- Vineet Goyal, Joint Managing Director, Kohinoor Development Corporation
With real estate at the core of its business, Pune-based Kohinoor Group has developed over 4 million sq ft of projects in the residential and commercial segments. Rated by Proptiger as the third fastest selling company in Pune in the last quarter, the company has build on its brand in the city by initiating the concept of ´nano homes´. What´s more, it has now expanded to the logistics segment and has proposed to invest Rs 300 crore in setting up two logistic parks in Maharashtra. Sharing more on these developments is Vineet Goyal, Joint Managing Director, Kohinoor Group in conversation with CW.
The company´s concept of nano homes helped the real-estate market in Pune during the recession. What benefit did this strategy bring to the company?
In 2009, the concept of nano was introduced with the Nano cars being new at the time; that was when we initiated nano housing. As we contemplated the market and the ongoing recession, we decided to build small homes. Drawing from the popularity of Nano cars, a decision was taken to brand these nano homes. After the introduction of nano homes, we started getting a good response from the western part of Pune and decided to majorly concentrate on this region. Today, 90 per cent of Kohinoor´s projects are in this region. To date, we have delivered some 4 million sq ft of area and by the fourth quarter of the next fiscal, we will be delivering another 3 million sq ft - all this will majorly be in Ravet, Hinjawadi, Bhugaon, Moshi and Pimpri-Chinchwad. So, nano homes established us as a brand and we were able to capitalise upon the landfills.
Tell us more on the size and cost of these nano apartments.
When we started off in 2009, a nano house spread across 500 sq ft was priced at around Rs 12 lakh for a one-BHK and Rs 18-19 lakh for a two-BHK. We have taken the same philosophy coupled with the Prime Minister´s vision of ´Housing for All´ and are developing one project in the western part of Pune under the brand name Abhimaan. We are doing 1,200 apartments of similar size - 562 sq ft one-BHK and 792 sq ft two-BHK - and the ticket size is Rs 21.5 lakh all inclusive for a one-BHK and Rs 28.93 lakh all inclusive for a two-BHK. This is certainly affordable compared to the Talegaon prices.
Despite a slowdown in investment housing in Pune, many people from Mumbai and several NRIs continue to invest.
For the past five years, my company has no investors. In fact, we had a policy in place, wherein we never had investors. But as the company grows, these people become a part of the business and so, more than investors, I call them partners. The term ´investor´ for me will apply more to people who are with you when the company is in profit, and leave when recession hits you. So, answering your question, there certainly has been an increase by 7-8 per cent in the past five years. And, these are partners who mostly prefer houses in the mid-segment, in the bracket of Rs 50-70 lakh. Pune is more of a customer-driven market than an investor-driven one. The city does not have much scope for investors, specifically in the residential segment.
Do you face any funding-related challenges in your projects?
At present, we have 11 ongoing projects, and these are sufficient for us to manage our cash flows for the future.
Also, it is through these projects that we are also able to fund our other land parcels. My company´s debt would not be more than 6-7 per cent of the total net worth of the company.
How is Pune being listed among the smart cities giving a boost to the real-estate scenario in the city?
Because Pune is among the top nine cities in India to be declared a smart one, the Centre and state have granted some Rs 36,000 crore for its development as a smart city. With this, the whole business will improve and a lot of international clients, customers and business houses will come into the city. So this is a great opportunity for the entire city. New technologies will come up such as the river bed; as we hear, the river beds will be streamlined and developed fully.
Tell us about the innovative materials and technologies used in your projects.
In one of our projects in Hinjewadi called Tinsel Town, we are executing two towers with Mivan technology. We plan to deliver the 14-floor tower in a year´s time. Although our commitment to the customer is 18 months, we will deliver in 12 months. But the way forward for us is mass housing, towards which we will launch 2,000 flats in one of our projects next year. This will certainly drive the need for technology that will help speedier construction.
How do you see the implications of the RERA Act?
We welcome RERA and GST with open arms. It is for the betterment of the industry as well as the customer. Also, the illegal construction that was occupying about 25 per cent of the space will have to be legalised or stopped; there will be demand for residential property and developers can encash this. And, the GST, because of the centralised tax, will lessen the cost of an apartment by 4-5 per cent.
Are there any new segments you plan to tap?
We entered the logistics arm last year and are coming up with warehousing projects at two locations, Ranjangaon and Chakan.
How do you see the company growing five years down the line?
In terms of turnover, in 2016-17, we have already reached the 80 per cent mark of last year. So we are anticipating 1.8 times the turnover this year, and the next time, it has to double up over this year. By 2020, we want to reach a turnover of about Rs 5,000 crore. I would like to acquire good land parcels and opportunities in Mumbai. We are planning to come up in the city of Nagpur and state of Gujarat in the coming year.
Year of Establishment: 1983
Top Management: Krishna Kumar Goyal, Chairman and Managing Director; Vineet Goyal, Joint Managing Director; Rajesh Goyal, Joint Managing Director
No of Employees: 95
Turnover: 25 per cent growth this year with an estimated growth of 30 per cent next year
Recently completed projects: Latis, High Point, Kohinoor Sangrilla, Saheel´s Fortune Park, Saheel´s Calysta, Kohinoor Towers
Ongoing projects: Tinsel Town, Falcon, Abhimaan Homes, BZone, Kohinoor Grandeur Upcoming projects: Residential projects in Bhoirwadi Hinjawadi, Shirgaon near Talegaon and Zendewadi near Hadapsar.
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