Investing in branded land? Here’s what you should know
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Purchasing branded land is emerging as one of the most viable investments today.
Authored by Samujjwal Ghosh
Purchasing branded land is emerging as one of the most viable investments today. Investors have become wary of equity markets and commodities, owing to the higher risks, volatility, and uncertainty due to the pandemic. Those looking at long-term stable options may find land as the most rewarding investment choice in the current scenario.
However, there exist certain apprehensions and preconceived notions about land purchases that can be addressed by gaining a better understanding of the current reality, as well as the opportunities available in the sector.
Challenges with land buying in India and how branded land is addressing the need-gap
Investment in land is usually considered a risky and tedious process due to the lack of transparency on title approvals, ownership, the legality of land use, etc. Substantial time and effort are required to be invested in understanding these modalities.
Before making the purchase, buyers must also possess knowledge about the future value of land which, in turn, necessitates a keen understanding of insights such as current and future infrastructure development, etc. Perceiving the entire process as complicated and time-consuming, retail investors and first-time buyers remain hesitant to make a financial commitment
However, land as an asset class can create incredible and lasting value, if done right. Historically, Indians have experienced blockbuster gains by getting land investments right and along with gold, there is always an unstated large affinity to this asset class.
At an aggregated level, most profits of real estate developers had resulted from visionary identification of future-value land acquisition at extremely attractive prices and holding them for a reasonable period of time to subsequently monetize it to generate huge value.
Branded land is the answer to address the need gap in the current market. Banded Land can create significant business and consumer value through a thorough, scientific and customer-centric way of approaching the retail franchise of land business.
Another point of contention with purchasing land has been the fact that such investments are largely illiquid. During uncertain times, it is immensely difficult to sell/liquidate landholding if the documentation, approvals, 7/12 extracts, etc. are not in order. In case the holding is of agricultural land, there is no transparent mechanism to evaluate the real tradeable value.
Therefore, it is always advisable to buy non-agricultural land if the objective is an investment.
Investors who possess branded land have a more holistic advantage when it comes to liquidating the asset. Branded land by definition is completely title-assured, legally and physically secure. In addition to this, the physical location of the asset is of extreme value.
With rapid urbanization and a focus on creating more smart cities, the areas surrounding major cities will see a huge increase in value in the next five to ten years. In view of this, one can expect a further shift towards buying land in suburban locations with accessibility to the city, and yet away from the stressful, crowded and increasingly busy life that is starting to plague city dwellers. With gradual acceptance for work from home, proximity to the place of work is no longer a concern and this is only further incentivizing the urban dweller to take the leap of building their own home in plotted land developments.
With the buyer realizing there is no need to restrict themselves to 5-6 major cities when it comes to real estate investments, there is scope to move towards exciting locations and consider vacation homes in scenic locations. The prospect of designing and building a home from scratch is also an incredibly attractive prospect for buyers.
Since these locations are still up and coming, the increase in value will definitely see a compounded effect 10-15 years down the line once infrastructure developments and businesses shape up in these areas.
Owning a branded land also unlocks a transparent and legally sound process of purchase or resale as it is backed by brand value and trust. With documentation, legal processing and financials all streamlined, there is little to no scope of something being amiss, making the entire process vastly stress-free.
Land parcels, especially those meant as investments, are often purchased in areas where customer accessibility is either low or limited. As owner visits become less frequent, the property can fall into disrepair because the retail customer does not have any visibility on the present condition of the land/development. Moreover, if such plots are not protected, they are at a high risk of encroachment and become the subject of protracted legal battles;
Purchasing branded land takes care of these security and maintenance-related concerns. Customers have easy access to planned and pre-cut plots as well as tech-driven solutions that can help them to assess the land and its current situation remotely. The developers also provide the required security to protect the property from encroachment, along with world-class amenities and services, enabling customers to avoid the unnecessary expenditure on resources, time, and energy to protect and maintain their property.
Branded Land and the democratization of land buying
With well-known developers bringing their brand equity and trust to the game, land buying is no longer a dreadful purchase, riddled with red tape and mistrust that it was once considered. Codename B.L.I.S.S from the House of Abhinandan Lodha, at Dapoli is one such example where they have democratized land buying, by streamlining the entire process. The ease of purchase was to the extent that could actually buy branded land online. The buyer didn’t need to leave the comfort of their home and could register remotely. There are options of different sizes, views, and proximity to amenities available for the buyer to choose from. Developers are also providing the service of empaneled architects and contractors helping buyers with construction, unburdening the buyer from the hassle of searching and convincing professionals to travel to these locations.
Additionally, developers are helping build communities for branded land owners to co-habit, by providing not only the basic infrastructural inputs of electricity, water, and security, but also amenities like community centers, recreation zones, gyms, restaurants, retail outlets, common gardens etc. which are aesthetically designed, keeping a larger architectural theme at the heart of the development.
Land being a finite asset, branded land only makes the proposition a must have for anyone looking to invest in real estate. Branded land makes owning property simple, and risk, and hassle-free. We’re now seeing Indian and global investors eyeing this offering as an investment with massive potential.
Samujjwal Ghosh is Director at Xanadu Realty. Views are personal
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