Solving Real Estate Contractor Challenges Positively

Real estate developers in India are facing significant challenges in securing the right contractors for construction projects, as the number of housing unit launches has surged. The quarterly launches in the top seven cities have doubled to approximately 125,000 units, compared to 60,000 before the COVID-19 pandemic. This increase in demand has prompted developers to enhance their in-house capabilities and engage global contractors to avoid delays and ensure quality delivery.

Current Industry Challenges

Anuj Puri, chairman of Anarock Group, highlights the difficulty developers face due to the ongoing government infrastructure projects and the rapid advancement of construction technology. These factors contribute to the real estate contractor challenges, making it difficult to find contractors who can deliver quality projects using the latest technology within the required timeframes.

According to Anarock data, the number of housing units launched in the top seven cities was 236,000 in 2019, which decreased to 127,000 in 2020 due to the pandemic. However, the numbers rebounded to 236,000 in 2021, 357,000 in 2022, and reached a record high of 445,000 units in 2023. The trend is expected to continue, with projections suggesting the number will exceed 500,000 units this year.

Strategies for Overcoming Challenges

To address these real estate contractor challenges, developers are adopting various strategies:

• In-House Capabilities: Companies like Trehan Iris are boosting their in-house construction capabilities to maintain control over project execution and ensure high standards and timely delivery.
• Global Contractors: TARC Ltd has appointed the Arabian Construction Company for its luxury residential projects in Delhi and Gurgaon, emphasizing the importance of experienced contractors in overcoming real estate contractor challenges and delivering high-quality developments.
• Construction Technology: Some developers are partnering with construction tech companies to leverage advanced technologies for efficient project management.

Focus on Skilling and Regulation

The Confederation of Real Estate Developers Associations of India (Credai) emphasizes the need for skilling workers and developing a regulatory framework to improve construction quality and speed. Manoj Gaur, president of Credai-NCR, argues that skilling the labor force is a long-term solution to the real estate contractor challenges, as relying on foreign contractors is only a temporary measure.

Conclusion

As the construction industry remains the largest employer of unskilled laborers in India, developers are increasingly focusing on enhancing their in-house teams and collaborating closely with construction partners. This approach ensures that sustainability goals are met, and projects are delivered on time without compromising quality.

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