Bottom Line: In the fifth edition of Track2Realty Brand X Report that will assess the performance of the real estate companies in the fiscal year 2016-17, the search of the brand leader of the year would not be easy.
The Indian real estate has entered into such a competitive zone that everyone is conscious of the fact that the brand leadership is no more writ large on the wall. It is unlike a few years back when the sheer market size was enough to intimidate the peer group in the sector. The brand analysts had no option but to elevate DLF as the brand leader and the rest of the developers had to fight for the next spots.
However, the DLF’s brand elevation over the years was also helped by the fact that the erstwhile potential challengers like Ansal API, Unitech, Emaar MGF, or the Jaypee could not pose any serious competition to the market leader. In the due course of time these potential challengers rather became case studies for all the wrong reasons.
Only the Mumbai-based Oberoi could maintain decent consistency with its brand performance over the years. The size of the developer with only limited inventory was nevertheless not enough to emerge as the brand winner that could beat the market leader by size.
Of late, some other companies like the Lodha could create a brand disruption without actually delivering the product. Some of these developers raised the bar of expectations too high but could reach nowhere near the consumer confidence index to sustain the momentum.
However, the real challenger could emerge not from the brand-conscious markets like the Delhi-NCR or the Mumbai but from a consumer-conscious market like Bangalore that completely changed the brand dynamics of real estate business in this part of the world.
Sobha Ltd and Prestige Estates that had been consistently delivering with satisfaction to the customers emerged as the real serious challenge to the DLF’s brand monopoly before Sobha dethroned DLF to emerge as the brand leader for the first time in the fiscal year 2014-15. Prestige has not been far behind Sobha, rather ahead of it on some of the metrics like fiscal performance, but the customer satisfaction index added with the effective communication with media mix went in the favour of Sobha Ltd.
On the eve of 2016-17 when the new challengers with strong fundamentals are yet again knocking the doors the question is whether Sobha will continue to be the brand leader this time around. If one goes by the corporate stature then Godrej has its claim on the brand leadership this time around. However, only corporate governance is not enough to elevate a developer as the brand leader.
It is a point that has also been proved by the rising number of consumer grievances against another otherwise respectable corporate entity, Tata. Unfortunately, Tata Housing falls way short of the corporate reputation that the Tata Group otherwise enjoys. With plethora of consumer grievances and cribbing buyers Tata Housing could never be a serious claimant to be brand leader at the national level.
It is to be noted that Tata Housing is so defensive in the wake of consumer complaints that it has rather blocked Track2Realty to interact with its aggrieved homebuyers on its Facebook Page.
Godrej Properties is, however, another corporate entity in contrast. The statistics is no doubt impressive for the Godrej Properties. Facts speak for themselves. At a time when real estate developers, especially in the National Capital Region (NCR), are struggling to stay afloat, Godrej Properties claims to have sold villa units worth over INR 300 crore at its newly launched project, Crest, in Greater Noida in a single day.
The developer has garnered significant traction for its other projects also in the recent past, at a time when the market has been struggling. Late last year, it sold 300 apartments at a project in a Mumbai suburb within a week of its launch, in a market that has been constantly reporting the worst ever performance in the absence of buyer activity.
Add to it, the fiscal management & sales performance, trust of corporate entity, consistent delivery in the last few years and the impression that one gets is that a new brand leader has arrived. Will Godrej Properties really topple Sobha Ltd this time around?
Well, if only the statistics could tell the whole story then Godrej Properties is already way ahead of Sobha Ltd. However, beyond the statistics lies a major benchmark of public perception to evaluate the performance of the brand. As a matter of fact, it is this metrics of brand evaluation that has brought the Bangalore-based developer Sobha this far in brand leadership.
Has something changed this year? Has Godrej improved its consumer confidence index? Can Prestige Estates throw a surprise? Well, only the time will tell. But what can be vouchsafed at this point of time is the fact that brand leadership in the Indian real estate has indeed gone into a very competitive zone. There are new claimants to brand leadership that are knocking the doors very hard. For instance, another Bangalore-based developer Puravankara has scaled up pretty fast to be in the elite club of top brands at the national level.
Sobha Ltd may not be as flashy as Lodha or Oberoi; it may not have as sound fiscal figure as Godrej properties; its fiscal figure might be lower than the Bangalore counterpart in Prestige; it may also not be as aggressive with its geographical footprint, but it has consistently maintained its sales figure, delivery track record, and most importantly the consumer confidence index.
In a few months the verdict will be out as to who is the brand leader of Indian real estate during the fiscal year 2016-17. Till then the ball lies in the court of Track2Realty jury members and the public at large who will vote for the brand leader of the fiscal year.
By: Ravi Sinha