Saturday, November 18, 2017

Realty Biz

Pune is yet to be a Smart City but surely has the smartest real estate

 

 

Ranked among the top real estate developers in the country, Kumar Builders KUL has left its strong imprimatur in terms of residential and commercial development in Pune for close to 50 years. The real estate development and construction company also operates in Mumbai, Bengaluru, Hyderabad, Panchgani and Nagpur. Projects span across affordable, mid-segment and luxury homes to commercial and retail space, IT complexes and SEZ. KUL has also forayed into the area of healthcare and education. KRUTI JAIN, DIRECTOR, KUMAR BUILDERS KUL spoke to SHRIKANT RAO on the current areas of her company’s focus and the emerging trends in the city’s real estate. 

 

Briefly give us an understanding of KUL’s contribution to the growth of Pune’s urban landscape?

 

I believe the attempt is important and we as a company have always tried to set a milestone, to cross a barrier or get the best practices into whatever we do. A decade back, we would plant 3-5 trees per flat. Six or seven years ago when the Municipal Commissioner of Pune heard about our rules for planning he said the rest of the developers can at least grow one tree per flat.  The buildings we constructed a decade back were being spoken of as green buildings even when there were no certifications. It is only since the last 5-6 years that we are seeing and hearing about certifications. The city’s first Public Private Partnership to make a green project was done by KUL with the Pune Municipal Corporation, the city’s IT Park Orion and the Cerebrum was developed by KUL; the city’s first mall, the Central Mall, was also developed by KUL. I would say a lot of before its time developments spread over different categories of development were developed by KUL. My father Lalit Kumar Jain has always taken a lead in various developments. Many years ago, he presented a plan for the development of the city’s river front which was accepted by the government. Eight years ago, we developed housing which we sold at Rs 1800 sq ft.  That was the time when FDI in real estate and the first few funds had made an entry in India. We were doing a mass housing project which included everything from 1BHK up to 3BHK. I remember a gentleman from one of the fund houses telling us about our price points: “I cannot construct this project at $25 per sq ft forget selling it at $30. It is impossible that you are giving this kind of a quality at this cost!”  An explanation for this is earlier on we have developed the technological expertise within the company which keeps our construction costs down with no outsource requirement. As a real estate organisation, we have always kept social and environmental concerns in mind.  When I entered the industry we used to develop one building with a layout which could accommodate 20 buildings at a time. I have seen the industry grow from that to developing 40 buildings and coming up with townships, while providing to customers, the best amenities. This is a paradigm shift we have seen as a company about eleven and half years ago. Projects like Kumar City with 150 villas were constructed in three and half years; today we have projects like KUL Ecoloch where 20 buildings are being built at a time, Kumar Kruti, where one million sq ft of development is built at a time in the residential affordable luxury segment. I would say many of these projects have happened before their time. My father was leading the business, with his hands on with one vision of giving the best housing to all and all these have been Golden Years for KUL.  Now obviously the market has changed, the industry has graduated and there is a big hygiene difference. Though Pune cannot be called Smart City as yet, it has some incredible Smart Real Estate. You have national and international real estate and other brands working with the city. We have more than 2000 hotel rooms in Pune and I have not heard any of them shutting down. From the design and architecture perspective too you have international representation like Yoo Pune. 

 

 

What has the arrival of brands like Tatas done for the real estate industry? 

 

I believe the entry of players like the Tata’s into the real estate business has given the industry great credibility. Not only has that added to volumes but has also contributed to refinement and character which was much needed. Being a woman, when I joined the business, everyone wanted to know why I was in the real estate business and not into any other sector.  That seems to be undergoing a change now.  The real estate sector is no longer considered a black sheep. Earlier there were no developers doing projects across the country and you never heard of them taking up construction projects abroad. All that shifted when policies opened up. Corporate companies now see that it is easy to enter the business. Real estate is very much needed. You are talking of a 2 million housing shortfall in Maharashtra alone and can well imagine what the requirement would be across the country. The demand supply gap is huge and there is enough work for everybody. There is no entry barrier for anyone and anybody  with 20,000 sq ft of land can become a real estate developer. You will find developers in India now coming together to help each other do a better job. Why is that? Do you see such healthy, homogenous competition in other industries? It might be there in a few corporations but it is on a different scale in CREDAI where we have 7000 developers coming together because there is one vision for everybody. What this industry was lacking was government giving it that recognition it deserved. I think CREDAI has done a great job in creating awareness. Developers are now beginning to feel ‘There is good money in real estate. Yes, there is high risk but if the government supports we can really mitigate not just a lot of consumer risks but also the developers’ risk.’ It is that awareness which has brought a lot of credible brands into the business. Therefore the entry of good brands into the business adds to the flavour for sure. It is for time to tell whether they can deliver and become what consumers expect. Old established real estate brands will always get a preference because there is a great word of mouth and referral value to it. Going forward real estate will be a great contributor to the employment and to the quality infrastructure that the nation needs to create.

