Trickle of customers has builders bending backwards
Swaha Sircar | TNN
Hyderabad: It was after a lull of six months that a city builder witnessed a rare sight— a potential customer. Not having sold a single property in the last few months, the builder says he was in no mood to take any chances. So, he brushed aside his marketing manager, flashed his best smile, fished out the brochure and gave his best performance. And, as luck would have it, he got a chance to repeat the same act two days later. Two sales in a week, he now beams, are a “positive sign’’ and hopes that these are signs of things to come.
City builders agree. They say after State Bank of India cut its floating home loan rate, which was soon followed by several other banks, they have finally seen a trickle of buyers who had turned elusive over the last few months. Builders, who would routinely send their marketing teams to meet clients and net deals, are now doing the needful themselves.
Anand Reddy, executive director, PBEL, says that while earlier customers had to approach the builders, now “we are going to them’’. “We are making ourselves available 24X7 and trying to establish a comfort level with them, sharing details on home loans and the banks they could approach,’’ Reddy says.
Besides, tapping new customers is the mantra for most builders now as they are now approaching individual entrepreneurs and those in businesses other than IT.
But the excitement of receiving customer calls is evident. “Just today (Tuesday) I met a client who is on the verge of buying property and is looking for the right bank to take a loan from,” says Anwar Pasha, general manager, Sillicon Property Dealers, his excitement palpable over the phone. He shares that he is making personal visits now as against talking to potential customers over the phone. “I now have a one-on-one interaction with them,’’ he says.
Most builders are giving out each and every detail of the property they are developing in the fond hope that at least one detail would woo the customer. C Shekhar Reddy, president of Builders’ Forum, says that builders in the city over the last two weeks have suddenly seen some increased activity after a period of gloom and predictably, wouldn’t want such consumers to look any other way and grab their full attention.
Several real estate firms in the city had started downsizing over the last few months with much of their activity coming to a standstill. Construction activity of many upcoming projects had stopped and their phones had stopped ringing. Some builders had started placing advertisements explaining the downward economy and how it was the right time to buy property.
But consumers were clearly not convinced and what could eventually stir them was the drop in home loan interest rates.
Prem Kumar head of Doyen Constructions says that after a lull in the real-estate market the reduction of interest rates have brought some much needed cheer to the sector. “People want to take advantage of the situation and a number of buyers who had temporarily put their plans of purchasing property on hold, are now approaching real estate agents,” he says.
Shekhar Reddy notes how the high interest rates in the last few months had led to buyers thinking twice before availing of loans. “We were expecting a cut in home loan rates by March or April but fortunately the banks decided to reduce their rates earlier than expected,” says Reddy, adding that with builders lowering their property prices and interest rates declining conditions have become more balanced and conducive for buying.
However, some like Ashwin Rao, director of Manbhum Constructions is not too hopeful, with many private banks that control a large chunk of the home loan sector not slashing interest rates yet. “The rate cuts are uneven and even SBI’s move to increase demand is not adequate to encourage customers. And even though property prices have fallen they haven’t decreased at the rate that customers were expecting, so it is not going to bring a great change in the market,’’ he predicts.
Supermarkets shut shop, face rent crisis
Roli Srivastava | TNN
Hyderabad: It is not just Subhiksha but several retail chains that are reeling under the recession. Over the last few months, about 30 supermarkets have shut shop in the city. All the outlets were part of big retail chains, that decided to pull down shutters on these outlets to cut costs.
Senior officials of supermarket chains say they are faced with a 15 to 20 per cent dip in footfalls, budgeted spending and worse, rents they can ill-afford now. In addition, manufacturers of various FMCGs slashing retail margins is further choking the industry, they say.
Hyderabad, like other cities in the country, saw a rash of supermarkets over the last few years. Last year alone, over a 100 new outlets came up in the city, some of them in malls while others as stand alone stores. Industry observers note that this (malls coming in the last year) played a major role in landing retailers in this big problem they are faced with now. “Rents were peaking last year. The average rate was Rs 100 to Rs 165 per sft, depending on the location. Add to that 12 per cent service charge on the rentals,’’ says a retailer, explaining how it has become difficult to sustain these outlets when the average bill amounts of consumers have dropped significantly.
