Re-branding Realty
Gone are the days when a real estate brand in India was recognised by its sheer market size or sales performance and revenues.
Since many real estate companies are not listed on the stock exchanges, it is very difficult to know for sure their track record of performance and growth to establish their leadership.
Under the circumstances, Track2Realty’s annual Brand Report 2016-17 has developed a unique approach to rank real estate brands in the country, using a three-tiered process: 1) Culling information based on public domain, as most of the companies are not listed on the stock exchanges, 2) a 20-city survey of 10,000 respondents and 3) evaluation by a jury board of nine members from across the real estate industry.
The report took into account 10 metrics to evaluate the big guns of the real estate sector.
These were financial performance, investor confidence, execution capability and delivery of the projects, public perception, users’ experience, consumer connect with the builder, aspiration value of the brand, recall value of the brand, medial perception of the brand, and its employment worthiness.
This year’s fifth annual edition of the Rating and Ranking of Track2Realty Brand Report 2016-17, declared Bangalore-based listed Sobha as the top brand, which interestingly has retained its leadership position for a third year in a row.
The top nine brands in the descending order are Godrej Properties, Prestige Group, Puravankara, DLF, Oberoi Realty, Embassy Group, Brigade, Tata Housing and Lodha.
“This recognition has been extremely humbling for the entire Sobha family. We have been very conscious of our international quality products built to perfection and delivered on time. Sobha’s brand strength depends on our delivery excellence, which is an outcome of our unique integrated business model,” Ravi Menon, chairman at Sobha, said.
He adds: “This recognition reiterates our commitment and endorses that we have been able to improve on brand reputation in a challenging market environment and consolidate our positioning and competitive edge.”
Points out Ravi Sinha, CEO and managing editor at Track2Media Research: “Our methodology is very transparent to rate and rank real state players in the country,” the seven-year-old New Delhi-based company, told Financial Chronicle.
Branding is always intangible and cannot be measured in absolute terms. “So basically it is the perception about a given brand than the measurement in terms of tangible and absolute numbers. Moreover, in a business where the large universe of the companies are not listed and even debt not reported on the books, any metrics applied will not calculate it in absolute numbers,” Sinha points out.
It is therefore christened the Brand Perception Audit Report and not Brand Audit Report, since brand itself is all about perception, he says.
The rating and ranking of the companies is a collective experience and perception of the public at large and hence, the report factors in the public perception as the most important benchmark.
“Our jury board just evaluates what is already in the public domain and more, importantly, in the public perception,” Sinha says.
With public perception as their lodestar, the evaluation process takes into consideration the buyer experience of the brand and the aspiration aspect of the builder as well, he says.
In the last decade, the entry of the corporate conglomerates in the real estate business, which lacked the critical element of trust and transparency, forget brand equity, was widely perceived to change the business outlook of the sector. The common man believed their entry would increase transparency and trust quotient. This load of trust and business opportunity goaded many corporate houses into the non-core expertise area of real estate.
Thus, Godrej, Tata, Mahindra, Piramal, Shriram, Hero Group, Ambuja, Zandu-Emaami, Phoenix Mills, L&T and Shapoorjee Pallonji found happy hunting grounds, he points out.
In fact, he says because they are credible players in the areas of their expertise and command corporate goodwill, has actually earned them the seal of trust in real estate sector.
Thus, a homebuyer who has been cheated, harassed and humiliated by petty developers obviously found the corporate giants more professional and trustworthy.
A perception therefore gained ground in the last few years that these companies would be the brand leaders in the Indian real estate market.
“Since these corporate giants have spent years in the business of real estate and delivered a number of projects, it is pertinent to take stock of the performance of the brand,” Sinha says.
The larger issue today, he says, is whether these corporate groups have replicated the consumer satisfaction index of core areas of expertise into the real estate business.
Even more pertinent is the question whether the corporate conglomerates have finally arrived as brand leaders of the Indian real estate.
“And it is here that the issue of brand optimism verses the brand performance on the ground comes into play,” notes Sinha.
The fact of the matter, he rues, is that many of these corporate groups have either failed to live up to the consumer satisfaction or are yet to deliver a sizable inventory to be awarded the leadership mantle.
“Godrej Properties is the only exception that has continuously scaled up the brand leadership with both the delivery performance as well as the consumer satisfaction with the delivered projects,” Sinha says.
Tata Housing, on the contrary, fails to live up to the brand promise. “The company is sitting over piles of consumer grievances and the chart is growing northward with their brand leadership chart moving southward. If they still manage to be in the top leadership chart, the credit goes to other bigger defaulters in the business. The brand study is, after all, relative study about the performance of the brands,” Sinha points out.
The latest report has noted that the performance of the homegrown developers with core expertise in the business of real estate has a slight edge over the corporate conglomerates, which do not have real estate as a core business. Most of these corporate giants are actually leveraging their brand goodwill and financial clout to the distressed small developers in the country.
For this year’s brand leadership, the race was pretty close between the real estate-focused group Sobha and Godrej Properties.
As a matter of fact, says Sinha, Godrej Properties has been ahead of Sobha on some metrics like financial performance, among others, but in the end it is the vote of consumer confidence that elevated Sobha as the brand leader of the year.
“As a matter of fact, Sobha created history by becoming the first real estate developer to make a hat trick of brand leadership this time around,” Sinha says.
Before Sobha, only DLF could manage to be at the top brand leadership for two consecutive years in 2012-13 and 2013-14.
The report also pointed out that it is not the brand leadership of Sobha alone that makes the turf more promising for the developers who have real estate as core business. The performance of Prestige Group or Purvankara this year is also testimony to the fact that the developers with core expertise in real estate have an edge over the corporate, who are by and large, yet to turn their promise into performance.
Michael Gonsalves