 

 

Take us through KUL’s performance in 2013-14, project focus and strategies?

 

We have changed our strategies substantially. Over a period of time we have really consolidated our position – we have 1700 acres of land across Pune, Mumbai, Hyderabad, Nagpur and Panchgani. We have now focused our energies only on integrated townships. Anything between 100 acres to 300 acres is the average size of the townships projects we do now. We are currently trading at 3000 units in the market at any given point of time across our projects. So in Pune we are doing 15, in Mumbai we are doing 7; in Panchgani we have done a gated community project of 45 acres, comprising only villas. Among the projects under construction we now have Cerebrum SEZ, which is a 100 acre plus IT project, we also have KUL Ecoloch which is a 100 acre development and KUL Nation too of 103 acres project.   

 

 

Tell us about your emphasis on integrated development and sustainability in your township projects? 

 

Our focus now is towards integrated development in which we do not need to complain about a government for. Since we expect a lot from ourselves also that  we wanted to push our boundaries we said ‘Ok the city will catch up when it has to – we have enough land in the city to develop it at a future date – but today let us make sure that we give world class cities. So yes, as developers we can create Smart Real Estate or Smart cities within our townships. You walk into KUL Township now and you can see everything is technology driven – with fully serviced houses, not service apartments. You just need to move in with your bags and from food to maid to laundry to cable to phone everything is already set for you from Day 1 you walk in. You have no more of electricity bill hassles. You don’t even need to move out from your house for the rest of your life if you don’t want to and everything is at your doorstep. Another part of an integrated development is environment. We are creating our own water replenishment system. KUL Nation or KUL Ecoloch are some of our townships where, if we are using 2 lakh litres of water per society a day we are replenishing in that year the full water we used across – 95 per cent of the water used by the township at the end of the year is replenished as ground water. That is how Smart Cities are. Unfortunately, since the government does not support much we have our own electricity system, Wi-fi and public transport developed within the township.

 

 

That suggests that with little support from the government self help is the new mantra among developers?

 

Yes, very much so. For instance, we have a redevelopment project called Nirvana Hills in Pune where we are rehabilitating 5000 slum dwellers there. Our Chairman met the slum dwellers in groups of 50 to understand what their common problems were. Every family with an average size of 8 had three generations living together and this included old people. Therefore, as per the current slum rules one has to provide a big hall with a toilet and a kitchen in terms of rehabilitation.  Nowhere could you have settled those people in there and you cannot give them a tenement that is less than 250 sq ft. In such circumstances we designed a 2BHK house for each and every slum dweller in 250 sq ft. Sounds impossible, doesn’t it? It’s the largest slum you have heard of in the private sector here. We finished rehabilitating 1300 families. We have the patent of the design on our chairman’s name because he made it. In our office we actually created the sample flat and moved the walls physically to see how 8 members of a family can live together in harmony without disturbing each other. All this development is with the objective of creating dignified living space and meeting hygiene requirements. So with great responsibility to family and with social conscious this redevelopment is being done. We have created Mahila Udyog for women in the slums to end their working as maids and start small business on their own; we also started ITI programmes for people who are of an older generation, not educated, and can build some skills. We follow the World Bank norms of rehabilitation. In India, we are the only company following that. We have a FDI called FMO, a Swedish fund, which has invested in this project and actually monitors how these rehabilitated families are taking the next step towards life instead of falling down. I believe urban slums will be a part of future cities and developers and private sector establishments will take this such projects with great responsibility and show the world how it is done. Besides redevelopment we have also done affordable housing projects.

 

 

Give us an idea of developments in the city’s IT space, retail and hospitality sector?

 

The IT industry of Pune is stuck at 3 million sq. ft. for the last 5 years. Hinjewadi, where all IT sector is, has 3 lakh people working there. It is an MIDC, a government project, but we have a 12 metre road entering it – that is a joke. It is taken for granted because it is steadily growing instead of taking a big leap. It is just a matter of one game changer and IT will see a big boom like no other city. Pune does not have a fulltime international airport. If IT has to do well it needs to take a big leap in its connectivity. The overall story of Pune retail is healthy in Pune. Lot of learning is yet to happen in Mall format here as elsewhere in India. There is no heartburn, but there are strategic malls which would have gone wrong – either in terms of architecture or design so that people refuse to venture into the upper levels, or the location is wrong, or there is an oversupply of 4 million sq ft retail on one road but it has its flipside. Because there is concentration of malls in one area like Nagar Road, people say ‘let’s go there, we will get what we want in one of the malls’. There are projects which are not doing well, but those are isolated cases. In hotels, there is an oversupply of rooms right now because the market is down. There is already talk of expansion, two have been announced and they will come up in the next three years.

 

 

 

 




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