SOBHA DEVELOPERS

Sobha Developers Ltd., a 20 billion Company, is one of the fastest growing and only backward integrated real estate players in the country. With three decades of experience in creating resplendent interiors of palaces and masterpieces in the Middle-East, Mr. P.N.C. Menon founded Sobha Developers in 1995 with a clear vision to transform the way people perceive quality in the real estate sector in India. Since inception the Company has always strived for benchmark quality, customer centric approach, robust engineering, in-house research, uncompromising business ethics, timeless values and transparency in all spheres of business conduct, which have contributed in making it a preferred real estate brand in India. Sobha went public in the year 2006. The Focus Sobha is primarily focused on residential and contractual projects. The Company’s residential projects include presidential apartments, villas, row houses, super luxury apartments, luxury apartments, semi-luxury apartments and plotted development along with amenities such as a clubhouse, swimming pool and shopping complex. In all its residential projects the Company lays strong emphasis on environmental management, water harvesting and high safety standards.

On the contracts side, the Company has constructed a variety of structures for corporate including corporate offices, convention centres, software development blocks, multiplex theatres, hostel facilities, guest houses, food courts, restaurants, research centres and club houses. Some of Sobha’s prestigious clients include Infosys, Taj Group, Dell, HP, Timken, Biocon, Institute of Public Enterprises (IPE), Bosch, Hotel Leela Ventures and others.

Core Strength

Sobha's superior quality execution capability is its core strength. As of September 30, 2012, in the past 17 years since its inception, Sobha has completed 81 real estate projects and 221 contractual projects covering about 53.73 million sq. ft.  The Company currently has 39 ongoing residential projects aggregating to 24.54 million sq. ft. of developable area and 17.35 million sq. ft. of super built-up area, and 41 ongoing contractual projects aggregating to 9.93 million sq. ft. under various stages of construction.

The backward integration model is one of the key competitive strengths of Sobha. This literally means that the Company has all the competencies and in-house resources to deliver a project from conceptualization to completion. Backward integration includes an interiors division with one of India's largest woodworking factory, a metal works and glazing factory, and a concrete products factory.

Sobha is a process driven organisation where each activity is extensively detailed. We were one of the first companies in the industry to obtain the ISO 9001 certification. We have also received the OHSAS 18001:2007 and ISO 14001:2004 certifications for our Environmental, Health and Safety Management System. As a conscious step, in sync with the international initiative, our future township projects will be designed for accreditation with the Indian Green Building Council.

Awards and Accolades

Sobha has time and again been acknowledged for the quality of its projects by various institutions of repute. Some of the prestigious awards include "CNBC Most Reliable Builder Award", as voted by customers, at the CNBC Awaaz Real Estate Awards 2012, 'CNBC Best Executed Project Award' for Sobha Malachite, 'CNBC Best Residential Project with more than 5 lakh sq. ft. Award' for Sobha Daffodil, 'CIDC Best Building Award' for Infosys Global Education Centre II, 'India's Top 10 Builders Award' by Construction World, 'Handa Golden Key Award' 2011 for excellence in Value Engineering, Value Management (VE/VM) and 'Employer of the Year Award' by Realty Plus Excellence Awards 2012, among many others.

Multiple laurels have been showered on the founder of Sobha, Mr. P.N.C. Menon, who is now the Chairman Emeritus of the Company. He was conferred the prestigious Pravasi Bharatiya Samman Puraskar by the President of India, Ms. Prathiba Patil, on the occasion of Pravasi Bharatiya Divas in 2009. He was also recently honoured with the Cherian Palathra Award 2012 for his outstanding contribution and exemplary service to the society.

Sobha is an organisation where quality meets excellence, technology meets aesthetics and passion meets perfection.

Built Expressions, in an exclusive interview with Mr. Ravi Menon, Chairman, Sobha Developers, explores   various facets of Sobha. Excerpts.

BE: Being one of the India’s leading corporate real estate developers how has been your journey in the last ten years? What kind of challenges you faced en route the journey?

