Radical & Disruptive Residential Brokerage
Former Chairman and Country Head of JLL and now the Chairman of Anarock Property Consultants Anuj Puri is set to disrupt the Indian residential property market. In an informal interview with Sapna Srivastava, he explains the multi-pronged approach of the new venture.
Anuj Puri joined JLL in 2007 when his company Trammell Crow Meghraj (TCM) merged with the Indian arm of the global real-estate services firm JLL. This year, he announced the launch of Anarock Property Consultants Pvt Ltd, essentially re-branding JLL’s erstwhile residential brokerage business which he had acquired recently. Simultaneously, Puri announced the firm’s real-estate investment and fund platform, which will invest Rs 300 Crore in residential real-estate projects.
Thus, starting as an entrepreneur way back in 1995 with Chesterton Meghraj Property Consultants, Puri has come a full circle being an entrepreneur again. Commenting enthusiastically he said, “After 10 incredible years at JLL, it is now time to move on to become an entrepreneur again.My tenure at JLL was the highlight of my professional career and still there is a definite emotional involvement. The launch of Anarock was long on the charts and very much part of my plans for the future. It is conceived to simplify residential real-estate transactions through an effective mix of online and offline strategy. The name “Anarock” is derived from the combination of mathematical term “Ana” meaning 4 to denote four ethos of the organization,ethics, integrity, trust and transparency and ‘Rock” denoting confidence & stability and property in the literal sense.”
In fact, he feels it is a new learning curve for him as he moves on from B2B property transactions into the gamut of B2C property broking system. “This is a new way of doing business and working for me. Though the developer clients remain the same with whom I have a long standing relationship, the profile of the buyers has changed from corporate to end-customer,” Puri added.
Reasons for foray into residential brokerage market
“The current B2C residential brokerage sector lacks trust and transparency. Given the RERA provisions, I would say that 90 per cent of the brokers will not be able to qualify. Only 10 per cent of the brokers will be able to get registered with RERA which offers a huge opportunity for a professional organized player like us to be the advisors in the middle and bridge the gap between the developer and the end-customer.
With strict regulation of RERA on anvil, developers too want a reliable broker who would not overstate or falsely represent their projects that may lead to legal implications for them.The mismatch between the demand for housing and the supply from the developer due to lack of confidence in the broker is another reason for players like us to enter the market and bring in reliability factor.
Thirdly, the residential property market in India is maturing and this is the right time for us to be present here. I feel that year 2017 onward we are going to see the buyers getting more informed and aware of their rights and responsibilities. It will take a few years more but, consumers already are wary of fly by night operators and would rather prefer corporate and institutionalized residential service provider.
Lastly, the current home buyers search properties through online portals which do not offer end to end services to the customer. Their business model is to generate leads and sell the same. Anarock offline service and interaction through its own in-house team will address the offline transaction gap.”
The residential property sector is at the cusp of a major sea-change. On one hand, it has just begun recovering from a prolonged slowdown on account of muted sentiment and on the other the implementation of RERA and the Government’s determined push for affordable housing is boosting the revival curve. Only credible players who are duly registered with RERA and are thereby accountable for their business practices will have a foothold in the industry.
Services to be provided under Anarock Property Consultants umbrella
Talking about the company’s service portfolio, Puri explained the multiple real-estate service verticals that it will cover. “We will provide regular residential advisory services with zero brokerage charges for the customers and 2-7 per cent from the developers depending upon the services they require from the company. The firm will operate a revolutionary business model of bulk-purchasing residential apartment inventory through a proprietary investment fund. The ticket size of the properties will range from 50 Lakhs to 3 Crore. The buyers in this segment search properties online but want to close transaction offline. Our skilled in-house team will help clients close the deal and thereby offer end to end service from digital to delivery.
Anarock will also provide debt, equity and mezzanine funding to residential developers. Our Investment and Fund platform, which is targeting a capitalization of USD 500 million by 2020, currently houses two funds. ROF-I, with its recent investments fully deployed at INR 161 crore. It has already demonstrated successful exits. ROF-II, for which INR 300 Crore were raised in 2016, will invest into meaningful residential assets from an existing pipeline and its deployment will commence as soon as it completes the last leg of regulatory requirements.”
Anarock’s radical residential brokerage model fully enables supply, demand and discovery through a digital platform, with transactions facilitated offline via highly-trained real estate experts.
Appointment of Rahul Yadav as Chief Product & Technology Officer
According to Puri, taking on board Rahul is in line with the company’s highly technology-driven orientation and business model for its residential advisory services. He said, “So far, the real-estate sector has not been able to emulate the success of ecommerce for consumer durables and services. We intend to change that, and Rahul Yadav’s experience in harnessing the consumer housing market via technology will add the key element. Rahul has deep understanding of the real-estate residential product and at the same time is highly aware of technology and algorithms that go in building a user friendly technology platform. Considering the Anarock main business is brokerage, he is constructing the online portal, technology systems and mobile apps for the team from consumer’s point of view, starting from the grassroots and moving up.The model pioneered by us will now be backed with a robust technology infrastructure, in the building of which Rahul is instrumental.”
Indian residential buyers and investors will not embrace an ecommerce model of property purchase unless they get a seamless experience from online selection to offline advisory and transaction closure.
The business strategy and the journey ahead
The company which has been on-going since 2012 when it was known as JLL Residential changed the branding and the business strategy from March 2017. Currently, it has 500 employees and the organizational strategy is to add about 80 people a month across Mumbai, Chennai, Hyderabad, Bengaluru, Kolkata, Gurgaon, Delhi and Noida. The organisationis also entrepreneurial in nature and believes in offering lucrative commission to encourage productivity, but also provide quality remuneration so as to discourage unethical selling to earn high commissions. This is one of the reasons for not appointing franchisees. Also, Anarock digital portal is not a competition for other much older online property portals. In fact, the company will be buying leads from other portals to pursue offline as the company focus will be on offline business transactions.
Puri with an excellent career span of 22 long years in the real-estate sector feels that there will be new challenges to overcome given the completely different set of buyer profile to service, “Residential market is eight times the size of office market and will continue to grow. In a B2C model, the training needs for the workforce are very different. The distribution network that is required is far more expansive than for a B2B model. Also, the B2C transactions are lesser in value but volumes of these transactions are huge. To handle large volumes of transactions in a highly regulated and compliant market post RERA and GST will be a challenge.”
However Puri opines that his long standing knowledge of developers and their professional history and projects track record will come in handy. As he states that the company’s internal committee decides screens the developers before taking on board based on their past history, approvals status, RERA compliance & registrations, financial stability, quality of projects and timely deliveries.
Concluding the conversation on an optimistic note Puri feels that the residential property segment is gradually moving towards maturity. Going forward it will see residential products designed in sync with customer buying capacity and land prices dropping to create rationally priced residential projects that can cater to the large bandwidth of customers.