We plan to develop 1.6 crore sq ft of real estate by 2012

01 Dec 2011 Editorial Team

Boman Irani, Managing Director, Keystone Realtors Pvt Ltd

Here's a company that builds with ideas, not just mortar, and designs its blueprints with nature, open spaces and insight. Indeed, Rustomjee, also known as Keystone Realtors Pvt Ltd, is driven by the commitment to provide premium residential and commercial complexes and townships to thousands of Mumbaikars. Chairman & Managing Director Boman Irani shares the company's milestones and his view on what makes Mumbai an ideal real-estate destination, with Shriyal Sethumadhavan....

You have a proven track record of delivering projects using the latest technologies.
Rustomjee has a reputation of delivering high quality homes in the Mumbai Metropolitan Region (MMR) that offer value for money with added amenities like sports facilities, clubhouses, squash courts, hobby rooms and play areas. Further, our unique concept of an amusement park, like Yazoo Park, and a knowledge centre, like The Leons World, (in certain projects) gives us a distinct edge over competitors in terms of childcare. Our core focus is on a strong, low-risk development portfolio where most projects are executed through the joint ownership or development model. We build a strong relationship with financial partners and adopt a 'value-picking' rather than 'buy-at-all-cost' strategy. We also focus on establishing relationships with government agencies and contractors to execute projects within the given timeframe. With the aim to deliver customer-focused projects, we have created township communities in suburban areas; a substantial portion of our portfolio also focuses on value for money.

What are the company's achievements?
With many national and international awards to our credit, we have grown at a CAGR of over 30 per cent since inception. Our developments in Mumbai comprise 80 per cent of our total portfolio. With 3.2 million sq ft of completed projects and about 35 million sq ft of potential and ongoing developments, today more than 2,100 families are living happily in our homes, and 5,000 more have chosen a Rustomjee home.

What is the best solution to the perennial problem of land acquisition?
The biggest hurdle in the Indian growth story is land. Projects worth around $150 billion (Rs 665,550 crore) have reportedly been stalled in India in the past decade mainly owing to land acquisition problems and opposition from local communities. The basic economic problem India is facing is how to allocate scarce resources (land) amongst unlimited uses in a sustainable fashion. This requires an economic, political and environmental solution. In our experience, a joint development model has been most successful and acceptable for both landowners and developers. Given its inclusive nature, the model ensures that landowners hold the title till the land is developed and get their share. On the approvals end, we need to have a single-stop clearance for any development project and strengthen the existing regulatory mechanism.

Virar is witnessing development like never before, and you are part of the growth story...
The slow and gradual adoption of a cosmopolitan culture in Virar and the ever increasing cost of real estate have resulted in migration from the Mumbai mainland. The suburb's growth is yet to be seen in full form as the quadrupling of the railway line between Borivali and Virar just started in 2007. The Virar-Alibaug corridor is an ambitious project undertaken by the MMRDA, and a major developmental milestone in the history of Virar. Bringing a paradigm shift to the skyline is our township, Global City, built jointly with Evershine Builders across 127 acre, which will house 18,000 families. Architect Sanjay Puri and professors from VJTI have contributed to the planning. The project offers homes ranging from 1, 2, 3 and
4 BHK. Infrastructure being executed includes roads (75-100 ft wider), water and power supply and three STPs (sewage treatment plants. A dedicated STP is expected to generate 1.20 lakh litre of water per day for flushing and gardening.

Besides this, around 60,000 plantations will provide a green environment and an underground drainage system will ensure there is no water-logging. The township will also offer the best in social infrastructure such as Yazoo Park.

How will the GRIHA rating system for large developments address the lack of adequate guidelines for sustainable design, planning and development?
The GRIHA rating system will further lend credibility to well-planned integrated developments. We are undergoing a similar certification process for our township project in Thane, Rustomjee Urbania. Also, policymakers must offer incentives for green developments.

What is your reaction to the BMC's decision to not charge extra premium as per the new Development Control Rules for compensatory FSI in redevelopment projects?
The entire premise was incorrect. It would have made the redevelopment under implementation unviable; so, it is pragmatic that they decided against it. My appeal to the BMC and the government is to also reconsider the move to levy premium on developers for compensatory FSI for other projects as it will add to the development cost and burden the buyer.

