If there is one thing Amit Bhosale, MD, ABIL Group, knows, it is how to make a winner of a venture he takes on. Whether it was his pet project, The Westin, Pune, when he first started out in the family business or his more recent, runaway triumph, St Regis, Mumbai, he has many accomplishments to boast of, at a very young age. While the hospitality segment is what makes him tick, he is equally confident in his real estate moves, with landmark developments currently springing up across Pune and Mumbai.
As the dynamic scion builds on his father and ABIL’s founder-chairman Avinash Bhosale’s legacy of creating uber-luxurious properties, there is no doubt that he has also mastered the fine art of balancing multiple construction segments, deftly manoeuvring between real estate and hospitality, much like his father switched from handling the former in the 80s to developing infrastructure projects when the market required him to do so in the 90s. While the senior Bhosale still looks after the group’s infrastructure portfolio, Amit has eagerly picked up the real estate-cum-hospitality baton that his father handed him, and hit the ground running with full gusto.
And that is a fascinating story in itself. As I sit in Bhosale’s opulent office at the St Regis, he explains how prior to treading down the same path as his father, he dabbled in the restaurant business. And he tasted success too, setting up some popular eateries in Pune. But destiny had other plans in mind.
Marked for Success
It was in November 2002 that the erstwhile Holiday Inn, Pune, was up for auction, after its owner came into some financial troubles. “It was a prime property, being on Bund Garden Road, and also one of the very few 5-star hotels in Pune. Hence, we thought it was a good investment opportunity, so my father decided to bid for it, and we ended up winning the bid. That was the first hotel that we owned. It was meant to be a pure investment, but when I look back on it, we must have been fated to enter the hospitality business,” confesses Bhosale.
Soon after, Bhosale graduated, and while he had grown up hearing stories about his father’s real estate and infrastructure dealings, hotels were an entirely new line of business. “The terminology is different; the way you look at the business is very different; it’s about owning the asset, versus building and selling. Yet, it was a good-looking proposition, unlike a construction site. Everybody enjoys going to hotels, and so did I,” he states.
That was also the time when he had to think of what career option to pursue, and having taken a liking to the hotel business, he felt that in order to add more hotels to their repertoire, he would need to study hospitality management. A rigorous course at Switzerland’s Les Roches later, he returned to Pune’s thriving hotel industry in 2005. With the only three luxury hotels in the city doing roaring business, witnessing occupancies in the early 90s and average room rates of Rs 8,000-9,000, Bhosale knew he had to join the party. And that is how The Westin, Pune, was born.
“I would say that The Westin was my first big learning, where I was involved from A to Z, whether it was procuring the land; conducting a market study; going out and meeting new architects and consultants; appointing an entire list of architects, interior designers, landscape architects and structural engineers; or going through the planning process; thinking of which brand to tie up with; negotiating with the people at Starwood; getting all the sanctions and commissions; and later liaising with the contractors and vendors during the construction phase. I would say that the project was actually my baby,” Bhosale says with apparent pride, adding that he is grateful to his father for having given him a free reign with the project, which eventually opened its doors to much fanfare in December 2009.
Moving with the Times
In the meantime, while The Westin was underway, real estate too was booming around 2006. That’s when ABIL, which was heavily involved in infrastructure projects at the time, began shifting its focus back to the segment, starting with putting together their own team for real estate projects.
“At that point, my sister, Swapnali, was also a part of the business. We had a plot next to The Westin, where she was beginning to build a residential structure. That was actually the first 100m tower in Pune, which was previously only allowed 40m or 12-storey buildings. We gave the city its first high-rise of 24-storeys, which was called God’s Blessings. This was followed by God’s Grace and God’s Gift. In 2008, we partnered with a very close friend of ours, to acquire a large piece of land of about 150-acres for a township project in Hinjewadi, Pune, titled Megapolis,” points out Bhosale.
With this mega venture, they are developing about 12 million sq-ft of space, with a total saleable area of almost 15 million sq-ft or 12,000 apartments. They have already sold close to 5,000 apartments and delivered about 4,000 of those, yet, with around 6,000 flats completed so far, the project has been executed only to the halfway stage.
Apart from this, the company has been acquiring sites at regular intervals. One of them is being developed as Castel Royale, an 18-acre site in the heart of the city, overlooking the University of Pune. These are large simplex and duplex apartments, with the smallest apartment admeasuring 3,000 sq-ft, and the largest adding up to 8,500 sq-ft. The project consists of about nine towers, of which four are complete with OC and have people residing in them, while two are under construction, and the remaining two haven’t been started on as yet. “Given the current market scenario, we are carrying out a phase-wise development. We will not be starting construction for the final two towers until the market improves,” admits Bhosale.
