Importance of project management in real estate industry

India has witnessed strong economic growth in the last decade primarily on account of economic reforms that have ushered in an era of liberalization and provided for increased participation from the private sector.

Opening up of the economy for investment was
instrumental in spurring broad-based fundamental growth across various sectors, thereby leading to accelerated consumption and heightened investment activity in the
economy.

This growth has percolated to the construction and real estate industry as well, which is a conduit for growth in a large number of ancillary industries in the country.

The Indian real estate and construction industry is a major part of the economy and plays an imperative role in the development of the country’s infrastructure  base and provide gigantic influx in the terms of economic activity.

The construction sector has strong links with various industries such as cement, steel, chemicals, paints, tiles, fixtures and fittings, etc. The real estate sector is an indispensable component of construction industry that also serves as a creator for private sector involvement in the growth of the country’s environment.

Project management embraces various parties, people, procedures, practices and processes. In real estate development, project management is used to ensure the development project is completed on time, within cost budget, in accordance with quality and design requirements, and in compliance with relevant laws and regulations.

The real estate development and construction industry is no stranger to volatility.  Managing a large-scale construction or renovation project can be daunting for any company, especially when building in a different country.

Navigating the various processes, government regulations and construction trade differences inherent to specific countries can pose significant roadblocks for companies as they embark on global projects spanning many markets.

In order to remain competitive in the marketplace, there are opportunities to deploy project management expertise outside the comfort zone of your own country or region.
Real estate sector is now getting more organized and also the policy makers of the country is taking cognizance and addressing bottlenecks of the industry.

Economic slowdown coupled with high rate of inflation is taking its toll on housing development growth. Many of the organization is turning now towards adopting better management to increase efficiency in terms of cost, quality, delivery and profit. 

Construction is highly labour oriented and the projects mostly get delayed due to unpredictable market conditions such as non availability of major raw materials and labourers.

The project management serves to efficiently manage activities such as proper planning, scheduling, monitoring and timely delivery while keep sustained growth.

As projects become more complex and expectations rise, project managers are now frequently used in a typical real estate confined to a more design role while the project managers take up the role of monitoring and supervising the overall development progress.

Project managers are to take mainly the interest of the real estate owner or developer first in making sure the project is completed on time etc and they are to be differentiated from construction managers, who are usually hired by the building contractor to coordinate the various construction site activities.

Real Estate Development involves the amalgamation of various processes and aspects such as market analysis, financial analysis, Urban / town planning, land and title administration, land acquisition and negotiations, community-political and administrative-governmental approvals, architectural design, construction budgeting, contracting and tendering, building construction and site supervision, project management, occupancy management, marketing and leasing, disposition, property and facility management, and tax / accounting etc.

Project Management is a fairly new phenomenon in the development industry. The consultants generally associated with the industry are architects, engineers and quantity surveyors.

Project management is fundamental in ensuring project success which revolves around four elements: performance, cost, time and scope.

A project manager is responsible for the on-time and on-budget completion of the development project and typically works directly for the owner.

Before construction begins, the project manager may be responsible for site selection and due diligence, securing the correct zoning and entitlements, selecting contractors, and creating a working schedule and budget.

Over the past couple of decades, project management has become more widely accepted in the construction industry, and the role of an independent project manager as essential for successful project execution.

With globalization, increasing diversity and complexity of projects as well as more stringent financing requirements, most of the developed economies continually redefine PM methodologies to meet these demands and achieve project objectives.

Clients (developers and investors) insist on more stringent time, quality and cost terms, making it increasingly necessary to include specialist management skills in project teams.

-K K Goel
KDP Infrastructures

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