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JBS Case Study Series Case No. JIITU/JBS/2008/01 The Moving Sky – A Case Study Mohan Agrawal Suresh Sannapu Bill Koehler Madhu Dutta Abstract The case is about a project named “Hyderabad Rocks”, which is based on the unique concept of a moving skyscraper. Developed by architect David Fisher, a moving skyscraper is a tall building which moves, changes direction and shape resulting in a unique and ever evolving structure. With each floor rotating at different speeds, the building adjusts itself with changing seasons and weather conditions. The focus of the case in on the viability of “Hyderabad Rocks”, to be started by a real estate firm, Akash Constructions in the city of Hyderabad, located in South India. A historical review of skyscrapers is presented with emphasis on business needs and the technological challenges faced. An overview of real estate demand in India, investment opportunities and other key features and trends in India are also presented. The case also has details about the city of Hyderabad in terms of its attractiveness related to real estate investment and suitability of a moving skyscraper project. A SWOT analysis of the project is made to assess the viability of Hyderabad Rocks. The case concludes with the marketing efforts which are required to make the project successful and the marketing challenges lying ahead. Key words: moving skyscraper, luxury villas, real estate, dynamic towers, construction Mohan Agrawal, Jaypee Business School, India, (www.jbs.ac.in) Suresh Sannapu, Faculty Marketing, Jaypee Business School, India, (www.jbs.ac.in) Bill Koehler, Associate Dean, Business School at University of Massachusetts,Boston, USA, (www.umb.edu) Madhu Dutta, Massachusetts Institute of Technology, USA, (www.mit.edu) © 2008 Jaypee Business School, Noida (U.P.), India 1 JBS Case Study Series Case No. JIITU/JBS/2008/01 Some anonymous visionary once said …. “ Hope is a walking dream”, We, Human first hoped of flying on sky, Wright Brothers Fabricated our hope with aero planes…..Now we hope of Living on the Sky, ruling it… Introduction Akash Rao, CEO of Unique Constructions Ltd. Hyderabad was returning to his office from his new project site, located at city outskirts, under deep thoughts. The car ride in the heavy city traffic in the evening was telling his body to call it a day. Yet, he ignored the exhaustion and opened his laptop to complete a brief about his new real estate project ‘Hyderabad Rocks’. Akash had recently taken over the family real estate business from his father Mr.Jairam Rao who was a pioneer in real estate business in the city of Hyderabad. His first venture, Rifle Rocks Enclave, was an instant hit. All the residential plots and manufactured houses were sold out. Now Akash was planning his second venture, ‘The Moving Sky- the project code for a moving skyscraper that actually moved and changed shape with the time of the day. With a view to help him launch this innovative project successfully, Akash intended to select a team of marketing consultants for a market study and strategy. Several leading marketing firms had agreed to make the pitch. The briefing note was in that direction. An Overview of the Real Estate Demand in India The Indian real estate sector has witnessed a revolution, driven by the booming economy, favorable demographics and liberalized foreign direct investment (FDI) regime. The size of the Indian real estate market is estimated at USD 12 billion and growing rate of about 30% annually. Booming economy, favorable demographics, relaxation of FDI norms, and availability of finance has lead to increased demand for real estate across all sectors. Rapid growth of the Indian economy has had a cascading effect on demand for commercial property to help meet the needs of business, such as modern offices, warehouses, hotels and retail shopping centers. Traditionally known for unhealthy practices, the real estate sector in India is getting to be a lot more transparent and professionalized. There are several reasons for it but primarily it is because of the regulatory reforms after 1994. The result is improving the real estate products in terms of quality, technology, adopting of more contemporary management, marketing and maintenance models. After a boom in the metro and centers of mega towns like Mumbai, Delhi, Chennai, Bangalore , real estate market in now in upsurge in the suburbs and tier II and tier III cities such as Mathura, Kochi and Pune. As per one estimate, the residential housing accounts for almost three fourth of the real estate market. Yet there was an estimated shortage of 19.4 million dwelling units in 2007. Growing at 30% per annum, housing sector promised better financial returns for the investors. The demand for residential housing was driven by several factors including the rising disposable incomes, availability of bank finance, increasing number of real estate investors and a change in consumer attitudes towards owning a house. © 2008 Jaypee Business School, Noida (U.P.), India 2 JBS Case Study Series Case No. JIITU/JBS/2008/01 Commercial real estate such as office space, shopping malls etc. is another major demand sector in the real estate market of India. The bulk of office space demand in India is from IT and ITES (IT enabled service providers), followed by the financial services and pharmaceutical units. In IT/ITES sector, the projected demand for the year 2010 is 150 million square feet of office space. As mentioned earlier, several secondary cities like Pune, Chandigarh, Indore and Kochi are now emerging as the new preferred business destinations. Real estate in India received a major boost from the organized retail operators. The sector was a mere 3% in terms of total retail revenue in India but was projected to grow at a whopping rate of 25 to 30% in the overall retail growth of 5-7%. With large number of malls being developed across the globe, organized was poised for an unprecedented growth in India. Finally, the real estate