REAL ESTATE BANGALORE

Flip through any newspaper that gets printed from Bangalore, and it is not uncommon to find real estate companies putting out full page advertisements of their projects.

Similarly, hoardings are back in action in the city showcasing real-estate developments, and radio ads are also being resorted to. Companies are now thinking out of the box and, in fact, 2009 witnessed a few prominent players showcase their ongoing projects in a bid to find buyers for their unsold stock.

With aggressive promotional campaigns on the one side, and favourable home loan rates and a big push from banks and the government on the other, developers were successful in stimulating buyer-interest during the second half of 2009.

Signs of good times?

Does this signal the return of good times for the Bangalore real-estate sector? Some reports do suggest that sales volumes in the residential market have gained momentum over the past few months, and transactions are said to have grown by about 40 per cent on a year-on-year basis. Companies have come out with new launches and sales continue to be better than last year signalling that the worst is, indeed, over.

According to a top official of the Bangalore-based Sobha Developers, the real-estate sector in the city is on a revival. In fact, the company was one of the first to reach out to buyers through innovative campaigns. “Since June 2009, there has been a pick up in demand. The economy is showing strong signs of growth and the interest rates for home loans have come down,” he adds.

With the economy getting over the slowdown blues, and the IT and ITeS sectors beating expectations in the past few quarters, the Bangalore market is witnessing a pent-up demand from these sectors, which augurs well for the real-estate market, said Mr Sunil Mantri, Chairman, Sunil Mantri Group.

“The IT/ITeS employees had stayed away from the market during 2008-09 due to job insecurity,” he said recently, while announcing the launch of two residential projects in the city. “But now we are targeting IT employees for these two projects, and there has been a good response. With the return of salary hikes and bonuses, IT employees' confidence has come back too,” he added.

Mr Anand Narayanan, National Director – Residential Agency, Knight Frank India, says that there is definitely an increase in buyer interest over the last six months. “The developers are also increasingly using top-of-the-line advertising and real-estate advisors to package and sell their products,” he adds.

Innovative channels

In fact, at Sobha Developers, the official says that besides advertising, the company has opened many other innovative sales channels such as an employee referral programme, lady consultants, brokers' channel, and online communications. “We have also opened new marketing offices in Dubai and Mumbai.”

These all-round efforts have resulted in a significant increase in enquiries and sales, he adds.

“Well-designed advertisements are the ones which will stand out and assist developers in generating product-level interest,” says Mr Narayanan of Knight Frank. Though developers are not willing to come out with actual ad-spends, it is believed that ad-spends in the rejuvenated market conditions could be significant. Though Sobha Developers declined to give the exact numbers, the official says that the ad-spend is “in line with the budget”.

Integrated marketing

For 2010-11, the company would focus on an integrated marketing communications approach, “to further enhance our brand equity, generate leads and sales enquiries, and reassure the consumer that we are a high-quality player with significant focus on delivery”, he adds. The planned spend for the next financial year would be based on “target sales and would be distributed appropriately across channels to optimise our cost of sale,” says the official.

If numbers are anything to go by, Provident Housing, the wholly-owned subsidiary of the Puravankara Group focusing on the affordable segment, spent about Rs 2 crore on its promotional campaigns in 2009-10 for its affordable projects in Chennai and Bangalore.

The company had print and broadcast campaigns for the Provident Wellworth project in Bangalore that had apartments in the Rs 14-19 lakh price bracket.

“Ads or no ads, the going has been excellent for us,” says Mr Jeyakar Jerome of Provident Housing. The company saw about 70 bookings a month.