Tribeca Follows Asset-Light Model

Tribeca Follows Asset-Light Model
Jun 2019 , by , in Interviews

“When I started my business the thesis was that in India, for the prices we pay, the quality that we get is abysmally low. This is across all classes of residential and it’s certainly true for luxury,” states Kalpesh Mehta, Founder Tribeca Developers

THE STRATEGIC TIE-UP WITH THE TRUMP

What we brought to the table was India and the understanding of the local conditions and relationships and The Trump brought their brand and expertise. They gave the mandate for the entire country to our firm and now India is the largest market for Trump Properties outside of North America. The product is built as per their specifications and standards and the architects and designers are appointed by us. They don’t get into the construction methodology. We understand the market best and make sense for us to decide what is best going to work in the market.

The most important aspect for them is the interior finishes, the materials, architectural standards and most specifically the façade. The architecture has to be iconic. The management of the property also needs to be as per the specifications laid out by the Trump, to be at par with the Trump properties worldwide.

THE SALES STRATEGY

The approach starts with the brand but then the product has to match. For distribution, a strong channel network is essential. You can’t sell direct. Our and Trump’s belief is that PR generated through digital and print medium has much more mileage than marketing. So, a few months before the launch we start talking about Trump properties around the world and India. Additionally, the channel partners are activated 6 months before the launch to create enough interest.

 

We have set up a platform with HDFC Capital Advisors that will invest Rs 500 crore. It will leverage Tribeca’s asset-light model of acquiring projects from existing developers through joint venture and development management structures. We are also doing similar platforms with other financial institutions.

In the global economy, companies are moving away from asset ownership and towards asset manufacturing. Asset ownership is the thing of the past, think Air-BnB, Uber, etc. The scalability becomes easier when you get away from capital intensive risky asset ownership to focus mainly on product and distribution.

Following an asset light model allows us to build our bandwidth and capabilities around our skillset which is product distribution. Currently, we are focusing on projects in Mumbai and NCR. In NCR, we have 4 projects, the Trump Tower; an HDFC funded project in Gurgaon sector 70 and in sector 150, a project bought from the YOO brand. With Logix Group, Tribeca has tied up to develop mixedused real estate project in Noida.

The long term goal is to build our product development routine and continue to be asset light. When you get into the land buying you need a lot of high risk capital. Getting in project cycle at end makes the capital more easily available and distribution faster. The model we will continue to follow will be to develop scale, accumulate capital and build organisational capabilities.

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