Sensing stressed opportunities, many developers are exploring alliances to jointly develop incomplete projects.
The real estate sector has been witnessing a slowdown over the past few years. The government has taken many initiatives to revive the market. Stakeholders of the industry are also making consolidated efforts in this regard. The earlier trend of many developers failing to deliver their projects on time due to lack of funds has had an absolutely negative impact on the buyer sentiment.
The prolonged stress in the real estate sector owes its existence to several factors, one of which is the tale of stalled projects resulting in a slowdown in the market. Recognizing this, the government came to the industry’s rescue by tightening up the norms and ensuring fiscal discipline through various acts and reforms, such as RERA and other court actions. Such acts and reforms brought in transparency into the industry processes.
The ultimate change, however, could only be brought by the consolidated efforts of the industry players. For a better future of the industry, this trend has already begun. For developers struggling to complete projects, various structures offer viable means to overcome financial distress and find synergies. Converting stress into opportunity, credible developers with great track record are taking over incomplete projects and assuring timely delivery. This, on one hand, reduces the burden of the developer in a deep financial trouble and on the other hand unfolds the avenues for well managed and forward looking developers to explore new business opportunities, eventually pushing the market to overcome the slowdown.
The reforms introduced by the government were much needed to regain the trust of buyers and revive the market. Developers with a track record of timely delivery have not been affected by these reforms and rather have gained from the positive shift in the buyers’ sentiments. This means there is no lack of demand in the market, but it has just shifted to the developers who are financially solvent and continue to work on their projects responsibly.
Strengthened by the positive sentiments of buyers, several responsible developers have come forward to the aid of the cash-starved developers. They are exploring alliances to take over the incomplete projects and jointly develop them to assure timely delivery. This action will ignite the purchase cycle, get cash flowing for many developers, and boost the revival of the industry.
A market is sustained by the welfare of all stakeholders. Any efforts by the government to revive the market would be futile without the initiatives from the developers who have walked on the right path during the times of slowdown. The real estate sector looks towards a new dawn as the stakeholders have realized that any obstacle can be overcome by joining forces and leveraging mutual strengths.
(By Ashish Sarin, CEO, AlphaCorp)