The real estate sector used to be the darling of investors/consumers not too long ago. However, over the last few years it has become the bete noire of all. People, especially in the north, are afraid to invest in any new projects fearing non-delivery of residential units, endless delays, developers diverting funds, heartbroken customers, unsold inventory, bank defaults, and dispute over over-invoicing, hidden charges that has come to afflict project after project, and developer after developer.
But there is a happy side to the sector as well. As it seeks to emerge from a protracted slowdown and as company after company tries to put its house in order — prodded by regulatory measures of course — there are pockets of excellence within that are shining bright. These are a handful of city-based realtors that have made a name for themselves over several decades of operations. Established by the first-generation entrepreneurs in the mid-70s, 80s and 90s, today these brands define the skyline of their respective cities. Consumers trust them, cherish them, swear by them, and are willing to be part of their projects.
In this microcosm are brands where the second generation is carrying forward the family legacy in the hope of taking the business into the next orbit and making it special for the community and consumers. Typically 25-35 years old, these brands are present across multiple cities/states and have a legion of happy customers. We are talking of the likes of DLF, Lodha, Hiranandani, Puravankara, Brigade, Embassy, SOBHA, Mantri, Prestige, Embassy, Omaxe, Vatika, to name a few.
What is driving the GenNext in some of these brands? Why and how did they chose their family business as their profession? What is their vision for tomorrow? We seek answers to these questions and much more from a cross section of GenNext.NextGen Realtors: Southern Connection
Today’s Bengaluru skyline is defined by a clutch of real estate developers, each of whom have made a name for themselves by not just time-bound delivery of commercial and residential projects but through the quality of work delivered at price points that worked for its vast migrant working population.
“Until I went to college, I thought I would be a writer, musician, even considered applying to the IAS. I had no intention of joining the business,” recalls Pavitra Shankar, Executive Director, Brigade Group, a Rs 2,000-crore-plus realty firm based in Bengaluru. “When my sister and I were younger, we didn’t know much about the family business. My mother used to be a stockbroker and my father was already in real estate by the time I was six, so their conversations about work were completely uninteresting to me,” she adds.
Today Pavitra has over a decade of rich experience and oversees residential sales and marketing plus the IT departments at Brigade. She holds a Bachelor’s degree in Economics and Mathematics from the University of Virginia and a Masters in Business Administration in Real Estate and Finance from Columbia Business School, US.
Like Pavitra, her sister Nirupa is also a director on the Board and heads the company’s hospitality, office and retail ventures in addition to human resources (HR), public relations (PR) and innovation functions. “My interest was piqued during dinner table conversations,” recalls Nirupa, a fitness enthusiast who begins her day with a jog, swim or a yoga session.
Before entering the family business at age 27 in 2009, Nirupa spent eight years working and studying in the US. “Upon graduating, I took up a consulting job with EY because the role had a steep learning curve and I wanted to hone my analytical skills. While working with EY, I took evening classes in Hotel Operations at New York University. I thoroughly enjoyed it and after three years of consulting, I resigned and applied for a Masters of Management in Hospitality (MMH) from Cornell University in New York. At Cornell, I majored in Hospitality Real Estate Finance and graduated amongst the top in the class,” says Nirupa, adding that she joined the family business as the hospitality industry was booming and “we were at the cusp of launching many new hospitality ventures back then”.
The Brigade Group enjoys a reputation for developing grade-A commercial properties. Founded in 1986 by M.R. Jaishankar, the company is credited with constructing the World Trade Center in Bangalore and Kochi, software and IT parks, SEZs and stand-alone offices housing top international brands. Brigade’s retail projects include Orion Mall at Brigade Gateway, Orion East in Banaswadi and the upcoming Orion OMR. Brigade’s hospitality offerings include star hotels across south India, recreational clubs and convention centres. Till date, Brigade has completed over 250 buildings totalling 45 million sq. ft in residential, offices, retail and hospitality sectors across seven cities.
Jaishankar has successfully inducted his two daughters—Pavitra and Nirupa—in the company’s board. Both have specific mandate and have helped the group grow and diversify its business over the past decade. But Brigade is different from its other notable counterparts in Bengaluru. Explains Nirupa: “We are across all segments – residential, office, retail, hospitality, education and real estate technology acceleration and have different strategies for each. Whereas SOBHA and Purvankara are primarily residential developers. Embassy is primarily an office developer.”
