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Keep it affordable

While consolidating his position in the residential sector, Sunil Mantri, CMD, Sunil Mantri Realty Ltd is making quiet but FIRM forays into SEZs, hospitality, IT & Textile parks, townships, malls and even power generation. In this interview, he tells Niranjan Mudholkar why affordability will be the key across sectors

It is interesting the way life comes back in a full circle. Picture this. In early 2009, Sunil Mantri, a leading realty player won the bid for three sick textile mills in Maharashtra where he plans to develop integrated garment and textile parks. More than a couple of decades back, his family ran a garment retail shop in the Marathwada region from where it spread business to Pune. The business thrived in Pune with the distributorship of then well-known brands like Binie’s, Mafatlal, Lalbhai’s, etc. In 1986, a small piece of land was bought in Pune as an investment.

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Gradually, it was decided to develop the land. Luckily, the project clicked. And then? In the words of Sunil Mantri himself, “Buoyed by this success, we undertook couple of more construction projects in Pune in 1988. These two projects too turned out very well. Our offerings as a construction company were admired by customers and there was no looking back.” Indeed, since then, the Sunil Mantri Group has successfully executed over 150 projects spread over 15 million sq ft of built-up area across 13 cities.
Of course, he is in not stopping here. Nor is he limiting his reach to the residential segment – where he intends to be amongst the country’s top ten players in just 8 years. His company will soon have considerable presence across a wide range of segments. He has already started to spread his Group’s wings internationally with the prestigious Cyberport project at Johor, Malaysia. But irrespective of the segment that he will operate in, Sunil Mantri will stick to his philosophy of providing a competitive product at a reasonable price. ‘Affordability is the key,’ he declares.

Your Group has embarked on an international project with the Multimedia Super Corridor (MSC) Cyberport in Johor, Malaysia. Please tell us more about this project. What role is your company playing in it and what is the current status?
We were lucky to get this project last year. We signed a Memorandum of Understanding with the Government of Malaysia for the development of the Cyberport in Johor Bahru, Malaysia. The contract was signed in the presence of the then Prime Minister of Malaysia.
Dubbed as Asia’s most exciting investment location for information and communication technology, the MSC was conceptualised in 1996. Spread across 750 sq Km, this Corridor is governed by business conducive cyber laws, policies and practices. The Johor Cyberport being developed by us will be a part of this growth Corridor. This development is partly inspired by the success of Cyberjaya, a thriving IT hub with the presence of who’s who from the Global IT industry.
Johor Bahru is situated just across a channel from Singapore. While hosting global MNCs and Malaysian companies, this Cyberport could also work as back end office operations for companies from Singapore where the lease rentals are extremely high. The project is spread over 150 acres where the Government of Malaysia has given my company unlimited FSI. We call it Mantri Cyberport and estimate 20 million sq ft of development over a period of 7 to 8 years. The Government of Malaysia - our treaty partner - is providing us the land and basic infrastructure including road, water, sewage and drainage. Our part of the deal involves fund raising, financing, planning, structuring, execution, sales and after sales servicing. Importantly, we also have a good local partner who is quite influential in the region.
Along with the IT hub, we will also be developing residential and commercial segments. A hotel is also planned. Basically, Mantri Cyberport will be a mixed use integrated township development.
We have just completed the land acquisition and are hoping that we will be able to commence the project in October 2010 subject to the receipt of required permits. We have a majority stake in this project – approximately 70%. Although the original MoU was for 50-50 partnership, my local partner has given me a bigger stake saying that our company has better expertise.

You bought three sick textile mills from the Maharashtra State Textile Corporation (MSTC) Ltd for Rs68 crore early this year. What was the strategy behind these acquisitions?
MSTC had called the bid for these three mills located in the heart of the cities. The mill in Solapur is about 28 acres, the mill in Kolhapur is 25 acres and the mill in Nagpur is 14 acres. We were the highest bidders at a consolidated price of Rs68 crore. Although we have won the bid, the final documentation is still in the process.
We are planning to develop textile and garment parks in these properties. Forty per cent area within these properties is earmarked for textile and garment parks while 50% - after leaving 10% open space - will developed for commercial and residential complexes. I want to create at least 5000 jobs in these three locations. My idea is to have all activities related to the textile market with all other basic facilities under one roof. That’s why we are calling it the integrated textile complex.

Mantri Realty has a massive land bank of about 1400 acres. Can you give us a break-up of the acreage in terms of geographical locations? How do you plan to utilise this key asset?
My land bank is spread across 13 cities - more or less equally divided. We have a reasonably good quantum of land in the metro cities of Mumbai, Bengaluru and Hyderabad; plus we have land parcels in the Tier II cities of Pune and Nagpur as well as in Tier III cities like Solapur, Kolhapur, Sangli, Gwalior, Belgaum, Hubli etc. We will develop these land banks as and when required.

You were planning to raise at least Rs1,000 crore from private equity (PE) to fund forays into new markets and for the development of your land bank. Have you succeeded in this?
The pace of PE activities has slowed down in the recent times. The kind of excitement that was seen with PEs about two years back has come down substantially. Basically, even they too are struggling to raise new funds and have become more cautious now.
However, we are confident that we will be able to raise the funds by the closing of 2010 either through PE or through our associations. Luckily for me, my land acquisition has not been at a very high price. It has been at a controlled price. This has brought down the investor risk considerably.
Secondly, I believe a good change has taken place in the investor environment. Now, besides the PEs, even high net-worth individuals and corporates who want to diversify in the field of construction are showing interest. And we are welcoming these players. They have money, we have land. It is a win-win situation. More number of projects can now be executed at one time. Of course, all these partnerships would be done at the project level and not at the entity level. We are not planning to bring entity level investment at this juncture – the reason being we would like to retain our freedom and we are more comfortable at the project level.

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