Two generations from five of India’s leading real estate & infrastructure companies give their account of evolving business conditions
by Mitalee Kurdekar
ABIL
Avinash Bhosale, founder & chairman, ABIL
Describe the industry when you started
We ventured into the construction line in 1979. At that time, the construction industry was a very local business. Commercial projects were low in demand and the residential sector enjoyed a good, steady demand. It was one of the most unorganised businesses during those days. The construction industry was stable with a handful of developers around. There was less competition. It was, therefore, a lucrative business at that point of time.
Biggest technological innovation in your time
Technology is constantly evolving. In every aspect, there are technological advances, which have bettered real estate. It is therefore hard to pin point any one.
Key factors when approaching a new project
Many aspects have to be considered while venturing into a project, like the city, location, future growth of the area, size of land available, cost of acquisition, cost of development, etc. Its important to get your numbers right. But most importantly in addition to everything, we make sure that we create landmarks.
Value of selling projects online
The Internet has taken the world by storm. It is the future and selling homes online is a possibility. There is a definite value to this proposition. But in the premium luxury segment that we’re in, online selling will always be difficult. This is because homes are upwards of $1 million.
One change that the industry needs
Government clearances and procedures need to get simpler and faster. The time taken from acquiring land to developing it has to be shortened.
Amit Bhosale, MD, ABIL
Describe the industry when you started
When I entered the business, it was a good time for real estate and hospitality. International fund managers and organisations were looking at entering India. Foreign architects, interior designers and consultants were looking at India as a new market, and hence were willing to offer their services here. Many new players from different business were entering the real estate field. Newer policies were reshaping the industry. Townships, SEZs and other ambitious projects were being planned. Real estate as a sector was looking very promising. It was a good time for the industry. We were fairly established in the real estate sector by then. We then diversified into the hospitality sector.
Biggest technological innovation in your time
Technology is making the process of construction faster, safer and better. Marketing in real estate has changed and advanced tremendously. The technology adopted to reach the end user has advanced due to innovations in the marketing strategies. A construction company now has so many verticals due to the technological advances; the complexities of technology have further given scope to specialised consultants. There is not one technological aspect that can be pointed out, but technology as a whole, in every aspect of construction, has improved tremendously.
Key factors when approaching a new project
In addition to the above, the consumer behaviour, average income levels of the end user, and the surrounding & future development in that particular location should be considered. Competition is also an important factor to consider. The most important thing that we always envision while approaching a new project is to be sure that it will be a landmark project for the city and its skyline. We create landmarks.
Value of selling projects online
Online selling for premium projects like ours will be difficult, as the customer will not be comfortable buying a home online which is worth a million dollars or more. The online space can be used for branding and promoting your project. The customer still prefers the physical touch and feel before buying any real estate. On most occasions, they insist on meeting the developer before making their decision. But in the future, there can be a possibility for online selling.
One change that the industry needs
Quicker clearances or rather single window clearances will help the industry to prosper more rapidly. There are duplications while getting permissions from different departments. These duplications for the same cause consume time and effort. Procedures need to be streamlined.
Al Fara’a Infraprojects
Dr J R Gangaramani, chairman, Al Fara’a Group
Describe the industry when you started
Al Fara’a was setup during the 1980s when the construction industry was one of the toughest industries to establish oneself in, owing to the lack of proper infrastructure facilities and technological advancements. During this period, one of the biggest challenges was mobilisation of manpower and logistics support for transportation of materials to work locations. However, with the passage of time and introduction of more mechanised equipment, and with the advent of technology, the construction industry has improved by leaps and bounds.
Biggest technological innovation in your time
From the time we entered the construction industry until now, I have personally experienced numerous technological innovations, which have greatly contributed to and changed the face of the industry. Out of the many innovations, I can proudly say that Al Fara’a Group has widely contributed to the field of Concrete Technology in the GCC region through its associate company, Unitbeton Ready Mix. By focusing on efficient waste management systems and by using the best practices, we are reducing the impact on the environment and bringing substantial and measurable savings of cost incurred on material procurement and transportation, thereby sharing the end results of cost-effectiveness with its customers. Unibeton is the first and only Gold Certified Sustainable Concrete Plant by NRMCA in the world.
Key factors when approaching a new project
The approach to any new project is shaped by the strategic plan of an organisation, which is influenced by market demands and resources constraints. The process associated with planning and feasibility studies sets the priorities and timing for approaching various new projects to meet the overall objectives of the organisations. However, once this decision is made to start a project, market pressure may dictate early and timely completion. With intensive competition for national and international markets, the trend is moving toward shorter project life cycles, particularly in technology intensive industries.
