Ashish R. Puravankara, Managing Director of Bengaluru based Real Estate Company Puravankara Limited speaks to Buildotech about the group’s growth plans and how he wants to make the group one of the most preferred real estate brands in both residential and commercial segments.
Puravankara Limited is a public listed Company based in Bengaluru, founded 43 years ago in the year 1975. Puravankara Ltd was established with a clear vision and objective to meet the aspirations of teeming millions by offering quality homes. In pursuance of our endeavour, we always maintained the highest levels of integrity and transparency in all spheres of our work. Today we have our presence across India- Hyderabad, Bengaluru, Chennai, Kochi, Coimbatore, Mangalore, Mumbai, Pune and Goa with an overseas presence in GCC and Sri Lanka.
As a Group, till date we have completed approximately 28,000 units and currently about 25,000 units under development with around 10,000 units to be launched in the near future. We have a land bank size of 75 million square feet also being marked for future development.
Realizing the growing need of high-quality affordable homes in the country, we launched Provident Housing Ltd., (a wholly-owned subsidiary of Puravankara) in 2008 to meet the aspirations of mid-income and first-time home-owners. We have the distinct advantage of being the first organized player to move into the affordable housing sector. Over 16.28 million square feet of projects have been launched across four Southern cities with over 5,000 homeowners. Additionally, about 6,000 units have been planned for new launches.
The company’s marketing strategy & growth initiatives
Over the years, we have grown from strength to strength and has completed close to 31 million square feet out of which 54 are residential, and four are commercial projects. Additionally, over five million square feet is in the pipeline for the coming quarters.
Three years ago, Puravankara went through an Organizational Transformation, where we put a qualitative strategy into place with a 5-year plan. Our vision is to evolve into a lean and strong organization by leveraging our expertise in the areas of land acquisition, design and innovation, sanctions and marketing. We plan to outsource construction and focus on bringing in more efficiencies, thereby ensuring timely deliveries.
To achieve our aggressive growth targets over the next five years, we are in the mode of constant innovation with reorienting our resources focused on Human Capital Management, Project management and advances in construction technology.
We aspire to leverage the brand that our Founder & Chairman Ravi Puravankara has built with a stellar reputation in quality and transparency and now evolve into a performance-driven organisation; on-time delivery with quality with added focus of customer-centric behaviours.
Company’s expansion plans
As an organisation we are heading towards a phase of exponential growth, with the continuing commitment that we have made to our stakeholders. We intend to leverage our strengths and our Brand on the expressway of growth. The recent debt reduction of 450cr is in line with the strategy of the organization to unlock value for the stakeholders and create opportunities for growth. The strength of our balance sheet enables us to now assess and also have faster turnarounds in closing deals and launches. This enables the company to stay on its growth trajectory and sustain successfully, especially in the current economic scenario, where we expect several lucrative prospects coming our way.
Over the next few quarters, we envision anywhere between 8-10 million square feet of launches between both our brands, but of course Provident will have a larger share of the pie in terms of volume. Here we could leverage our existing land bank or even new deals especially JDs & JVs. Our past few launches have seen immense traction on the strength of which many viable deals have come across to us, some being assessed currently and some on final stages of closure.
Traditionally our commercial portfolio has been a small share of development but over the next few years, we plan to increase that especially in cities like Pune where the office-space absorption trends are healthy and on an upward trend.
As an organization, we have set aggressive growth targets for ourselves which in the current environment we are very confident of achieving.
RERA’s effect on the Real Estate Sector and the infra projects
The implementation of RERA brings along a host of features which will benefit the real estate sector in the long term. The Act promises greater accountability, transparency and efficiency in the industry, as it lays down guidelines for both buyers and developers about their rights and obligations. It will also introduce the coming about of a more credible and consolidated sector which would be more customer focused.
RERA’s regulations and compliances may impact the frequency of the launch of new projects, and increase the demand for existing projects. However, this trend will eventually phase out and alter the ongoing demand and supply proposition in the market impacting the price proposition across the nation. Also, with its buyer centric features, RERA will have a positive impact on property sales.
We believe that RERA will bring a paradigm shift in the overall industry, which eventually will transform into growing customer and investor confidence. At Puravankara we have taken into account the rules and made all necessary preparations. We have also appointed a RERA compliance officer, who will work within our existing legal function to monitor and ensure compliance with the regulations as prescribed in the ACT.
Impact of GST on real estate
The introduction of GST is a positive wave of change for the Indian construction sector. By bringing in the concept of a single consolidated tax system, it would mean greater clarity and transparency which benefit not just developers, but also the end-users, home buyers and investors alike.
For developers with GST rolling out, the taxes on construction materials like cement and steel will witness a considerable drop. The same will lead to reduced project costs which translate to a comparatively lower acquisition cost for under-construction properties. Also, with the entry of the concept of input tax credit, developers will benefit from an increased profit margin.
For buyers, GST offers a simple taxation process by subsuming several indirect taxes like VAT, registration tax, service tax, etc. – 12% tax for under-construction properties and no tax to levied for ready to move in projects.
Our focus is always on delivering the best to our discerning customers. From our inception we have made all efforts to pass on the benefits to the end users. With regards to GST also we will certainly pass on the benefits to the customers.
Disclaimer: “The imagery used is indicative of style only. The photographs of the interiors, surrounding views and location may have been digitally enhanced or altered and do not represent actual views or surrounding views.”