boom was fuelled by the hotel industry as well. More than half of the demand for hotel rooms came from the tourist and business travelers. The traditional 5-star hotels though accounted for no more than a quarter of the total hotel segment , they still projected a demand 80,000 additional rooms by 2010 growing by no less than 18% per annum. Exhibit 1: A sketch of moving skyscraper David Fisher is the brain child of moving skyscraper concept. It’s a tall building which actually moves, changes shapes and yet manages to stay erect. It will change direction and shape from spring to summer, from sunrise to sunset and even adjust itself to the weather . © 2008 Jaypee Business School, Noida (U.P.), India 3 JBS Case Study Series Case No. JIITU/JBS/2008/01 As per one estimate, the residential housing accounts for almost three fourth of the real estate market. Yet there was an estimated shortage of 19.4 million dwelling units in 2007. Growing at 30% per annum, housing sector promised better financial returns for the investors. The demand for residential housing was driven by several factors including the rising disposable incomes, availability of bank finance, increasing number of real estate investors and a change in consumer attitudes towards owning a house. Commercial real estate such as office space, shopping malls etc. is another major demand sector in the real estate market of India. The bulk of office space demand in India is from IT and ITES (IT enabled service providers), followed by the financial services and pharmaceutical units. In IT/ITES sector, the projected demand for the year 2010 is 150 million square feet of office space. As mentioned earlier, several secondary cities like Pune, Chandigarh, Indore and Kochi are now emerging as the new preferred business destinations. Real estate in India received a major boost from the organized retail operators. The sector was a mere 3% in terms of total retail revenue in India but was projected to grow at a whopping rate of 25 to 30% in the overall retail growth of 5-7%. With large number of malls being developed across the globe, organized was poised for an unprecedented growth in India. Finally, the real estate boom was fuelled by the hotel industry as well. More than half of the demand for hotel rooms came from the tourist and business travelers. The traditional 5-star hotels though accounted for no more than a quarter of the total hotel segment , they still projected a demand 80,000 additional rooms by 2010 growing by no less than 18% per annum. While Exhibit 2 summarizes the taxonomy of real estate Market in India, Exhibit 3 lists the key features of the same. Exhibit 2: Taxonomy of Real Estate market in India. © 2008 Jaypee Business School, Noida (U.P.), India 4 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 3: Key Features of the Real Estate Market in India Industry Structure 1. Highly fragmented sector with few organized players of scale 2. Most real estate developers have only a local or regional presence 3. Modest participation of large corporations in the sector 4. Margins are higher in India (>20%) as compared to the developed markets (5-6%) 5. Participation of institutional finance in Real Estate is just beginning 6. Real estate venture funds permitted: Prominent Indian corporates like ICICI Bank, SBI and HDFC have promoted real estate venture funds 7. Proposal to allow Real Estate Investment Trusts (REITs) being examined 8. Various foreign Real Estate and Finance companies like GE Commercial Finance, Tishman Speyer, Ascendas and Farallon Capital have entered the Indian market Policy: 100% FDI is allowed in real estate development subject to minimum scale norms of either:25 acres in case of serviced plots or integrated townships or 50,000 sq. mtrs. of built-up area for construction development projects. Outlook : The Real Estate market is projected to grow to $50 billion by 2010 with a CAGR of over 30% p.a Potential 1. Several factors are expected to contribute to the rapid growth in Real Estate. 2. Large demand-supply gap in affordable housing. 3. Demand fuelled by the availability of loans at low interest rates, tax incentives and a growing middle class with higher savings 4. Increasing demand for commercial and office space especially from the rapidly growing Retail, IT/ ITeS and Hospitality sectors 5. The recently announced Urban Infrastructure Renewal Mission is expected to give further boost to the sector. $11.5 billion earmarked over 5 years for 60 cities 6. Investment opportunities exist in almost every segment of the business - Housing: About 20 million new units expected to be built in five years - Office space for IT/ITES: Five-fold increase in office space requirement over the next 3 years - Commercial space for organized retailing: 200 million sq. ft. by 2010 - Hotels & Hospitality: Over 50,000 new rooms in the next 5 years 7. Investment opportunity of over $50 billion in the next five years 8. Major foreign institutional investors have shown interest in investing in Indian real estate. Opportunities for Investors in Indian Real Estate India in the recent times has been the potential goldmine for investors all over the world. With a booming economy and liberalized government policies, investors from all over the globe are choosing India as their business destination. Driven by positive growth in the real estate scenario and the Government of India’s decision to allow100% FDI under the 'automatic route' in the construction and © 2008 Jaypee Business School, Noida (U.P.), India 5 JBS Case Study Series Case No. JIITU/JBS/2008/01 development there has been a significant rise in the number of Indian as well as foreign investors in the realty sector. Some of the trends related to investments in real estate market related are depicted below. Exhibit 4: Performance of real estate index vs sensex Source: Citi Investment Research Exhibit 5: Indian Tier I and Tier Developers’ Stock Price Performance Source: Citi Investment Research Exhibit 6: Indian Tier I and Tier II NAV Discount/Premium