Irfan Razack, CMD, Prestige Group, is astute when it comes to choosing prominent locations and building landmarks. This instinct veered him to novel aspects of development such as retail, hotels, tech parks, SEZs and townships.
By Jayashree Kini Mendes
One can spend hours constructing a narrative about how impactful an idea can be, but nothing changes if you don’t deliver on that idea. Shipping—or bringing an idea to fruition—is what causes change to happen. People with meaningful lives finish what they start; this says a lot about their character and leaves a lasting impression on those around them. In the world of real estate, there are a sundry number of developers who have begun or launched projects with much fanfare — only to leave them incomplete or unfinished. The reasons could be many, but the nub is that they were not completed. In such a scenario, when Bengaluru-based Irfan Razack, CMD, Prestige Group, tells a compelling story of the importance of finishing every project he embarked on, you begin to wonder at the motivation of the individual, and the manner in which he overcomes hurdles.
It is common practice for developers to simultaneously work on three to four projects, or maybe more. The Prestige Group has 57 ongoing projects across the country! Ask him how he works out the math and Razack says, “There is no math. We have projects going on in different parts of the city and country. There’s a strong inclination to focus on what needs to be done for each project, besides allocating the right people. For any project to be viable and succeed, it is important that everyone shares the same vision and mission to reach the goal. Ultimately, the goal has to be reached in the way it was conceptualised and envisioned.”
Such insightful precepts tell us that the route to success is paved with passion, dedication and a positive attitude. Razack does admit that the journey is not easy. “A project calls for putting together a whole lot of components, addressing challenges like getting different agencies to co-ordinate for work, among other things. But concentration, a sense of self-assuredness, and the right intentions can help reach the goal of completing a project. It may not be easy and there could be hurdles such as cash flow, regulatory issues, but I am certain that grit and the determination will get you there. But, again, there are a few problems that can’t be resolved. On our part, once we have signed up for third party entitlements, there are customers and contractors involved, and one cannot afford to renege on commitments,” he adds.
It is probably this resolution that has helped the largest listed real estate company touch a market capitalisation of Rs 10,943 crore, and a turnover of Rs 5,567 crore last fiscal.
Razack’s reputation had also led the industry to elect him as Chairman of CREDAI in its previous term. Long before RERA came into effect, Razack has been studiously encouraging developers to be transparent and accountable, which has held him in good stead. It’s no surprise that Prestige Group is the only Crisil DA1 rated developer in the country. It was also awarded the financial rating of A+ by ICRA. But Razack is not resting on his laurels. He says the rating only reinforces credibility, and in fact one’s own belief. “The rating certifies that we’ve got the ability to deliver the project on time, with proper titles and specifications. That means whatever we are doing, we are doing it right. We are the only developer in the country to have received this rating, so I am told,” he adds with a smile.
A firm believer of staying customer-centric, he asserts that completing a job and offering what they want and at the right price means doing justice to his work. Razack says his biggest satisfaction is when buyers have made significant returns on their investment in Prestige homes. At Prestige, he is busy scouting to place talented people in the right jobs. Once that is recognised, they are given the portfolio they can handle best. “As captain, I have to lead my troops in a certain direction, immaterial of whether we are going to win or lose the war. But at least you are moving. A bad decision is better than no decision. It is better to be decisive, nimble and keep moving ahead,” he adds.
All of Prestige Group’s developments are known for offering lavish residencies cocooned in the lap of nature.
As an entrepreneur, Razack has shown an uncanny knack to see beyond corners. As a businessman, he feels strongly about progress, building the business up and ensuring a sturdy bottom line. But he knows that all this can only materialise if he delivers projects and quality homes on time. Importantly, offering homes in the right location is a priority for the company. Each project is envisioned based on the locality and community living in the area. Razack says he has been fortunate in acquiring ideal locations and believes it is his privilege of giving people their most precious asset—a home. He says, “If one is building on the outskirts, it is important to understand whether people will have access. We are very choosy about our location and also careful about doing business with the right people. We are always scouting for prominent land parcels, but not in tier II and III cities. We prefer to develop in Chennai, Bengaluru, Hyderabad, NCR and Mumbai,” Razack said.
The keen eye for location is visible in its decision to develop Prestige Courtyards. Located off the Old Mahabalipuram Road, christened as Chennai’s IT corridor, the location has emerged as a favored one for real estate investments owing to the IT Business Parks and dedicated SEZs. This launch complements Prestige Group’s strong southern corridor strategy, which includes the existing luxury residential villa development Prestige Silver Springs that has villas designed, built and fitted out to blend perfectly with an affluent lifestyle.
