Sunteck Realty has become a Giant in the Mumbai Real Estate Market and is Gearing up to take on National Giants Mona Mehta Analyses
The oft repeated adage “Slow and steady wins the race” may not be applicable for Sunteck Realty, a BSE listed premium real estate developer and Mumbai’s second largest in its category. Sunteck has moved at a rabbit’s pace in the Rs.6 trillion Indian real estate market and created such a strong foothold that the strength of its structures is only surpassed by its topline growth of 40% in FY10.
Post the slowdown in the sector due to the global financial meltdown, the real estate sector has bounced back especially in Metros, with surging demand for premium residential space and Sunteck has been at the forefront in cashing in on the same. Sunteck’s business model is mainly based on joint ventures (JVs)/joint development associations (JDAs) with landowners and currently holds 77% of its saleable area through JVs/JDAs. The balance is through slum rehabilitation schemes (SRA), redevelopment projects and land buyouts. According to a recent report by Religare Securities, the JV/JDA model helps the company build a capital-efficient business by stripping away investment on land purchase and allowing a greater focus on value addition. It also supports efficient capacity utilisation and higher IRR (50-55%). For Sunteck, the cost of land via JDA/JVs has been Rs.48/Rs.130 per sq. ft, significantly lower than that for outright land buyouts.
It is developing a range of landmark residential projects with apartments ranging from Rs.10 million to Rs.40 million which offer unique designs and superior quality. Kamal Khetan, CMD, Sunteck, told B&E, “Total saleable area is of more than 30 million sq ft in Mumbai’s city centric locations and not in peripheral areas of Mumbai, with 27 projects in development pipeline. We are also actively pursuing commercial projects spread across Mumbai, Nagpour, Jaipur ad Goa.” Also, its rental asset portfolio helps it to generate steady income to take care of its operational expenditures, Khetan adds.
The oft repeated adage “Slow and steady wins the race” may not be applicable for Sunteck Realty, a BSE listed premium real estate developer and Mumbai’s second largest in its category. Sunteck has moved at a rabbit’s pace in the Rs.6 trillion Indian real estate market and created such a strong foothold that the strength of its structures is only surpassed by its topline growth of 40% in FY10.
Post the slowdown in the sector due to the global financial meltdown, the real estate sector has bounced back especially in Metros, with surging demand for premium residential space and Sunteck has been at the forefront in cashing in on the same. Sunteck’s business model is mainly based on joint ventures (JVs)/joint development associations (JDAs) with landowners and currently holds 77% of its saleable area through JVs/JDAs. The balance is through slum rehabilitation schemes (SRA), redevelopment projects and land buyouts. According to a recent report by Religare Securities, the JV/JDA model helps the company build a capital-efficient business by stripping away investment on land purchase and allowing a greater focus on value addition. It also supports efficient capacity utilisation and higher IRR (50-55%). For Sunteck, the cost of land via JDA/JVs has been Rs.48/Rs.130 per sq. ft, significantly lower than that for outright land buyouts.
It is developing a range of landmark residential projects with apartments ranging from Rs.10 million to Rs.40 million which offer unique designs and superior quality. Kamal Khetan, CMD, Sunteck, told B&E, “Total saleable area is of more than 30 million sq ft in Mumbai’s city centric locations and not in peripheral areas of Mumbai, with 27 projects in development pipeline. We are also actively pursuing commercial projects spread across Mumbai, Nagpour, Jaipur ad Goa.” Also, its rental asset portfolio helps it to generate steady income to take care of its operational expenditures, Khetan adds.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles
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Zee Business Best B-School Survey 2012
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IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
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IIPM B-School Facebook Page
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