Real Estate Decline: What’s keeping some companies like Lodha still strong?

If you recall, one of the major causes of global economic slowdown was real estate sector in America, and after the slowdown, it was this sector that took biggest beating across the globe.

look at the figures, not only demand for residential properties has touched a new low, but absorption of the commercial real estate dropped around thirty percent last year too.

But, this doesn’t mean that the slowdown has affected all real estate developers similarly. Some have seen fewer losses than others, while some, like Lodha group, have defied the trend, grabbed the opportunities in spite of
descending twirl and still are standing tall.

The Lodha group, who is building the world’s largest residential tower, 117- storey World One project (with 60% flats already sold), acquired 17.5 acre plot in Lower Parel from DLF (real estate group that got negatively affected in slowdown) recently, also paid off 2500 crore to its German investor Deutsche Bank. All this must make you wonder, what is it that they are doing right?

A major reason for success of Lodha group can be attributed to their focus of development being Mumbai. It is a common knowledge that, with infrastructure and job opportunities existing in metro cities, migration is always in
this direction, which in turn creates demand for residential and commercial property.

In an interview to Business-Standard, Abhisheck Lodha, MD, Lodha Developers, said that they spend very little time between buying the land and constructing projects and starting the sale, thereby minimizing cost overrun. This
could be one of many things that they must be doing right. 

Also for a big player in real estate sector, trust plays an important role. “Credit” is like essential lifeline, and if investors and customers both have faith in you, half of your job is already done, and well done. So, developers who
have kept this nitty-gritty in mind are still developing and hopefully will not suffer huge losses in future either.

Sorce: interview from Business standard mentioned in article (courtesy: Shraddha Rai)