Kunal Premnarayen, Group CEO, ICS Group, graduated from Wake Forest University, North Carolina majoring in Communications with International Studies being the minor subject. After his initial stint in USA with firms like Merrill Lynch and Lucent Technologies, Kunal moved to India a decade ago. Since then he has been with ICS in a senior management role and has developed deep domain knowledge of India’s evolving real estate sector. Kunal is responsible for developing the core leadership team, the medium and long-term strategies for the individual businesses and their implementing plans. He works at a strategic level with the individual CEOs and is actively involved with the asset management business.
An avid sportsman, Kunal was ranked among the top 5 tennis players and was the national champion of Maharashtra. He also enjoys running and squash.
ICS Group has interest in real estate, hospitality, asset management and financial services. ICS Realty is the Group’s holding company for real estate ventures and apart from investment, it provides strategic direction to facilitate growth of the various real estate businesses. ICS Group has partnerships with international domain leaders like Old Mutual Property, South Africa for property development and management, Bentel Associates, South Africa for architectural business, Mantis International, South Africa for hospitality in the boutique luxury space and Secure Parking, Australia for car park management. ICS Realty in conjunction with Old Mutual Property (South Africa), successfully promoted a FDI compliant real estate fund for India. The corpus raised and fully deployed was US$70mn. The Group is looking at promoting more such products for India. Through its various businesses, ICS Group is involved in executing projects in 25 cities pan India and employs over 750 people. The Group is headquartered in Mumbai with offices in Delhi, Pune and Bangalore.
Replying to Anil Mascarenhas of IIFL, Kunal Premnarayen says, “Over the last decade ICS, in conjunction with its various international partners, has launched complementing businesses in the real estate and financial sector.”
You are in retail real estate as well as financial services. Briefly explain to us your business model and how has the company evolved over the years?
ICS Group has interest in real estate, hospitality, asset management and financial services. Over the last decade ICS in conjunction with its various international partners has launched complementing businesses in the real estate and financial sector. In the real estate sector it has property management and development, architectural design, parking management & consultancy and in the financial sector it has interests in corporate finance and asset management. The Group has recently forayed into the hospitality sector.
What are some of the services offered through your various companies and what is the revenue contribution from each?
Under Real Estate we have Pioneer Property Zone which is the property management and development business of the Group. PPZ is unique in its offering of complete end-to-end property solutions, with the objective of creating successful retail-centric assets, generating exceptional returns to its stakeholders and providing a comprehensive retail experience to the end customers. Bentel Associates Realty Design Consultants Private Limited is the architectural design and development division. It offers a host of services including master planning, project concept and development, architectural design and development, interior design, graphic design and store planning.
Secure Parking Solutions is the parking management division. It provides end-to-end solutions right from the conceptualization or design stage up to actual management of the car parks.
With Ayana Hospitality, ICS has recently forayed into the luxury boutique hospitality segment.
In Financial Services, ICS Asset Management arm provides investment management/ advisory services to institutions/ funds focused on the Indian real estate sector.
In Corporate Finance ICS provides comprehensive and wide range of financial services to its clients. It has a dedicated team of senior professionals who bring forth a combination of strategic, operational and corporate finance skills. Our revenue model is to charge superior fees to our clients for providing value addition and integrated services.
Comment on the partnerships you have and what do the main players bring to the table?
ICS has partnered with international domain leaders for its businesses. For Pioneer Property Zone ICS tied up with Old Mutual Property (OMP). OMP has more than 50 years track record in asset management and property development & management in South Africa with a current AUM of approximately US$ 3.3bn (28 million sq. ft.). ICS has also partnered with OMP for its asset management business.
Bentel Associates Realty Design Consultants (Bentel India) is a joint venture between ICS Realty and Bentel Associates International (BAI), South Africa. BAI has 50 years of designing experience. It has designed 300 million+ sq. ft. of retail real estate and 280 million+ sq. ft. of hypermarket/ supermarket space for Carrefour and Pick ‘n Pay and is the pioneer of the ‘Theme Centre’ concept
ICS partnered M/s Secure Parking for its parking management and consultancy business to form Secure Parking Solutions. With more than 15,00,000 parking bays, Secure Parking International is the largest car park operator in Australia, SE Asia, India and Middle East region.
Ayana is a recent joint venture between ICS and Mantis Group, South Africa, to address the opportunity in the luxury boutique hospitality sector. Mantis Group owns and operates a diversified global portfolio of 53 properties including safari camps and private game reserves in Africa, eco‐lodges in South America, city hotels in London and New York, and a luxury camp in Antarctica
Our International partners brings with them their domain knowledge, expertise, international best practices, understanding of the global trends which coupled with our local knowledge help us create value for stake holders.
