Aug 15 2012 | Rail Zone
We have not yet been impacted by the slowdown
Established in 1984, Tata Housing is a closely held public ltd company and a subsidiary of TATA Sons Ltd. Since it’s revival in late 2006, Tata Housing has evolved into one of the fastest growing real estate development company in India. With the primary business being the development of properties in residential, commercial and retail sectors, the company’s operations span across various aspects of real estate development, such as Land Identification and Acquisition, Project Planning, Designing, Marketing & Sales, Project Execution, Property Services and Estate Management.
"We have not yet been impacted by the slowdown and have been seeing steady sales for all our projects across geographies. This could be because in such times customers opt to go with the developer that they can trust and also base the purchase decision of the quality of the product on offer."
Brotin Banerjee, MD & CEO of Tata Housing shares his views with Sandeep Sharma about his company, realty scenario in metro and non metro cities, housing stock, imposition of development tax near infrastructure projects, single window clearance system, affordable housing and rental housing scheme. Edited Excerpts…
Could you brief us about your Pan-India footprints and the parameters on which you have recently received Golden Peacock Occupational Health & Safety Award – 2012?
Tata Housing has grown exponentially establishing itself as the fastest growing real estate developers in India, with over 50 million sq.ft under various stages of planning and execution and an additional 19 million sq.ft in the pipeline. With a strength of over 500 employees, and presence in Mumbai, Lonavala, Talegaon, Pune, Ahmedabad Goa, Gurgaon, Chandigarh, Bengaluru, Chennai, Kolkata and Bhubaneswar; the company is now in the process of expanding its footprints to other parts of India across tier I and II cities. The company has also ventured into foreign markets such as Maldives and is actively exploring other markets including Sri Lanka and other South Asian countries.
Tata Housing was awarded the ‘Golden Peacock Occupational Health & Safety Award’ for the year 2012, in recognition of the initiatives and performance. In the infrastructure category, Tata Housing’s responsibility of continuously excelling in safety standards and practices has been recognised.
Tata Housing’s Organizational Health & Safety (OHS) Management, involves consultation, participation & involvement of employees, contractors, and workers. Tata Housing believes in institutionalizing safety governance wherein the management leads from the front and inculcating a safety culture. The strong EHS organization under direct supervision of MD & CEO, is instrumental in a safety conscious planning process that sensitizes and engaged workforce. There is a routine Quarterly Safety Rating of all projects based on an internal audit and employees are rewarded and recognized. The Golden Peacock Awards Secretariat receives over 1,000 entries per year for various National and Global awards, from over 25 countries worldwide.
It’s been more than 6 years of your company’s revival under your able leadership. Can you elaborate about the steps you have taken which could do the turnaround?
The company has been growing at nearly 100 per cent CAGR since 2008 and we hope to achieve this growth this year too. We have a number of strategies in place to achieve our growth targets. We have tried to balance our growth aspirations with a prudent approach towards buying land by trying out different financial arrangements with landowners. Departing from the normal practice of creating a large land bank, Tata Housing has taken a conscious decision to keep itself light and try to monetize the land reserve faster. Instead of buying the land, the company has entered into joint development agreements with land owners on a revenue share basis with 10 percent to 15 percent of the cost of land being paid upfront and the rest paid out as a percentage of sales.
We have a presence in multiple cities and are not focused only on the two big metros. We are also looking at overseas markets. We were the first real estate company to launch pan India projects. Housing constitutes 70-75 per cent of the real estate industry and Tata Housing’s presence is largely in this segment. Our projects include both premium and affordable, so even if one slows down, the other will de-risk us. We are building large townships which allow us to scale up depending upon demand.
We also lay a great emphasis on the type of projects we develop. Primarily on three important factors. First - Aesthetically and efficiently built products, much better than most efficient competitors. Second, we ensure that the customer is not short-changed. Third, most projects have some innovative tilt. Whether it is the tallest tower, or whether it is a theme or art and culture or whether it is sheer affordability. We have some strong value proposition for each of our product to differentiate it from competition. It has really helped in selling out faster and steer away from the adverse impact of slowdown.
How far Tata Housing is successful in providing affordable homes to the Indian middle class?
With an intention to meet the demand from the value and affordable housing segment, Tata Housing in 2010 launched – Smart Value Homes Ltd, 100% subsidiary of Tata Housing to exclusively focus on this segment. Under Smart Value Homes we have two pan-India brands – Shubh Griha (Value Homes) and New Haven (Affordable Homes). Smart Value Homes currently has projects in Mumbai at Boisar & Vasind and at Ahmedabad. Currently we are developing over 4500 value homes under Shubh Griha brand and over 2800 homes under New Haven brand. We plan to take both these brands on a pan-India level not only in metros but even to Tier II cities. We believe that we have been very successful so far in the value and affordable segment and the vision of Smart Value Homes is to be the India’s largest home provider.