One change that the industry needs
In its path of advancement, the industry has to overcome a number of challenges. However, the industry is still faced with some major challenges, including housing, disaster resistant construction, water management and mass transportation. Recent experiences of several new mega-projects are clear indicators that the industry is poised for a bright future. On the technological front, the picture is abysmally low. The country has not invested adequately into making technical human resources capable of addressing the professional services needs of the construction industry like litigation, training of artisans, cost indices, contracting, insurance, finance, banking and taxation. On the engineering design front, education of the practicing engineers has not been adequately augmented from time to time with in-house or distance education modules.
Nitesh Gangaramani, director, India, Al Fara’a Infraprojects
Describe the industry when you started
In India, we entered this business during the year 2011, with just two projects in hand, one in Mumbai and the other in Bengaluru. We found that the Indian construction industry is fragmented and there are very few well-organised players in the industry, mostly working on age-old conventional practices. With construction activity being labour intensive, construction companies have been mainly focusing on the mechanisation process, in order to increase productivity and reduce cost. As a new entrant in the Indian market, our focus is to create safe working environments to complete the project on time with excellent quality standards.
Biggest technological innovation in your time
During the initial years, we were following the traditional construction techniques like conventional formwork using cup lock systems. However, the ever increasing demand for speedy completion of projects from clients and heavy competition from peers has made us think of better alternatives. So in order to decrease the timelines and to deliver the best quality product, we have collaborated with various foreign players from countries like Germany, the UK and other European countries to introduce the latest technologies like Aluminium Formwork, PERI Formwork , Rail Climbing System etc.
Key factors when approaching a new project
Construction projects have a specific set of objectives and constraints such as a required time frame for completion. The uncertainty in undertaking a construction project comes from many sources and often involves many participants in the project. Since each participant tries to minimise its own risk, the conflicts among various participants can be detrimental to the project. Only the owner has the power to moderate such conflicts as he/she alone holds the key to risk assignment through proper contractual relations with other participants. Generally we would like to go through some of the key factors such as Design Assumptions, Site Conditions, Construction Procedures, Contractual Relations, Economic Instability, Environmental Protections and more importantly Occupational Safety including Public Safety Regulations well before the finalisation of any tender. We do have an internal checklist. We have a detailed report prepared considering our financials, reputation, project location and project type. Apart from the above, we generally will conduct a background check of the statutory required permissions from the concerned authorities before approaching any new project. Then we prepare an internal cash flow and have a prima vera project baseline prepared.
One change that the industry needs
We need to bring in new technologies in construction. For instance, we are working on a proposal for the affordable housing segment where we are in talks with the Maharashtra and Karnataka governments to bring in this technology called Plast Wall Building System, which is a unique fibre reinforcement cast in place and permanent concrete formwork, and replaces costly steel aluminium and plywood formworks. It increases the site production by as much as 300%, requires significantly lower skilled labour to build quality concrete homes and buildings.
Brigade Group
M R Jaishankar, chairman & MD, Brigade Group
Describe the industry when you started
In 1986, when I started my first project – Brigade Towers (an office tower), real estate was in a nascent stage in Bengaluru. Brigade Towers was probably the first project to offer ownership offices in Bengaluru. Even though the building was just 60 mts in height, it was the tallest private building in Bengaluru. Only two other government buildings were taller.
In addition, real estate was not professionally managed in the 1980s.
Brigade Group is known for many firsts in the real estate field.
Biggest technological innovation in your time
We are the first real estate developer to have adopted precast panel construction technology by setting up a factory in 2012. We were probably the first or second developer to have received ISO 9001:1990 process certification in Indian real estate in 1996-97. We are also amongst the first few to go in for SAP software to integrate different aspects of business.
Key factors when approaching a new project
The key factor undoubtedly is marketability of the project by taking into consideration location, categorisation of the type of product, demand for the product, legal titles, future potential, financial feasibility, etc.
Value of selling projects online
The first online booking was received by us in 1999 from an NRI in Africa, who had not seen Bengaluru in his life! Today, it has become the norm. It will only increase in the years to come with more and more customers becoming computer savvy. We have also started a Customer Portal to facilitate viewing project progress online, apart from viewing account statements, seeking queries etc.
Whether technology or otherwise, Brigade Group has innovated in different ways. Our strategy to market Brigade Towers on a national level was a first of sorts in the country. Our advertisement in India Today magazine, in October 1986, is supposed to be the first real estate advertisement India Today ever carried!
We were the first to introduce the concept of model flats/show flats in Bengaluru for our project, Brigade Regency, in 1996.
One change that the industry needs
The dream is to have a single window agency, in the true sense, to obtain approvals in a transparent and speedy manner, online.