RM: The budget, location, convenience, comfort and, added to that, high quality drives the requirement. The budget had an upper edge over the quality and comforts. Now, slowly the change is happening as the quality is getting an upper hand over the budget. Sobha started its journey with a well-defined path for success. We are one of the few real estate companies which strive for the highest quality and transparency. We treat the home/apartment as a product of international standard. Driving this focus on quality into the customer's mindset was a tough job initially and we feel proud to tell you that we have succeeded.

The market conditions keep changing. A few years back FDI was never ever thought of but today it is the reality. The prices of land banks have gone up manifold. The gap between the supply and demand for construction materials is skewed because of environmental issues. The adoption of new policies towards the changed environment is a challenge for any real estate company. Sobha has quickly adapted to the changing market requirements and has developed a framework of the company. This helps us in developing aesthetically pleasing and ergonomic products, which provide the best value-for-money propositions.

BE:With plethora of reputed projects, your contribution to the real estate sector has been enormous. What is the main motivating factor that drives you to give the best?

RM:Quality and passion are the driving forces of Sobha. We strive to infuse quality into everything - be it concepts, designs, selection of materials, execution, best practices of construction, addressing customer concerns, etc.

We are the only backward integrated real estate player.  Every aspect related to the product is designed, manufactured and executed by our in-house experts. The need for a beautiful home is everyone's dream. We transform dreams into reality in a very professional manner.

We measure customer satisfaction through the smiles on their faces of our clients and this drives the company to scale new heights. Sobha is privileged to have the highest number of repetitive customers.

BE:Sobha Developers is primarily focusing on residential and contractual projects. Any specific reason? Please tell us more about it in terms of opportunity and growth.

RM:India has a population of over a billion and has been experiencing consistent high GDP growth for more than a decade. The need for a quality home is perennial. Sobha caters to this requirement. The real estate division of Sobha has a more focused approach towards fulfilling this requirement of the masses with sheer quality and passion for perfection. We do not develop a product for the masses but yes, we produce for the mass, which expects world-class quality.

Sobha's quality is impeccable and this qualitative outcome should also be experienced by other developers. Hence, the equal focus is given to contractual projects with a note of no conflict of interest between divisions.

BE:With increasing urbanization cities are getting cluttered and services affected. What in your opinion is the right solution? Is growing tall is the only solution?

RM:There is a shift of paradigm in the way we work and live today. Sobha believes in the 'work, play and enjoy' mantra. To provide a holistic living experience, we are developing townships with world-class amenities, which are situated close to workplaces and IT hubs so that people come back home soon and spend quality time with their families.

Building tall towers is of course an accepted solution. But, we believe in building a cluster of self-contained habitats with every possible amenity, so that people need not have to travel for long. There should be a dialogue between town planners and real estate developers to find a better solution to handle the needs of the increasing urbanisation.

BE:Sobha believes in the philosophy of rural development for achieving sustainable development. Can you describe this in brief with some case study?

RM:At  Sobha we believe that if companies adopt one or two villages, it will address the problem of poverty as a step like this will go a long way in providing financial inclusion for all below poverty line (BPL) families. Sobha, as part of its social developmental initiative, has adopted two panchayats Vadakkenchery and Kizhakkenchery in Palakkad district of Kerala in the year 2006.

The entire BPL population of the two panchayats, comprising 2,500 families, has been adopted through an in-depth scientific poverty mapping called Social Empowerment Mapping Exercise (SEME). The aim of this action plan is to achieve comprehensive and sustainable social empowerment of these families. The program covers key human development verticals like education, health, employment, water, sanitation and housing besides various social empowerment measures.

BE:Being one of the responsible members of CREDAI, what are your views on the acute labor shortage existing in the country and especially in metros? What is the remedy? Can you explain the role of ‘Sobha Academy’ in this respect?

RM:There is a shortage of skilled labourers' in our industry. The primary reason for this is not reverse migration to the villages but lack of attitude and commitment. Ease of availability of facilities makes people less focused.

Sobha believes in handling this issue more holistically by deploying two strategies. In the first strategy, every person working with Sobha is given training in technical skills and communication skills so that one is empowered by the latest technology, tools and expertise. In the second strategy, we thrust upon using the latest advancements in the construction industry, which reduces labour effort.

Our in-house training centre, Sobha Academy, is doing a wonderful job in imparting latest skills so that every Sobhaite – be it a management employee or tradesman - is empowered to lead.