Source: Citi Investment Research © 2008 Jaypee Business School, Noida (U.P.), India 6 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 7: NAV Discount Trend for Select India and China Developers. Source: Citi Investment Research While top developers in India like the DLF, Omaxe, Sobha Developers, Bengal Ambuja, Unitech, Vatika and Sahara Infrastructure among a few have initiated large scale real estate developments in the residential sector catering to all segments of the society. With more corporate houses entering real estate, corporatisation of real estate can be witnessed. The sector is now much more professionally managed. There are no monopolistic positions in real estate, as there are more players today in the development game. The greater the number of players, the healthier the competition and the beneficiary of all this would at last be the end-user. In the residential segment, with the increase of disposable incomes and easy availability of home loans, most builders are trying to woo investors with lucrative features and the latest inclusions are premium luxury apartments and condominiums fitted with the most modern accessories in home luxury. The commercial ventures include state-of-the-art office spaces, sprawling malls, multiplexes and retail outlets. Reports indicate that around 200 new malls with a combined retail space of Rs.2.5 crore / sq.ft and investment of Rs.12500 crore are expected to come up in this year. The boom and the relaxation in FDI are also attracting interest from foreign investors to invest in India and many are seen tying up with the local developers in expanding their business. As the competition in the market is intense, builders are going out of their way to be different and provide quality services. Major real estate investor’s in the foray Emmar Properties, of Dubai one of the largest listed real estate developer in the world has tied up with the Delhi-based MGF Developments to announce India's largest FDI in the realty sector for mall and other facilities in Gurgaon. On the other hand, in a recent development DLF and UK-based construction major, Laing O'Rourke (LOR), has joined hands for participation in airport modernization and infrastructure projects. DB Real Estate, a unit of Deutsche Bank AG, has set up plans to start a global fund that will invest as much as US$ 300 million in India to tap an expected surge in demand for property. © 2008 Jaypee Business School, Noida (U.P.), India 7 JBS Case Study Series Case No. JIITU/JBS/2008/01 Vancouver-based Royal Indian Raj International Corporation (RIRIC) will invest a whopping US$ 2.9 billion in a single real-estate project named Royal Garden City in Bangalore. Estimated to be of retail value of Rs 41,000 crores, this project is to be completed in a period of 10 years. Indonesia-based Siputra Selim group is slated to invest $200 million into the housing sector in Kolkata. Indiabulls Real Estate (IREL) is proposing to enter into arrangements with Dev Property Development, a company incorporated in the Isle of Man, whereby Dev shall subscribe to new shares and also acquire a minority shareholding in the company, in Indiabulls Property (IPPL), Indiabulls Real Estate (IRECPL) and Indiabulls Infrastructure Development (IIDL). Dev has completed an initial public offering of its ordinary shares for a total amount of Rs 12 billion or GBP 138 million and shall be listed on the alternative investment market of the London Stock Exchange. As the real estate investments open up opportunities for the associated fields like Home Loans and Home Insurance, a number of global insurance companies have shown interest in the sector. This include companies like Cesma International from Singapore, American International Group Inc (AIG), High Point Rendel of the UK, Colony Capital and Brack Capital of the US, and Lee Kim Tah Holdings to name a few. As India opens up its market to foreign players more competition is expected to give quality-based performance for customer satisfaction which will consequently bring in quality technology and transparency in the construction and realty sector. And the ultimate winner irrespective of all is surely to be the buyers. The Skyscrapers A skyscraper is a tall, continuously habitable building. There is no official definition or a precise cutoff height above which a building may clearly be classified as a skyscraper. However, as per usual practice in most cities, the definition is used empirically, depending on the relative impact of the shape of a building to a city's overall skyline. Thus, depending on the average height of the rest of the buildings and/ or structures in a city, even a building of 80 meters height (approximately 262 ft) may be considered a skyscraper provided that it clearly stands out above its surrounding built environment and significantly changes the overall skyline of that particular city. The word "skyscraper" originally was a nautical term referring to a tall mast or its main sail on a sailing ship. The term was first applied to buildings in 1880’s shortly after first tall buildings were constructed in Chicago and New York City. The traditional definition of a skyscraper began with the "first skyscraper", a steel-framed ten storey building. Chicago's now demolished ten storeys steel-framed Home Insurance Building (1885) is generally accepted as the "first skyscraper". The structural definition of the word skyscraper was refined later by architectural historians, based on engineering developments of the 1880s that had enabled construction of tall multi-storey buildings. This definition was based on the steel skeleton—as opposed to constructions of load-bearing masonry, which passed their practical limit in 1891 with Chicago's Monadnock Building. Philadelphia's City Hall, completed in 1901, © 2008 Jaypee Business School, Noida (U.P.), India 8 JBS Case Study Series Case No. JIITU/JBS/2008/01 still holds claim as the world's tallest load-bearing masonry structure at 167 m (548 ft). The steel frame developed in