‘Upbeat on commercial real estate; to invest Rs 7,000 crore for developing 12 million sq ft’: Purvankara MD Ashish

As the real estate sector gradually tries to find its new normal, Purvankara is already working on its various expansion plans. The Bengaluru-based developer is further expanding in commercial real estate. Its managing director, Ashish Puravankara told FE’s Rishi Ranjan Kala that the company plans to invest Rs 7,000 crore by 2027 to build assets across 12 million sq ft (msf). This is besides its launch plans for residential space. Excerpts:

Covid-19 forced developers to explore unique ways of engaging homebuyers. What has been your experience?
In initial days of lockdown, the focus was mainly on safety and security of our stakeholders, especially workers at construction sites. Next priority was to create a roadmap to provide hassle-free service for customers. We also ensured there is no delay in handover (apartment) during lockdown. Our CRM team shifted to online handovers and also set up a digital desk to address the queries of NRI customers. We identified individuals to perform essential tasks like collection of agreements, or documents and financial instruments from customers and deposit it in banks on their behalf.

How are you leveraging digital medium? What has been your experience?
The realty space has been very encouraging of technology, the rate of tech-penetration has especially accelerated in last five years. Most importantly, data driven marketing has an edge over traditional marketing tools, as it creates performance-based campaigns through better analysis of consumer data. At Puravankara, we allocate 1-3% of project costs to budget for software technologies.

Early adoption of technology has kept us ahead of the curve and address operational issues that arose due to Covid. One example would be, first-of-its-kind virtual property launches in residential segment. We did three virtual project launches in June and July. It generated immense interest and saw participation of more than 30,000 attendees for all our 3 projects.

What are your plans for commercial real estate and warehousing segments?
For our commercial real estate portfolio we have planned investments of Rs 7,000 crore over the next 7 years to build assets across 12 msf. Delivering office, retail and mixed-use property will only reinforce our position as a reputable developer of diversified projects, while also adding value to our residential mix. We have identified Bengaluru, Hyderabad, Mumbai and Pune and excellent location of our assets within these markets, combined with the credibility of our development partners and our technical expertise in design and innovation will only support our expected take up rates, going forward. Also we are focusing on expanding our product offerings in commercial/industrial asset classes to cater to increased long-term needs for quality office space, logistics hubs and other industrial facilities. For realising our aspirations in this business, we are leveraging on the expertise and network of international players via strategic partnerships. For instance, our JV with Morgan Stanley to develop warehouses in south India.

How is your residential projects launch timeline looking?
At this juncture, we are working towards zero deviation from our planned launches for FY21 across both our brands, Puravankara and Provident Housing. We are geared with our plan of launching 11 projects for this fiscal spreading over close to 10.5 msf. These include six under the Puravankara luxury brand and five under Provident affordable housing brand. While Covid remains a concern, we are confident that our projects will address the changing needs of consumers in these times. We are currently planning and designing new aspects in our upcoming projects to suit needs of the post-Covid world.

For our launch pipeline in FY21, we will be investing close to Rs 3,000 crore and anticipating revenue of over Rs 6,000 crore. Out of which, we have successfully launched closed to 2.5 msf, which comprises three of our projects — Provident Woodfield, Purva Atmosphere in Bangalore and Purva Aspire in Pune.

What is the rationale behind entering plotted development?
At Puravankara, we understand the ever-evolving need of buyers. An integral part of our R&D involves identifying locations, which will be most conducive for living and provide for a better quality of life and is a sound investment. Our first plotted development project, Provident Woodfield was purely catering to the lacuna that existed in supply-demand equation. Plotted development as an asset has gained significant traction in all major and tier II cities. A deep dive would validate that demand for plotted development projects in Southern India is far better in comparison to other parts of India. Response to Provident Woodfield, was phenomenal, and we sold nearing 70% of inventory in less than 24 hours. With the kind of momentum that has been built around this project over last few months, we expect to close 100% of our inventory, in next 6 months.

What are your views on consolidation in real estate?
Industry has seen consolidation begin almost immediately post-RERA, where cost of regulation could not be borne by all. As we move forward, consolidation will get accelerated and resilient developers with established legacies will emerge stronger and bigger. It is our belief and experience that divergence of performance amongst branded and organised players will widen going forward. Even before Covid, we have always been looking for viable business opportunities.