Tuesday, January 19, 2021

Interview - Arshdeep Sethi (RMZ Corp)

A developer will see how much money can be made from a Smart City



RMZ Corp is among India's leading developers, owners, managers and investors of prime real estate with 15 million sq ft of development to its credit since its inception in 2002. The Bengaluru based firm has made its mark in the development of smart ‘state of the art’ real estate – this includes commercial offices, residential, retail and hospitality spaces. ARSHDEEP SETHI, MANAGING DIRECTOR, RMZ CORP offered SHRIKANT RAO a developer’s perspective of a Smart City.



The government’s programme to develop smart cities is a great vision to have but it is left best to the judgment of states because all of this would need huge capital. If I recall the smart city idea is well grounded in Ahmedabad where they have the concept of smart cities which they are looking to build between Gandhinagar and Ahmedabad. People have bought lands there and are selling it at exponentially high rates. I think that has been going on for the past 4 to 5 years. I am not too sure though about what has been achieved besides  good marketing.



My own assessment is that a smart city would depend on man power availability for a particular sector business. Today if we look at smart city as a concept it is essentially office and IT driven like we have in Bengaluru or Hyderabad or Chennai, cities which are predominantly doing well on the IT side and have a captive graduate population. In the case of a Smart City the mother is IT followed by other support services required on the periphery. To me it is important that smart cities need to complement with employment opportunities for graduates passing out and that we have people that are willing to move to these locations. So if you see all these growth in the last couple of years it is predominantly because of IT and big companies moving to these cities. I think 70 cities is a great vision but it would be nice to have two to begin with to showcase to the whole world and the country that this is possible. Then that model can be replicated elsewhere. What started with Bangalore, then Hyderabad and later Chennai, was followed by everyone. One has to pick up 2 to 3 cities and create world class infrastructure to support it. Don’t forget that there is so much of deficit around.



We have to first meet the basic needs of the people. Who are the main players in the EPC domain who will be a part of the smart city mainstream? The names are written on the wall - there are 3 to 4 big guys, the L&T's of the world, we are looking at L&T, Punj Lloyd, Shapoorji Pallonji. Then we have the IT big guns, all the major companies would certainly figure on the Smart Cities development list. Today we have Nandan Nilekani in his manifesto talking of making Smart Cities – that is a great idea to have but implementing it requires a lot of capital and so much else. We need Smart city concepts like wi-fi being available; various information available on your phone, smart transportation and utilities. It needs a lot of back end connectivity similar to what Aadhar initiated. On a backend everything has to be connected right from your passport details to your driver’s licence to bill payments. When you put the idea of a Smart City to a development company they will see how much money is there to be made, the ROI. It has to have a vision plus feasibility. Would we at RMZ put our money on Smart Cities? As long as I get the expected returns from any business I do, why not? Anyway we are doing smart buildings today which have Building Management Systems, where everything is connected in terms of contingency plans, where equipments are back ended, where power shortages are redundant. In all our projects – whether at Bengaluru or Chennai – we have smart components woven into the real estate assets.  




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