Similarly, the Group has also tied up with SR Jindal Group to develop Prestige Jindal City comprising four residential towers on Tumkur road in Bengaluru.
There’s a sense of space when Razack describes a development. He is firm that developments must have open spaces, plenty of landscape and that it should ‘breathe’. For that, he places plenty of faith in the architects he deals with.
Few real estate companies can boast of offering unparalleled and myriad offerings such as malls, large townships, tech parks, hotels, luxury villas, and SEZs. Razack is not averse to tying up or acquiring land from reputed financial institutions to further the development cause.
Prestige Golfshire, Bangalore, is India’s first Golf development.
With the company looking to aggressively grow their commercial portfolio, Prestige Group entered into an agreement to acquire 80% stake in Sterling Urban Infraprojects for a cash consideration of Rs 336 crore. Razack plans to develop commercial office space on Sterling’s nearly 60 acres of land parcels in Bengaluru.
The developer is not content with pure luxury and commercial projects alone. The focus on affordable housing has also caught Razack’s eye. Early this year, Prestige signed a Rs 2,500 crore residential joint venture agreement with HDFC Capital Advisors to expand its residential business by identifying strategic land parcels with the potential of developing large-scale residential projects in the mid-income segment. Razack is now gearing up to build a new mid-income housing portfolio, accelerate the office development business and enter National Capital Region (NCR) and Mumbai, that will catapult the company into the next level of growth. In another move, it has signed a term sheet with marquee investor GIC Pte to sell a 40% stake in its subsidiary Exora Business Park, which has a portfolio of office projects.
In another annuity portfolio, early this year, Prestige Group, through its subsidiary, concluded acquisition of CapitaLand’s stake in its various SPVs for around Rs 342 crore. Considering that these properties are located in growth markets, the acquisition will boost Prestige’s annuity portfolio. The acquisition also includes a 143-key operating Oakwood serviced residences at Whitefield, a residential project with a potential developable area of 0.6 million sq-ft in Kochi, apart from five ready and operating retail malls in Bengaluru, Hyderabad, Mangaluru, Mysuru and Udaipur and a mall management firm.
In December, Prestige Group, acquired 67% stake in its group company PE partner Red Fort India Real Estate for Rs 324 crore. This will give it access to develop a mixed-use project on the 180 acres land parcel on Sarjapur road which will include an affordable and mid-income housing project as well as a retail space. The deal will cement the company’s footprint in the affordable housing segment in a big way.
Prestige Group has bagged several awards for some highly exclusive developments.
Simultaneously, Razack is wary about being tagged as a ‘national builder’. Though markets beckon, he believes that hitherto what aided his success was getting a few things right: a controlled geographical expansion; diversifying the business portfolio at the right time; and ensuring annuity income when others struggled with huge debts. He is unwilling to forego any of that. As a listed company, Razack is well aware that he is answerable to stakeholders. Finding the middle path to balancing expansion and funds is a call he’s often asked to take.
With consistent growth came the need to diversify the portfolio. He is careful to ensure that businesses across sectors flourish and prefers to play it safe instead of allowing a volatile market to catch him unawares. Razack says, “Last year, we completed a corporate restructuring to create separate verticals for office, retail, hospitality and residential with Prestige Estate Projects as the holding company for all the SPVs.”
Firing on all cylinders will continue as before, but the office portfolio is what Razack wants to grow. The company currently expects income from retail and commercial properties to touch Rs 1,800 crore within the next 3-4 years. Both its hospitality projects, The Sheraton Grand and Conrad Bengaluru have started operations.
With retail malls seeing more footfalls, Razack sees good prospects there. Prestige inaugurated the Mysore Centre City Mall in January, while Forum Prestige Shantiniketan, Whitefield, is expected to be ready in Q2 2018. The company also announced “Forum” brand, with the inauguration of Forum Centre City Mysuru.
Besides this, the Prestige Group is also looking to replicate its success in the commercial sector with warehouses. It aims to create a robust warehousing presence to meet the growing demand from the FMCG, e-commerce and manufacturing sectors. In May, it launched its first logistics centre in Malur, about 50km from Bengaluru. Razack says he foresees a huge demand for plug and play in this space. Besides this, it is launching an IT park in Pune and a commercial building in Gift City.
Interestingly, the headquarters where Razack sits is aptly named ‘Falcon House’. The fearsome bird of prey is known for its ability to fly at high speeds, change directions rapidly, and spot small things from great heights – traits that the group has displayed over the years. The coming year will be a milestone one for the company as it prepares to go national by spreading its wings beyond South India to the cities of Mumbai, NCR and Pune.