Of he few structures that would be hard to miss while sauntering along Dubai’s Business Bay, the Boris Becker Business Tower, which is increasingly becoming an emerging commercial hub of the city, forms the key. The 19-storey tower standing tall above the water-level, is the third and final offering of the ‘Sports Legends Trilogy’ built by Germany’s ACI Real Estate Developer, which has also built the Niki Lauda Twin Tower and Michael Schumacher Business Avenue. Moving beyond the city of gold, even countries like UK and Jordon have developed a state of the art Media City to promote the media industry of their respective countries. In India too, the development of Cyberabad in the city of Hyderabad, marks the coming together of several Fortune 500 companies from the IT/ITeS sectors. But these aforementioned projects are all commercial, relatively easy to sell and more so, when you have a theme associated with the structures. And while this trend of marketing commercial real estate projects (either by associating a personality or attaching a theme with the project) has for long been in vogue, the ‘theme’ proposition is steamrolling itself into the residential property space in India. Apparently, this would help real estate developers boost sales by spamming the nouveau rich segment. Umm, does this even work?
The success of Bollywood superstar Shah Rukh Khan’s maiden real estate venture – Shah Rukh Khan Boulevard – in Dubai is an example of how aspirational the global consumer has become when it comes to buying a house. But then, isn’t the Indian customer a beast with an undefined nature? With the commercial real estate still growing at a sluggish pace in the Indian market, all hopes of most of the developers are pinned on their residential projects. Currently, the market scenario is such that around 40% of the property being purchased is for investment purposes and the remaining 60% is bought for actual residential use. To that extent, developing theme-based housing projects does seem – on the face of it – to be a high risk high return proposition.
But Vivek Mittal, CEO, Realty Stocks, disagrees with us, “The last 18-24 months saw a huge dip in the realty sector, with both residential and commercial space suffering from a lack of demand. Affordable housing helped the realtors gain some ground by selling houses in the range of Rs.20-30 lakh. However, it is time that realtors offer more than just affordable houses to their consumers. Launching theme-based houses is a step in that direction.” It is accepted that with more and more educated consumers coming into the picture, there is a dire need for proper marketing of the projects. But wouldn’t theme-based projects end up being too costly for the consumer?
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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