M Murali, Managing Director, Shriram Properties
Cash-rich is a term that aptly defines Shriram Properties as the company has been in the news for the huge amounts it has received as investments! Part of the Shriram Group since 1995, it has an extensive presence in Southern India and is developing a township in Kolkata. Playing cautiously is the mantra of the company; despite this, it is eyeing a growth of 30 per cent. M Murali, Managing Director, Shriram Properties, shares on how the company survived through the ups and downs of the real-estate sector.
The company has had some major capital investments. How do you plan to use them? Yes, these have been through Piramal Fund Management investment for a luxury residential project in Chennai, Tata Opportunities Fund investment of Rs 468 crore, and Rs 67 crore from India Realty Excellence Fund II. All the acquired money will be invested in new projects. We have plans to buy assets in Bengaluru, Chennai and Coimbatore, which will mostly comprise mid-market projects as well as luxury projects.
Shriram Properties acquired a 50 per cent stake in Unitech´s luxury development in Bengaluru. What made the project so attractive?
The Bengaluru market is booming; this includes not just luxury but mid-market residential and commercial projects too. We have some upcoming luxury projects in the city, of which we are set to launch five residential projects along with three in Chennai, and one project each in Visakhapatnam (large villa project), Coimbatore and Hyderabad. As the luxury projects will be high rises, we will use shuttering material for them.
With Visakhapatnam being developed as a ´smart city´, how do you foresee opportunities for the real-estate sector?
With the Modi Government coming to power, there are many opportunities in Vizag. Also with plans to develop this as a smart city, our expectations are high. Real-estate demand has already gone up. But the smart city plan for the city is yet to take off. Once it happens, we will chalk out our plans as well.
Having extensively covered southern India, how do you view the prospects of real-estate development in cities in the eastern, western and northern regions? There is good demand across the country. In Bengaluru, the mid-market segment is doing well. Overall, there is not much aggressiveness in the country. Once there is a positive economy, there will be a change in the mindsets of buyers in other cities. Apart from the south, we are eyeing opportunities in Mumbai.
We´ve heard the company plans to raise Rs 1,000 crore from private equity funds next year.
Yes, the capital will be used for further expansion of the company.
Having completed 20 years in business, what would you list as milestones?
In the past five to 10 years, the industry has seen a lot of ups and downs. There was a lot of money in the market at one point of time, but the market crashed. Despite that, we maintained absolute transparency with our stakeholders: the customers. We took advantage of the stock market boom from 2003 onwards. When FDI in real estate opened in 2005, we locked up a good amount of capital. And, in the 2008 crash, we looked at investing in good projects. Even now, when people are looking at procuring capital, we have a good amount of capital with us. Overall, we have been able to take advantage of both the ups and downs. We do not take many risks and along with playing cautiously and conservatively, we play aggressively.
From the construction point of view, what are the recent trends in construction materials and technologies?
New technologies help us cut down costs in the long term and contribute to speed up the construction process. We are up to date on technology-friendly homes. In our Bengaluru projects, Shriram Sameeksha and Shriram Chirpingwoods, we have brought in structural formwork and block work. In an IT SEZ in Chennai, we have used the flat slab technology. Further, our projects in Vizag withstood the Hudhud cyclone.
How will the sector benefit by the establishment of the Real-Estate Investment Trust (REIT)?
The setting up of such a trust will be of great help. Once REIT is introduced, long-term money lending will be available.
How has the company performed in the last fiscal? What are your expectations from the coming fiscal?
We had about 20 per cent growth in the last fiscal. For the coming fiscal, we are looking at around 30 per cent. The government´s ´Housing for All by 2022´ initiative can only be achieved by involving private developers. Private players have stayed away from the affordable housing sector only because of high input costs and absence of benefits. The government should address this issue. We are looking at developing affordable housing projects in the southern cities.
What are your growth plans in the near future? Any plans to venture into the hospitality sector?
We have no plans to venture into the hospitality sector but there are some plans for the IT space. And we continue to focus on national opportunities.
Year of Establishment: 1995
Top Management: M Murali, Managing
Director; SS Asokan, Executive Director
No of Employees: 515
Centres of Operations: Bengaluru, Chennai, Vizag, Coimbatore, Kolkata & Hyderabad.
Completed projects: Total construction area delivered: Over 15 million sq ft (Over 5,200 units).
Ongoing projects: Residential apartments in Yelahanka, Sarjapur, Hebbal and Electronic City, villas and apartments in White field and Sarjapur and mixed commercial and residential project in Electronic City (Bengaluru); township, villas, residential and hotels (Visakhapatnam); retail, apartments and villas (Chennai); villas and apartments (Coimbatore) and a township (Kolkata).
Current Order Book: Around 18 million sq ft under construction, 57 million sq ft in upcoming projects and 15 million sq ft already completed.
Turnover: `7,567 million
To share your building experience, write in at feedback@ASAPPmedia.com