Sky is the limit
Sushil Mantri, CMD, Mantri Developers, reveals the strategy that has helped his company grow by leaps
Selling properties has become increasingly challenging for real estate developers. Buyers are spoilt for choice as newer inventory comes into the market and there are chances that some of the older inventory might not find willing customers. In such cases, a developer needs to constantly innovate to do things differently so as to attract buyers and ensure sales. Creating attractive themes that bring in a whiff of exotic locales are becoming a norm. But that is on the outside. But
how about transformation on the inside and the way a real estate company conducts its business?
At a time when the general public looks askance at the methods adopted by real estate companies and who are no stranger to disputes, one man has decided to clean up the act for his company. He has taken a firm resolve to ensure that all dealings are transparent and his employees follow this diktat loyally. An absolute rule he insists that everyone follow is that despite red tape, hurdles and corruption, a business can be built successfully if one is disciplined, hard working, customer-centric, transparent and adheres to best practices. Too much, huh? That is Bengaluru-based Sushil Mantri, chairman and managing director of Mantri Developers and the man behind some of the hugely successful properties that dot the metros in the South and now western India.
In just 15 years, the company has built over 28 projects. The developer cumulatively has to his credit around 16 million sq-ft of constructed area, over 30,000 satisfied residents and over 23 million sq-ft under various stages of construction,
which means a record of delivering 1.4 homes per day since inception.
What sets Mantri apart is their excellence in execution and the strategy behind it. He says, “We don’t do anything different from others. We buy the same raw materials like others and our structures are no different. We take pride in our precise planning to the last rupee and ensure that we stick by it.”
Down to the last detail
The planning process is quite elaborate, and though intricate is made to appear simple. Just like in the movies where a script is subject to frequent change, developers too are not steadfast with their designs even when a project has gone
into execution. Mantri knows that if a company is to make profits, and a substantial one at that, it must strengthen its
foundations. So finalising the design is imperative if one is to adhere to cost.
Only after the detailed designs have been approved by all departments, the company sets to work on the materials to be used and makes it purchases. One of the stipulations here is that no department is allowed to budge from the commitments made. “We make no allowances for changes after final approvals. If I visit a particular site and suggest changes in certain raw materials, which means an increase in cost, the team puts its heads together to look at the cost ratio. If the cost escalation is more than 2% then we put it up to the board,” he says. Mantri is particular that investors remain
in the loop during all stages of execution of the project. The meticulous planning also helps him discard any activity
that needs constant reiteration. For instance, until the detailed drawings have passed muster, he will not move to
the next stage of the project. “Over time, our fastidious planning has become our biggest strength. Unless the drawings
are good for construction, we do not plan the budgets. At a time when cost over-runs are common in our industry, our
budgets are very accurate. We work on time budget and cost budget and what matters most to me is time budget.”
He exudes a quiet confidence as he speaks about the unique aspects that have put the company in the vanguard
of top developers in the country. “It’s regular for developers to witness 7-8% wastage during development. Right from
cement to sand to casting off tiles that break during installation,not to forget the fixtures. But who’s paying for it? We
look minutely at the wastage issue and have brought that to 2%. So if my profit margins are 10% and I save another 5%
from wastage, it only adds to the bottom line.”
The ability to drastically cut out wastage that has seen a commensurate increase in bottom line just strengthened his
resolve to work out more ways to enhance profits. His entire strategy is founded on two principles: ROTI (Return on Time
Invested) and PQRST (Punctuality, Quality, Reliability, Speed and Transparency). Throughout the interview, Mantri constantly
returns to these philosophies often stating that they play a vital role in every decision making.
See how they build
An important factor for success in business is being at the right place at the right time. Way back in 1999, when Mantri
decided to move out of the family real estate business in Pune and venture out on his own, he decided that Bengaluru
it would be. In between, he tried his hand at manufacturing in automotive forging but that didn’t offer any satisfaction.
Since funds were scarce, he began with affordable housing offering homes at Rs 10 lakh, all inclusive. Mantri Woodlands
saw a phenomenal response because it hit the sweet spot for first time buyers. In 2005, the government allowed FDI in
real estate. And a year later, Morgan Stanley invested Rs 300 crore in Mantri. “Our turnover was around Rs 300 crore then,
and we preferred a private equity infusion instead of launching an IPO. Over the years other private equity investors
such as ASK and Xanders also joined,” he adds. While the company has closed nine projects with Xanders, it has also
raised Rs 165 crore from Piramal Fund Management for two projects. Mantri says that he is probably the only developer
whose investors have stayed with him for several years.
In 2005, he also constructed south India’s then most expensive apartments, Mantri Altius, which have won him accolades.
In order to sell, the company developed a screening process for buyers, and interviewed every applicant before
letting them live in Altius. The project also established Mantri Developers as a differentiated real estate player. “The key
learning from here was that real estate project becomes popular not because of who has built the houses, but because
of those who live in them.
Having gained confidence and experience, Mantri forayed into Hyderabad and Chennai in 2005. There’s a reason for this, he says. There were a large number of IT and ITeS offices coming up in the south. “Our data mining showed that most of the crowd coming into these cities were in their 30s. And if you consider the real estate figures last year, Bengaluru alone leased out 14 million sqft commercial space. The city creates 1.4 lakh jobs in IT sector every year, and for every one
job in IT there are eight non-IT jobs. You can be assured that soon these youngsters will buy their own place and we want to be ready.”
