Having large and numerous numbers of projects to one’s name is every developer’s dream. Needless to say, every developer also takes pride in seeing their property names splashed across streets not to mention the hoardings advertising them. But few developers feel an actual sense of quiet pride in realising the long and arduous hours spent in understanding into what went into building that property.
If housing were simply a financial
investment, buyers might be clearer-eyed in their decision-making. It is well accepted that most people do not fall in love with government bonds, and Treasuries have no other use to compensate for a fall in value. Housing is different. The experience of buying a home is an emotional one. That makes it likelier that people will pay over the odds.
And Ashish Puravankara, joint managing director at Puravankara Projects Ltd, knows this well. He is clear when he says that he does not erect buildings for the mere investor.“Everything we build is for the end user. It is not uncommon to have a combination of investors and end users each time a property development is announced. Fortunately for us about 98% of our buyers are end-users.”
The 35-year-old scion of Puravankara Projects was gently prodded into the business by his father Ravi Puravankara, founder chairman of the company. Having been brought up in Mumbai and completing his early college education, he went to the US for a Bachelor’s degree from Virginia Tech. On his return, he spent two years at sites understanding the engineering and construction. His father and mentor knew that another degree would enhance his skills and ready him for the business and so nudged him into acquiring an MBA from the US. On his return in 2005, he worked in Bengaluru for a year. At that time, the company was looking to expand. Chennai seemed a good market and Ashish was given the responsibility of setting up an office there, acquiring all the sanctions needed and launching pre-projects. “Though I resisted in the beginning, it has stood me in good stead. Setting up an office, conceptualising the project and putting things in place gave me an understanding of the business,” he says with a smile.
The one factor that Ashish cannot stress enough on is the company’s forte to introduce new construction methods and technologies thus offering value to buyers. “Introducing new technologies into our construction methods means much to us,” he says. “I was also part of the team that set up Provident Housing, a 100% subsidiary of Puravankara Projects, and a company dedicated exclusive to building premium affordable housing. It was also a phrase we coined to distinguish from affordable housing and luxury housing.”
Premium affordable housing was unique to Puravankara before others caught on. The developer has effected a new way to create the ambience while ensuring that it keeps prices affordable. Ashish says, “We have taken the luxury unit and compressed the size by application of mind while keeping function spaces still large. That involved cutting down on passages and balconies, while offering a decent 12×13 bedroom and 10×12 second bedroom. We continue to offer amenities such as a tennis court and a swimming pool.”
Puravankara launched its first premium affordable homes in March 2009. Since then it has launched a little over 14 million sq-ft and over 14,000 apartments ranging from 850-1,150 sq-ft. It has sold over eight million sq-ft and delivered about five million sq-ft to buyers.
If one considers the company’s projects, most of them are, by nature, large. Ashish attributes this to the founder chairman’s like. “Large projects offer scale. My father believes that large projects help pack in plenty of amenities and offers economies of scale.” For instance, way back in the early 90s, the company launched one of the largest projects in the heart of the city in Bengaluru. It had about 450 apartments and being a trend-setter they also combined a club house and an indoor squash court. From there on, there was no looking back. Every project following that has been larger than the other.
Of course, large projects also bring with them the challenges of completion times and the logistics of it can be mind-boggling. However, what helped the company take the challenges in their stride was adoption of technology and mechanisation. “Mechanisation helps in completing a project in the desired time, while allowing one to standardise on quality and the final product. Although the country could do with adopting mechanisation, way back in 2003, we were one of the first few companies who adopted aluminium formwork and pre-cast. Some of the technologies that developers adopt here are new to India, but globally they have been around for some years. The availability of easy and cheap labour held Indians back from adopting technology,” says Ashish.
Every technology that Puravankara Projects has introduced has involved travelling continents before settling down on any one. John McNamara, senior president, strategy, Puravankara Projects, is constantly known to move along with the heads of various teams, exploring countries where the technology has been adopted, and studying it over a period of time before bringing it to a project in India. Speaking about precast, a technology that the company has recently begun using, he says, “There are challenges with setting up factories for precast. One cannot easily transport it. Moreover, large formwork cannot be easily transported. Then there’s the problem of waiting for a week for it to be cured before transporting it. We spent seven months before adopting precast. We understood it first and met every precast manufacturer in Europe.”
