Property companies are expediting projects, or cutting down on project completion time, by nearly 20 per cent in an attempt to realise value and overcome the liquidity crunch.
Companies that earlier took 36 months on housing projects are now completing them in around 30 months by boosting efficiencies and using modern technology.
Commercial project developers are going a step further, completing projects in 17 months instead of 24.
In some instances, mainly in smaller commercial buildings, developers are trying to cut down the project completion time to a mere 9 months.
Take Mahindra & Mahindra's upcoming special economic zone in Jaipur. The company has squeezed the construction time for a commercial building to nine months from the normal 12-15 months.
It began the construction of a four-storey building in November last year and has already completed two floors with complete fit-outs that already house a BPO unit.
Less than 100 metres away, the IT major Infosys is building a five-storey building that will house a 3,200-seater BPO. The contractor started the construction activity in July and two floors could be ready by the month-end.
Sumit Arora, vice president of the Pune-based DS Kulkarni Developers, said, "There is a lot of pressure from customers. Everybody has seen the world. You have to be on your toes and complete projects, lest buyers go to others.''
The company expects to complete its upcoming housing projects in Pune, Mumbai and Bangalore in 18-20 months instead of the usual 24-28 months.
The construction work of DLF and Indiabulls in Mumbai, Parsvnath (Delhi) and Sobha (Bangalore) is progressing even during the monsoons. "Even if we cut the construction time by two months, we will save up to 20 per cent on labour and preliminary expenses, although the material costs remain the same,'' said JC Sharma, managing director of the Bangalore-based Sobha Developers, which is the main contractor for Infosys.
Sobha has prepared its own construction manual, an amalgamation of Bureau of Indian Standards and DIN (German Standards), which talks about the dos and don'ts of construction.
Methods, safety-codes, tools and processes are photographed and filmed to show how construction could be speeded up. The company has also set up an in-house training school to train engineers, masons and architects on new technologies, processes and systems.
The Hyderabad-based Indu Projects uses modular construction in housing projects, cellular lightweight concrete blocks in building walls and beam-less slabs in commercial buildings to save on time and costs. These products save 25 per cent to 30 per cent time for the developer.
Faster project completion helps in realising funds quicker from the customers. "If you complete projects early, you can collect money faster from the customers and improve the turnover as payments are directly related to completion,'' said Sharma.
The main reason for the faster turnaround of projects is the decline in property sales by over 30 per cent in the last six months across Mumbai, national capital region and other regions, which were the main revenue streams for the developers.
To add to woes, the prices of cement, steel and labour, which account for more than half of the input costs, have risen 50 per cent over the last one year, putting pressure on developers' margins.
Construction costs, which vary from city to city, are growing 20-25 per cent every year, said industry experts.
