Thursday, November 10, 2016

Olympian Bet on Affordable Housing


Sudhir Raikar, Content Architect, IIFL | Mumbai | November 08, 2016 08:44 IST

Olympeo Infrastructure is a distinctive real estate player in a crowded marketplace, thanks to its offbeat value proposition that has brought affordable housing center stage. The company’s Chairman and Managing Director, Prabhat Ranjan, a B. Tech from IIT Delhi and MBA from IIM Bangalore, unfolds the vision, mission and values of his debut venture in this brief tête-à-tête with IIFL’s Sudhir Raikar.

Many observers believe low-cost accommodation is still a distant dream due to a host of constraints including availability and affordability of land banks and the burden of tax component in ownership cost. But Olympeo Infrastructure firmly believes in the value prop of affordable housing. The company’s Olympian bet on affordable housing is built on the promise of a dramatic, game-changing transformation of Neral - located at the foothills of the popular tourist landmark of Matheran - from a sleepy hamlet to a bustling, modern hub of affordable housing for scores of middle class families who work in the big city Mumbai but can’t afford a house in it.

Excerpts of the Q & A interaction with CMD Prabhat Ranjan:

For long, real estate was largely, and at times unfairly, linked with players of suspect ambitions and shaky credentials. Did you have to fight this perception during the formative period of Olympeo?
Yes, we had to fight this per-conceived notion for long and we still grapple with its remnants at times. The fact that a few builders haven’t been able to deliver flats on time or have failed to meet the promised quality benchmark has made buyers jittery. Buying a flat is an emotional decision for the bulk of the populace which is why they begin on a note on suspicion about the builder’s intentions. Only the consistency of positive outcomes can reinstate the lost faith on the demand side. Talking of our venture, we are committed to make a positive difference through our unflinching vision and mission.

Did the thought of becoming an infra player germinate during your Reliance Infra or India Bulls stints?
The idea of venturing into construction was always resident in my mind, it just got strengthened during the India Bulls stint. I find a deep sense of satisfaction in real estate, It was this sentiment that paved the way for my career choice. When you build, and deliver something tangible, a physical property that houses many a residential and commercial dream, the joy of the feat is so overwhelmingly fulfilling. I mean the mere sight of the structure even after 15 years can make you nostalgic. In an instant, you can relive all that has gone through into its making.

Why did you decide to zero in on the affordable housing segment?
Affordable housing segment is a sector with huge potential and the scene is going to improve in future. This is a market where ticket size is small, so it’s not that difficult to move inventory compared to other segments. But yes, the sector needs assistance from the government as the margin is very small compared to other segments.

Do the twin responsibilities of being the co-founder of Brick Eagle and founder of Olympeo involve conflicting overlaps?
I quit Brick Eagle and then I started Olympeo, although I’m still a shareholder of Brick Eagle. It would have been difficult to handle both as setting up a new firm requires energy, time and dedication.

You have chosen 'beyond Thane and New Mumbai' zones for development. Do you face stiff competition from the players already active in this zone?
The land parcels which are feasible for affordable housing development are only available in this region. Hence the competitors. But the competition is healthy and it should be there. One advantage of competitors is that you don’t have to hard sell the location. People are already aware of it and you don’t have to promote it. You just need to convey your value prop.

How do you plan to balance lifestyle and affordability? Given that home buyers are skeptical about such claims, are you running any special campaigns to unfold the value prop to the target audience?
We have strategically formulated our approach to deliver a best-of-breed product at a cost-effective price. The flats have been designed in a manner that would make maintenance a low-cost affair but the quality is not compromised in any respect. About promotions, we run marketing campaigns from time to time to attract potential buyers. We also showcase our products in events, exhibitions and through BTL activities.