Real estate industry analysis strategic focus of a major real estate company

Abstract

The slowdown in global market was caused by the real estate bubble burst in USA. This slowdown engulfed almost the entire world and the Indian economy was not an exception. However, the Indian economy was shielded to a certain extent due to the government’s conservative actions. Still the effect was in felt and it led to some structural changes in the business environment. Real estate sector in India was also affected due to a great extent due to this global slowdown. Indian real estate industry is slowly and steadily recovering with changes in structure and focus of businesses. The recovery of the industry is happening with economic improvement which has been mapped with the help of the following parameters: GDP, employment rate and FDI. The real estate market too is taking its first steps albeit slow towards recovery. The residential segment is moving towards affordable housing. On the commercial front, inventory produced earlier is still driving the market. Due to high inventory, there is no increase in supply and rentals and capital values are currently seeing corrections across the country. We have focused on studying the corporate strategy of Sobha Developers Ltd. (SDL) during this meltdown period. The choice of company was narrowed down to SDL as it is one of the four major housing construction companies in the country. We have mapped the industry’s outlook in the near future with SDL’s current strategy in order to gauge whether they are on the right track. The primary focus for the project with respect to SDL’s strategy has been the commercial and residential sectors as they are concentrated only in these rather than in Retail.