stages of increasing self-sufficiency, with several buildings in Chicago and New York advancing the technology that allowed the steel frame to carry a building on its own. Today, however, many of the tallest skyscrapers are built almost entirely with reinforced concrete. Pumps and storage tanks maintain water pressure at the top of skyscrapers. Skyscrapers were preferred because of their ability to build more real estate out of a relatively small ground area. Most Americans liked to have their offices near the centre of the city. This led to the development of skyscrapers as architects found it easier to expand the metropolis upward than outward. The major challenges in building a skyscraper were the vertical force of gravity, horizontal forces of the wind, safety and comfort of the users. The main obstacle in building upward is the downward pull of gravity. As new floors are added, the total force on the floors below continues to increase. To counter this force, the lowers floors need to be thickened for every new floor added to a point where there is very little space left in the lower floors. This makes it impractical to occupy lower floors as the building height increases. A major technological advancement that made skyscrapers widely possible was the development of mass iron and steel production. The long beams of solid iron could support much more weight than the solid brick walls in older buildings, while taking up only fraction of the space. Later iron gave away to steel which was lighter and stronger. Building comfort and safety was the key consideration in the design of skyscrapers. Since stairs are not comfortable to use after the fifth or sixth floor, the skyscrapers needed lifts or elevators. The first passenger elevator was installed in New York's Haughwout Department Store in 1857. Threat of fire was another key concern in building skyscrapers as huge number of people work thousands of feet above a safe exit. Skyscrapers used fire resistant building material and are equipped with sprinkler equipment that extinguishes the fire before it spreads too far. Because of the force of wind, like a swaying tree, skyscrapers can move several feet in either direction, , without damaging their structural integrity. If the building moves a substantial horizontal distance, it can affect occupants and damage loose furniture and equipment. The methods to control the horizontal sway are to tighten the skyscraper structure and construct strong cores through the centre of the building. This also provides protection from the earthquake-induced horizontal sway. Several other new technologies are under use or development to control the horizontal swing among sky scrapers. For example, Citicorp Center in New York, uses a tuned mass damper where its oil hydraulic systems pushes a 400-ton concrete weight back and forth on one of the top floors, shifting the weight of the entire building from side to side. A sophisticated computer system carefully monitors how the wind is shifting the building and moves the weight accordingly. Some similar systems shift the building's weight based on the movement of giant pendulums. Style became another important consideration in building skyscrapers especially following the art deco movement of 1920s. Some of the most famous skyscrapers, including the Empire State Building and the Chrysler Building (above), came out of this era. In 1950s, as per the then international styles, these buildings were made mostly with © 2008 Jaypee Business School, Noida (U.P.), India 9 JBS Case Study Series Case No. JIITU/JBS/2008/01 glass, steel and concrete with little or no ornamentation. Since 1960s, many interesting variations have come. For example, the Sears Tower in Chicago consists of nine aligned tubes that reach to different heights giving the building an ‘interesting and staggered appearance’. Moving Skyscrapers A tall building which actually moves, changes shape and yet manages to stay erect is the simple essence of the moving skyscrapers. Many of us may have now probably been to many revolving restaurants, but a building that revolves floor by floor is at the core of the moving skyscrapers as envisioned by David Fisher, the visionary architect (Exhibit 3) and creator of the Dynamic Tower as the world’s premier moving skyscrapers (Exhibit 4). “All buildings including skyscrapers would follow the rhythms of nature. They will change direction and shape from spring to summer, from sunrise to sunset, and even adjust themselves to the weather. In other words, buildings will be alive", said Fisher while unveiling his plan to the media in New York in June 2008. "From now on, buildings will have four dimensions. The fourth dimension is 'time', to be made part of architecture," Fisher further said, adding, "Buildings in motion will shape the landscape. Whether they are tall or small, residential buildings, office towers or hotels, each room will have a view." By combining motion, green energy and efficient construction, the Dynamic Tower will change architecture as we know it, and herald a new era of 'dynamic living'. Exhibit 8: David Fisher, the creator of Dynamic Towers © 2008 Jaypee Business School, Noida (U.P.), India 10 JBS Case Study Series Exhibit 9: skyscraper Each Case No. JIITU/JBS/2008/01 floor rotates independently © 2008 Jaypee Business School, Noida (U.P.), India in a typical moving 11 JBS Case Study Series Case No. JIITU/JBS/2008/01 The Dynamic Towers offer infinite design possibilities, as each floor rotates independently at different speeds, resulting in a unique and ever evolving structure The Dynamic Towers are environmentally friendly and have the ability to generate electricity for itself as well as for several other buildings nearby; making it the first building designed to be self-powered. It achieves this feat with wind turbines fitted between each rotating floor. An 80-story building has 79 wind turbines, making it a true green power plant. Dynamic skyscrapers offer several other explored and unexplored innovations. Hyderabad