Aparna Constructions is continuously implementing innovative ways to improve quality and customer experience. Our backward integration gives us an advantage since we have set up in-house building material facilities to ensure a reliable and cost-effective supply of inputs. It allows for more efficiency and control of the development ecosystem, and thus shields our customers from elevated costs. It also insulates the company from market cycles and from such ‘black swan’ events that we are facing currently.
There will be high demand for reputed developers with minimal execution risk, even if the property is relatively higher priced.
Real estate sales in India were improving in the first quarter of 2020 until the social distancing advisories by the government came into effect, which reduced site visits. Due to the subsequent lockdown, home buyers deferred their decisions until there was more clarity regarding the government response and the overall market outlook.
Real estate is viewed as a safe investment; the emergence of an economic crisis only reinforces this sentiment. Owning property elicits a high sense of security when there is uncertainty and turmoil in the financial market. Furthermore, home buyers will largely favour risk-free property investments during this time. There will be high demand for reputed developers with minimal execution risk, even if the property is relatively higher priced. Home buyers will carefully consider the quality of the developer, project, neighbourhood, environment, and amenities.
Disruption in the supply-chain of raw materials may force developers to source from alternate markets, which will impact their price and increase construction costs.
As we emerge from the lockdown, prices are expected to continue their upward trajectory. More support will be required to ensure the health and welfare of workers. Construction costs will increase due to the additional labour maintenance costs, as well as the paucity of workers resulting from the lockdown.
Construction costs will increase as allied sectors such as cement, sand, and steel rely on importing raw materials which may see restrictions. This will cause the supply of building materials to decrease and accordingly their price will rise. A significant disruption in the supply-chain of raw materials may force developers to source from alternate markets, which will impact their price and increase construction costs. The decreasing value of the rupee against the dollar results in inflated prices for raw materials, which also increases costs.
The economic relief measures announced by the government will allow real estate developers to recalibrate their business strategies and focus on high-priority operations without additional financial burden.
The provision to invoke force majeure for the COVID-19 period will relax the timelines for project delivery while maintaining RERA compliance. New project registration certificates can be issued and, registration and completion date can be extended for up to six months for newly registered projects without individual applications. This will help ease the anxiety of both developers and consumers and ensure the completion of projects. The announcement of a special liquidity scheme of up to Rs 30000 crore for NBFCs, housing financiers and microfinanciers, which will be fully guaranteed by the Government, will ensure the much-needed liquidity in the real estate sector. Overall, these moves will help ease the near-term financial burden for the sector and keep prices on their upward trajectory.
The fiscal, monetary and administrative measures will create conditions that will enable a gradual economic revival as we ease out of the lockdown.
The positive initiatives announced by the government, including relief funds, loan moratorium and repo rate cuts, must be implemented immediately. The repo rate cuts are a positive move, but the transmission of these rate cuts must be implemented with immediate effect to effectively bolster the economy. Swift implementation of the relief measures will boost confidence and revive demand.
Moving forward, real estate developers will have to create a contingency plan to ensure employee health and safety monitoring, crisis management training, how to maintain operations with significant absenteeism, remote working infrastructure and capabilities, and travel restrictions.
The extension of the moratorium on term loan repayments for another three months will be especially helpful for those who have home loans as the uncertainty of the lockdown may affect income. The accommodative policy stance taken by the central bank will boost market sentiment and lend confidence to the financial system, while maintaining liquidity as the economy recovers. The measures outline plans to improve functioning of markets, increase investments by FPIs by voluntary retention route, support exports and imports, and allow extension of measures to ease financial stress.
The real estate sector will have to bring efficiency into its operations and undergo a digital transformation in order to ensure a complete revival. In fact, digitization and mechanization is the only way for a prosperous construction sector.
Staying connected with potential customers and maintaining a sales pipeline without the benefit of face-to-face interactions or site visits is a tremendous challenge. Having a robust IT infrastructure will allow developers to create virtual workspaces for teams to minimise interaction and meetings. For most activities, including administration, procurement, marketing, training and recruitment, work can continue digitally without significant interruption. Teams can communicate via online chat, email, tele- and video conferencing.
Today, digital media is the most cost-effective and personalized marketing channel. We regularly conduct online behavioural experiments to understand the consumers’ unique mindset and accordingly adopting the most suitable communication strategy. Each user is provided with a customized web experience based on personalized mapping. This is followed by the integration of automation tools for lead nurturing through emails, social media and online advertisements. This results in a more immersive and personalized online experience.
Big data plays a major role in our planning and design of digital marketing initiatives. The company website is a comprehensive platform for its multiple projects in different cities and locations. The website provides users with a wide range of choices, in a mobile-first approach, by providing each user with a personalized web experience. We utilise virtual 3D walk-throughs of our projects for an immersive experience, and use photos and videos to show the status of each project so that buyers have an updated view on the progress.
With the benefits of tapping into a geographically diverse talent pool, developers will increasingly explore how to make remote working part of their company’s culture. The sector will have to introduce technology-based systems such as e-learning into their training and development programmes. This means incorporating personalised micro-learning, gamification, virtual reality, and augmented reality for corporate learning.
Mivan technology offers higher construction efficiency, close to zero wastage, and a massive reduction in the skilled resources required.
As Aparna Constructions enters the affordable housing segment, Mivan technology will be put to its strongest test. Mivan technology offers higher efficiency, close to zero wastage and a massive reduction in the skilled resources required for constructing the shell and core of the building, thereby substantially bringing down the overall cost of the project.
FY 2019-20 projects in hand & order book.
Aparna Constructions has completed 41 projects comprising fully integrated gated communities of villas, apartments and commercial buildings. These projects cover 23 million sq.ft. with an additional 15 million sq.ft. currently under development. The company has also ventured into affordable housing, which was given a major boost with the granting of infrastructure status and is the most incentivised segment for both developers and buyers. We are also preparing to enter commercial realty including retail and warehousing. We will be developing around 5 million sft of commercial assets and 10 boutique malls across Telangana and Andhra Pradesh, and have received approvals for setting up a 3-lakh-sft mall at Nallagandla in Hyderabad.