What impact will the BMC's decision have on your projects?
We can continue to focus on the redevelopment space; an additional imposition on FSI premium would have caused us to rethink our strategy. The current housing shortage in India is pegged at about 19 million units, of which Mumbai's carrying capacity is around 11.9 million people today and expected to be 16 million by 2025. Over 17,000 old and dilapidated buildings in South Mumbai and MHADA colonies in prime locations are ready for redevelopment. Rustomjee has already completed 5.26 lakh sq ft of redevelopment projects with 3.08 lakh sq ft under construction. Further, 33.6 lakh sq ft of construction in the redevelopment vertical is likely to be completed in the next five years. Some of our upcoming projects are Rustomjee Oriana and Rustomjee Season, BKC Annexe, Bandra (E); Rustomjee Elements, Upper Juhu; Rustomjee Paramount, Khar (W); and Rustomjee Summit, Borivali (E).

How do you view the Maharashtra government's plan to raise FSI for Mumbai from the existing 1.33 to 2.20?
The real choice is not between increasing or not increasing FSI but between increasing it or relocating a large number of households out of Mumbai. From an urban economy point of view, potential GDP growth, like in Mumbai, cannot be stopped. Thus, the only option is to increase infrastructure, either by increasing the number of metros or increasing capacities. In Mumbai, regulated FSI has constantly decreased since 1964 when it was first imposed. It was fixed at 4.5 in Nariman Point then, while it is now 1.33 in most of the city. Many buildings predate the imposition of FSI regulations and, therefore, have an FSI higher than 1.33. Consequentially, redevelopment of old buildings would entail a loss of floor space, which, given the current high price, makes any redevelopment uneconomical and relocation in situ impossible.

An increase in FSI may result in a higher density on the affected plots and decrease in infrastructure standards. However, what I am advocating is different from the ad hoc approach taken to date. It is about a planned city and wide adjustment of the current FSI to allow it to reach a level comparable with the best practice globally. Infrastructure must be redesigned and rebuilt in areas where a large FSI increase is projected to correspond to modern standards of consumption. This can be financed in various ways, and the additional cost will be borne entirely by those benefiting directly.

What is the USP of Rustomjee Urbania? Why did you opt for Thane for this township project?
Our integrated township project, Rustomjee Urbania, is spread across 127 acre. Designed by Hafeez Contractor, it comprises residential, commercial, retail and entertainment in the same vicinity, and more than 50 per cent of this township is green open space. Moreover, the buildings have been designed and certified IGBC Gold to meet energy-efficient standards. We chose Thane because the suburb offers bigger layouts. It enjoys close proximity and connectivity to CBDs like BKC and Navi Mumbai, and areas like Andheri and Powai. Thane is witnessing a smooth transition from a manufacturing industrial hub to an economy driven by providing a strong infrastructure base. Thus, its skyline has changed with the construction of large layout community structures by prominent developers like Hiranandani, Kalpataru, Rustomjee, Lodha and Dosti.

With a development portfolio of about 30 million sq ft in the MMR, do you plan to move beyond this space?
We have established a leadership position here with significant brand equity. We strongly believe in the vast potential of its real-estate market and are fundamentally committed to its development. We now plan to develop 1.6 crore sq ft of real-estate by 2012.

How do you view the Indian real estate industry's growth in the coming year?
With India's sustained GDP of over 7.5 per cent in the past few years, investors will continue to focus on alternate investments like real estate. The future is bright, and I expect the sector to become organised with new technology and innovations. This will lead to challenges like high input costs, shortage of skilled labour, and the cyclic nature of the sector, which must be addressed together by developers and policymakers. Robust housing demand and advent of superior infrastructure, offices and retail opportunities will continue to trigger real-estate demand. And, our unique features will ensure lucrative yields for us in terms of returns.

Fact sheet:

Year of Establishment: 1996
Top Management (Promoters): Boman R Irani, Chairman & Managing Director; Chandresh D Mehta, Director; Percy S Chowdhry, Director.
No. of Employees: Approx. 900
Centre of Operation: Andheri, Mumbai
Top Ongoing Projects: Rustomjee Oriana, Bandra (E); Rustomjee Elita, Upper Juhu; Rustomjee Elanza, Goregoan (W); Rustomjee Meridian, Kandivali (W); Rustomjee Sangam, Santacruz (W); Rustomjee Central Park, Andheri (E); Rustomjee Evershine Global City, Virar (W); Rustomjee Urbania, Thane (W)
Top Upcoming Projects: Rustomjee Seasons, BKC Annexe; Rustomjee Paramount, Khar (W); Rustomjee Elements, Upper Juhu; Rustomjee Summit, Borivali (E)

