Prudent Capitalist Reviewed by Momizat on . Bijay Agarwal, MD, Salarpuria Sattva, has built an empire through studied means and believes quality and on-time delivery is the key to success. By Jayashree ki Bijay Agarwal, MD, Salarpuria Sattva, has built an empire through studied means and believes quality and on-time delivery is the key to success. By Jayashree ki Rating: 0
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Bijay Agarwal, MD, Salarpuria Sattva, has built an empire through studied means and believes quality and on-time delivery is the key to success.

By Jayashree kini mendes

If the chairman of MahaRERA, Gautam Chatterjee, were to meet Bijay Agarwal, MD of Salarpuria Sattva Group, there’s a strong chance that he would have held him up as a shining example to other developers. Ever since Chatterjee took over, he has often re-stated that developers need to maintain fiscal discipline (mainly) that will help them untarnish their reputation.
Agarwal needed no such advice. Ever since setting up the company in 1986, Agarwal has always been strongly inclined to resist the temptation of excessive debt for any of the numerous projects he has executed. He has succeeded most of the time. Speaking about the discipline it takes to run a real estate business, Agarwal says, “Coming from a simple small town background, we were taught the basic rule of money management: Live within your means. For that reason, I ensure that my debt is contained to a certain level and once the project is complete, it is paid off.”
Of course, there have been times when he has been compelled to approach the bank for a lump sum amount to fund a project, but Agarwal says with a hint of self satisfaction that he has never had the opportunity to restructure his debt ratio with a financial institution. Similarly, he safeguards the company’s and his own interest by conducting a financial health check every six months, which allows him to know just how ambitious he can get.
This is indeed a rare occurrence among developers and, perhaps, one of the main reasons why Agarwal, whose unwavering adherence to quality, has been given the ‘trusted’ tag among builders in the country. What is unique to him is that CRISIL – a global analytical company providing ratings, research and risk and policy advisory services – has given an ‘A – Stable’ rating to the company, and so also ICRA.


Over 30 years, Agarwal has completed more than 60 residential projects in Bangalore alone and has a presence in nine cities across the country. Just like Rome was not built in a day, Agarwal’s steady rise to a prominent Bangalore-based developer was slow and steady. Recounting his early days, Agarwal says, “My stint in real estate was pure chance. Working in Kolkata, I was sent on a mission to Bangalore to take on a half-constructed project as the developer was under financial constraint. Little did I know what fate had in store for me. I completed the project and even made a small profit. There has been no looking back since.”
Back then, the Bangalore market was not playing ball. Friends dissuaded him saying that when home-grown developers are seeing little buying appetite among buyers, his chances of making the cut were slim. By then, the entrepreneurial bug had well bitten Agarwal. Beginning with a small plot offering 20,000 sq-ft construction area, he quickly moved from project to project as and when opportunities came his way. The initial phases focussed more on a mix of commercial and residential developments and rapid bookings only encouraged him to scout for more land. Agarwal says, “Initially, my main concern was to keep the business going. As and when we acquired land, we worked out the math whether to build commercial or residential, going by gut feel and market trends. The actual focus for the group came in 1998-2000 when the IT boom hit Bangalore.”
Agarwal’s bigger boost, and one that became the talk of the town then, came when global companies were scouting to invest in residential and commercial properties. Customers such as Lucent Technologies, Ernst & Young, Big Bazaar, Intel, sought him out and he was happy to custom build commercial space for them. “Every commercial development had buyers who wanted space of 40,000 sq-ft to one lakh sq-ft. We were growing faster than the market pace, and that also wiped out the any misgivings we may have had about the Bangalore market. By 2015-16, we had completed 110 projects and that includes in cities such as Hyderabad, Kolkata, Coimbatore, Pune, Jaipur, Goa, among others.
Every passing year saw Salarpuria Sattva growing its footprint with ever larger projects. One of Agarwal’s most ambitious projects today is the $1 billion Knowledge City in Hi-Tech City in Hyderabad. The technologically advanced pre-LEED Gold Certified multi-purpose commercial building has a total development of over 7.5 million sq-ft with an array of amenities. Agarwal says, “Altogether we are working on 18 million sq-ft IT space in Hyderabad alone — Knowledge City, Cyber Park and Necklace Pride. Knowledge City was well accepted and some of our prominent clients are Novartis (1 million sq-ft), SAP, JP Morgan, HSBC, etc. We should complete the project by mid-2019. Recently we launched a mixed development project, Magnus, at Jubilee Hills. It is a premium gated community and we plan to develop 5.4 acres and construct four residential towers and one commercial tower.”

