Consultants expand bouquet to beat blues

WITHSTANDING THE FALLOUT

The effect of the slowdown was most visible in the residential segment,since it represents a very economy-sensitive patronage. Over the last two months,we have seen transactions picking up by 15-25 per cent,depending on location and typology,but those service providers who depended solely on traditional residential deals reached or came close to the breaking point when demand sank to its lowest levels a few months ago. There was also a decisive impact on deals pertaining to retail and office spaces,the latter category predominantly in IT/ITES and MNCs. However,Jones Lang LaSalle Meghraj was among those IPCs that successfully leveraged and built on the increase in the niche demand by domestic companies. We noted that the number of domestic transactions actually increased,though the value of these transactions certainly decreased. Nevertheless,this niche demand sufficed to help the most evolved IPCs safe from the worst of the downturn.

Now that markets are picking up,we can safely say that most IPCs pulled through credibly. It has certainly been a rough journey – our findings indicate that year-on-year growth in IPCs was at the rate of 30 per cent from 2006 until 2008,a period of stagnation in growth from the beginning of the slowdown,a case-to-case decrease of around 10 per cent from that point until the past two months,and a general growth increase of 5-7 per cent since the beginning of revival.

Going forward,we see considerable opportunities for IPCs in consulting beyond the conventional models. We have seen a 30 per cent upsurge in demand for portfolio management,as well as project and facilities management. There is now vast scope for real estate companies with sufficient capabilities to effectively execute disposition of surplus or distressed assets,address the requirements of HNIs and catalyse debt funding for developers. We have also stepped up our investments in strategic business consulting for domestic clients,as well as in catering to Government contracts.

ADDRESSING THE ISSUES

International Property Consultancies use local expertise and experience to match Indian real estate to global requirements. They understand demand drivers and supply,and have informed knowledge of inherent challenges and opportunities. This provides an edge that clients recognize and seek to build into their real estate and business strategies.

There is no laxity permissible in the dealings of an IPC,which have to be in adherence with international best practices in real estate business. Satisfying the needs of an international client or,for that matter,a local client who caters to international players – means addressing the needs of clients who have no local expertise and need to be hand-held at all levels. The level of transparency an IPC offers is impeccable and completely above reproach. Due diligence,clear titles and complete transparency as far as finances are concerned are of paramount importance. Thanks to the comprehensive processes and systems they offer,IPCs have helped considerably in restoring investor confidence in the Indian real estate market.

IPCs are also defined by their services bouquet,which must cover all areas of the real estate business including: Research and Consulting. Transactions in land and industrial,office,retail,residential,hotels – and,in the case of our organisation,warehousing and logistics: Real estate capital markets,project management,and facilities management.

RESIDENTIAL SECTOR

In order to give comprehensive solutions to the sector,the firm has also started using our database and expertise in tracking,mapping and analysing residential real estate. Homebay,the division to handle these,promises to offer a transparent deal,unlike the local brokers,with whom one is not sure about the legality of deals. The distinction from other local players is the thrust on transparency in dealings,guided by a documented and rigid code of ethics,capabilities to deliver on a pan-India basis,understanding of customer requirements and ability to provide appropriate options,besides research-based local market intelligence.

The division has a team of more than 95 residential professionals operating from 10 offices across the country. It offers services for properties in metros,mini-metros,tier I and tier II cities across the country.

Apart from these services,the division also work closely with property developers in providing advisory services for planning,pricing,project launch strategy and project marketing. It also has a database,which is regularly updated,of apartments that are offered on a resale basis in the secondary market. The services provided include location advisory,site visit and short listing,developer negotiations,due diligence assistance,signing of letters of intent (LoI)/ memorandum of Understanding (MoU),legal documentation,property customisation and loan assistance.

In the troubled times,different strategies and adaptability helped IPCs to recover revenues to a significant extent. Of course,the magnitude of recovery again depends on how suited any IPCs service offerings are to the current market dynamics. l

The writer is CEO -Business,

Jones Lang LaSalle Meghraj