Know of a builder who made it big in the industry? Write in at feedback@ASAPPmedia.com

Boman Irani, Managing Director, Keystone Realtors Pvt LtdHere's a company that builds with ideas, not just mortar, and designs its blueprints with nature, open spaces and insight. Indeed, Rustomjee, also known as Keystone Realtors Pvt Ltd, is driven by the commitment to provide premium residential and commercial complexes and townships to thousands of Mumbaikars. Chairman & Managing Director Boman Irani shares the company's milestones and his view on what makes Mumbai an ideal real-estate destination, with Shriyal Sethumadhavan....You have a proven track record of delivering projects using the latest technologies.Rustomjee has a reputation of delivering high quality homes in the Mumbai Metropolitan Region (MMR) that offer value for money with added amenities like sports facilities, clubhouses, squash courts, hobby rooms and play areas. Further, our unique concept of an amusement park, like Yazoo Park, and a knowledge centre, like The Leons World, (in certain projects) gives us a distinct edge over competitors in terms of childcare. Our core focus is on a strong, low-risk development portfolio where most projects are executed through the joint ownership or development model. We build a strong relationship with financial partners and adopt a 'value-picking' rather than 'buy-at-all-cost' strategy. We also focus on establishing relationships with government agencies and contractors to execute projects within the given timeframe. With the aim to deliver customer-focused projects, we have created township communities in suburban areas; a substantial portion of our portfolio also focuses on value for money.What are the company's achievements?With many national and international awards to our credit, we have grown at a CAGR of over 30 per cent since inception. Our developments in Mumbai comprise 80 per cent of our total portfolio. With 3.2 million sq ft of completed projects and about 35 million sq ft of potential and ongoing developments, today more than 2,100 families are living happily in our homes, and 5,000 more have chosen a Rustomjee home.What is the best solution to the perennial problem of land acquisition?The biggest hurdle in the Indian growth story is land. Projects worth around $150 billion (Rs 665,550 crore) have reportedly been stalled in India in the past decade mainly owing to land acquisition problems and opposition from local communities. The basic economic problem India is facing is how to allocate scarce resources (land) amongst unlimited uses in a sustainable fashion. This requires an economic, political and environmental solution. In our experience, a joint development model has been most successful and acceptable for both landowners and developers. Given its inclusive nature, the model ensures that landowners hold the title till the land is developed and get their share. On the approvals end, we need to have a single-stop clearance for any development project and strengthen the existing regulatory mechanism.Virar is witnessing development like never before, and you are part of the growth story...The slow and gradual adoption of a cosmopolitan culture in Virar and the ever increasing cost of real estate have resulted in migration from the Mumbai mainland. The suburb's growth is yet to be seen in full form as the quadrupling of the railway line between Borivali and Virar just started in 2007. The Virar-Alibaug corridor is an ambitious project undertaken by the MMRDA, and a major developmental milestone in the history of Virar. Bringing a paradigm shift to the skyline is our township, Global City, built jointly with Evershine Builders across 127 acre, which will house 18,000 families. Architect Sanjay Puri and professors from VJTI have contributed to the planning. The project offers homes ranging from 1, 2, 3 and 4 BHK. Infrastructure being executed includes roads (75-100 ft wider), water and power supply and three STPs (sewage treatment plants. A dedicated STP is expected to generate 1.20 lakh litre of water per day for flushing and gardening.Besides this, around 60,000 plantations will provide a green environment and an underground drainage system will ensure there is no water-logging. The township will also offer the best in social infrastructure such as Yazoo Park.How will the GRIHA rating system for large developments address the lack of adequate guidelines for sustainable design, planning and development?The GRIHA rating system will further lend credibility to well-planned integrated developments. We are undergoing a similar certification process for our township project in Thane, Rustomjee Urbania. Also, policymakers must offer incentives for green developments.What is your reaction to the BMC's decision to not charge extra premium as per the new Development Control Rules for compensatory FSI in redevelopment projects?The entire premise was incorrect. It would have made the redevelopment under implementation unviable; so, it is pragmatic that they decided against it. My appeal to the BMC and the government is to also reconsider the move to levy premium on developers for compensatory FSI for other projects as it will add to the development cost and burden