We have delivered about 1.65 crore sq ft in the past 25-odd years

- Chintan Sheth, Director, Sheth Corp Founded in 1986, Sheth Group has created some of the largest townships and complexes and tallest skyscrapers through resourceful planning, an unwavering focus on quality and customer-oriented designs. The group´s portfolio boasts over 17,000 homes, 60 projects and 15 million sq ft, developed and delivered. After pursuing his master´s in the US, Chintan Sheth returned to Mumbai to support his father and add his expertise to the business. With Sheth Corp as Director for about six years now, he shares more on the company´s projects and an industry perspective, in conversation with SHRIYAL SETHUMADHAVAN. Please introduce us to your business. We are primarily a residential real-estate company that eventually diversified into the commercial and retail business. My father started this company in 1984 in Pune; in 1986-1987, he moved to Mumbai. We have been developing residential projects since then. We started, of course, with the outskirts, because for any new developer the challenge is raising money to buy land. We eventually moved into the suburbs, and started building our portfolio with larger and more complex projects. We acquired two good, old companies: Vasant Galaxy in Goregoan West, Mumbai from Eastern Ceramic and Voltas Switch Gear in Thane. So my father had basically specialised in acquiring companies that had shut down, dismantling them and making developments out of them. Tell us about your township projects. We are in the process of acquiring a couple of large land parcels in Kalyan and Panvel and in the outskirts of Thane. Each will be about 250 acre. By next year, one of them will be launched. You have also developed a mall... My father is basically the driver in terms of design and development and R&D towards this. We took about three to four years, visited a lot of countries such as South Africa, Japan, China and Singapore, and met mall developers. We have worked with an international architectural firm that specialises in large-format retail spaces. Mall design is a scientific business. It´s a lease model and so you plan it for 25-30 years or even 40 years. What is your current land bank like? We have invested in land in the outskirts of Mumbai, like Panvel, Kalyan and Thane, which are yet to be developed. So we buy land, develop and move on. We have delivered about 1.65 crore sq ft in the past 25-odd years. So if you actually consider it per year, the delivery comes in lakhs. The company has always focused on offering quality and customer-oriented designs, and hence R&D... There are two aspects to this: Quality of the product and quality of the design. We spend a lot of time, money and effort to ensure our processes and systems at site -- quality assurance or quality control, material and work checking - are running smoothly and up-to-date. Also, we focus on R&D at site in terms of new materials we can use to make designs lighter to give better value to customers. For example, making thinner walls to give more carpet area to the customer and, at the same time, ensuring these walls are soundproof. In terms of quality of design, we look at design in a holistic way. There are so many designs and a lot of niches and passage areas that are basically dead areas; we fill these. Also, in terms of light, ventilation, etc, we are eco-friendly and want to give the customer the best. To date, the company has delivered as many as 60 projects. Which one would you point out to as a landmark, and why? Many of our projects have been landmarks in their own time. But our most well-known project is Beaumonde in Prabhadevi, Mumbai- today, it still stands testimony to our efforts. We roped in international consultants for the design and layout. It was one of the first projects in 2001-02 with the concept of an eco-deck. The building, up to the second or third floor, has been clad with granite; above that, we have clad with ACP, an aluminium sheet imported from Malaysia. This probably still remains the only residential project to use this kind of material because it´s expensive; and compared to paint, it´s a plaster finish. Also, it is moisture, heat, wind, dust and water-resistant. It does not lose its colour easily and makes the building light in design. You have also built an international portfolio... This was basically when Dubai opened its doors to freehold land for the world to come in and develop its market there. We first started a project called Iris Blue in Dubai Marina. We did not work with the Sheth name but developed a sub-brand in Dubai called Iris. But Dubai works in a different way; architects and developers have a different role to play. We completed three projects there and had four more lined up in the pipeline. But in 2008-09, the market absolutely crashed. Fortunately, we had not taken any high-risk engagement. We sold off almost 70-80 per cent of our work; at present, we are finishing our outstanding work. We have done a couple of JVs in many projects and sold off one. We are wrapping it up and are not looking at expanding in Dubai. There is enough work in India. Do you plan a pan-India presence? Not really pan-India, but beyond Mumbai I am looking at Bengaluru actively. However, the city has its own challenges. We have closed two properties, and one of them will be launched at the end of this year. What are the funding-related challenges in India? Fundamentally, the biggest problem for the real-estate sector is that it is not a recognised one although it contributes to a large percentage of India´s GDP. It still remains unorganised with lack of clarity on regulations, timeframes, delivery schedules, accountability, etc. So for an investor, the appetite for risk is high and, at the same time, expectations from the market are high. This has to be corrected sooner or later. If the risk becomes lower and there is a better regulatory environment, expectations from the market will improve and it will be easier for companies to fund this industry. Where do you source your funds? Most of our funding is through banks and NBFCs. We also recently sold our stake in our mall to GIC, which is the sovereign of Singapore Sovereign Fund, in a private equity deal. So we do both debt and private equity. How do you see this year panning out for the company? This year is going to be steady. In 2015, we offloaded part of our equity to GIC and used the fund to clear out a lot of our high debts and stabilise our short-term considerably. Also, sales are happening smoothly; we do good launches and we sell fast. Receivables are on track for this year. So while I see this year going smooth, its more about consolidation for me right now. FACT SHEET Year of Establishment: 1986 Top Management (promoters): Ashwin Sheth, Chairman & Managing Director; Chintan Sheth, Director; Maulik Sheth, Director No of Employees: 450 Centre of Operation: Mumbai Ongoing projects: Sheth Midori, Dahisar; Sheth Avalon, Thane; Montana, Mulund; Avante, Kanjurmarg; Sheth Aiyana, Goregaon Completed projects: Residential: Vasant Lawns, Thane; Beaumonde, Prabhadevi; Vasant Garden, Mulund; Vasant Galaxy, Goregaon; Vasant Valley, Malad; Vasant Marvel, Borivali; Vasant Nagri, Vasai; Vasant Sagar, Kandivali; Sheth IVY, Dindoshi; etc.Commercial: Cynergy and Sigma Estate, Mumbai. Retail: Viviana Mall, Thane. turnover: Rs.400 crore