Covid made people realise you need your own house: Gautam Singhania, CMD Raymond

Gautam Hari Singhania, CMD, Raymond Ltd.

Gautam Hari Singhania, Chairman and Managing Director of the Raymond Group, launched the suiting and apparel giant’s real estate business in 2019, in Thane, where it has a land bank. Earlier, the Board of Directors had approved Raymond’s Realty business becoming a wholly owned subsidiary. A new company by the name of Ten X Realty Ltd was incorporated as a step subsidiary of Raymond Ltd to develop the real estate business. The first project, called ‘Ten X’, received 146 bookings in Q4FY22 taking the total number of bookings to 1,909 units (79% of the total inventory) as of March 2022, with a value of Rs 1,887 crore. The second project, called 'The Address by GS’ which is a premium residential project, has received bookings with a value of Rs 400 crore.

In an exclusive interview with Moneycontrol, Singhania said the venture is on track to meet all its deadlines, and en route to becoming a “core business” for the group.

Edited excerpts:

You began work on your new venture Raymond Realty at a difficult time –– just before the lockdown began in March 2020. How did that work out?

We built it through COVID. So basically, Raymond had land in Thane that needed to be monetised. There are three ways: sell it, jointly develop it, or do it yourself. Initially, we thought we would sell it. But then obviously, every builder wants to give you a low price, and we were not getting the value that we wanted. So, having burned my fingers in a joint development before — 20 years ago — I decided to do it myself.

I think we learned the business reasonably quickly. And today we are the leading project in Thane, with Phase One being over 3 million square feet, on 14 acres. It’s purely residential, and that's really become a launchpad for us to seriously look at the real estate business. Last year, we announced in January that this year on December 10th at 10 AM we will deliver the apartments. We have a countdown timer on our website. So that's built a lot of confidence. And we are on track to deliver 900 apartments by then.

How do you see Thane district itself developing?

Thane is developing very well. The metro is right outside our properties. Carpet prices are around Rs 21,000 to 22,000 per square feet approximately (2021-22). So, you can get our one bedroom-hall-kitchen apartment for Rs 75 lakh, and a two-bedroom for around Rs 1.30-1.40 crore. Recently, I saw the coastal road project; it's amazing what it'll do for connectivity in the city. I mean, the suburbs will become much more accessible. You go down the coastal road, you take the connector road from east to west, which is coming up, and you can hit the Eastern Express and get to Thane in 30 minutes or 40 minutes. With the infrastructure, Thane is no longer a distant suburb. And once this whole infrastructure work that's happening in Mumbai gets completed…once 50% of Mumbai traffic goes out on the coastal road, the city roads will become emptier. I mean when was the last time you went through Mahim to go to the airport? You don't. You go through the sealink. Who goes to Shivaji Park and Mahim and all? Nobody goes.

How large is the Raymond land parcel in Thane?

It's a little over 100 acres now. I think we will have a balance of about 60-70 acres now. So, Phase 2 is about a million square feet. In phase two, our project is called Address by GS, which has my own name on it and will be more premium than 10 X, which is the name of the first project. There will also be a phase three as there’s a lot of land to monetise. Also there'll be a phase four and phase five and phase six because the land is eventually all going to get developed.

Only residential or also commercial?

Phase one and phase two have no commercial development so far. But I guess it will evolve over time. We're focused on real estate. That's where our strength is, we understand the product, we understand the market there. And we have built a solid brand.

How involved are you in the real estate venture and what does it mean for the group at large as a business? I hear from the grapevine that you're very hands on…

I am involved as much or as little as I am required. Any new business requires your involvement until It’s up and running and gets settled. Now, it’s become a core business. I mean, we've got 175 People in the division and we are currently developing four million square feet. I think by the end of the year, we'll be up to 8 million square feet of development. So, it's a serious business for us. I mean, to become number one developer in Thane against all the reputed guys is not a joke. Also, we're not only doing our own land now we're looking at outside joint developments, where we are developers for other people's land in Mumbai.

Given that you aren’t a legacy builder, how have you gone about construction ?

Project to project, we float out a tender. And we work with whoever is most competitive. Right now we're working with Capacit’e Infraprojects, with whom we have a good relationship with and they're building phase one and phase two. The architect is Hafeez Contractor.

Will you be open to lending the Raymond name to other projects?

Not lending. It is going to be a Raymond project. We will do it. If you are a landowner, we will come and develop the whole thing for you. Now, we're focused on Maharashtra, which I think still has enough development opportunities. I mean, we take a five-six-acre property, it will still give you a million square feet, which will usually be a half a billion dollars. And in the suburbs, a 10-12-acre property is a billion-dollar project, as a thumb rule.

Does owning the land fast-track development?

No, it doesn't. Regulation applies to your land or my land both; it is about how you approach the problem. In a JDA, it may be your land, but we will be the best bet for you to develop it. Because we are focused, where we come from a manufacturing mindset. We didn't stop or really slow down through COVID except during the major lockdowns. We come from a different mindset, we don't understand anything about real estate. So, maybe we are naive that way. But we have come up with a new set of rules.

What is your overall view of the real estate sector…

I think COVID has made people realise that you need a house. What pain people have been through, living with multiple families in one unit. I think what it has really done is turned housing into a priority item, even if it's a small house. Number two, I think people understand the value of it, and we're operating in the belly of the market, which is 1 BHK, 2 BHK, 3 BHK — what we call building India 123. We're going to build India using the 123 BHK. That's where the bulk of the demand is.