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THE SMALL-TICKET INVESTMENT

The developers today are focusing on completing and executing smaller projects due to the changing market dynamics

Manjeet Dabral, an NRI, on his return to India wanted to invest in one of the largest projects in the country; however, he soon realised that smaller projects and compact homes have become the new norm. “I enquired with the developer and realised that post the implication of RERA, it is not a feasible idea for the developers to construct large projects. They would rather concentrate on smaller projects and finish them within the deadline than face any penalty (as the chances of bigger projects being delayed are higher),“ he mentions.

ARE SMALLER PROJECTS IN VOGUE?

In metros, today, most of the developers are finding it convenient to opt for smaller projects than the larger formats. It might give one the impression that its execution challenges and approval bottlenecks are stimulating the developers to opt for smaller projects. However, experts agree that the new regulatory regime, post the formation of the real estate regulator would make it safer for the market to em brace the idea.

Vineet Relia, managing director, of a leading real estate company agrees that breaking down the bigger projects into smaller phases or units has always been a better strategy in terms of both, money and time management.According to the new laws, all such phases or units can be registered as an independent project; and therefore, it will be easier to finish a small project in the stipulated time-frame.

WHY ARE DEVELOPERS OPTING FOR SMALLER PROJECTS?

Smaller projects help the developers manage their cash flow better; A large project leads to a bigger inventory. Hence, the chances of the apartments being sold in a smaller project is faster than a larger project; The developers also consider appreciation over a period of time. Hence, if they do it in phases, the project in the later phase might be able to avail the appreciation in price; Breaking down the project into smaller phases gives a better control of operating processes and ensures quality of work.

Source : The Times of Group (Bangalore)

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Santosh Kenchaamba

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