Changing Realty Business
The ICS Group diverse interests include real-estate, hospitality, asset management and financial services. Deep Kantawala, Group Chief Financial Officer, ICS Group spoke to Realty Plus about the various Company initiatives
ICS Group has been an established player since 1999 and ICS Realty is the Group’s holding company for real-estate businesses, apart from investments. ICS Group partnered with Old Mutual Property (OMP), a renowned $ 500 billion asset management and property development/management Company based in South Africa, listed in the UK and USA and in 2005 established a joint venture Pioneer Property Zone in India. This business caters to the institutional clients like Asset managers and Fund investments offering complete end-to-end property solutions.
By servicing clients on the entire value chain, from land acquisition to developing and managing the retail asset, the company plays a pivotal role in in developing the property. So we would pretty much behave like a developer for an investor. We are also working with developers and work with them on the same model providing project feasibility, design development, property management and investment advisory services except for the actual construction of the project and the construction or project management.
Our clientele are across the spectrum but primarily focused on developers and institutional investors. Some of the major clients include Blackstone, Goldman Sachs, Mantri Group, Phoenix, DLF, Embassy, Marriott, Shriram Group, amongst others
ICS Realty provides the knowledge based services as we understand what it takes to manage the assets efficiently and we bring all sorts of learning’s and requirements to see that the development is conceived in a particular manner especially for malls or hotels.
All the verticals of the Group are primarily focused on the real-estate sector and though are independent businesses, they benefit from each other’s client relationships. We are also able pitch to a developer a one-stop solution to his fund raising, development and management needs.
In terms of providing comprehensive services, the architectural design services are provided by the Group Company Bentel Associates.In 2004, Bentel Associates International, a 60 year old South African design firm and ICS Realty partnered to offer differentiated solutions in the evolving Indian market. The Group has now taken over the firm and has about 90 plus architects with teams in India and South Africa working on projects in India, Africa and Middle East.
Mall development is essentially about experience. Lease management is structured in a way to align the mall owners and the retailers. Essentially, the turnover agreements with the retailers ensure that the retailer’s business model matches the strategic road map for the property, the developer is profited along with the retailers and we as operator and manager are incentivised. From investor point of view, we manage the asset on the ground and the investment to maturity.
Ahead of its time, ICS anticipated the need to provide integrated solutions in the organised car park management sector in the country. It partnered with M/s Secure Parking, Australia (Auspark) to form Secure Parking Solutions in India in 2007 and offerend-to-end solutions the design stage to actual car park management.
The latest venture of the group initiated in 2012 is the Ayana Hospitality, a joint venture with Mantis Group, South Africa, a global luxury boutique hospitality company. The business addresses the untapped opportunity in the boutique luxury hospitality segment in the Indian sub-continent and South-East Asia. Ayana Fort Kochi is our flagship property in Fort Kochi, Kerala.
The Current Realty Environment
Conceptually, some view the recent changes as short term pain and long term gain. According to me it is the consolidation of the real-estate segment which has always been an attractive asset class in India. With the positive changes and consolidation, the land aggregators will be able to bring in the domestic and foreign institutional investors and the foreign investors will be able to get the flavour of Indian market through REITs and FDI. These options need to be incentivized by government with structural changes as they are better than FII which is an opportunistic kind of investment option. . Developers are revamping their business models and fine-tuning product offerings and the end-user interest is slowly creeping in due to, lower ticket size projects and fall in interest rates but most are still in a wait and watch mode.For institutional and small investors,going forward REITs will be an attractive option because of their relatively low risk.