BE:What are the emerging trends in Real Estate Sector?

RM:India is one of the fastest growing economies where the per capita income is increasing rapidly. It has generated employment for millions of people in the past decade, and as a result, there still remains an unmet demand for quality housing across all segments - be it luxury, super luxury or even plotted development.

The urbansation of India is presently at around 31% and the country is headed towards 40% urbanisation. Hence, it is estimated that as many as half a billion Indians would need new homes in the country's various cities over the next decade. Also, the GDP growth, which is hovering around 6%, is expected to rise to about 8% in the next 10 to 15 years. This is another factor which will help trigger the successful absorption of new launches at price points which will be comfortable for the buyers.

As far as the New Year is concerned, 2013 is slated to be a defining year for the sector as the passage of two crucial bills, Real Estate Regulation Bill and Land Acquisition Bill may take place. We hope that the government provides incentives to developers with respect to key measures like faster plan approval and easy clearance of land titles. Moreover, in this year the RBI is expected to lower interest rates in the coming months which will benefit developers as well as consumers.

Housing rents may continue to rise, so, owning a house may seem more viable than renting in many cities. Add in the expectation of price appreciation and we may soon see more renters itching to buy their own homes.

Attractive development prospects will beckon India from known global giants. Cities like Mumbai, Bangalore, Chennai and Kolkata will see a faster growth pace and pockets of NCR region will continue to maintain investor interest and confidence. The demand for super luxury housing will remain strong even during testing times.

The widespread deployment of technology across the various operational phases is expected to enable the sector to rationalise construction-related processes and improve the quality, cost-effectiveness and timeliness of project delivery, while also ensuring that the projects are developed and completed in consideration of long-term sustainability and environment-related concerns.

BE: 'Graamasobha' is your unique Social Development Program. Can you briefly explain this as part of your CSR?

RM:To usher in holistic growth of the grass-root level, the Company, under the aegis of its CSR arm, Sri Kurumba Trust, initiated Graamasobha – a unique social development initiative for the two graama panchayaths, Vadakkenchery and Kizhakkenchery located in the Palakkad district of Kerala, in the year 2006. Spread over 150 sq km, they were the poorest and most socially and educationally backward ones among the 975 panchayaths in the state.

In order to make a difference, Sobha's founder, Mr. P.N.C. Menon, wanted to reinvent the timeless Gandhian concept of 'Gram Swaraj' by developing world-class infrastructure and effective strategies to improve the quality of life of the rural masses, thus making the villages self-reliant. For this, specific information on the socio-economic dynamics of the poor living in the two panchayaths was required. So, an in-depth Social Empowerment Mapping Exercise (SEME) was undertaken by the Social Empowerment Department (SED) of the Trust. to fulfil the following objectives:

• To identify and enlist genuine beneficiary families from the two panchayaths using clear-cut norms and terms.
• To generate qualitative and multi-dimensional 'Baseline Reports' on the target families, so that specific programs and activities could be implemented for their benefit.
• To devise target-based, area-specific empowerment programs and activities for key human development verticals like education, health, employment, housing, and water.
• To design an effective mechanism to measure and monitor processes and the pace of the empowerment programs of the Trust.

In 2008, the Trust selected trained and deployed 20 people on a full-time basis to complete the exercise. For about a year, they studied the incidence, depth, and severity of poverty of the beneficiaries with the help of various mapping methods.

Families, which had extremely poor living conditions or those which had a monthly income level of Rs. 4,500 or below, were categorised as Below Poverty Line (BPL). In addition to the above criteria, several other factors like possession of valid ration cards issued by the government and proper authorisation of the beneficiaries by the local ward members were looked into.

The Trust covered more than 15,000 families and identified nearly 2,500 families (around 11,000 people) from the BPL bracket. A physical map of the area depicting the houses of the direct beneficiaries was developed. Individual photo identity cards were issued to each member of the adopted families. As a result, the Trust has detailed and authentic data about each beneficiary and his or her requirements.