In addition, the government must introduce Title Insurance for properties.
Nirupa Shankar, VP, business development, Brigade Enterprises
Describe the industry when you started
I joined the business in 2009, during the midst of the US financial crisis. At that point in time, many real estate companies – even in India – were in a financial crunch. It was a tough market, which seems to have come full circle again in 2016.
Biggest technological innovation in your time
Brigade started using pre-cast technology by creating its own pre-cast plant. While this is a different method of construction, ideal for modular homes, it also speeds up the construction process. But there has been no major breakthrough like what WhatsApp has done for communication in the past seven years. However, we are hoping to change that with the launch of our Real Estate Accelerator Program (REAP). It will be the country’s first accelerator to focus on start-ups in the real estate space. The objective of Brigade REAP is to identify high-tech companies in IoT, Nano Tech, Clean Tech, Visual Computing and Logistics, whose end product or service can be applied to the real estate industry. Brigade REAP will mentor start-ups by providing them with the domain knowledge required to have a workable product in the space, and also the business and technology know-how to go to market and scale up.
Key factors when approaching a new project
There are a number of factors to consider. The most basic but important ones are:
⊲ Location of the land
⊲ Clear titles for the land
⊲ Road width/buildable area
⊲ Nature of project – is it suitable for residential, hotel, office or mixed use?
⊲ Financial viability of the project
Value of selling projects online
Absolutely. Going forward, we will definitely see more homes being sold online, through third party channels as well as individual developer websites and mobile apps. This will open up the market considerably. Using Virtual Reality (VR), potential buyers will even be able to ‘view’ their apartment before buying.
One change that the industry needs
Transparency and accountability in the approval process.
Dilip Buildcon
Dilip Suryavanshi, chairman & MD, Dilip Buildcon
Describe the industry when you started
I was a civil engineer and I started my contracting business in the 80s when the infrastructure industry was non-existent. Development of infrastructure was not an the agenda of any government then, so there was no big spending on it. There were no large projects like the ones we see today. It was mostly small government housing projects in the city or small roads. Also, we hardly saw any modern equipment being employed for construction. It was all mostly manual labour, so it was a time consuming affair, without any focus on quality. However, given the ambitions & aspirations I had, I decided to focus on quality & timeliness, both of which are what Dilip Buildcon is now most known for!
Biggest technological innovation in your time
Technology has changed tremendously in the more than three decades that I have been in this industry. The overall concept of how to build infrastructure along with the systems & process to do so have changed phenomenally. The government guidelines/codes to build infrastructure have become entirely different from what they were. I can’t say what would be the biggest, but incrementally things have changed over the years. We have the world’s best equipment available in India today, which I think is the single biggest driver for timeline & quality in any project. Personally, I was very focused on use of innovative and modern technologies to ease work and that has really helped the company to grow to the heights it has reached today.
Key factors when approaching a new project
While each project is different, we look for a range of conditions before we bid for any project. First of all, because we own all our equipment and have a huge base of full time employees, the most important thing for us is to get good projects that we can quickly execute. The factors that we consider for this are – availability of land, availability and location of mines, requirements of clearances required, religious structures that we may need to demolish, local issues, local government’s track record, etc.
One change that the industry needs
We need a lot of changes if we want to really build all the good quality infrastructure India needs. The biggest change we need is the change in attitude of governments. The government should ease a lot of the rules & regulations and come up with a single window clearance system, where you get all the project clearances on the day of the project award. Only when the whole land has been acquired, should a project be awarded. And finally, payments for the work should happen on time.
Rohan Suryavanshi, head, strategy & planning, Dilip Buildcon
Describe the industry when you started
When I entered the industry in 2007, I was a young 21-year-old commerce graduate in a small engineering & construction company. The industry was still in its early days at least in our state of Madhya Pradesh, which was viewed as an undeveloped state. The local infrastructure players in our state were also very small compared to those in the developed states. However, all of that has changed in the last decade with Madhya Pradesh leading the country in road building today, and Dilip Buildcon being the largest road EPC player in the country.
Biggest technological innovation in your time
When I joined, things were still very unorganised in this sector and people were not very focused on innovation or new technology. Even the equipment that we used was mostly from domestic manufacturers. But since then a lot of advances have happened. Back then, most of the global manufacturers used to import equipment in India and hadn’t set up factories here. Now I see most of them have set up facilities in India, given the size and potential of our market. Also, there are a lot more ways to track performance of your equipment and manpower today. For example, all our equipment has GPS, which tracks minute details like fuel consumption and use.