Rocks The firm Unique Constructions Ltd. Hyderabad under the leadership of Akash Rao was most fascinated by the concept of moving skyscrapers and was equally determined to build one in Hyderabad. “Hyderabad Rocks’ the pilot name given to the project proposed 80 floors, and would be 420 meters (1,380 feet) tall. The apartments ranged in the sizes from 124 square meters (1,330 square feet) to villas of 1,200 square meters (12,900 square feet). They were complete with a parking space inside the apartment. Villa residents on the other hand, will be able to drive directly into the building where a special elevator will take their car to their floor and park at the entrance to their villas. (Refer to Exhibit 5 below for a car parking in the proposed moving skyscrapers). As per the emerging world class luxury standards, all bathrooms in the Hyderabad Rocks were to be preassembled at the Leonardo da Vinci factory in Italy and were to be made of precious Italian marble, sauna, Turkish bath, chromatography and sound therapy. The first 20 floors were offices, floors 21 to 35 for a luxury hotel, floor 36 through 70 were to be residential apartments, and top 10 floors were to be luxury villas with swimming pools. The Hyderabad Rocks was to be located at Banjara Hills- a prime location of Hyderabad. The project excited Akash no end. While he was largely sure of what features the project should contain, he was unsure as to whom the project might mean the most and how to market it to them. Should the marketing approach be ‘product centric ‘ or ‘service centric’ Or, were there other alternatives to identifying market, marketing mandate, efforts and outcome. One thing Akash was sure of though: any marketing plan of the ‘Hyderabad Rocks’ had to be most imaginative, creative and rocking as the project itself was. It must ‘Rock ‘n Roll instantly with the marketing plan’ he willed to tell each of the consulting firms that were there to pitch for his multi-million dollar marketing account. Exhibit 10: Location Map of Hyderabad Rocks © 2008 Jaypee Business School, Noida (U.P.), India 12 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 11: Location of Hyderabad INDIA HYDERABAD Highlights of Hyderabad • • • • • 5th largest city of India Capital of Andhra Pradesh Referred as Silicon valley of India 150 I.T. companies registered in S/W Technology Park Population: 70 lakhs Real Estate in Hyderabad Hyderabad, the city of Nizams, is one of the "most promising" destinations for foreign direct investment (FDI) such as joint ventures and Real Estate investments in India. The realty sector of India is on an upsurge due to the favorable FDI policies so this is the best time to materialize a property deal in one of the most evolving cities of the world. Investment in Hyderabad Hyderabad, the capital of Andhra Pradesh offers a right mix of heritage, traditional hospitality and a thriving software revolution. This wonderful city is known for its rich history and culture with monuments, mosques, temples, rich and varied heritage in arts, crafts and dance. With the development of a township with state-of-the-art facilities called HITEC City in Hyderabad, the place has emerged as one of best places for property investments. Today Hyderabad is known for IT and ITES Services, © 2008 Jaypee Business School, Noida (U.P.), India 13 JBS Case Study Series Case No. JIITU/JBS/2008/01 Pharmaceuticals and Entertainment industries. Many call centers, Business Process Outsourcing (BPO) firms, dealing with IT and other technological services were set up in the 1990s making it one of the major regions for call centers in India. The city also houses Ramoji Film City, one of the largest regional film studios in the world. The Indian economy has registered growth of 8.7% for the year ’08 and is expected to grow at same level in next decade. The mounting pressure has raised prices of residential and commercial properties in Hyderabad. Hyderabad contributes 15% to the state’s GDP and 78% of its revenue is generated through • IT & ITES • Bio -Tech • Pharmaceutical & Engineering • Telecom • Retail Banking, Financial & Insurance Services • Hospitality • Tourism • Public and private transportation • Luxury residential space Apart from its technological prowess, the city is also known for its Metal crafts, Ikat fabrics, Perfumes, Bangles, Pearls and above all a delectable cuisine. The city of Hyderabad is a natural and sophisticated blend of old and new - an old 'Nawabi' culture with a new pro-active approach and hospitality. The benefits offered by the city in terms of education, infrastructure and technology has made Hyderabad an obvious choice for corporate and commercial investment. Hyderabad has been rated as the 4th largest growing city in the world (Source: US International Market Research Report). The growing cityscape has led the Hyderabad Metropolitan development authority to step up the infrastructure and facilities in the city. Hyderabad has yet another first to its credit. The city has become the first and favorite destination for several international players interested in real estate business to foray into Indian real estate market. Over the last 12 to 18 months, the city has attracted biggies like Sunway Berhad, Malaysia, ACI Real Estate - an affiliate of German Investment Company Alternative Capital Invest GmbH, Property and Building Corporation (PBC), Electra Real Estate from Israel and the list goes on. The internationally acclaimed players have chosen Hyderabad as their gateway to explore the real estate business in the country. They either forged alliance with a local partner, or appointed franchisees to make a beginning. The city is also receptive to new ideas. Foreign players look at Hyderabad as a good testing ground. They feel that whatever succeeds here will succeed in other metros as well. Also the government is very proactive. Hyderabad is rapidly becoming a hot investment hub for NRIs, with many of them investing in Hyderabad real estate as the luxury housing segment is