Building Growth in South [August 2012]

Sanjay Raj, CEO at Golden Gate Properties speaks to Subhajit Roy about the company’s business focus in South India and its expansion plans
Looking at the ongoing slowdown, what is your perception on the current situation? According to me there is sluggishness across the country but luckily in Bangalore we are having genuine buyers at right location and right price. Therefore, we will be able to meet the expected targets. At the same time, we have branched out into plotted development to keep the cash flow ringing. Moreover, we are also launching Rs. 25 to 30 lakh bracket apartment under affordable housing segment. In this way we are positioning ourselves in different asset classes to keep us growing as per our projections.
Brief us about your entire portfolio?We have crossed 1.2 crore sq. ft of completed projects and have got several ongoing projects. This year, we have six launches and are on the verge of launching another three by October this year. Out of the three, one is going to be a plotted development near Hebbal. Though, as of now, we do not have any projects under small township category, we will be launching a project around Chikka-Tirupathi Road in the outskirts of Bangalore by December this year.
As most of your business is concentrated on Karnataka which faces difficulties in terms of environment related regulations, are you finding any difficulties for your business?We have no complaints about the same and are kind of used to it. If the authorities can speed up the procedure and implement online submission, there will be immense cost benefit. Today, we have to wait for almost 12 – 18 months from a time a land is purchased to get the necessary approvals before the work is started. If the time period is cut short, the benefits can be passed on to the customers. The Government has encouraged the idea of online submission and if it is implemented things will be much better. I think lot of transparency is being achieved already in the real estate sector. However there are some grey areas that need to be addressed before the project is made in terms of land acquisition etc.
We would expect the government to initiate measures on allowing faster approval, reducing home loan rates and give some concession in terms of the affordable segments so that more people would be able to buy homes. There is a very huge demand for affordable housing and the sector needs more encouragement.
Have you started any kind of project in the affordable housing segment?We would be launching a project comprising of 550 apartments mostly in the Electronic City of Bangalore which would cost Rs. 25 lakh per unit. As far as affordability is concerned, we are making apartment in the bracket of Rs. 25 to 30 lakhs.
Do you have plans to extend your business beyond South India?Right now our main focus is only Hyderabad and Bangalore. We might look at Chennai and are working on one transaction. If that works out, Chennai will be our next destination.
How do you maintain the liquidity and what is your annual turnover?At present our turnover is around Rs. 360 crore and target a growth of 40 per cent. We have various verticals that include plotted developments, apartments, villas, and row houses. Each segment keeps getting us revenue. Right now, we have launched projects worth ` 1500 crore which will be the turnover for us in the coming 2 to 2½ years.
FSI in Indian cities is much lower than global average, are you happy with the kind of FSI you get in Bangalore?In Bangalore it is fine. We have no complaints as it helps us branch out little more out of the city.

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