Indian Real Estate Developers Struggle to Find Quality Contractors Amid Housing Boom
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Indian Real EstateHousing BoomConstruction IndustryContractorsAnarock GroupCredaiReal Estate NewsAug 21, 2024
Many developers are enhancing their in-house capabilities, engaging global contractors, and utilizing construction tech companies to mitigate these challenges. Industry experts emphasize the need for skilled local labor and effective regulatory frameworks to improve construction quality and speed.
TARC Ltd recently appointed Arabian Construction Company as the principal contractor for its luxury residential project TARC Kailasa in Central West Delhi and the upcoming TARC 63A in Gurgaon. Trehan Iris is also boosting its in-house construction capabilities and partnering with global contractors.
“It has indeed become challenging for developers to get the right contractors for their new projects. The fact that there are numerous government infrastructure projects underway doesn’t help,” said Anuj Puri, chairman of real estate services provider Anarock Group.
According to Anarock data, 2.36 lakh housing units were launched in the top seven cities in 2019, which dipped to 1.27 lakh in 2020 largely due to Covid and increased again to 2.36 lakh in 2021. The number rose to 3.57 lakh in 2022 and reached a record high of 4.45 lakh units in 2023. This year, it is expected to breach the 5-lakh mark.
Industry body Confederation of Real Estate Developers Associations of India (Credai) said that appropriately skilling workers and developing a regulatory framework for them is the key to improve quality and speed of construction. “India is a labour-intensive country, and the long-term solution lies only in skilling the labour and not availing services of foreign contractors as the latter, at best, could be a temporary measure and not the long-term answer to skill shortage,” said Manoj Gaur, president of Credai-NCR and chairman and managing director of Gaurs Group.
Construction industry is the largest employer of unskilled labourers in the country. Many developers are now beefing up their in-house teams to have more control over projects. This move allows them to maintain high standards and greater control over project execution, ensuring that sustainability goals are met without relying solely on external partners.
A platform for contract manufacturing and projects, Mytek Innovations plans to raise $10 million from investors to triple its order book by FY25. Ishaan Singh, director at Gurgaon-based real estate developer AIPL, said securing the right contractor has become increasingly challenging amid a surge in launches.
“Builders are now more than ever focused on ensuring quality and timely delivery. It is crucial that the management is closely involved at every stage of the construction process to prevent delays and maintain the highest standards of quality,” he said.
Amar Sarin, managing director and CEO of TARC Ltd, said Arabian Construction Company with 50 years of experience is known for high quality developments and specialises in construction of high-rise buildings. “We want to bring the best consultants and engineers for our customers to deliver nothing less than the best,” he said. Pralayesh Guha, VP – project at Trehan Iris, said, “By prioritising collaboration and transparency with our construction partners, we aim to set new benchmarks for quality and efficiency in the industry.
Frequently Asked Questions
What is the current challenge faced by Indian real estate developers?
Indian real estate developers are facing a significant challenge in finding the right contractors for construction, resulting in delays and quality concerns.
How many housing units are being launched every quarter across top seven cities?
Approximately 1.25 lakh housing units are being launched every quarter across top seven cities.
What is the solution to improve construction quality and speed according to industry experts?
Industry experts emphasize the need for skilled local labor and effective regulatory frameworks to improve construction quality and speed.
Which company has appointed Arabian Construction Company as the principal contractor for its luxury residential project?
TARC Ltd has appointed Arabian Construction Company as the principal contractor for its luxury residential project TARC Kailasa in Central West Delhi and the upcoming TARC 63A in Gurgaon.
What is the expected number of housing units to be launched this year?
This year, it is expected to breach the 5-lakh mark.
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