Ashwin Sheth Group: Pocketful of houses
Chintan Sheth, director, Ashwin Sheth Group, has worked tirelessly to build a reputation for quality development
Astute and discerning. That would sum up the characteristics that has brought the Ashwin Sheth Group this far. At a time when reputed developers continue with familiar and comfortable models of development (ultimately leading to inventory pile-up), the Sheth Group (an Ashwin Sheth initiative) has refashioned itself to move with the changing times.
Having been in the real estate business for more than three decades speaks volumes about experience. Today, the Mumbai-based developer, with over 17 million sq-ft of development, and a strong presence in residential, is mulling commercial and retail spaces too. Chintan Sheth, director, Ashwin Sheth Group, says, “The real estate business is highly dynamic and volatile. A trend that began in the early 2000 was people’s migration to luxury projects. Though buyers then were few and far between as compared to today, most developers veered towards such developments. But then came the crash of 2008-09. It got us thinking. We changed strategy and began looking at homes for the aspirational. It worked well.”
While it’s true that developers (not listed on the bourses that is) do not reveal their turnover, the Sheths have made no bones about their business. With a current portfolio of Rs 4,000 crore, the Group announced in December that it will invest Rs 2000 crore over the next five years to create a portfolio worth Rs 10,000 crore. The idea is to de-risk the large concentration of residential business which the Sheth Group has made its forte.
Chintan Sheth is not used to giving in to melancholy. Though the markets may not have been kind to developers last couple of years, Sheth is not sitting twiddling his thumbs. The Group currently is working on eight ongoing projects (7 residential; 1 commercial) and work is on in full swing. The RERA diktat has only made it harder for developers where deadlines are concerned. Says Sheth, “We have largely adapted to market conditions and now offer a tad smaller apartment for a lesser ticket size. This seems more reasonable to the buyer and affordable.”
The globalised world today is increasingly seeing more people choosing to live or work abroad—and this trend seems to be a good thing. Social sciences studies have proclaimed that international experiences can enhance creativity, reduce bias and put you on the path to success. Moreover, there’s a clearer sense of self. This could be true of the Sheth Group. If one were to analyse the numerous developments of the Group, it would be evident that there is a distinct aspect to each one of them. For Sheth, design and form matters. In his words, “The brand value gains and gathers momentum and is based on credibility. Buyers must first like the final product and for them to like it, the design and product must resound quality. Aesthetics may play on the mind, but basic rules of houses are ventilation and space. For this reason, we work with reputed architects in India, Singapore and the US.”
Architects are asked to showcase designs that would withstand the test of time. Leaving the complex out, the Sheths prefer neat clean lines in terms of design and fittings that would be available even after its lifespan, which means ensuring replacements when they wear out after a few years. Sheth says, “International architects adhere to methods that are unique to them. Moreover, their processes too are regularised and often unmatched. Their delivery processes too are admirable. I am not undermining Indian architects. They too offer great designs that could be at par with international ones, but there are learnings to be imbibed from global architects.”
Sheth does not believe in leaving anything to chance. Even before acquiring land, the team has conceived an outline of the project in their mind’s eye. Location, neighbourhood, market conditions, inclusive growth of the overall neighbourhood, are some of the factors considered. Sheth says, “Since we mainly operate in the mid-market segment, it’s imperative that we fulfil all aspects of the buyers’ aspirations.”
Sheth adds that times have also taught everyone that a project cannot have staggered timelines. “It is necessary that everyone involved with the project come onboard together so that all stakeholders understand the core of the project. Today an architect will work hand in hand with the structural engineer, which was unheard of earlier,” he adds.
On the main road
For all that one might say, few understand one underlying fact about the real estate business: It is largely local. It’s not that those who have successfully spread their wings to other locales err in this thought. But like Sheth says, “Though we have a successful commercial project in Dubai, in India, we have preferred to remain rooted in MMR. Not for lack of initiatives or ideas did we hold back; we did try entering newer markets within the country, only to realise that the nuances there are largely different. One needs that kind of bandwidth to tackle the myriad legal aspects of acquisitions and approvals. Moreover, we believe that the respect and reputation we have earned here over the years, would mean starting over with new ventures elsewhere.”