Ashish says, “Precast requires modifications for the Indian climate and in construction. One just cannot lift a precast form and place it in a building. We need to adapt it to Indian climactic conditions. Unlike Europe, Indians use a lot of water. Considering this factor, we need to protect the joints and prevent leakages. In India, only the structure is precast. The real precast is when all the fittings sit in well. For instance, a bathroom precast would come with the tiles, the mirror, the door, the window and any other fittings inside it. What most Indians adopt is the structure and then they work on the tiling which means sand and debris at site.”
The company is also in the process of setting up its own precast factory with numerous variations so as to give it the advantage of backward integration. Puravankara has recently outsourced a project to Larsen & Toubro who has set up a precast factory at the site. With this, the developer is hoping to learn more before going ahead with plans. Considering that the project logistics of precast are humongous, a challenge is to make it oneself for a project. Currently, Puravankara also has a joint venture with Keppel Land Ltd, a property arm of Singapore-based Keppel Group.
It is this passion for technology adoption that led the company to make some strategic changes in its construction methods. For one, it now works purely as a developer, which meant outsourcing construction. Ashish says, “We are going to focus on construction management and contractor management. Our subsidiary, Starworth Infrastructure and Construction Ltd, has gathered expertise of aluminium formwork, and are being trained for Plasmolite. Soon they will set up precast factory for us. We push our contractors to use a particular technology based on the project. We believe that the process of defining the technology to be used should start at the design stage. Only after the architect has given us the go-ahead do we tender out a project.”
McNamara says, “For Plasmolite, we had to go to the Philippines. And when you import it in, we are faced numerous issues such as taxation, scarcity of labour to understand it, which means bringing in the specialists.”
The idea of outsourcing construction has vastly helped the company get its books in order. “When we constructed in-house it was difficult to discern if the profits were on account of construction or because the land prices went up. So Starworth was born,” says Ashish.
The use of new construction methods has mainly arisen out of the need to tackle the issues within the country. For instance, bringing in Plasmolite eliminates plastering as the government had banned sand mining. So while it moved to machine sand, the developer was sceptical of the quality. McNamara says, “For every 10 truckloads we received, we would reject three. We conducted several trials on machine sand and on various concrete mixes last four-five months. We moved to fly ash and ground granulated blastfurnace slag (GGBS). In the end we dropped fly ash and now use only GGBS.”
The R&D team employed by the company work rigorously round the clock. Just deciding between fly ash and GGBS took them up to four months. Ashish says, “The evidence for using any material must be gathered before putting it to use. Recently we started using gypsum plaster again. It is more expensive. But we didn’t jump straight to it. It took us a couple of months to learn the benefits of gypsum plaster and design.”
Speaking about the company’s new ventures in Mumbai and Pune, Ashish says, “We started out in Mumbai. In a way, it’s actually going back home. Mumbai is a great market to be in. There are pockets of over-supply and pricing. We are launching our first project in a micro-market in Bhandup. Similarly, in Pune we are working on a 30-acre project in Mundhwa.”
The Pune project, like most of Puravankara’s projects will be developed around a theme. However, the company has realised the need to stay focused
and look at the areas it has chosen to stay in such as Bengaluru, Chennai, Hyderabad, Coimbatore, Kochi, Hyderabad, Pune and Mumbai. Considering that Provident Housing is also highly active, the company will go with premium affordable or luxury based on the opportunities available.
Ashish is happy that Bengaluru as a market and south as a region has continued to be stable. The fact that population has doubled in a decade in the city alone offers much scope for work. Considering that buyers like to move in on a project early on also helps the developer in constructing the entire project. “Our focus has mainly been residential. We are looking at opportunities in the commercial space. We already own properties in central business districts in Bengaluru. We completed one in Chennai and one in Hyderabad is under construction,” he adds.
Looking forward, as Ashish sets his sights on expanding into other cities, he is confident that Puravankara’s solid reputation will hold it in good stead. Whether it is in Bengaluru, Chennai or Hyderabad, end-users , who comprise a whopping 98% of his buyers, are only too happy to endorse Puravankara’s quality. Just what Ashish is betting big on.