Interview with Rahul Shah – CEO, Sumer Group
Founded in 1965, Sumer has grown into one of the largest players in Real Estate Industry in Mumbai, Goa, Alibaug and Pawana having presence in industries ranging from earth-moving to construction and is engaged in development of both commercial as well as residential developments projects. They have delivered more than 30 mn square feet of residential and commercial Space.
In which segment are you earning more revenues– affordable housing – mid-segment or luxury housing?
We are doing transfer development rights which is popularly known as TDR. Government is encouraging TDRs that range from sizes of 269 square feet. There are also other segments that are becoming popular, that is the mid-level apartments which are usually 2-2.5 bedrooms as well as 3 bedrooms. Moreover, the premium and luxury housing too have become very popular. At present, more revenues and responses are coming from TDRs that is Transfer development rights as well as ‘Affordable Housing’.
With the implementation of RERA, has it had a positive or negative impact on your business? Why?
RERA has made the real estate sector relatively transparent. For instance, the builders can no longer give a false impression of the property’s size by citing ‘built-up’ or ‘super built up’ areas, now it is mandatory for them to quote the ‘carpet area’ in all agreements. Buyers can also see the status of their project—the site plan, units sold, construction stage, possession date, etc. on the RERA website. So the industry has been systematic now. Developers with a good team of people will be performing well in the market. Rest of the developers without a team won’t be able to perform. Now, only the professional people will stay in the market.
Did the recent construction ban affect Sumer Group?
Sumer group is not affected by the recent construction ban. We have already taken approvals before. We have all our approvals in place. The Debris Waste Management have taken approvals before the ban has been implemented by the Supreme Court.
What is the current state of the real-estate market?
Presently, real estate markets are slow. With the financial market where the NBFCs and banks at the end of September have experienced a great fall in the share price on the stock exchange after which all the disbursements are kept on hold and it’ll take time to revise because NBFCs value have been dropped by 30-50%. Banks have also faced a drop in values.
Since we are approaching on the festive season, are you coming up with festive offers for homebuyers?
There are no specific schemes. We have already offered subvention schemes for the customers. Either you give subvention schemes of 10% and the remaining on possession or you can give them a CLP (Construction Link Plan) and offer discounts. The customers are smart enough today and know on what they are getting discount and how. Consumers are much safer now and now they know who the real players are. Customers look at all the real benefits they are getting.
What are the upcoming and future projects of Sumer Group?
There are several future projects on the line. We are recently coming up with projects having 1 bedroom, 2 bedroom developments in Kandivali in the price range of 1 crore to 1.1 crores. We are starting a commercial project soon at Lower Parel, Mumbai. We are targeting for smaller office spaces from 500 square feet carpet area to 600 square feet carpet. Presently, we are doing another project at Byculla with 1 or 2 bedrooms. All the projects that we are starting now, the targeting price is of a smaller range, box price. For the Lower Parel office, we will be selling at Rs 21000 sellable price and it will be around 50 meters from the station. The Byculla project will be launching after Diwali as the approval and process are still going on with new RERA regulations. We are working on projects at Kandivali and Lower Parel as per approval.
Has RERA delayed your Byculla Project?
RERA has not delayed, because of the new rules coming up RERA has made the system disciplined. Thought it’s taking time to execute in many places but it has made everyone to perform within a stipulated time. If you are not performing within time, it cannot be delayed further.
What inspired you to have a big project like Harbour Central Mall in Mazgaon?
The wholesale trading company in Mumbai has approached us. The trading people in Crawford Market, Mustafa Bazaar, Crockery Market – these people are having illegal shops. Customers buy a huge amount of stocks from here which is a good way of revenue for the dealers but every time, they get threats from BMC for demolishing their structures. These people approached Sumer Group for the opening of a mall. As they take the major responsibility for importing all goods and moreover, the storage of the materials is on the same road where there’s Sumer Group’s property, we gave a thought to the project. The idea initiated then – if there is a large mall for them, they’ll move all the segments and will be freed from the hazards of BMC.
With its tactical placement the retail project aims to target the wholesaler trading community residing in South Mumbai who can consider moving in there as it would curtail their travel time and at the same time keep them connected to other hotspots of the city through road and rail connectivity.
Is Mazgoan a place where you can gain profits?
There are two communities who take interest in buying residential products – Bohra community and Marwari community. When we met the trading people at Crawford Market in Musafirkhana, they do not have large shops. The sizes of the shops they have is around 70-100 square feet. They all work with the concept of storing the materials and having a minimum display. This is the reason we have come up with this Mazgaon project.
What are the attractions of your upcoming project – Harbour Central Mall?
Sumer Group is coming up with a luxurious residential project – Harbour Heights, in the heart of Mazgaon, South Mumbai. The project comprises of 4 huge towers has a unique extension to it called Harbour Central Mall. This retail extension clubbed with a residential apartment is a never seen format in this part of the city from where everything lies within one’s reach. Spread across 1,70,000 Sq ft of land, the 5 levels Harbour Central mall will have around 2000 shops having 70 sq feet carpet area and more. With state-of-the-art facility the mall will have a dedicated gymnasium, banquet hall, food court, prayer hall and an ambulation area.
We are going to approach a couple of banks, HDFC and ICICI for ATMs. There will be a parking facility too. They’ll be getting a designated and well-maintained, air-conditioned place and that’s the whole idea of constructing a Harbour Central Mall.
When is this project unfolding?
The huge project is going to unfold in the next 18-20 months, it is likely to be ready by December 2019 . There will be a basement for car parking. The mall will be G plus 5. On the 5th floor, we are planning to build a gym, banquet with restaurant facilities. We are going to create a small display unit centre where there will be all kinds of shops for the customers – mobile shops, crockery market, jeans, and watches with each shop having a carpet size of 70-100 square feet. In the future, A vision plan is also being prepared for Mumbai’s Eastern Waterfront.