on an upsurge. Hundreds of US firms and big IT heads are also showing interest in investing in Hyderabad real estate. © 2008 Jaypee Business School, Noida (U.P.), India 14 JBS Case Study Series Case No. JIITU/JBS/2008/01 Banjara Hills Banjara Hills is on the west of Hyderabad city. The locality is primarily a residential place with impressions of the nearby Hitech City. The regions around the township include Panjagutta, Jubilee Hills and Mehdipattnam. The place as such shares a little with the famous technological city. There are many software companies who do regular business in these parts. The region has excellent accommodation and catering facilities available. The Rock Castle, Mount Banjara, Taj Krishna and Manali Guest House are the best in the township. Some famous eating places in the region include Gallopin Gooseberry, Flame, Southern Spice, Fusion 9 and Our place. There are many educational institutes including schools and other private training institutes established at Banjara Hills. Anwar-Ul-Uloom College of Management is one of the reputed institutes in and around the city of Hyderabad and is located within the premises of this township. In the north east of Banjara Hills is present a small park called Banjara Park. The Banjara Super Market is located further north east and on the Panjagutta Road. There are many small roads that provide access to the interiors of the city. Banjara Hills lies north west of the city center which is Abids. The two places are connected by a series of inter linked roads. Banjara Hills is about 6 kms from Abids. Bus services are available from many parts of the city. Khairatabad Railway Station is the nearest one to Banjara Hills. It is located towards the east of the region and about 3 kms from it.. The airport is about 6 kms from Banjara Hills. Banjara hills tops the list of retail rentals - India ranks 16th in the most expensive high streets across the world and the South Indian cities, Hyderabad, Chennai and Bangalore, emerged as the top retail locations to have witnessed highest high street rental growth across India according to the Cushman & Wakefield India Retail survey. Banjara Hills and Jubilee Hills, though traditional markets, are preferred by the new age retailers with the highest annual rent rise in the country. These markets are prime residential locations. Banjara Hills in Hyderabad was the highest gainer in India with an annual rental growth of 114% appreciation over last year. This market is a prime residential location and home to the city's HNIs. Furthermore, the demand for space here far supercedes the supply. Exhibit 13: Real Estate Market Scenario in Hyderabad. Source: Property plus / Cushman and Wakefield REAL – ESTATE MARKET SCENARIO Hyderabad contributes 15% to GSDP. Increasing participation from large local and international players. Government allows 100% FDI; created by affordable financing options and rising disposable incomes. Apart from the IT sector, demand for commercial space is also expected to be driven by the SEZ. Demand-supply gap for international quality real estate space in Hyderabad, created spillover demand in smaller cities. A CAGR of 3.8% is anticipated for the five-year period 2005-2010, bringing the industry to a forecast value of $514.6 billion in 2010. Multi-storey prefabricated structures could just be the solution to Indiaʹs growing housing problem. Never mind if the concept of prefab buildings is yet to catch up in the country. © 2008 Jaypee Business School, Noida (U.P.), India 15 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 14: Self powered moving sky scraper © 2008 Jaypee Business School, Noida (U.P.), India 16 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 15: Parking space at ‘Hyderabad Rocks’ Apartment- hundreds of feet above the ground Exhibit 16: Each floor moving independently © 2008 Jaypee Business School, Noida (U.P.), India 17 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 17: Luxury villas on the top floors of ‘Hyderabad Rocks’ Exhibit 18: View of an Apartment at Hyderabad Rocks © 2008 Jaypee Business School, Noida (U.P.), India 18 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 19: Overview of the surroundings from the top Exhibit 20: State of the art luxury bathrooms © 2008 Jaypee Business School, Noida (U.P.), India 19 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 21: Car elevator and parking Exhibit 22: Another view of car parking © 2008 Jaypee Business School, Noida (U.P.), India 20 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 23: Luxury hotel Exhibit 24: Self generated power systems © 2008 Jaypee Business School, Noida (U.P.), India 21 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 25: Lateral view of Parking at Hyderabad Rocks Exhibit 26: Swimming pool at the top © 2008 Jaypee Business School, Noida (U.P.), India 22 JBS Case Study Series Case No. JIITU/JBS/2008/01 Features of Hyderabad Rocks Number of floors are 80 The height of building is 420 meters The size of each apartment is 124 sq. metres Size of each villas 1200 sq. meters There would be 20 floors for offices There would be 15 floors for luxury hotel There would be 35 floors for resident The top 10 floors would be for luxury villas First LIVING building in the world Changes Shape Constantly with time and season There is parking space inside the apartments It will be the first self powered building with 79 Wind turbines between each floors and solar cells to produce energy Special Elevator to park their cars in their floors Each floor revolves independently Fire resistant building material Italian marble Bathrooms with Sound therapy, sauna bath, chromatography More foreign investment Attraction for foreign tourism MNCs and business firms will open there offices Generates Electricity Land mark for the city as well as India. Hyderabad Rocks – Building, Construction and Remodelling The spinning floors, hung like rings around an immobile cement core, would offer residents a constantly changing view of the city's futuristic skyline. The