Now, officials of various retails chains are re-negotiating rents with the property owners and according to sources some are seeking a relief of 50 to 60 per cent on their rents.
Samar Singh Shekhawat, vice president (marketing), Spencer’s, that has closed 55 to 60 outlets across the country, explains that rents have fallen by 30 to 40 per cent in Tier II cities and by 15 per cent in Tier I. However, in most cases property owners are in no mood for negotiating the rents, forcing many to close down some outlets. “Most landlords are in denial,’’ he says, adding that retailers are now trying a “partnering’’ approach with them.
Nevertheless, no retailer is treading into malls anymore. “In fact, some stores located in malls have already shut shop,’’ says an industry insider, referring to an outlet in a mall at Banjara Hills that pulled down shutters recently. Industry experts note that mall space doesn’t come for anything less than Rs 100 per sft which is clearly unaffordable in these times.
There is also a lot of ‘rightsizing’ happening and this is not related to the manpower strength. “A 10,000 square feet store, for instance, is being rightsized to about 7,000 sft with officials seeking permission from the property owners to sublet the remaining portion,’’ says a retail industry source.
Industry observers say that chains expanded blindly over the last couple of years and now are faced with the problem of managing logistics. “There would be four supermarkets in one stretch of road alone. There was obviously no analytical thinking done on their sustainability,’’ says a senior industry expert.
Heads of retails chains say it’s not the rent alone but the dip in sales that has left them gasping. “Even during festivals such as Sankranti, sales weren’t as anticipated,’’ says Sriram Kakkera, CEO, Magna. While he notes that the retail sector is confident on basic product (groceries) sales, in other sectors such as apparel the industry is working on a “hand to mouth’’ business model. “We are curtailing our purchase cycle and purchasing stock as required,’’ Kakkera says.
However, even in groceries consumers are giving big brands the go by. “Consumers are cutting down on premium goods such as high cost shampoos, deodorants, high value cereals. The sale of cheaper varieties is gradually going up,’’ says Sandeep Agarwal, managing director, Ratnadeep Supermarket. And the drop in sales of products such as health drinks has manufacturers slashing retail margins.
While most retailers say that the check in inflation hasn’t checked prices of goods such as pulses, Samar Singh Shekhawat of Spencer’s tries to be optimistic. He says that Spencer’s may have shut down 55 to 60 nonviable stores across the country, but it added four hyper stores in January alone. Besides, he notes the business is now “leaner, fitter and more focussed’’.
Strikes, bandhs are part of right to freedom of expression: SC
Dhananjay Mahapatra | TNN
New Delhi: The Supreme Court on Tuesday termed bandhs as legitimate means of expressing people's feelings in a democracy, reversing a trend judiciary has followed since 1997 when it had come down hard upon political parties for causing inconvenience to public by forcing shutdowns.
The volte face, which will be celebrated by a political class which had chaffed at judiciary's opposition to chakka jams, came when the court refused to ban the Chennai bandh called for Wednesday to protest against the killings of civilians in Sri Lanka's military campaign against LTTE.
The stark change of stand looked even more so because of the fact that the fresh position was outlined by a Bench headed by Chief Justice of India K G Balakrishnan. In 1997, the CJI was part of the Kerala High Court Bench which gave the landmark antibandh judgment. The judgment was upheld by the Supreme Court, setting the stage for similar rulings from other HCs.
The court scheduled a hearing on the petition against the bandh only for February 16.
On Tuesday, the Bench headed by CJI, and comprising Justices P Sathasivam and J M Panchal, observed that in a democratic country, everyone had the right to express their feelings: a remark that would be lapped up by political parties who never accepted judiciary's stand against bandhs.
The Bench was unmoved when Ajit Puduserry, appearing for petitioner J Satish Kumar, invoked the 1997 verdict of the Supreme Court.
Pudussery argued that the bandh call given by an umbrella organisation of political parties -- Sri Lankan Tamils' Protection Movement -- was a violation of the order that the apex court gave upholding the Kerala HC's slamming bandhs.
The line did not work. "What has this court to do with stopping strikes? India is a democratic state where everyone has a right to express their feelings," retorted the Bench.