Key factors when approaching a new project
We are very selective when it comes to bidding. Each project brings with it new challenges and opportunities. However, as a company, we look at certain set conditions for all our projects. Availability of land is the biggest factor because we don’t like to get involved in projects where we will get stuck or the pace of work will be slow. Besides this, we look at distance from mines, regulatory clearances required, socio-political situation of the area, religious structures, & many more such issues that are important for project execution.
One change that the industry needs
Even though this government has taken a lot of positive steps, we are far behind our global counterparts in terms of the contractual terms & regulations. While there are many things I would like the government to change, the most important would be to change the lowest bidding criteria as you can’t build a world class infrastructure on that basis. This criteria basically incentivises you to focus on cheap rather than quality and that is not how you want to build the base of the economy.
Puravankara Projects
Ravi Puravankara, chairman, Puravankara Projects
Describe the industry when you started
The industry has progressed significantly in the last four decades in terms of governance, structure and robustness. From being a construction activity earlier, the concept of real estate development has evolved as an ecosystem and is becoming one of the fastest growing markets in the world. Being a part of the industry for around four decades, we feel immensely gratified. We witnessed the changing dynamics of the industry and this helped us to foresee the needs of the consumers and deliver accordingly. One of our trend setting initiatives include recognising the need for affordable housing in the country way back in 2006. With this foresight, we set up Provident Housing, to cater to the aspiring mid income segment, and have successfully delivered several projects across cities over the years.
Biggest technological innovation in your time
Advancement in technology has significantly augmented the growth of this sector. It has moved from unskilled labour to skilled labour; it has changed the way of using conventional construction techniques. Today we see an integration of the entire supply chain, which includes material manufacturers; logistics; developers and other stakeholders; making it easier and hassle-free to deliver projects on time.
Key factors when approaching a new project
We consider location to be one of the most important parameters. We understand the needs of the customers. The geography, target segments, thrust for social and economic development and micro market indicators are some of the key parameters that determine our decision to invest in projects.
Value of selling projects online
Online home sale is a new age concept, as only traditional marketing methods were adopted earlier. It definitely has a great value proposition as it connects us to a wider customer base and enables access to newer markets.
One change that the industry needs
Housing being one of the social objectives, developers are keen on regulatory involvement of all stakeholders, which will bring in much needed transparency and accountability. The inclusion of all stakeholders to form a regulatory environment will boost the trust in this sector, leading to better home sales.
Ashish Puravankara, MD, Puravankara Projects
Describe the industry when you started
I entered the industry around one-and-a-half decade ago and have seen it mature rapidly. Housing needs have changed, income levels have gone up and there is a clear differentiation of luxury and affordable housing. Today, there is a focus on providing a lifestyle around homes, and Puravankara has specialised in providing unique theme-based projects to meet the needs and aspirations of consumers.
Over the last few decades, developers have corporatised their business, brought in corporate governance and high levels of transparency, which has reinforced trust among customers. The current market sensitivities have paved way for the Indian real estate sector to evolve. Residential space has diversified over the years, developers that focused on luxury housing are now launching projects that can cater to the mid income segment, which is expanding and seeing strong demands.
Biggest technological innovation in your time
The environment is vastly different today with the supply chain being very strong. Developers are keen on innovation in construction methodology and follow extensive research to offer customised solutions. Technologies like precast and MIVAN Formwork help save construction time and improve quality ensuring effective utilisation of resources, for large housing projects. Today there is more emphasis on quality and timely delivery of projects, which makes it imperative for developers to adopt new innovative methods to stay ahead of the curve.
Key factors when approaching a new project
Apart from well-developed areas across regions, we invest in micro markets that have the potential for rapid infrastructure development and price appreciation. Excellent connectivity to central areas of the city, commercial activity and the social economic fabric are some of the essentials we evaluate before embarking on a new project.
Value of selling projects online
We believe that the way forward for the real estate industry is technological advancement in e-commerce, which includes real time selling of properties online. Integrating digital tools that give a 360-degree view of apartments, amenities etc. provides the customer with comprehensive information about the project, to enable a buying decision and ensure a superior consumer experience. We have recently partnered with Snapdeal and other e-commerce platforms for our online sales.
One change that the industry needs
Effective implementation of RERA in all states will be a crucial change leading to better transparency in the real estate sector. This Act, once implemented, will consistently regulate different sizes and types of projects. It aims to set a standard for the sector and will mitigate risks associated with construction and development projects. This will further bring in operational discipline and accountability.
Streamlining the approval process is necessary to meet the rising demand for housing. This will also help in controlling the cost of units and make the system more efficient and competitive. High quality infrastructure would also add to the rapid progression made in India, over recent years.