crucial developments for modern skyscrapers were steel, glass, reinforced concrete, water pumps, and elevators. A few penthouse villas would spin on command using a voice-activated computer. The motion of the rest of the building would be choreographed in patterns that could be altered over time. Giant wind turbines installed between every floor, will generate enough electricity to power the entire building, and lifts will allow residents to park their cars right at their apartment. Plumbing pipes will connect to the core via attachments similar to the ones used by military aircraft for in-flight refuelling. Building's modular construction will allow easy access to parts that need to be replaced. © 2008 Jaypee Business School, Noida (U.P.), India 23 JBS Case Study Series Case No. JIITU/JBS/2008/01 To further improve the energy efficiency of the Dynamic Tower, insulated glass and structural insulating panels will be employed. In addition, natural and recyclable materials including stone, marble, glass and wood will be used for the interior finishing. We will provide you with the craftsmanship, experience, and professionalism demanded by today’s discerning customer. Building Materials - Resources Beautifying your pool deck, porch, walkways, patio & backyard areas with an attractive, safe and durable 100% virgin granule rubber which is kid-safe (used in playgrounds across the USA), slip-resistant and easy on the feet. For those seeking the finest quality building materials, Tuscan Resource offers an extensive selection of custom-crafted natural stone including marble, limestone and travertine. Recessed lighting with dimmers gives you the modern look and feel, without any cords to trip over. Designs and manufactures custom, one of a kind, old-world style Chandeliers, Swag Lamps, Table Lamps and Floor Lamps, Wall Sconces, Candelabras, and Home Accessories. REVOLUTIONIZING OFFICE PREMISES: The first twenty floors of the skyscraper would be the area meant for office space. These offices will have numerous distinct and exclusive features. It would be well equipped with video conferencing and audio visual facilities. There would be provision for separate meeting rooms, conference suites, lounge areas and board rooms. Additional facilities would include hygienic pantry services to provide timely refreshments to employees, CCTV cameras and highly sensitive security alarms for security purposes, availability of round the clock internet access via WI-FI. There would be provision for centralized air conditioning. We would also incorporate temperature control systems which would regulate the office temperature in case of adverse deviations. This will make the office environment more comfortable and soothing for the people working there. Leisure facilities for employees will be provided in terms of indoor games like snooker, table tennis, chess etc. which would provide a sense of relaxation to employees. LUXURY HOTEL: The hotels will be equipped with world class luxury spas, restaurants, bars, presidential suites and also a provision for a movie theatre. The interiors of the suites too will be designed tastefully with contemporary furniture along with spacious and well fitted bathroom accessories. It will have the most modern and well equipped conference centers. © 2008 Jaypee Business School, Noida (U.P.), India 24 JBS Case Study Series Case No. JIITU/JBS/2008/01 APPARTMENTS: Keeping in tunes with the needs of the market and the latest trends the apartment which includes following features: Apartments would spin a full 360 degrees at voice command. 1. LIVING & DINING ROOM- Separate living room features with contemporary sofas & armchairs and a dining area with a seating capacity of 4 to 6 people, several four bedroom apartments with a private patio and garden furniture overlook the pool and are ideal to soak in sun or enjoy the evening over some great wine. 2. BEDROOM & BATHROOM- We offer comfortable erogenous beds, feather pillows & electronically controlled shades, room equipped with individual temperature controllers, LCD’s etc. and bathroom with Italian marbles, spacious bath areas, steam bath, Jacuzzis etc. 3. KITCHEN-Western style kitchen with cabinets, counter tops, top off the line refrigerator, electric cookers, silverware glassware etc. RESIDENTIAL VILLAS: The villas would be set within 12900sq ft with features such as wood paneling, marble floors, terrace garden, and swimming pool equipped with bar, sauna, and gym. An ultra modern air conditioning would be provided in each room operated by an individual remote control. Villas would be accompanied with a brand new Italian mosaic tiled private pool having an under water light for night time swimming acting as a lovely back light to the terrace and garden. Exhibit 27: Inside of a residential Vila © 2008 Jaypee Business School, Noida (U.P.), India 25 JBS Case Study Series Case No. JIITU/JBS/2008/01 Exhibit 28: Dinner by the poolside The top ten floors will be luxury villas and the target customers would be the elite class and NRIs. CAR PARKING An automated car parking system can be introduced where residents can directly drive into their building and a special elevator will take their car to their floor and park at the entrance to their villas. Such a parking system would be available for offices and hotels. Certain advantages of such a parking system are: 1. Security 2. Cost effective : Vehicle is safe from damage, adverse weather condition and theft is impossible : both construction and follow up cost of such system is comparatively modest MARKETING HYDERABAD ROCKS What is Hyderabad Rocks? Designed by Italian architect David Fisher, the 80-story Dynamic Skyscraper gives residents the ability to completely change their view. With the use of a simple voice command, the apartment’s entire floor can rotate 360 degrees. Hyderabad Rocks is constantly battling the effects of wind; this dynamic building uses the wind’s rotation to generate power for the entire building. As if that wasn’t enough, residents