The Indian real estate sector is undergoing a significant shift in capital allocation, driven by the integration of advanced technologies, particularly artificial intelligence (AI). These technological advancements are fundamentally transforming how projects are monitored and financed, broadening the scope for investment opportunities, especially for mid-sized developers.
Historically, capital in the real estate sector was concentrated among a select group of developers, primarily due to institutional investors’ reliance on proven track records and established reputations. However, the advent of AI-based project monitoring systems is now democratising access to finance by providing enhanced transparency and operational efficiency, thereby mitigating risks associated with investment.
“Technology is pivotal in reshaping capital allocation within the Indian real estate industry. By improving risk management, enhancing transparency, and streamlining operational efficiency, these innovations are opening new avenues for mid-sized developers and fostering a more sustainable industry,” remarked the Chairman and Managing Director of Dosti Realty. AI’s influence extends to generating precise cash flow projections and profitability reports, which facilitate more informed investment decisions. The Managing Director of TruBoard Partners highlighted that AI-driven sales analysis tools offer a high degree of accuracy in forecasting future sales by analysing historical data and market trends. This capability provides investors with a clearer picture of a project’s potential returns, thereby reducing perceived risks and making mid-sized developers more attractive investment prospects.
Despite the promising nature of many mid-sized projects, securing funding has traditionally been challenging due to perceived risks associated with their smaller scale and lesser market presence. The Founder and CEO of Integrow Asset Management, which utilises its proprietary real estate monitoring platform Arjava, noted that technological advancements are now enabling these developers to access capital that was previously out of reach. This shift not only enhances project diversity but also supports the growth potential of mid-sized players in the sector. AI-based monitoring systems offer real-time, data-driven insights into project performance, tracking costs, progress, and future expenses with precision. This technology is reducing project monitoring costs from 7-8% to as low as 4%, improving profit margins and preventing projects from becoming distressed assets.
Furthermore, digitisation is streamlining key processes such as home buyer NOC issuance and project expense approvals, reducing manual errors and expediting project timelines. The increased transparency and speed of updates provided by these technologies are ensuring more effective and timely interventions by stakeholders. Overall, the integration of AI and advanced technologies is not only enhancing investor confidence but also driving efficiency and cost-effectiveness in the Indian real estate sector, heralding a new era of capital allocation and project management.
