Tower of strength
Vikas Oberoi has turned Oberoi Realty around and built a formidable empire.
BY JAYASHREE MENDES
Dabbling in the luxury real estate segment alone is not a game that most developers are attracted to. The market is diffident. Buyers are wary. However, for Vikas Oberoi, chairman and managing director of Oberoi Realty, building quality homes for customers is a priority. He begins the interview speaking about his strong focus on customers. “In India, buying a home is considered to be a sign of prosperity, and a realisation of dreams. A customer writes the biggest cheque of his life while buying a home. I am happy that my passion became my work and I got the opportunity to create spaces that directly impact and enhance the lives of our customers.”
Since Vikas Oberoi took over the reins of the company, the company has been constructing residential, commercial projects and retail projects in prime locations across Mumbai. Most of this has not been easy. But Oberoi has pulled it off with panache. One of the reasons, he mulls, was his father’s insistence that the younger Oberoi develop a passion for real estate that was inculcated in him at a young age. “I have grown up watching my father’s uncompromising surge to build quality homes for our customers,” he adds.
However, like any serious businessman, Oberoi is careful before stepping into a project. Due diligence is most important. A characteristic that could be attributed to his passion for flying and one that calls to play safe. Just like a good pilot would be cautious of flying in rough weather, so also Oberoi will not venture into any project without understanding its implications.
Having completed about 35 projects till date, Oberoi understands that as a company they need to manage a portfolio. “Our attention on design, detail and functionality, a thorough understanding of the customer and product and a continuous attempt to evolve the business as per global trends and practices, has made the company excel and introduce quality developments to the Indian consumers that compare with the best internationally. Our brand is known for developing innovative projects through its emphasis on contemporary architecture, strong project execution and quality construction.”
Jaswinder Sandhu, executive vice-president, EPC, Oberoi Realty, says, “We have a track record of delivering quality construction projects and adopting best practices in terms of design, planning, structure and lifestyle amenities. The success behind getting right the exquisite finish for the apartments is not only in availing precise construction techniques and material on site but also putting together the entire process to the execution stage.”
For Oberoi, their latest financial performance is a reflection of the confidence consumers have in the offerings and the brand. Last month, the company reported 34% increase in consolidated net profit at Rs 103.02 crore for the quarter ended March 31, 2015. The company’s consolidated net profit stood at Rs 77.03 crore in the year-ago period. “We are prudent with our financial management and have a stream of stable cash flow from our leased assets which enables us to balance our requirements for cash and help us deliver aspirational products to our customers,” says Oberoi.
At a time when most developers pore over local architects, Oberoi Realty prefers to work extensively with international consultants as they bring rich global experience and knowledge to the table. “Working with these consultants helps us keep pace with trends and upgrade to new technology, construction methods and materials. They also bring with them a broad base of collaborators, who make for a big bank of shared knowledge, which helps in the betterment and refinement of design,” he adds.
A building is only as strong as its foundation and works. Oberoi Realty ensures that it works with some of the renowned contracting and project management companies, through an outsourcing model, wherein the execution work is outsourced to best-in-class contractors, both national and international. “We use state-of-the-art formwork system like self-climbing formwork, aluminum formwork, table formwork etc. Each formwork has its own advantages. The aluminum formwork gives a monolithic framed structure that eliminates external plaster on the towers thereby reducing leakage and other environmental effects on the RCC structure. Similarly the self-climbing formwork offers an advantage of faster construction and systematically lowers the tolerances thus giving good finishes,” says Sandhu.
Another aspect that matters to the developer is the mechanical, electrical and plumbing (MEP), which is the life line of a building. “A lot of care is given to workmanship to achieve error free installations thus ensuring leak proof, shock proof installation. For example, for drainage i.e. soil and waste lines, we use low noise polypropylene pipes which reduces the noise level in the pipes. The technical specifications of these pipes is far more advanced than the regular UPV pipes. Similarly for domestic lines, we use stainless steel pipes which are not only non-corrosive but also decrease chances of contamination in water,” adds Sandhu.
A chance that Oberoi Realty does not want to take is developing an in-house construction and design team. “We outsource our construction and design. So whether we are executing a project in Goregaon or Gurgaon will be pretty much the same thing.”
Oberoi is also excited about the government’s initiatives to build 100 smart cities. “This will help open up job opportunities, attract youth to these cities and offer a better lifestyle for the people. We are open to explore any land parcel or partnership which makes business sense to us and one which fits into the company’s overall expansion plans,” Oberoi says.
Ask him about affordable housing, and he avers, “Currently, we are not present in that space and do not have any immediate plans to do so. Affordable housing can be successful when undertaken through a public-private partnership model, for which the government will need to free up land for development. This will bring down land acquisition costs, thus allowing developers to acquire and develop land at reasonable prices since land is a major price component in the overall cost of a project.”
Oberoi is also not convinced about the concept of buying homes online. While he wishes those developers well who have entered this space, he cannot be persuaded to do so himself. “This bodes well for those selling affordable housing where the ticket size of the apartments is relatively low. I believe that property portals are a good starting point to get firsthand information but buying a house is a huge investment decision for home buyers and to complete a transaction one will want to visit the property, understand the details, and then take a decision,” he adds.
Meanwhile, he knows that with two big ticket projects coming up, there’s a lot of work lined up for him. And he cannot wait to go to Milan where he was headed to fly the Dassault.