And the savvy businessman knows just how to work the market, something he has learnt from his father. Thus, when the real estate market began to dip in 2012, he saw that as an opportunity to explore another avenue. So, while other developers were struggling, Bhosale dipped his toe in a different vertical, which was the business of financing developers. “We have done so in Mumbai, while keeping co-ownership positions. Most of the time, we actually work as finance-plus-development partners. This has opened up a whole new area for us to explore,” acknowledges Bhosale, whose first such outing was in 2014. To date, ABIL Group has tied up with the likes of Radius Developers for a project in Bandra, apart from carrying out a JV with Sumer Group, and taking a finance-oriented position with Sheth Realtors.
While these ventures are project-specific, there is obviously a considerable amount of risk involved. In most cases, ABIL is approached to fund a project that a bank has refused to lend to, however, given that Bhosale understands the workings of such developments from a developer’s perspective, his risk appetite towards them is larger. “Of course, at such times, we think like a financial institution. However, because we are taking a greater risk, we ensure that the return guaranteed is more than usual. To get your money back is the big issue in such bad times, and that’s been challenging, but we have managed to do well with such undertakings,” states Bhosale.
No matter what the project, the company is extremely clear regarding their strategy to not develop outside their comfort zone. While leading developers have been gunning for a pan-India approach, the farthest ABIL has gone is Nagpur, with their Le Méridien project, and even from that expansion, Bhosale agrees that he has learnt a lot.
“The hotel was inaugurated in October 2009, and while it is really beginning to do very well now, if I apply the logic of return on money invested and return on time invested, I will not be as pleased. Despite this, I have obviously learnt from it, and that has actually helped me to keep away from some of the other B-town markets, wherein we have had proposals from Kolhapur or Nashik, but chosen not to explore them. Our focus is only on Pune and Mumbai; that’s our stronghold. Industry giants have had to exit trained markets like Mumbai, purely because real estate, as a game, is one where you need to be present at all times. It needs your full attention. For example, while I can run a show in Mumbai from a city as close as Pune, I cannot imagine sitting in Pune and trying to run a project in Delhi,” he explains.
And, in fact, he has proved this to be true, with the phenomenal run that the St Regis has been having. Opened as Shangri-La in 2012, in partnership with the Ruias, the plush hotel was ABIL’s first venture in Mumbai. It helped Bhosale understand the dynamics of the market, and later taught him the finer details of working a hotel, when the developers parted ways with Shangri-La, leaving them without an operator. Retaining much of the founding staff, the Bhosales and Ruias, together, ran the hotel as Palladium, in the interim, before finally tying up with Starwood’s St Regis brand in 2015. And there has been no looking back since.
Bhosale is consciously being selective in his choice of projects, and it seems to be paying rich dividends. In fact, the group has moved up its hospitality game with the launch of W Goa, another premier luxury hotel, this time at Vagator Beach, Goa. Not only that, last year, they launched a high-end residential project on tony Hughes Road, Mumbai. ABIL Mansion will bear the signature ABIL stamp, only upped a notch, what with Versace endorsing it. The mansion will house only 10 units, each one being a large duplex, with a price tag northward of Rs 50 crore, and completion expected to be in December 2020.
Sense & Sensibility
There is no doubt that the construction methodology for such a project differs greatly from that used for a multi-development township such as Megapolis. Therefore, while they use Mivan for the latter, cookie-cutter shuttering methods will not work due to the lack of scalability in the former’s case. Bhosale’s ingenious solution is to leave the job to the experts. While most developers look to undertake backward integration and are building an in-house contracting team, Bhosale is of the thinking that he’d rather plan, liaise and market his projects, than putting in the time and effort trying to comb through the zillion issues that are an ongoing battle on a construction site. In fact, he opines that the time is not far when turnkey contracting will become the norm in India.
On the other hand, when asked if it was always ABIL’s strategy to have a play in all segments of construction, Bhosale is quick to suggest, “It’s never been a conscious strategy, but that is how it panned out. You tweak your strategies with what you learn, and the experiences gained. These past five years have taught us a lot, where real estate has been down, but hotels have been continuously giving us those necessary cash flows. Banks and institutions are now looking at this line of business very seriously because development is getting difficult by the day, and if you have a quality asset, people are ready to invest. And it feels good to have an asset to fall back on,” Bhosale professes.
Of course, he seems to have built a number of such bankable assets in recent times, and is in no hurry to slow down, with a commercial project in Pune, a hotel in Navi Mumbai, and another hotel in the Maldives, all in the pipeline. While he feels that everybody within the ecosystem goes through a learning curve and their strategies change as they get a sense of the market and its sensibilities, Bhosale himself has had a steep learning curve in his short career span. More importantly, he seems to have picked up the tricks of the trade better than most. And that is something that will assist him in times to come, no matter which segment of the construction business he chooses to turn his attention to next.