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Massive developer consolidation in top nine cities
Real Estate

Massive developer consolidation in top nine cities

There has been a massive developer consolidation in the top nine cities in India, with over 50 per cent of the total developers that existed in 2011-12 leaving the market by 2017-18, according to PropEquity Research.

Consolidation of developers in Gurugram, Noida, and Chennai has been to the tune of 70 per cent since 2011 to date. A considerable reduction in the total number of developers by over 65 per cent was also witnessed in Kolkata and Bengaluru in the past six years. The total number of projects launched across the cities also declined substantially during the same period.

As a result of this consolidation, the project share of the top 10 developers has increased across the cities from 2011 to 2018. The total number of projects launched by the top 10 developers in Gurgaon and Noida today stands at 55 per cent and 78 per cent, respectively, while in 2011, it was 28 per cent and 52 per cent. This clearly indicates that Noida and Gurugram have witnessed an increase of 27 per cent in the number of projects being launched by the top 10 developers since 2011. Samir Jasuja, Founder and Managing Director, PropEquity, says, “Consumers are now looking for developers with excellent track records in terms of quality and execution.”


Financial distress of small developers, lack of execution capability, oversupply of inventory, GST, demonetisation, excessive land banking, lack of understanding of demand-supply dynamics, unjustified price appreciation and lack of social and physical infrastructure in emerging markets are all distress-creating factors—and when they occur together, it is the perfect storm. 

Interestingly, this storm started building way back in 2010. Maximum launches in India were witnessed from 2010 to 2013, leading to a situation of high supply and consequent absorption being largely led by investors. “Today, the effects of this storm have led to the consolidation of developer numbers across India,” adds Jasuja. “The unorganised players have been unable to cope with these year-on-year mounting market issues with the final impact of RERA that insists on regulatory compliances.” 

There has been a massive developer consolidation in the top nine cities in India, with over 50 per cent of the total developers that existed in 2011-12 leaving the market by 2017-18, according to PropEquity Research.Consolidation of developers in Gurugram, Noida, and Chennai has been to the tune of 70 per cent since 2011 to date. A considerable reduction in the total number of developers by over 65 per cent was also witnessed in Kolkata and Bengaluru in the past six years. The total number of projects launched across the cities also declined substantially during the same period.As a result of this consolidation, the project share of the top 10 developers has increased across the cities from 2011 to 2018. The total number of projects launched by the top 10 developers in Gurgaon and Noida today stands at 55 per cent and 78 per cent, respectively, while in 2011, it was 28 per cent and 52 per cent. This clearly indicates that Noida and Gurugram have witnessed an increase of 27 per cent in the number of projects being launched by the top 10 developers since 2011. Samir Jasuja, Founder and Managing Director, PropEquity, says, “Consumers are now looking for developers with excellent track records in terms of quality and execution.”Financial distress of small developers, lack of execution capability, oversupply of inventory, GST, demonetisation, excessive land banking, lack of understanding of demand-supply dynamics, unjustified price appreciation and lack of social and physical infrastructure in emerging markets are all distress-creating factors—and when they occur together, it is the perfect storm. Interestingly, this storm started building way back in 2010. Maximum launches in India were witnessed from 2010 to 2013, leading to a situation of high supply and consequent absorption being largely led by investors. “Today, the effects of this storm have led to the consolidation of developer numbers across India,” adds Jasuja. “The unorganised players have been unable to cope with these year-on-year mounting market issues with the final impact of RERA that insists on regulatory compliances.” 

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