Like Father, Like Son
Unlike the Shankar sisters, Ashish R. Puravankara, MD, Puravankara is also a next-generation developer who has grown the family business many folds since joining it several years ago. The company was established in 1975 by his father Ravi Puravankara with operations in Mumbai. Later, it shifted base to Bengaluru. “I grew up in a home where most discussions veered towards business. My real estate education started at the dinner table. I was mentored by a passionate and focused visionary — my father. I was captivated by the passion and perseverance that my father dedicated to this sector, building vibrant communities and enriching lives by offering families their dream of buying a home,” recalls Ashish who also went to the US to obtain an under-graduate degree from Virginia Tech.
“I flagged off my official Puravankara race at the now iconic Purva Heights (Bengaluru) project site. I worked completely on-site as there is no better way to learn the brick and mortar business than being surrounded by brick and mortar every day,” says Puravankara. After a few years of working, he went back to the US to pursue his MBA at Willamette University in Salem, Oregon. He returned two years later. “Initially, I was at Bangalore but when the opportunity arose of expanding to Chennai, I jumped at the challenge of setting up from scratch. So for some time I packed my bags and shifted my base to Chennai, lock, stock and barrel,” he adds.
Puravankara has the distinction of being the first developer to obtain FDI in the Indian real estate industry. It did so through its joint venture with Singapore-based Keppel Land, the property arm of the 54 per cent government-owned conglomerate Keppel Corporation. The joint venture company, Keppel Puravankara Development has several ongoing housing projects in India. The company has also successfully completed 48 residential projects and two commercial projects totalling 23.54 million sq. ft.
An Automatic Choice
For the 37-year old Ravi Menon, Chairman, SOBHA, joining the family business was an automatic choice. Established in the mid-1990s by his father PNC Menon, a NRI builder with strong roots in Kerala, Bengaluru-based SOBHA is known for quality construction and on-time delivery. The company is credited with building offices for some of the top corporate houses in the country including Infosys, Wipro, HCL, Dell, Bosch, Biocon, Taj Group of Hotels and ITC Hotels, among others.
SOBHA has delivered projects totalling 100 million sq ft and has a turnover in excess of Rs 3,000 crore. Ravi finished his schooling in Oman and his Civil Engineering from Purdue University, US before joining the family business in June 2004.
“My international exposure has helped me bring focus on creating quality products transparently and delivering it on time. Creating excellence is a way of life for me,” says the junior Menon, who likes to stay away from the media glare and interviews. In his spare time, Ravi loves playing tennis and watching movies of Malayalam superstar Mohanlal.
What is the secret of SOBHA’s success? “We are one of the few companies in the market to have adopted precast technology. Precast concrete is highly versatile and is available in a vast variety of sizes, functions, finishes and colours. Precast reduces construction time to meet project timelines and brings down the cost by 10-15 per cent,” says Menon.
“For home buyers, precast translates into faster occupancy. The top-notch quality of construction minimises leakage, seepage, cracks, atmospheric corrosion and so on, lowering the maintenance cost,” he adds.
North, East, & West
For the 30-year-old Mohit Goel, CEO, Omaxe, joining the family business could not have come at a worse time for the real estate sector. “It was 2009, a tough time for the sector and the group as the sub-prime mortgage crisis in the US had impacted economies worldwide, including India. Our stocks were severely affected. While it was the toughest situation to handle, it was the best situation to learn,” recalls Goel. “My father taught me one important thing. More than personal assets, it’s commitment to the company that matters,” he adds.
Goel is a commerce graduate from Delhi University. He has also completed courses in management from London and IIM Bangalore. With a focus on mid-income and affordable housing in tier-2 and tier-3 cities, Goel has streamlined Omaxe’s strategic focus, not to mention strategic acquisitions of a value-accretive land base that has helped reduce the company’s debt and overhaul its capital structure to improve Omaxe’s returns.