the buyer.What impact will the BMC's decision have on your projects?We can continue to focus on the redevelopment space; an additional imposition on FSI premium would have caused us to rethink our strategy. The current housing shortage in India is pegged at about 19 million units, of which Mumbai's carrying capacity is around 11.9 million people today and expected to be 16 million by 2025. Over 17,000 old and dilapidated buildings in South Mumbai and MHADA colonies in prime locations are ready for redevelopment. Rustomjee has already completed 5.26 lakh sq ft of redevelopment projects with 3.08 lakh sq ft under construction. Further, 33.6 lakh sq ft of construction in the redevelopment vertical is likely to be completed in the next five years. Some of our upcoming projects are Rustomjee Oriana and Rustomjee Season, BKC Annexe, Bandra (E); Rustomjee Elements, Upper Juhu; Rustomjee Paramount, Khar (W); and Rustomjee Summit, Borivali (E).How do you view the Maharashtra government's plan to raise FSI for Mumbai from the existing 1.33 to 2.20?The real choice is not between increasing or not increasing FSI but between increasing it or relocating a large number of households out of Mumbai. From an urban economy point of view, potential GDP growth, like in Mumbai, cannot be stopped. Thus, the only option is to increase infrastructure, either by increasing the number of metros or increasing capacities. In Mumbai, regulated FSI has constantly decreased since 1964 when it was first imposed. It was fixed at 4.5 in Nariman Point then, while it is now 1.33 in most of the city. Many buildings predate the imposition of FSI regulations and, therefore, have an FSI higher than 1.33. Consequentially, redevelopment of old buildings would entail a loss of floor space, which, given the current high price, makes any redevelopment uneconomical and relocation in situ impossible.An increase in FSI may result in a higher density on the affected plots and decrease in infrastructure standards. However, what I am advocating is different from the ad hoc approach taken to date. It is about a planned city and wide adjustment of the current FSI to allow it to reach a level comparable with the best practice globally. Infrastructure must be redesigned and rebuilt in areas where a large FSI increase is projected to correspond to modern standards of consumption. This can be financed in various ways, and the additional cost will be borne entirely by those benefiting directly.What is the USP of Rustomjee Urbania? Why did you opt for Thane for this township project?Our integrated township project, Rustomjee Urbania, is spread across 127 acre. Designed by Hafeez Contractor, it comprises residential, commercial, retail and entertainment in the same vicinity, and more than 50 per cent of this township is green open space. Moreover, the buildings have been designed and certified IGBC Gold to meet energy-efficient standards. We chose Thane because the suburb offers bigger layouts. It enjoys close proximity and connectivity to CBDs like BKC and Navi Mumbai, and areas like Andheri and Powai. Thane is witnessing a smooth transition from a manufacturing industrial hub to an economy driven by providing a strong infrastructure base. Thus, its skyline has changed with the construction of large layout community structures by prominent developers like Hiranandani, Kalpataru, Rustomjee, Lodha and Dosti.With a development portfolio of about 30 million sq ft in the MMR, do you plan to move beyond this space? We have established a leadership position here with significant brand equity. We strongly believe in the vast potential of its real-estate market and are fundamentally committed to its development. We now plan to develop 1.6 crore sq ft of real-estate by 2012.How do you view the Indian real estate industry's growth in the coming year?With India's sustained GDP of over 7.5 per cent in the past few years, investors will continue to focus on alternate investments like real estate. The future is bright, and I expect the sector to become organised with new technology and innovations. This will lead to challenges like high input costs, shortage of skilled labour, and the cyclic nature of the sector, which must be addressed together by developers and policymakers. Robust housing demand and advent of superior infrastructure, offices and retail opportunities will continue to trigger real-estate demand. And, our unique features will ensure lucrative yields for us in terms of returns.Fact sheet:Year of Establishment: 1996 Top Management (Promoters): Boman R Irani, Chairman & Managing Director; Chandresh D Mehta, Director; Percy S Chowdhry, Director. No. of Employees: Approx. 900 Centre of Operation: Andheri, Mumbai Top Ongoing Projects: Rustomjee Oriana, Bandra (E); Rustomjee Elita, Upper Juhu; Rustomjee Elanza, Goregoan (W); Rustomjee Meridian, Kandivali (W); Rustomjee Sangam, Santacruz (W); Rustomjee Central Park, Andheri (E); Rustomjee Evershine Global City, Virar (W); Rustomjee Urbania, Thane (W) Top Upcoming Projects: Rustomjee Seasons, BKC Annexe; Rustomjee Paramount, Khar (W); Rustomjee Elements, Upper Juhu; Rustomjee Summit, Borivali (E)Know of a builder who made it big in the industry? Write in at feedback@ASAPPmedia.com