In a show of unity, real estate developers across the country have joined hands and decided to source raw material supplies in bulk from manufacturers at preferred rates. This initiative is a cost saving measure and will help the industry tide over the tough business environment brought in by the COVID-19 pandemic.
To begin with the bulk procurement will be for tiles, bathroom fittings, elevators, pipes, cables and electric fittings. Cement and steel manufacturers will not be part of the arrangement.
It is not only the large developers that will benefit from the initiative, but also the small and mid-size developers that will gain cost efficiency. It is estimated that the decision to source raw material supplies in bulk will result in at least 5-7% cost benefit to the developers and in turn the homebuyers.
Buoyed by the success the developers in Pune got by purchasing the materials in bulk, realtors body is now looking at taking this forward to more than 200 cities across the country. According to the president of CREDAI National, the plan is to execute the initiative at city and regional levels and pass on the cost benefit to the homebuyers. “The idea is to connect the disconnected and derive benefits for all. This will ultimately help in pushing demand and the economy as a whole due to the multiplier effect real estate has on over 250 sectors and ancillary businesses,” said Niranjan Hiranandani, president, NAREDCO.