In today’s scenario building a project on time is a challenge. Hemal Jain, Director – Homes (Sales & Business Development), Neev Group highlights the guidelines for developers to ensure timely delivery
The current slowdown in the real estate sector has caused an upsurge. A rise in the interest rates, rising inventory levels and tightening of liquidity have impacted the capital availability of developers and are resulting in widespread delays in the construction of residential projects across segments.
At present there is an enormous escalation in cost of land, liaisoning costs, construction costs, and marketing expenses. Finances have been stalled by the RBI and the interest rates on home loans for buyers have increased tremendously. A developer has to undergo series of tedious processes for approvals on the building plan, layouts, the basic amenities and NOC’s from pollution board, lift authorities, sewage operation department, hydraulic engineering department for water supply, and neighbouring societies etc. from the local governing authority followed by the state and central, if required. Once the construction work starts, the unavailability of manpower and inadequate supply of raw materials due to change in Government regulations might lead to the delay of the project and with the delay comes the burden of additional overhead cost, cost of retaining manpower, and most importantly it affects the credibility of a developer.
So the question remains, can one deliver a project on time? According to the Mumbai-based real estate and infrastructure developer, Neev Group, the answer is – yes. The group has developed three major residential projects and plans to deliver 6 months ahead of the delivery time.According to Hemal Jain, Director – Homes (Sales & Business Development), Neev Group, “From the consumer point of view, timely delivery has positive implications for the end-user, both financially and psychologically.” The advantages include: • With the timely delivery of property, the security deposit and the rental amount saved can be used in paying the EMI. Timely possession enables a family staying in a rented house, plan permanent solutions for their child’s future – neighbourhood school / college admissions, recreation activities; purchase of other assets adding to the family’s lifestyle needs. • If the investment is for a second home then it has dual benefits – tax benefits can be availed and it is a secondary source of income, if the property is rented out. The rental income can be used to pay off the loan EMI and once repaid; the rent amount turns out to be a fixed source of income appreciating every 11 months.
“Timely construction can only prove beneficial, not just only for buyers’ but for the developers as well”, Mr. Jain adds.
There are certain guidelines to achieve timely delivery. Mr. Jain has outlined some of the guidelines the developers need to adhere to ensure timely delivery. Those are:
Time is money: The faster a redevelopment project is the rent and overhead costs are minimised thus ensuring more cost optimisation for the builders.
Consistent plan of action: Developers should have a consistent plan of action in place before commencement of projects which is of immense importance.
Sort out all the necessary permissions with legal bodies: Approvals from the government and necessary regulatory bodies should be obtained before time to avoid later hindrances and cause delays in project.
Seamless Internal Communication / Clear cut communication between all departments: All departments’ right from the engineering team, purchase, sales amongst others should collaborate and familiarise themselves with the project plan and structure.
Using one’s own Raw Materials: Being self dependant and owning raw material production plants helps developers deliver on time by ensuring continuous flow of raw materials required for the project. This will also prevent stalls in projects due to paucity / unavailability of raw materials like ready mixed concrete (RMC) from external sources.
In-depth knowledge, technical knowhow and experience: Expertise and technical knowledge of employees working in industry since a long time can contribute in a large way to ensuring success of a project. Developers should focus on recruiting and engaging best-in-class talent and a dedicated workforce.
Unity within teams: A spirit of unity should foster amongst teams ensuring a healthy, motivating and passionate working environment.