Housing.com launches commercial vertical specialising in grade B properties
Housing.com, a digital real estate platform and one of the brands owned by the Australia-based Real Estate Australia (REA) Group, has launched a commercial real estate listing service, which will focus on offering grade B properties in the top eight cities in India, according to Dhruv Agarwala, Group CEO, Housing.com.
Speaking to businessline, Agarwala said the new vertical is expected to contribute around 20 per cent of the company’s total business over the next five years. Grade B properties are usually of ordinary design and offer basic space with fewer amenities compared to Grade A properties . These properties are often older and are considered more of a speculative investment than grade A properties.
In India, REA Group operates through REA India and has three brands that own leading digital real estate portals: Housing.com, Makaan.com, and Proptiger.com. It has around 1,700 people across all verticals.
Also read: Housing.com to hire about 200 people in FY23; to invest in technology, brand promotion
The move comes as REA reported a strong performance in the Indian market, with revenues for the first half of FY23 increasing by 48 per cent YoY to $36 million. Overall, the REA Group’s annual turnover amounted to $617.3 million, according to the company’s half-year results ended on December 31, 2022.
Further, financial year 2023 will be a year of peak losses, which means starting in FY24, it will see EBITDA losses decrease.
“We haven’t given any guidance yet in terms of when we are going to break even and turn profitable. So this is in terms of absolute numbers; in terms of margins, we’ve been improving year over year,” Agarwala said.
Also read: Housing.com enters co-living space
The platform will offer grade B properties — strata sales (sale of assets to retail or individual investors), floors, and retail establishments — not large malls and other such things. “These are more investment products for investors and properties for small-time business owners looking to rent a property. We’re not competing with International Property Consultants (IPCs) in the grade A segment,” he added. It has 100,000 commercial listings currently.
Given that the incremental cost to serve is not high and it does offer an additional product to its existing customers, Agrawala said, “It made eminent sense to enter this business. But having said that, it’s not going to be as significant as residential.” According to the latest data, it has an audience base of 19 million people across the country.
The CEO also noted that commercial real estate has been doing well and will continue to do well as the GDP increases and the economy matures; therefore, the growth potential is unquestionably substantial. The size of India’s commercial real estate market is estimated at $20.71 billion in the current year and is anticipated to register a CAGR of over 21 per cent during the forecast period, according to a report.
Mortgage vertical in the works
Additionally, the company also intends to launch a mortgage vertical on Housing.com, shifting from being a lead generation platform to one that actually originates the mortgage. “We have a common customer base for residential and commercial verticals and believe that we can leverage our existing customer base and consumer base to launch the mortgage business.”
Currently, the platform does lead generation for banks and NBFCs on Housing.com and a limited amount of end-to-end mortgages in the PropTiger business for customers who buy property from it. In India, the company competes with companies such as 99acres, Magicbricks, and Nobroker.