Realty firms must use IT tools, data analytics to cut marketing & construction costs: Experts

Real estate developers can significantly reduce their construction and marketing costs by using data analytics and undertaking proper market study before launching projects, industry experts said on Wednesday.

Addressing a CII-CBRE conference on 'Changing dynamics of construction industry', ATS group CMD Getamber Anand stressed that real estate developers need to change their mindset and working approach to execute their residential and commercial projects.

"There is a tremendous scope of cost saving in marketing activities by doing market study through the use of data analytics," he said.

Citing the example of his own company, Anand said ATS has been able to reduce marketing expenses to less than 1 per cent from earlier 4-5 per cent of the overall project cost.

 

The cost of acquiring customers used to be 7-8 per cent, including an average brokerage of 3 per cent, he said.

Similarly, Anand said there is a lot of wastage of construction materials like steel and cement which could be easily curbed.

"Builders have been mismanaging cash flow and sales...We need to change, else we will not be able to ride the next wave of success," he said.

Speaking at the event, CBRE Chairman and CEO (India, South East Asia, Middle East and Africa) Anshuman Magazine said: "Developers should do market study and analysis before launching their projects to understand the need of the buyer and price point at which flats can be absorbed."

He said consulting firms like CBRE have always been advising this to developers, but unfortunately it was never implemented.

Magazine, however, said the current slow market condition is now forcing developers to change their strategy and focus on cost saving in marketing and construction.

The competition from big corporate houses which have entered into this segment is also leading to this transformation, he said.

Abhimanyu Munjal, Chairman, CII Delhi State said: "Cities across the country are facing unprecedented economic, demographic, fiscal and environmental challenges that have caused industries to rethink the way cities are built."

Gurjot Bhatia, MD-Project Management, CBRE India, said, "Project management competencies are becoming more about simplifying complex scenarios, delivering superior outcomes, allowing real benefit realization and the best possible returns to clients/users within the constraints of scarce resources, tighter budgets and time frames, higher market uncertainties and the need to achieve more with less.