DLF buyers help to fix price
With an uncertain demand situation in the real estate industry, pricing practices are taking a novel turn. Realtor follows method similar to book-building in stock IPOs. Ruchi Hajela reports.india Updated: Sep 15, 2009 00:05 IST
With an uncertain demand situation in the real estate industry, pricing practices are taking a novel turn.
DLF, the country’s largest real estate company, is adopting a pricing model that resembles book-building in initial public offers (IPOs) of shares, using a process to test the market while pricing. Only the style is informal unlike in shares, in which a price band is set and formal offers are invited.
The company which earlier used to set property price internally is now surveying buyers to arrive at a price for forthcoming projects.
DLF’s authorised brokers and property consultants are collecting feedback from prospective buyers on what should be the price of a project by sending out mailers, text messages and in some cases, making personal visits.
“The purpose of the survey is to let us decide how many flats to launch and set good prices, which are attractive and value-for money,” said Rajeev Talwar, executive director at DLF. The company had for the first time conducted such a survey before launching the first phase of its Capital Greens project in West Delhi’s Shivaji Marg area in April this year.
It initiated the second such survey in mid-August for the next phase of around 1,400 apartments it plans to launch next week during the festive period.
Such surveys are going to be regular feature for upcoming residential projects, Talwar said. The results of the survey are expected by the end of the week and DLF is likely to launch the project at a premium of around 20 per cent, in the range of Rs 6,500-Rs 7,000 per square foot whereas it sold close to 1,400 apartments during the first phase at Rs 5,500 per square foot.