Swaha Sircar | TNN
Hyderabad: It was after a lull of six months that a city builder witnessed a rare sight— a potential customer. Not having sold a single property in the last few months, the builder says he was in no mood to take any chances. So, he brushed aside his marketing manager, flashed his best smile, fished out the brochure and gave his best performance. And, as luck would have it, he got a chance to repeat the same act two days later. Two sales in a week, he now beams, are a “positive sign’’ and hopes that these are signs of things to come.
City builders agree. They say after State Bank of India cut its floating home loan rate, which was soon followed by several other banks, they have finally seen a trickle of buyers who had turned elusive over the last few months. Builders, who would routinely send their marketing teams to meet clients and net deals, are now doing the needful themselves.
Anand Reddy, executive director, PBEL, says that while earlier customers had to approach the builders, now “we are going to them’’. “We are making ourselves available 24X7 and trying to establish a comfort level with them, sharing details on home loans and the banks they could approach,’’ Reddy says.
Besides, tapping new customers is the mantra for most builders now as they are now approaching individual entrepreneurs and those in businesses other than IT.
But the excitement of receiving customer calls is evident. “Just today (Tuesday) I met a client who is on the verge of buying property and is looking for the right bank to take a loan from,” says Anwar Pasha, general manager, Sillicon Property Dealers, his excitement palpable over the phone. He shares that he is making personal visits now as against talking to potential customers over the phone. “I now have a one-on-one interaction with them,’’ he says.
Most builders are giving out each and every detail of the property they are developing in the fond hope that at least one detail would woo the customer. C Shekhar Reddy, president of Builders’ Forum, says that builders in the city over the last two weeks have suddenly seen some increased activity after a period of gloom and predictably, wouldn’t want such consumers to look any other way and grab their full attention.
Several real estate firms in the city had started downsizing over the last few months with much of their activity coming to a standstill. Construction activity of many upcoming projects had stopped and their phones had stopped ringing. Some builders had started placing advertisements explaining the downward economy and how it was the right time to buy property.
But consumers were clearly not convinced and what could eventually stir them was the drop in home loan interest rates.
Prem Kumar head of Doyen Constructions says that after a lull in the real-estate market the reduction of interest rates have brought some much needed cheer to the sector. “People want to take advantage of the situation and a number of buyers who had temporarily put their plans of purchasing property on hold, are now approaching real estate agents,” he says.
Shekhar Reddy notes how the high interest rates in the last few months had led to buyers thinking twice before availing of loans. “We were expecting a cut in home loan rates by March or April but fortunately the banks decided to reduce their rates earlier than expected,” says Reddy, adding that with builders lowering their property prices and interest rates declining conditions have become more balanced and conducive for buying.
However, some like Ashwin Rao, director of Manbhum Constructions is not too hopeful, with many private banks that control a large chunk of the home loan sector not slashing interest rates yet. “The rate cuts are uneven and even SBI’s move to increase demand is not adequate to encourage customers. And even though property prices have fallen they haven’t decreased at the rate that customers were expecting, so it is not going to bring a great change in the market,’’ he predicts.
Supermarkets shut shop, face rent crisis
Roli Srivastava | TNN
Hyderabad: It is not just Subhiksha but several retail chains that are reeling under the recession. Over the last few months, about 30 supermarkets have shut shop in the city. All the outlets were part of big retail chains, that decided to pull down shutters on these outlets to cut costs.
Senior officials of supermarket chains say they are faced with a 15 to 20 per cent dip in footfalls, budgeted spending and worse, rents they can ill-afford now. In addition, manufacturers of various FMCGs slashing retail margins is further choking the industry, they say.
Hyderabad, like other cities in the country, saw a rash of supermarkets over the last few years. Last year alone, over a 100 new outlets came up in the city, some of them in malls while others as stand alone stores. Industry observers note that this (malls coming in the last year) played a major role in landing retailers in this big problem they are faced with now. “Rents were peaking last year. The average rate was Rs 100 to Rs 165 per sft, depending on the location. Add to that 12 per cent service charge on the rentals,’’ says a retailer, explaining how it has become difficult to sustain these outlets when the average bill amounts of consumers have dropped significantly.