can park cars inside their apartment using a special elevator Why Hyderabad Rocks? Today’s world of business involves a number of professionalized models working in a contemporary way. The underlying essence is to be as different, unique and marketable © 2008 Jaypee Business School, Noida (U.P.), India 26 JBS Case Study Series Case No. JIITU/JBS/2008/01 you can be to roll over the cash registers. The focus is on making something only when it can be sold. No sector is yet untouched by the above analysis. One of the examples of being innovative, unique and yet working to create a niche for such product through proper channels and concepts of marketing, is the business case of Unique Constructions. Why the need to build a skyscraper, that too which moves? • • • • Its ability to build more real estate out of small area. Continued to evolve with time in terms of stability, safety, technology and demand. The simple essence of the moving towers was that they move, change shape yet manage to stay erect. The unique concept is unheard and unseen in India complete with never experienced before facilities. SWOT ANALYSIS For formulating a comprehensive marketing strategy one needs to analyse the internal appraisal of the organization which can be done effectively through a SWOT analysis – which needs to include an assessment of the present situation as well as the portfolio of the product, services and an analysis of the product life cycle. S.W.O.T ANALYSIS STRENGTH Reputed brand name, Innovative concept, unique features, well known location First mover advantage Real Estate becoming more transparent OPPORTUNITY Booming economy and sector, encouraging consumer attitude – investment oriented, real estate as an investment © 2008 Jaypee Business School, demand. Noida (U.P.), India option, growing Favourable demographics WEAKNESS High price of the product High risk as customer response is unknown SWOT ANALYSIS THREAT Inflation, rising interest rates. 27 JBS Case Study Series Case No. JIITU/JBS/2008/01 MARKETING GOAL Transforming, developing & enhancing business and marketing concepts by going beyond the boundaries of traditional people capital support. To make things happen, against the odds in a collaborative way. Market Competition and Position Analysis • Highly fragmented sector with few organized players of scale. • Most real estate developers have a local/regional presence. • No other firm is working on a similar concept. Also, as of now, no other firm is equipped with the infrastructure to start a project on similar lines. • Hence, the firm enjoys every advantage of being the pioneer of Moving Skyscrapers in India. Marketing Efforts • No special efforts required to promote the brand. Because of the unique features and lack of competition the brand will gain wide publicity on its own. The skyscrapers are more of a status symbol, fashion statement along with the necessity for the Royal Class. It’s all because of endless facilities, elegance, royalty, exclusivity and last but not the least is a splendid and every second changing view. For the above reasons, the target clientele would be • • • • Business Tycoons Top Executive of Leading Companies. Movie Stars. NRIs Examples of some of the Target Customers : For Offices/ Banks o SBI Capital Markets Limited o PNB Housing Finance Limited o Bajaj Capital Limited o Birla Global Finance Limited IT and ITES Companies o Wipro Infotech o Satyam Computers o Infosys o TCS © 2008 Jaypee Business School, Noida (U.P.), India 28 JBS Case Study Series Case No. JIITU/JBS/2008/01 Airline Companies o Indian Airways o Kingfisher o Lufthansa India Airlines o Jet Airways For Hotels o ITC Hotels o The Park Hotel o Taj Hotels o Oberoi Hotels & Resorts o For Residential apartments, penthouse and villas o Lakshmi Mittal (Mittal Steel) o Azim Premji (Wipro) o Mukesh Ambani (Reliance Group) o Kumar Mangalam Birla (Birla group) o Sunil Mittal (Bharti Group) o Shiv Nadar (HCL Group) o Adi Godrej (Godrej Group) ADVERTISING AND SALES PROMOTION PLAN • Promotion of “Hyderabad Rocks” by presenting the models in front of high profile people by holding parties in five star- seven star hotels. • Holding press conferences where international media is also invited • As a part of sales promotion, the first flat will be given to the Man of the series in the upcoming WORLD CUP T- 20. This will give lead to international awareness and popularity. © 2008 Jaypee Business School, Noida (U.P.), India 29 JBS Case Study Series Case No. JIITU/JBS/2008/01 z Airplane advertising Unique advertising methods like airplane advertising can be used along with wide publicity in international airports. Advertisements can be displayed on the LCD screens embedded in the seats of executive/business class in elite airlines z Advertising in high class business magazines like – Global Travelers, Vogue etc. z Developing a personalized website. A website for the project Hyderabad Rocks can be made where in all the detailed information along with the photographs and videos can be provided. Database of those interested can be collected for follow up. © 2008 Jaypee Business School, Noida (U.P.), India 30 JBS Case Study Series Case No. JIITU/JBS/2008/01 z Documented footage of the construction site can be promoted via channels like Discovery and National Geographic. This will help in highlighting special features of the product like moving apartments, self power generation, elevated car parking and the luxury features. Marketing Challenges • • • Will moving skyscraper project be successful in India? Does the country have the technology and infrastructure to back up such a huge investment? Can Hyderabad Rocks really herald a new era of “dynamic living”? © 2008 Jaypee Business School, Noida (U.P.), India 31 JBS Case Study Series Case No. JIITU/JBS/2008/01 References SkyscraperPage.com Indian Real Estate Sector, City group equity research www.virtusglobal.com www.dbresearch.com Sify news Indiatimes.com www.rediff.com www.ecogeek.org © 2008 Jaypee Business School, Noida (U.P.), India 32