- Ahammed MP, Chairman, Malabar Group
Malabar Developers, the real estate development wing of the Malabar Group that is better known for its chain of Malabar Gold & Diamonds, commenced its journey in 1995 with its first project, Malabar Gate. Since then, it has delivered highly innovative living spaces in the form of premium villas, apartments and commercial projects. From contemporary design to grand, traditional architecture, the company has created an exclusive niche in the Indian real-estate market with sound engineering practices and customer-centric operations. Ahammed MP, Chairman, Malabar Group, shares more on the company's expertise and future plans, in conversation with SERAPHINA D'SOUZA.
How do you view the real-estate market in Kerala and how do you strategise to stay ahead of the competition? Also, how do you study buyer preference for your projects?
Like in any other state, there has been a slowdown in transactions after November 8, 2016, following the demonetisation decision. Secondly, certain changes have taken place in the Registration Act in Kerala, creating some uncertainty about registering a property. To overcome this, our strategy is currently focused on selling residential flats and leasing commercial space, instead of selling properties or land. We have completed and delivered about 1.6 million sq ft of commercial and residential space across Kerala. In terms of buyer preference, our R&D department makes an effort to continuously study and understand the aspirations of customers, and accordingly we develop and deliver a customised product in tune with their tastes. For instance, at present, a major chunk of our clientele comprises customers engaged in growing organic vegetables. So, we are providing space for vegetable gardens in balconies or on rooftops. Our customised M24 services - covering as many as 24 customer-related services such as interior design support, travel desk, building insurance and housekeeping, to name a few - are another innovative step towards providing additional value to customers.
How do you plan to develop your current land bank and what is the total investment outlay like?
We currently have a land bank of 250 acre across Kerala, Tamil Nadu and Karnataka, with over 2 million sq ft of ongoing projects and more than 16 million sq ft of upcoming projects. In the 22-acre land bank along NH-47, Thrissur, Kerala, we will be developing a high-tech IT park, an educational complex, a residential complex, and a commercial mall. In Tamil Nadu and Karnataka, we plan to develop mainly residential buildings. We have a separate land holding company for procuring and maintaining a steady asset base of land parcels. So, our strategy is to scout for and buy land through JVs and then develop these. Our team is also in the process of looking to buy land in Kannur, Thrissur, Calicut and 90 taluks in Kerala in the next four years. We are planning an investment of Rs 10,000 crore in the coming years for several construction projects that are in the pipeline.
What are your procurement requirements for upcoming and ongoing projects?
We regularly procure cement, steel, hollow bricks, etc, through local suppliers. And, we subcontract to reputed subcontractors in Kerala with modern facilities. Moreover, as part of becoming a backward integrated company, the first step was to start our own contracting company. We are taking measures to modernise our contracting company, Solidity Contracting LLP. This will improve productivity and help in speedy construction and completion of projects. Our strategy of backward integration for all project requirements will help fulfil our in-house procurement like flooring, ceiling and other required materials. Further, we are planning to invest in precast concrete methodology for upcoming projects.
How do you implement green and sustainable practices in your projects?
All our projects are broadly based on environment-friendly methodologies such as energy-efficiency and water conservation in ways of sub metering, rain-harvesting tanks, etc. We are also in the process of getting our headquarters in Calicut LEED accredited as part of our commitment towards green and sustainable practices.
The company plans to launch mid-priced housing projects in Kerala, Tamil Nadu, Andhra Pradesh and Karnataka. Would these fall in the affordable range, thereby supporting the government's vision of achieving housing for all?
We are focused on launching housing units across all price ranges as part of our commitment to the government's vision. However, the emphasis will be on the affordable housing segment, which has received a huge boost with pro-poor terminology and a conducive policy environment.
We are looking to acquire land through JVs to develop properties in this segment. We are also planning to acquire land to build gated communities comprising about 50-60 apartments, with amenities that include swimming pools, gymnasiums, club houses, etc. These facilities are mainly available to only luxury projects in Kerala, which we will develop and offer at about Rs 40-50 lakh.
What measures have you taken towards quality control, training and safety?
We have already initiated concrete efforts to start a vocational training facility by 2018 with an emphasis on training and safety. Meanwhile, there is a team regularly working on quality checks, construction checks, policy controls, engineering standards, fire safety, etc, to adapt to norm requirements.
How do you raise funds for your projects? Also, what are your plans towards expansion and what growth targets have you set for the future?
We largely raise for our projects through equity and bank loans. Our expected RoI is about 20-25 per cent, varying from project to project and location to location. Our turnover stood at Rs 900 crore in FY2015-16, and we expect to cross Rs 1,000 crore in FY2016-17. Further, we have planned an expansion of around 16 million sq ft for the upcoming year. And, with multiple JV projects in the offing, we are steadily moving to our target of becoming one of the leading developers in the country by 2020.
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