Sheth is also confident that developers must keep a sharp eye for financial closure of projects before plunging headlong into a project. Gone are the days when banks and financial institutions freely lent to developers. “There’s a trend today to go in for joint developments or development management and more such things. On our part, we continue to seal all financial elements before venturing into a new project. Money then accrued will then be mainly through sales,” says Sheth thoughtfully.
The Sheths have also been prudent. Always preferring to look within, the Group has ensured that end-to-end project execution is done in-house. That way strict controls over procurement and execution is maintained, while leaving no room for delays and future explanations. Sheth says, “Procurement is a bulk process. The thumb rule has been to guarantee full control over the business since conception. Moreover, we standardise internal specifications and that brings a certain kind of sanity into the business. It also allows us to plan and procure for the long term and offers economies of scale.”
He debunks the school of thought of buying commodities in bulk when prices have touched rock bottom. “Many have tried. But I am yet to see such successful transactions yet. There are so many other costs that add up in a project, however thoughtfully planned. Construction cost alone is 25% of the overall project cost. And considering that Mumbai (more often than not) is one of the most steeply priced real estate regions, these things might work to a certain extent, but overall is a futile exercise,” he adds.
Whilst the second generation of the family is focussed on the future, there is no doubting the role patriarch Ashwin Sheth has played in the development of the organisation’s value systems and mission that goes beyond brick and mortar. A deep sense of commitment to the development of community and social infrastructure has been the core of the group’s business vision. Thane to a large extent has developed into this multifaceted mixed-use complex if one were to use an oft used term, what with its malls, hospitals, commercial and residential communities. Today the stretch from the Cadbury junction through to Majiwada is being referred as Thane’s Platinum Belt, and not without good reason. It is not for high end residential complexes or shopping but for the community magnets that exist that make it highly sought after. TPB connects key commercial hubs alongside premium education and healthcare facilities. Also, being centrally located, this belt is conveniently accessible from western suburbs, south Mumbai, Kalyan, Bhiwandi, Navi Mumbai, etc. With the recent proposed infrastructure development, Thane has emerged as the most promising destination with more availability of land to explore.
Building for the future
Construction does not confine to completing a ‘building’ alone. Today, the term also takes into consideration sustainability of the overall development. No erudite buyer would want to be saddled with an apartment that creates considerable costs of occupation in the long run. The Sheths realise that built environment is a major contributor to green house gas emissions and also large consumers of power and water. Over the last few years, this has been driven top-down through a series of regulatory requirements pushed out by the government, but it is encouraging that the push has started to come from the wider market too. Sheth says, “There are plenty of norms in place now. But for long, we have been actively looking and seeking out ways to reduce the maintenance costs for our customers. Even through our construction methodology, we have sought out windows and paints that can offer light during the day and a cooling effect at night. Even in terms of our procurement, we have considered ways of reducing the carbon footprint and source materials that arrive at the shortest possible time.”
Besides this, Sheth says that the team has begun scouting for new-age materials for construction – beginning with fly ash bricks, among other things.
In all this, quality plays a primal role for Chintan Sheth. Perhaps, it is one of the few developers to deploy software throughout the stages of construction. He says, “Our quality control assurance is top-notch. The software we have documents every process and also takes care of the inventory. Flags are raised at any stage where there could be a potential problem and the team attends to it quickly. Besides this, it tracks the work quality of contractors and their quality aspects. This helps in maintaining costs while allowing for smooth progress of the project. In the bargain, we have collected tonnes of data that make decision making smoother and quicker.”
Like it’s said, leaders become great, not because of their power, but because of their ability to empower others. Chintan Sheth seems to be walking down that road.