Thursday, March 28, 2013

Niranjan Hiranandani

In This Exclusive Interaction with Virat Bahri and Mona Mehta, Niranjan Hiranandani, Founder & MD, Hiranandani Constructions Private Ltd. Speaks on The Company’s Expansion Plans and The General Scenario in The Real Estate Market

B&E: Hiranandani Constructions has created a strong foothold in Mumbai, and your Powai township created new benchmarks before the township concept gained ground. What has been your distinct philosophy towards realty development?
Niranjan Hiranandani (NH): Concepts are very simple actually. In realty, what you really provide is a great quality of life, and our approach has been to benchmark our concepts not with what’s constructed in India, but with what’s constructed elsewhere in the world. We build buildings before Powai also, but we were never satisfied because we couldn’t build the environment; for instance, with the Beach Classic building in Versova. We developed 11 buildings there in Lokhandwala complex, but couldn’t develop the environment. Moreover, I was a small builder at that time and did not have that much say as I would have liked to have. Powai was one of the ideas to create a canvas, which was large. At that time, it was cheap and far away from the madding crowd. We created the first mixed use township in India of its size here – residential, commercial, IT and retail integrated into one from day one.

B&E: As a market, real estate in India looks very regional in nature so far. What are your plans with respect to going national?
NH: The regional nature is a world wide phenomenon. Even in the US, you have people working in the West Coast who are not working in the East Coast, and so on. It’s about land, local cultures, connectivity with the government, approval systems, et al. In our case, we are already in Chennai, Bangalore & Hyderabad, and we are going to be in Ahmedabad, Pune Nasik, et al. In Dubai, we have built the tallest residential tower in the world, which will soon be the second tallest. When we select a market, there are two angles. The first is who you are and where you come from. We are obviously biased towards West and South, since we occupy this space and understand it since birth. We look at other opportunities also, but we look at them one step at a time. Secondly, it is about what appeals to you at a particular point in time.

B&E: Expansion options in Mumbai are a little constrained. What role can the government play?
NH: Issues of land are always a constraint. And in Mumbai, there is a more serious constraint, since it is hedged by the sea on three sides. Infrastructure is a very big concern. We are looking forward to the government helping in producing better infrastructure for projects. We do see some good beginnings. But they are too little, too far apart. There is a lot of competition for the few opportunities available, so obviously the pricing has been a source of concern in terms of land. Also, costs of cement, steel, materials and labour are all rising. It is becoming almost unaffordable to produce affordable houses. Moreover, around 36% of the price of the house is in the form of taxes. I think the government has to first give quick permissions, do a higher FAR (Floor Area Ratio) or FSI (Floor Space Index) and actually focus on infrastructure.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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