Do you see your company going further in the affordable segment and building Nano home for the Indian middle class or any diversification is in the offing towards the luxury segment?
As a comprehensive real estate developer of choice, Tata Housing straddles across all consumer segments from value housing to luxury housing.
Tata Housing the parent brand focuses exclusively on the Premium and Luxury segment, while its 100% subsidiary Smart Value Homes Ltd focuses on Value and Affordable Housing. We have clearly demarcated the focus areas of each company so that undisputed attention is given towards the development and growth of each category.
Amidst talks and news report of the unsold housing stock existing in metro and non-metro cities. Where does Tata Housing stand in terms of inventories and new project launches?
We have not yet been impacted by the slowdown and have been seeing steady sales for all our projects across geographies. This could be because in such times customers opt to go with the developer that they can trust and also base the purchase decision of the quality of the product on offer. We have been trying to do differentiated projects based on the extensive consumer research before developing any product.
There are plans to impose additional development tax of around 10% on realty transactions which are in close proximity to the infrastructure projects like Mono Rail and Metro Projects. Do you see it to be fair on the part of the government to propose such scheme amidst economic slowdown?
Media reports suggest that the Ministry of Urban Development is in favour of a 10% additional tax on property that is within 500 meters of a metro line. Home-owners already pay a premium by way of market valuation due to this location advantage. The metro ultimately will benefits everyone, not just those residing close to it. An additional tax burden simply based on proximity seems arbitrary.
What are the impediments according to you in implementing Single Window Clearance system for real estate projects across India?
Some of the Impediments for implementing Single Window Clearance are as follows:
1) Involvement of many authorities
2) No uniform law governing real estate across India, every state has own set of laws and regulations.
We believe the government understands the impediments faced by the industry due to delays in getting approvals but until both the central and state governments work together to get this through it will not happen.
Could you comment on the feasibility and success of the much talked about rental housing scheme mainly in metros?
We are developing about 4000 rental homes of 160 sq.ft each for MMRDA with an investment of `2000 cr at our project in Kalyan.
Lastly provide us a glimpse of your recently completed signature projects?
Name of Project: Eden Court - Primo
Details: Eden Court complex known as Eden Court - Primo. The new towers would be first of its kind in Rajarhat, with premium specifications and amenities. The complex has been designed by world renowned Architects – Callison, USA. Nestled amidst lush landscapes lie three majestic towers. A residential address that’s part of a complex planned to the last detail. You couldn’t have hoped for a better location. It’s in close proximity to the airport and Salt Lake, and situated closest to the Central Business District in Kolkata’s new IT hub: Rajarhat - which means work will not only be within walking distance but you’ll also get home in time to spend precious moments with your kids at the pool and clubhouse.
Name of Project: Louvre-Duplex Living at Raisina Residency
Segment: Super luxury
Details: Spread across a sprawling 11.73 acre campus, Raisina Residency has 9 aesthetically designed towers that compliment modern lifestyle and are packed to the hilt with unmatched luxuries. The master plan ensures that maximum flats get unhindered views of both the Aravallis and the city landscape. With only two flats on every floor in all the towers except one, unique floor plans have been designed to ensure that no flat overlooks the other. The project has pre-certified Green Homes under the guidance of Indian Green Building Council (IGBC). The key features of a Green Building have been taken into account while designing and layout of the complex. As a mandatory part of Green Building development and to ensure healthy environment for our customers, Raisina Residency is designed to provide excellent natural ventilation. Also, Raisina Residency comes with 86% open area surrounding the towers.
Name of Project: Aquila Heights
Segment: Super luxury
Details: Aquila Heights is Bangalore’s tallest and most luxurious residential address. Located within the HMT Township at Jalahalli and en route to the new airport at Devanhalli, Aquila Heights offers you a lifelong vacation from the crowded, noisy city life without taking you away from it. With luxuries to match the most lavish hotels, and open green acres Aquila Heights is a perfect blend of everything modern and yet surrounded with the goodness of nature. Pre-certified green building under the guidance of IGBC, this is the first in India to benchmark construction quality through the joint AAA+ certification offered by the Construction Industry Development Council (CIDC) and Construction Quality Ratings Agency (CQRA). Urban lifestyle redefined with 89% open areas – luxuri-ous apartments, with premium finishes and state of the architecture