Now, officials of various retails chains are re-negotiating rents with the property owners and according to sources some are seeking a relief of 50 to 60 per cent on their rents.
Samar Singh Shekhawat, vice president (marketing), Spencer’s, that has closed 55 to 60 outlets across the country, explains that rents have fallen by 30 to 40 per cent in Tier II cities and by 15 per cent in Tier I. However, in most cases property owners are in no mood for negotiating the rents, forcing many to close down some outlets. “Most landlords are in denial,’’ he says, adding that retailers are now trying a “partnering’’ approach with them.
Nevertheless, no retailer is treading into malls anymore. “In fact, some stores located in malls have already shut shop,’’ says an industry insider, referring to an outlet in a mall at Banjara Hills that pulled down shutters recently. Industry experts note that mall space doesn’t come for anything less than Rs 100 per sft which is clearly unaffordable in these times.
There is also a lot of ‘rightsizing’ happening and this is not related to the manpower strength. “A 10,000 square feet store, for instance, is being rightsized to about 7,000 sft with officials seeking permission from the property owners to sublet the remaining portion,’’ says a retail industry source.
Industry observers say that chains expanded blindly over the last couple of years and now are faced with the problem of managing logistics. “There would be four supermarkets in one stretch of road alone. There was obviously no analytical thinking done on their sustainability,’’ says a senior industry expert.
Heads of retails chains say it’s not the rent alone but the dip in sales that has left them gasping. “Even during festivals such as Sankranti, sales weren’t as anticipated,’’ says Sriram Kakkera, CEO, Magna. While he notes that the retail sector is confident on basic product (groceries) sales, in other sectors such as apparel the industry is working on a “hand to mouth’’ business model. “We are curtailing our purchase cycle and purchasing stock as required,’’ Kakkera says.
However, even in groceries consumers are giving big brands the go by. “Consumers are cutting down on premium goods such as high cost shampoos, deodorants, high value cereals. The sale of cheaper varieties is gradually going up,’’ says Sandeep Agarwal, managing director, Ratnadeep Supermarket. And the drop in sales of products such as health drinks has manufacturers slashing retail margins.
While most retailers say that the check in inflation hasn’t checked prices of goods such as pulses, Samar Singh Shekhawat of Spencer’s tries to be optimistic. He says that Spencer’s may have shut down 55 to 60 nonviable stores across the country, but it added four hyper stores in January alone. Besides, he notes the business is now “leaner, fitter and more focussed’’.
Strikes, bandhs are part of right to freedom of expression: SC
Dhananjay Mahapatra | TNN
New Delhi: The Supreme Court on Tuesday termed bandhs as legitimate means of expressing people's feelings in a democracy, reversing a trend judiciary has followed since 1997 when it had come down hard upon political parties for causing inconvenience to public by forcing shutdowns.
The volte face, which will be celebrated by a political class which had chaffed at judiciary's opposition to chakka jams, came when the court refused to ban the Chennai bandh called for Wednesday to protest against the killings of civilians in Sri Lanka's military campaign against LTTE.
The stark change of stand looked even more so because of the fact that the fresh position was outlined by a Bench headed by Chief Justice of India K G Balakrishnan. In 1997, the CJI was part of the Kerala High Court Bench which gave the landmark antibandh judgment. The judgment was upheld by the Supreme Court, setting the stage for similar rulings from other HCs.
The court scheduled a hearing on the petition against the bandh only for February 16.
On Tuesday, the Bench headed by CJI, and comprising Justices P Sathasivam and J M Panchal, observed that in a democratic country, everyone had the right to express their feelings: a remark that would be lapped up by political parties who never accepted judiciary's stand against bandhs.
The Bench was unmoved when Ajit Puduserry, appearing for petitioner J Satish Kumar, invoked the 1997 verdict of the Supreme Court.
Pudussery argued that the bandh call given by an umbrella organisation of political parties -- Sri Lankan Tamils' Protection Movement -- was a violation of the order that the apex court gave upholding the Kerala HC's slamming bandhs.
The line did not work. "What has this court to do with stopping strikes? India is a democratic state where everyone has a right to express their feelings," retorted the Bench.
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