Based on the data, the Graamasobha model was developed. In the history of Indian villages, there has perhaps not been such an initiative wherein so much care has been taken in designing, developing, and delivering state-of-the-art infrastructure and facilities for the poorest of the poor, without any discrimination whatsoever. The lives of thousands of underprivileged citizens are getting positively transformed through this growth model, which has a bottom-up approach towards poverty alleviation.

The following key social development institutions were established for the development of the deprived:

Sobha Academy- to empower and enable the rural poor to break away from the vicious circle of poverty, ignorance, deprivation, and exclusion by providing their children with high-quality education. More than 650 children have access to free, quality education due to this initiative. Another educational initiative of the Trust is 'Sobha Icon', which aims at creating "icons for India" by making high-quality learning opportunities available for meritorious students who have exceptional skills but not the opportunities to grow.

Sobha Academy, Bangalore-Where knowledge meets know-how

Sobha nurtures its talent pool with a myriad of skills and capabilities. The Sobha Academy, set up at Bangalore, is a unique centre for learning that offers specially designed workplace skill development programs. A comprehensive orientation program is designed and conducted for every employee who joins Sobha. Moreover, each department organises its own specialised training sessions for the new joinees.

 In order to make Sobha's staff more proficient, the Technical Training Department at Sobha designs and coordinates modules which relate to the various aspects of technical operations. All engineers and supervisors of civil, planning, safety, and quality departments are put through a preliminary training program during the induction phase. These training sessions aim at providing all-round, functional training of the various processes that are followed at Sobha sites, with specific emphasis on critical tasks and detailed procedures. Quality, safety, and cleanliness are the three words the Academy promises to add to the trainees' vocabulary and make sure they learn to practice it.

The Sobha Academy conducts courses for tradesmen, who are the key resource of the Company's project sites. Fresh recruits, who mainly hail from underdeveloped parts of the country, are given intense training to make them adept in specific work skills like tiling, granite masonry, gypsum works, waterproofing, electrical, and plumbing works.

The technical training structure at Sobha is divided into two parts i.e. supervision and execution. The Company has identified 28 activities, which go into the execution of a project. To execute each activity a sequence and procedures, using correct tools and methodology, have been laid down. This kind of specific training helps Sobha deliver a high-quality product which is best-in-class.

The Technician Supervisor Model adopted by the Academy for on-the-job training at the sites stresses on the importance of hands-on-experience.

Training at Sobha is driven by technology and enhanced by innovation. Due to the keen attention paid to workforce training, the Company's employees perform efficiently during project deliveries. This constant focus on the development of its staff has been a major driving force of Sobha's success.

Sobha Health Care- The Sobha Health Care Centre has redefined the limits of primary healthcare institutions anywhere in the country. The target group comprises the 2,500 BPL families of the adopted panchayats, senior citizens of Sobha Hermitage, students of the Academy and their parents. The facilities include free consultation, diagnosis, tests, treatment, and medicines. The Centre has also set up outreach counters to reach out to the needy at their doorsteps.

A School Health Programme (SHP) has been initiated through which comprehensive medical screening is carried out for the students, and preventive care is provided. Gynaecology and paediatric wards are also going to be launched soon. Besides, a comprehensive medical insurance scheme covering every member of the BPL families is being envisaged.

Sobha Hermitage- Sobha Hermitage, located on 23 acres of verdant green estates, is the most benevolent home one can hope to find for the deprived. It is the epitome of humanity, offering love, care, and support to the neglected sections of the society - senior citizens as well as young widows, referred to as "young mothers," and their children. The residents stay in a secular and secure environment where they are provided with food, clothing, shelter and premium resources and services along with the best facilities, all on the house.

Other Initiatives

Sobha Vocational Training Centre (SVTC) - SVTC aims at providing functional vocational training, and paid apprenticeships in carpentry to youth from poor families. Plans are afoot to add more trades in the near future. Direct and indirect employment is provided to hundreds through SVTC.

Sobha Community Centre- is a beautiful and spacious edifice for the deprived. It comprises a dining hall that has a seating capacity of 300. While it is open for public use for a nominal fee, its core purpose lies in feeding the poor, several of whom are fed free of cost every day. Special community feeding of about 30 aged and destitute women is organised daily.

