Page 50 - Construction & Architecture Update JAN-FEB 2018

developer Kolte Patil

A key part of our success can be attributed
to our customer-centric approach, focused

on delighting our customer through
timely delivery and offering the promised
specifications. We treat real estate as a

consumption business, selling large volumes
of a product which is a basic human necessity
through a strong sales and marketing network,
leveraging strong brand presence and
replenishing inventory which is utilized.

Gopal Sarda

Group CEO, Kolte Patil Developers

The New Year is started so what are your plans key approvals, and linking payments to receipt of approvals. We
for this year? mitigate macro risks by operating with one of the lowest debt in
We see a gradual pick-up in consumer confidence based on the industry and focusing on sales velocity and cash flows.
RERA-compliant business environment, supported by low home We have fostered several key financial partnerships in our
loan interest rates, to result in uptick in sales and collections. growth journey with large PE funds like ICICI Ventures, JP
Implementation of RERA and GST has consolidated demand to Morgan, KKR, IL&FS, ASK Investment Managers and Portman
organized, execution-focused developers like KPDL. Holdings, USA. These partnerships have enabled us to gain scale
KPDL is consolidating its dominant position in Pune, leveraging and internal discipline and processes. Kolte-Patil – Portman
its strong brand name/market position to accelerate development Holdings 50:50 JV completed its Margosa Heights project in
and launch subsequent phases of ongoing projects. The focus Pune in September 2016, generating an IRR of 36% and a money
will also be on diversifying our revenue base to Mumbai and multiple of 3.1 times for itself and its JV partner, Portman
Bengaluru. We have a strong pipeline of 1.4 msf in Mumbai Holdings, USA.
spread across 12 redevelopment projects in Mumbai requiring We have a flexible, project-specific capital structuring
low capital deployment, synergistic with Pune leadership, philosophy based on cash flow and approval visibility. Our foray
facilitating ROCE expansion. We will look to systematically in Mumbai was through capital-light society redevelopment
launch these projects. Bengaluru will be an additional growth and after change in DCR rules that made the entire engagement
engine. We have already launched one project, Exente on Hosur process more process-oriented. We have undertaken DMA
Road during H1 FY18 and we expect to launch a project in projects, another capital light approach, adding fee-income
Koramangala in H2 FY18. to revenue stream, leveraging our strong brand presence and
As always, our focus will be on execution, collections timely execution track record.
and cashflows. KPDL is in the business of building homes and communities
catering to the aspirational needs of the middle class consumer.
How would you define your investing experience A key part of our success can be attributed to our customer-
in your projects? What would be your piece of centric approach, focused on delighting our customer through
advice to investors looking at this market? timely delivery and offering the promised specifications. We
We have a judicious capital allocation strategy. Our focus has treat real estate as a consumption business, selling large
always remained on timing of cash flows through execution of volumes of a product which is a basic human necessity through
multiple projects – constructing and delivering increasing square a strong sales and marketing network, leveraging strong brand
feet of area. We look to acquire land clear of title to ensure presence and replenishing inventory which is utilized. We have
capital is not blocked. We are willing to pay more to acquire land asset management team in place to rent, sell, lease properties,
with key approvals in place, working with land owner to obtain extending the customer relationship cycle and creating goodwill.

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