Joining the company at age 20, Goel worked through all departments and went through a tough learning phase for three years. “Mostly, people knew me as an intern and not as CMD’s son. I was groomed by experienced hands at Omaxe,” he says. At age 23, Mohit joined the company as its CEO having learnt a great deal about the business and company’s operations. “Between 2012 and 2015, I was able to reduce debts and the revenues grew with strength,” he informs.
Established in 1987 by Rohtas Goel (now Chairman and MD), Omaxe was one the first few real estate players to take its operations beyond metros—to tier-2 and tier-3 cities and towns. So far Omaxe have developed projects totalling 111 million sq. ft across, residential, commercial and retail spaces. Over the last three decades, the company has delivered 36 residential projects including townships and group housing. During this time Omaxe has also delivered 12 commercial projects including retail. During FY18, Omaxe launched projects totalling 2.7 million sq. ft. The company also launched new projects across six cities in four states.
For 31-year-old Samyak Jain, Director, Siddha Group, the first memory of connecting with the family business goes was back to 2002-03 when he accompanied his father to a site in Jaipur which was spread over 141 acres with no habitation around it. “Now, there stands a NRI township in Jaipur Housing Board which is now a commercially viable trait,” says Jain, a graduate of St. Xavier’s College, Kolkata who is also a management post-graduate (MSc. in Management) from Middlesex University, London.
“After attending college in the morning I used to head directly to our Kolkata office where I learned how the business works by observing my uncle, my father and other seniors in the office. By the age of 26, the responsibility of heading the Mumbai operation was given to me as we entered the Mumbai market in 2016,” says Jain. The company has delivered 5 million sq. ft while more than 10 million sq. ft of real estate is under construction.
Kolkata-based Siddha Group started operations in 1986 and has operations across Kolkata, Jaipur, Mumbai and now Bengaluru. The group has been delivering homes in the affordable segment. The group is credited with ideating and offering unique rooftop skywalks in their projects, the first for an Indian real estate company. For example, Siddha Galaxia in Rajarhat offers what the company claims is the “world’s longest rooftop skywalk”. Without stepping out of the property the residents can experience luxurious world-class amenities. This project features “Starwalk”, a 1.1-km-long rooftop skywalk at the 14th floor level, which is 145 feet above the ground level and connects all the eight towers. The skywalk houses a jogger’s track, sun deck, landscaped garden, yoga and meditation zone, amphitheatre and water fountains, senior citizen corner, organic farm, party lawn, turf, sculpture garden, and reflexology trail. In Mumbai, the group is offering Siddha Seabrook (Kandivali West), which is one of the tallest buildings in Mumbai, located at Link Road. This 54-storey building will allow its residents to explore the environment from above, the company says.
Pavitra of Brigade sees a number of challenges facing the residential segment. “Going forward, the challenges will be how to build faster, cheaper, more efficiently and to focus on cash flow and working capital, especially in a RERA environment without input tax credit,” she says. For Nirupa, the challenges in all three verticals—residential, commercial, hospitality—are primarily the same — “Creating the right kind of product to suit client demands, customer retention and growth and creating a product that will withstand the test of time without overspending.”
For Puravankara, one of the significant challenges of the present and the near future is lack of skilled labour. “Lengthy approval processes and shortage of skilled labour continue to pose a big challenge to my business. Creating a single-window clearance will significantly cut down time and help builders finish on time,” he says.
Menon of SOBHA sees reduction in carbon footprint as an important challenge for developers. “SOBHA has implemented the concept of value engineering (VE) as part of constructing sustainable structures, especially high-rise building projects. Value engineering has allowed us to reduce the cement composition in every cubic meter of concrete, mitigating the carbon dioxide (CO2) emissions into the atmosphere. This is important for all developers,” says Menon. Additionally, location, cost, design and architecture, quality, timely delivery and transparency will always play an important part in helping developers to command premium today and tomorrow, Menon adds.
Agrees Goel of Omaxe. “For any serious player, this is the best time to be in the real estate business. After RERA enactment, situation has changed tremendously. Now there are serious players,” he says.
Whatever may be the situation one thing is absolutely clear that the next generation in the realty business will see a better time, a more transparent business environment and a healthy demand for right-priced projects. Of course, accountability and on-time delivery will become a mantra in the future too leaving only the most competent to survive and thrive.