Tell us about some of the major projects executed in India. What are your completed projects?
Some of our completed projects are:
Bentel: Oberoi Mall - Mumbai, South City Mall - Kolkata, UB City - Bangalore, DB Mall - Bhopal, Mantri Mall - Bangalore
Pioneer Property Zone: Pacific Mall - Delhi, Kumar Pacific – Pune, Koregaon Park Plaza – Pune, R City – Mumbai, Vega City – Bangalore
Secure Parking: Inorbit Mall- Mumbai, Oberoi Mall – Mumbai, High Street Phoenix - Mumbai, Sahara Mall, Gurgaon, DLF, Gurgaon, Trident Hotel, Mumbai.
Asset Management: Our asset management product, Triangle has presently raised approximately Rs3.75bn for a 35% equity stake in 3 large mixed-use developments, in India’s upcoming tier 2 cities, being developed by Prozone (a joint venture between listed retail major Provogue (India) and Capital Shopping Centres, a listed property company in UK)
These are just a few of our completed projects. We have projects over 25 cities pan India.
Brief us on your financials. What is the outlook?
As we are privately held company we would not wish to disclose our financials. At the asset management side the Group has an AUM of approximately Rs3.75bn. The asset management has also initiated the process of raising its next fund with the target size of approximately Rs13.50bn.
You are making an entry into luxury boutique hospitality segment. What is the potential in this business? Who are you aligning with for the same?
Our hospitality business is called Ayana. It has been formed to address the untapped opportunity in the boutique luxury segment of the market in the Indian sub-continent and south-east Asia. To enter in this segment we have done a JV with Mantis who is the world’s leading player in boutique hotels, game reserves and eco lodges, luxury yachts and ski chalets.
The venture is focused on providing hospitality services to high-end boutique hotels and lodges, primarily in nature destinations.
We realised that there is a sharp incline in the Indian tourism industry. The number of foreign tourists too India have been increasing and there has also been an influx in domestic tourism. The economic growth of India has given rise to the affluent class in India who are looking at luxurious getaways. We saw this potential and hence decided to venture in this sector.
Ayana will develop and manage luxury eco-friendly properties and heritage sites with a strong emphasis on responsible tourism, conservation of wildlife and restoration of traditional architecture.
The macro-economic situation appears relatively weak, but there is no correction seen in real estate prices. What is your reading of the situation?
This scenario may be relatively true for the Tier I cities where the developers are holding on to the prices even though the volume of sale transactions are reducing. The rental yields are also declining but the investors are reluctant to sell off the real estate at reduced prices.
However some impact of this can be seen in Tier II cities.
Brief us about your current and future projects?
Our client list includes names like Prestige Group, Mantri Group, DB Group, Brigade Group & Bansal Group to name a few.
Some of the projects Bentel is currently working on are:
Pacific Mall, Dehradun
Wave City, Ghaziabad
PVP Square, Vijaywada
The future project of PPZ includes:
Vega City, Bangalore
Suraj Mall, Bangalore
Karle Town Centre, Bangalore
DB Mall, Bhopal
PPZ has also recently taken over a mixed use development project in Patna
Secure Parking has recently undertaken:
Orion Mall, Bangalore
Junction mall, Durgapur
ICS Asset Management has now initiated the process of raising capital for its second real estate fund with a target size of approximately Rs13.50bn. It is also evaluating options to extend its investment management services to the hospitality and the car parking sector.
Ayana’s first project is a ten room luxury safari lodge at Pench National Park, which is expected to be operational by 2013.
What are your capex plans? Are you sufficiently capitalised for funding the growth in the current fiscal year and beyond? Are you planning to raise funds either through equity or debt?
Being in the services business our capex is limited and we are funded by internal accruals.
What is your shareholding pattern?
ICS Group is 100% owned by Mr. Deepak Premnarayen and family.
You are an avid sportsman. Any lessons from tennis?
Apart from tennis I also have interests in running and squash. Tennis has thought me some invaluable lessons in life.
It was due to tennis that I had the opportunity to travel at a very young age and gain experience by meeting different people and learning about different cultures of the world.
Tennis teaches you to never give up on your dreams and goals. Eventually hard work and persistence always pays off.
What is your company’s vision?
The ICS vision is to be an integrated player in the real estate and financial services sector by partnering international domain leaders and by developing a culture of transparency, governance and fair-play.
What is your employee strength? What kind of talent do you look for?
We have over 750 employees in our team. The functional qualification required is different for various businesses and various departments and is linked to the role to be performed. General qualities for potential employees are the right attitude, enthusiasm, maturity and desire to work hard work. There are ample opportunities for growth and development and the person with the right attitude can gain significantly as this is an industry is poised to grow.