Rural Women Empowerment- The Trust has also undertaken a series of Women Empowerment initiatives. It has already unveiled a program for comprehensive rehabilitation of young mothers living at the Hermitage. While they are presently employed on a salary basis in the Academy, they all have to complete graduation, for which the Trust will offer the necessary support and resources. After graduation, they will be placed in suitable positions in the institutions of the Trust. Separate living apartments are being constructed for them which they can move into, as their children grow older. Support will also be provided if they want to get married.

Sobha Group strongly believes that if an initiative like Graamasobha can be taken up by other organisations too, it could change India's poverty equation forever and bring about a sea change in the social fabric of this country.

Mr. Ravi Menon

Chairman, Sobha Developers Ltd.

Profile

Mr. Ravi Menon, 31, is the Chairman of the Bangalore headquartered realty major Sobha Developers Ltd., a Rs. 20 billion Company, which is one of the fastest growing and only backward integrated real estate players in the country.

Born in Palghat, Kerala, and brought up in Muscat, Oman, he is a Civil Engineer with distinction from Purdue University, USA. Mr. Ravi Menon joined Sobha Developers in June 2004 as a Director and was designated as the Vice Chairman in January 2006. As part of the succession plan, he became the Chairman of the Company in June 2012.

In a span of eight years, he has contributed significantly to product execution which has resulted in the Company's delivery levels increasing from 6 Million Square Feet in the financial year 2004-05 to over 50 Million Square Feet in cumulative during 2011-12, a new milestone in the history of the Company and the construction industry of India as a whole.

During his association with the Company, the turnover of Sobha has increased from Rs. 6,248.34 Billion in 2005-06 to Rs. 14,144 Billion in 2011-12, an increase of around 125%. He has played a pivotal role in devising the corporate strategy, diversifying through product lines and entering into new geographies, thereby strengthening the foundation of the Company.

A man of details, he also has brought about tremendous value addition to the organisation in terms of creating Project Management Information Systems (PIMS), a detailed technology manual, an elaborate quality evaluation procedure, customer care structure, innovation culture, and the Sobha Academy, which offers world-class training in construction and management to Sobha's entire workforce. All the training modules are meticulously designed and are driven by technology and enhanced by innovation.

For his dedicated service and achievements, Mr. Ravi Menon was bestowed with the 'Young Achievers Award’ at the Real Estate Awards 2012 and the 'Star Realty Magnetic Young Icon' award at the Star Realty Awards 2012.

Mr. J.C. Sharma, Vice Chairman & Managing Director

Sobha Developers Ltd.

Profile

Mr. Sharma, 54, joined Sobha in June 2001 as the Finance Director. Soon, he was appointed as the Managing Director in April 2003. In May 2012, he was designated as the Vice Chairman and Managing Director of the Company.

He holds a degree in Bachelor of Commerce (Honours) from St. Xavier's College, Calcutta. He is also a qualified Charted Accountant and Company Secretary with over 28 years of experience in diversified industries such as automobiles, textiles, steel and real estate in the areas of finance and management.

In his over a decade long association with Sobha, he has been entrusted with the responsibility of managing the overall affairs of the Company with a team of dedicated professionals to aid and assist him. He is instrumental in spearheading the growth mantle of the Company from a turnover of Rs. 1,369 Million during the financial year 2001-02 to Rs. 11,894 Million during the financial year 2006-07, thus paving way for a highly successful Initial Public Offer (IPO) of the Company in December 2006.

Under his leadership, the Company could steer from the economic downturn in 2008. The net worth of the Company has improved from Rs. 10,895 Million in the financial year 2008-09 to Rs. 20,000 Million in the financial year 2011-12. The debt-equity ratio has been brought down from the peak levels of 1.76 in the financial year 2008-09 to 0.52 in financial year 2011-12.

Sobha's core values of transparency, commitment and its philosophy of 'passion at work' influence his every task and interaction. Being an acclaimed thought leader and an expert in his field of work, he has been honoured with the Pathfinder's Award for the Most Enterprising CEO by Realty Plus. He has also been voted as the top CEO in the Property category on the Institutional Investor magazine's ranking of Asia's Top Executives survey, for 2012.

A man of impeccable integrity, his eloquence, level of energy and sense of ownership combined with his cool demeanour are his biggest assets, which drive him to success.