Graduating from building tall buildings and plush apartments, the tech-savvy Mantri saw another opportunity to attract the equally tech-savvy and discerning buyers in Bengaluru. The WebCity project is being touted as the first techno-residential project inspired by new age technologies such as robotics, cloud computing, nano technologies, digital library, tweet parks, among other things. Mantri says, “Phase I is ready for possession, while Phase II and III are under construction. Being developed over a plot of 40 acres, Mantri Webcity will offer a mix of 2- and 3BHK residential apartments and also penthouses. Altogether, the project offers a choice of 2,171 residential units.”
Last year, the company announced two projects in Pune and a total investment of Rs 350 crore. “We are clear that we will play only in metro cities as our focus is only large projects. So currently, we are developing properties in Bengaluru,
Hyderabad, Chennai and Pune. In the future, we might look at expanding to Mumbai and Delhi, but there are no plans to go to Tier 2 or 3 cities. I hope we will not change our mind,” he says.
I cite a report that speaks of the Pune market seeing a marginal decline over the next couple of years. He replies
with another question. “How many mobile phone brands are available in the market? If more brands were to come
in, don’t they stand a chance? It’s same with development. There are hundreds of developers and thousands
of projects, but each developer must find his own niche and create space for himself. Consumers will be attracted
when someone comes up with a better product or service and quality.”
For instance, Mantri Euphoria in Hyderabad is a one-ofits-kind super premium private ultra-luxurious villas and an
amalgamation of luxury and sustainable housing combined with exclusive state-of-the-art Balinese design features.
While Mantri Primus are luxury apartments stylised for senior citizens.
There’s an app for that
If given an option of constructing a building through a long and laborious process or adopting new and proven technologies
that will speed up construction, quality of finish, assure long life with low labour cost and high production levels
and up the ante by offering superior earthquake resistance, what would you choose? Mantri charted his course when
he began travelling the world to bring in the best learnings and experiences to their projects. A matter of pride for him
is the tunnel form technology that he picked up from Turkey and which allows his team to cast one floor in a single day.
“Faster work leads to lower emissions and lowers waste generation. It enables us to complete the RCC slab work
in three days/per floor, which in the conventional method would have taken 15 days,” he says.
Besides this, the developer has also adopted Jump Form work to cast the RCC shear wall within a day. Jump form
is typically used on buildings of five storeys or more; fully self-climbing systems are generally used on structures with
more than 20-storey levels. Trailing and suspended platforms are used for concrete finishing and retrieving cast-in
anchor components from previous pours. However, the developer continues to deploy mechanical equipment for extending rebars, and striping and re-erecting formwork thus cutting labour requirement to zero. Quadra software, an ERP based system, aids in the internal process. Besides this, the company is an ardent adopter of green technology such as fly ash and slag based cements, Aerocon blocks for construction work, re-using of STP waters for HVAC, flushing and gardening purposes, non-CFC refrigerants, Low VOC paints, and LED lights.
Importantly, in order to avoid any slippage in time and cost mismanagement, the company uses Primavera P6, an integrated project portfolio management software, that provides a real time view of portfolio performance. With 16,000 activities involved in a single construction project, Mantri has ensured that all departments within the company and those on-site use the software to balance resource capacity, monitor and visualise project performance versus plan,schedule and control complex projects, and conduct whatif analysis and analyse alternative project plans. Transparency is accorded very high importance in the company. Besides project plans, the company develops an entire year’s plan through the integrated software.
The vast benefit the company accrues from this is that it leaves no surprises for its contractors who are usually laden
with unfinished drawings and have to face the brunt of increasing costs. The accurate budgets planned by Mantri
Developers also validate the investors’ faith in the company as promises made are delivered to the last detail.
Mantri is also exacting in terms of contractors. When the company issues an RFQ, it screens the applicant and only
those who pass muster are chosen for the pre-qualification round. This way it narrows the list of contractors to just two or three. Even if one of those companies do not bid, he takes a special interest in unearthing the reason. That much is the
level of interest taken care in its projects.
Among other things
A shrewd developer who has understood the pulse of his buyers, Mantri manages several businesses that support his development activities. A rental division helps people shifting to Bengaluru find homes and could become potential buyers in the future. At a time when developers tend to ignore their buildings after sale, the conscientious Mantri offers lifetime maintenance for his buildings through its facilities management company, Prop Care. “It’s a thankless job. But someone has to attend to the maintenance so that even 10 years down the line, our customers can command a good price for their homes. This is a service we offer,” he says. Prop Care also acts as the middle man to sell homes after completion of construction. An active CRM connects Prop Care and the customer who then route all grievances and issues to the facilities management company.
Speaking of grievances, in his typical no-holds barred approach, Mantri laments that at a time when India is seeing
a tremendous increase of entrepreneurs, it is the duty of the government to step in and encourage them. As an entrepreneur
himself, he seconds the voice of the industry where developers are required to secure 60 approvals before moving to construction mode. “When a doctor claims that a person is dead, don’t the authorities recognise that certificate? So also when a chartered accountant says a report is audited, it too is recognised. Why can’t the authorities recognise an
architect’s design and approve it? Why does it have to go through perennial rounds of numerous departments for vetting?”
Going forward, he would like to build a model that would create entrepreneurs in the country. He reasons: If a few
budding entrepreneurs are employed here, then I can create jobs for only 10 persons. However, if each one of those
go out and set up their own business, then they, in turn, can create 100 more jobs.
We guess it’s not only PQRST he subscribes to, but also WYSIWYG (what you see is what you get).