Replying to Yash Ved and Pooja Jaiswar of IIFL, Ashish Puravankar says "We have laid out a detailed five-year plan to achieve annual group sales of over 13.3 million square feet (sqft) by the year 2020.”
What is the strategy behind the recent restructuring? What are your growth plans?
Puravankara is celebrating its 40th year, which is a significant milestone for the Group, having achieved an impressive scale of growth over the last four decades. The Group is well positioned to seize the vast opportunity and challenges in the Real Estate sector going forward. We have laid out a detailed five-year plan to achieve annual group sales of over 13.3 million square feet (sqft) by the year 2020. The area under execution is targeted at approximately 55 mn sqft, thereby increasing our development capacity by more than double in the next five years.
What are your growth plans?
In order to achieve our aggressive growth targets over the next five years, we are in the process of reorienting our resources with concrete measures focused around Human Capital management, Project management and advances in construction technology. This would also address improvements accounting to better workflow systems, profitability and management of customer expectations.
We aspire to transform Puravankara into a performance-driven organization focused on delivery, quality and transparency.
Our vision is to evolve into a lean and strong organization, by leveraging on our expertise in the areas of land acquisition, design and innovation, sanctions and marketing. We plan to outsource construction and focus on bringing in more efficiency, thereby ensuring timely deliveries.
What is your outlook on the Bangalore property market?
Bangalore has been one of the fastest growing real estate markets in India. It has also been a first private equity investor choice market in India, in which luxury housing is now one of the most vibrant and dynamic segments. The growing demand for luxury housing can be attributed to the rise in demand and supply, the rapid pace of urbanization, the influx of global lifestyle trends and the fast growth of service industries such as technology and financial services, which are resulting increase per capita income in the city. The Bengaluru market being largely end user driven, constitutes as much as 80 per cent of the realty clientele and prices are more reflective of the income levels. Climatic advantages also make it the best destination for education, health, employment and investment.
Bengaluru attracts large global corporations with headquarters of many companies being located here, boosting the need for housing across segments. New forms of Real Estate spaces such as E commerce Retail also add to the market share. The increasingly emerging startups are today’s flavor in the city, and the Government’s proactive support to these ventures is a very positive step for the Bangalore real estate market.
The pricing of Real Estate in the Bangalore market has increased more realistically and is still very affordable, offering great value for customers. The weighted average price in Bengaluru is predominantly in the range of Rs. 4500 per square ft, compared to Rs. 7500 - 8500 per sq ft in Mumbai.
Which are the upcoming areas and cities in which buying a home would be a value proposition?
There is a significant demand for homes in naturally ambient locations as well as in self-sufficient projects that offer entertainment and ease of living. The Real Estate market in South India has offered robust and sustainable returns to investors and continue to be affordable for a large part of the city’s population, thereby ensuring that there is a buyer for the property when the investor chooses to exit the investment.
The micro markets of Chennai, Bangalore and Kochi and Pune are doing well and the areas with potential for appreciation are:
- Chennai - Guindy - Velachery - Pallikaranai Corridor
- Purva Evoq (coming soon), High end 3, 4 and 5 BHK apartments near Guindy Race Course designed by an international architect. Prices starting from Rs 2.5 crores.
- Purva Windermere an elite enclave of 55 acres township at Pallikaranai (near Velacherry) with one bed Manhattan condos, two, three and four BHK apartments. Prices Starting from Rs 30 lakhs onwards.
- Bangalore - Kanakapura Road Corridor in South Bangalore, Hebbal - Hennur Corridor in North Bangalore, Mysore Road
- Purva Scarlet Terraces – High rise property in Kanakapura Road corridor with close proximity to NICE Road offering 2 BHK and 3 BHK units. Prices starting from Rs 65 lakhs.
- Purva Palm Beach, Hennur Road – Never before seen Beach themed residential project in Bangalore. Planned on the lines of a tropical beach resort, this residential apartment project spreads over 19.37 acres with a central courtyard, offering High end 2 & 3 BHK apartments. Prices starting from Rs 70 lakhs
- Provident Rays of Dawn -This 59 acre project is located off Mysore Road and slated for development due to its proximity to NICE corridor, offering 2BHK and 3 BHK apartments with luxury amenities. Prices starting from Rs 35 lakhs.
Pune – Kharadi – Mundhwa Corridor
PurvaSilver Sands (coming soon) - Unique Beach themed large scale project, located close to Kharadi region, acclaimed for
Technology Parks. Consists of Manhattan Pods and Condos, 2 BHK, 3 BHK and 4 BHK Units.
Kochi – Marine Drive
Purva Oceana & Purva Grandbay- Two of the most premium residential addresses located on the sought after strip of land in Kochi, with exclusive 3 BHK units. Prices starting from Rs 1.3 cr
What is your take on the current real estate scenario?
The Indian real estate market is cautiously optimistic. With the proactive approach adopted by the new government, there has been a rise in business confidence. Once economic activities pick up, we expect it to translate into more business, creation of more jobs, rising income levels and a boost in the demand for properties.
We have witnessed that key micro markets are continuing to do well and are stable. There is an increasing demand for the right products offered at the right prices. Modern homebuyers want value for money, finishes with finesse, and top-of-the-line amenities. There is a demand for luxury and premium projects by Grade A Developers, especially at the launch stage and this is reflective of the consumer behavior.
The South Indian markets have been more stable as these are end-user driven with stable economic activity, migratory population and an excellent socio-cultural background. The pricing of real estate in the Southern markets have been more realistic and are still very affordable – offering great value for customers. Investors have seen an appreciation of 15-18% annualized with the right developer.
Going forward, implementation of the Real Estate (Regulation and Development) Bill will boost the larger real estate eco system, ensure accountability of all stakeholders and protect the interests of consumers.
What you feel about the campaign such as the Make in India and Smart City, and how do you see your organisation going ahead with it?
We see large opportunities with the Government’s new Housing for All by 2022 and 100 Smart Cities Initiative. Puravankara has already pioneered premium affordable housing for the mid income group back in 2006, with Provident Housing. Our Provident projects across locations in the South are a step in the direction of ‘Housing for All’. We will continue working on similar initiatives, and are awaiting further guidelines from the Government to plan our next course of action.
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