifted our focus on NRI investors, who consider real estate as an asset class. We are getting good traction in the overseas market with the rupee fall,” says Girish Shah, Executive Vice-President (Sales and Marketing), Godrej Properties.

Analysts believe tapping NRIs through the social media route may help cut marketing costs by 30 to 40 per cent, but the very nature of the medium is not focused on getting leads, but for interactivity, and to carry out conversations, provide points of view and keep the customers and associates informed on the latest developments. It is indeed a questionable proposition as to how many international interest been expressed through digital media initiatives.

The developers nevertheless grappling with rising inventories and increasing cost of capital amid a marked slowdown of the country’s economy are wooing expatriates to buy residential apartments and villas from them, touting the record fall in the Indian rupee versus the dollar and the dirham as the clincher.

….to be continued

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