The taste from premium to mid-market projects developed after Agarwal perceived the inclination of the young brigade buyers. With seven ongoing residential projects, Agarwal has turned his attention to building apartments in the mid-market and reasonably priced range. “We realised that only affluent and well settled people can afford to buy apartments that cost Rs 2 crore and above. And there are a host of buyers whose budget permits them to seek out apartments in the range of Rs 45 lakh to Rs 1-1.2 crore. This comes within the range of fit-outs we offer and makes the project viable.”
The group is aware that demand for apartments priced at Rs 45 lakh and below is at a peak. But Agarwal is unwilling to venture into uncharted territory, for now. He says, “We are considering such projects, but that will be in the long term. Moreover, today we do not have the expertise to construct projects that will sit comfortably in that range. We would also like to run with the reputation we have earned of developing quality projects and offering hassle-free apartments.”
Agarwal, however, continues with his search for the right technology that will allow him to construct such affordable apartments and conserve quality as well.
But commercial development is what Agarwal is betting on now. “The commercial market has shown positive signs in two main cities, Bangalore and Hyderabad. Personally, I think that Bangalore is slowly losing its sheen in terms of returns on commercial space, mainly due to infrastructure bottlenecks. Hyderabad has shown a spike and what is working in its favour is its wholesome evolution.”
Agarwal’s bet on the Hyderabad market has paid off. After the political upheavals in the state settled down, he says that rent rates have soared 70%, while rates in Bangalore have jumped only by 50%. Interestingly, he adds, demand for commercial space has soared from the usual 10,000 sq-ft to 40,000 sq-ft to 1 lakh sq-ft and above. “Corporates are keenly looking at expanding and a developer must have the capacity to offer large spaces. For instance, Flipkart has picked up 500,000 sq-ft, IBM 1 million sq-ft, and we will soon supply 1.6 million sq-ft to Oracle, while Google has bought 1.3 million sq-ft in Hyderabad, says Agarwal.
He has indeed got the math right. Sales of residential aid cash inflow, and while commercial development may be risky, it offers good returns if you can find buyers. Maintaining a balance between residential and commercial has also helped in ensuring cash flow while continuing with the risk appetite with commercial projects. In Kolkata, Salarpuria Sattva has plans to construct a 79-storey tower with 56 plush residential units. He says, “The tower will be the tallest in Kolkata and we plan to offer 8,400 sq-ft apartments priced at Rs 22 crore. Similarly, we have entered the hospitality industry and hold a stake in Novotel and JW Marriott, both in Kolkata.” Expansions have become a way of life with Agarwal. His company has entered the Pune market with a commercial project and Coimbatore with the launch of new projects. He has recently completed a mall in Jaipur and a residential project in Goa. But Bangalore, Hyderabad and Kolkata continue to remain close to him in terms of development. In all this, he is careful to look at cities that have infrastructure, a stable government and one that is prone to inviting investments, though he admits that the former is out of his ambit. “In terms of construction quality, we issue tenders and rope in contractors of repute to execute the projects. This way, projects are completed on time and the buyers do not feel any anguish. We also source products for the buildings (tiles, elevators, kitchen essentials) from global companies and prefer to directly source them from their global plants. Hence, costs remain under check and there’s a guarantee about the quality. We believe that some things should be left to the experts and this is also the reason we invite architects or designers from foreign shores to give that international feel to certain projects,” adds Agarwal.
Education is a strong focus for the Group. The Greenwood High School in Bangalore stands testimony to the fact that it prepares students for higher studies with international courses. Agarwal says with a sense of pride that Dr APJ Kalam had paid a visit on hearing about the courses offered at the school.
For a real estate developer, Agarwal has not put all his eggs in one basket. He controls a majority stake in an aerospace components manufacturing company, besides Sattva eTech (providing end-to-end services for product design, development and low/medium manufacturing in embedded space), and a separate Facilities Management company.
Agarwal is indeed a busy man with varied interests. But, as he says, if one sticks to business ethics and maintains transparency, success is not far off.

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