Building trust

Corporate Reports
Business India u the magazine of the corporate world
Building trust
The Wadhwa group is all geared up to
get into the next phase of growth
Located at the heart of Bandra-
Kurla Complex (bkc), Mumbai’s
new financial nerve centre,
The Capital is an iconic commercial
development by Mumbai-based
developer Vijay Wadhwa group.
Designed by the world-famous architect
James Law of Hong Kong around
the innovative idea of cybertecture,
the office building with a mix of
retail and hospitality components
(total developed area of 1.2 million
sq ft), merges both modern architecture
and technology to create something
that is extremely commanding
and imaginative. This cuttingedge
edifice showcases an everlasting
and contemporary façade, while
its interiors feature a rich palette of
colours and textures.
From above in an architecturallymodelled
valley, this green building
with Gold leed certification, welcomes
its visitors to a lobby that is
three stories tall. The entire building
is designed to invite natural
light from all directions. The attractive
sober specialty lighting designed
by Bio Stieber of Singapore, is the
perfect complement to this natural
lighting. Among several innovative
and futuristic features, The
Capital boasts one of the largest fully-automated
car parking systems in
the world. Designed and executed
by woh r, Germany, the six-level
basement parking can accommodate
around 1,000 cars.
With several world class amenities
and features in place, The Capital
which got ready as per schedule in
2012 by the Wadhwa group wading
through the adversities of the postfinancial
crisis period, is currently
hosting many global names (area
leased out: 230,000 sq ft; remaining
space has also been sold) which
include among others Deutsche
Bank, Pfizer, State Bank of India, tec,
visa, Roche Pharma, Symantec, Tata
Starbucks and vm Ware. The average
rental in this building is around H250
per sq ft per month.
“The Capital is truly a world class
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commercial office building
which has all the ingredients
that a modern work
place should have. It features one of
the largest automated car parking
systems, and is a green building. We
are happy the way various facilities
in this building are being managed
by the Wadhwas,” says Abhay Tiwari,
vice-president, Deutsche Bank, one of
the anchor tenants, occupying over
90,000 sq ft of space since 2012.
“The Capital is an architectural
marvel which everyone would like
to be part of. Its cutting-edge systems
and facilities such as automated
parking, intelligent elevator and integrated
building management system
photos: sanjay borade
Wadhwa: we
want to give our
best
improve staff productivity considerably.
As a developer and owner, the
Wadhwa group has come up with a
spectacular project, and they serve
their tenants quite well,” says Ahmed
Malim, head, global operations of
Pfizer which has leased around 89,000
sq ft of office space in this 21st century
edifice that goes much beyond a
conventional construction.
“This structure is one of the creations
of new age architecture, where
there is a seamless assimilation of
modern architecture and technology.
With the innovations of cybertecture
and the unique egg structure,
The Capital has resulted in being an
extremely eco-friendly building,
enabled with smart features. Despite
the adverse financial condition as a
fallout of the global crisis in 2008,
the Wadhwa group went ahead with
this challenging project and showed
their exemplary perseverance,”
states James Law, chairman & chief
cybertect, James Law Cybertecture.
Modern amenities
Platina is another new age commercial
office space, built by the Wadhwa
group. Also located in the prime
location of bkc, Mumbai, this modern
office building (came up in 2007
before the global financial crisis) has
been one of the landmark office
buildings in this premier commercial
business district of
Mumbai. Ground plus 12
floors, spread across around
400,000 sq ft of developed
area, having large floor
plates with limited column
structures, it showcases a triple
height covered entrance lobby
with sheer glass wall atria, consisting
of a concave, faceted façade supported
on stainless steel tubular
structure within which are set the
stainless steel portico entrance doors.
Focussing on the concept of sustainable
development, there is controlled
air-conditioning with fresh air inputs
for avoiding sick building syndrome.
Equipped with a range of intelligent
solutions and state-of-the art amenities,
the structure boasts of an efficient
building maintenance system
for single point seamless monitoring,
control and maintenance. The
building has a coveted list of tenants
(leased space: around 307,105 sq
ft; average rental: H270 per sq ft per
month), including National Bank of
Abu Dhabi, sap, Sybase, at&t, Qualcomm,
NetApp, Regus, msd Pharma
and Juniper Networks.
“Though we wanted to be in bkc,
we zeroed in on to Platina after lots of
deliberations across several buildings
in this location,” says Rajeev Pant,
ceo (India), National Bank of Abu
Dhabi. “Besides the amenities being
offered, we are happy the way the
entire premise has been maintained.
In the Wadhwa group, we have found
a professional team, which has been
quite quick in response”. The bank
has leased about 22,000 sq ft of
space on the XIth and XIIth floor of
the building. Touted as the biggest
in West Asia, it signed an agreement
in March last year and started operations
out of Platina four months later
in August.
“Platina is a wholesome experience,”
says Rajesh Pillay, associate
director, facility management, msd
Pharma. “It has everything that a
tenant would look for in an office –
be it location, quality of construction
or services related to facility management.
The Wadhwas have put in lots
of effort in detailing the project in
terms of functionality and aesthetics”.
msd Pharma has been in this
building for over six years, occupying
around 58,000 sq ft of space.
Trade Centre in bkc is another
commercial office building (saleable
area: 5,00,000 sq ft), which is a testimony
to Wadhwa group’s consistent
penchant for quality and innovations
in the field of commercial
office space. Most of its buildings in
this space have got integration with
retail and hospitality towards creating
self-sustained premises. Above
all, they have been backed by world
class maintenance and facility management
services by players like jll,
cbre and others. In Trade Centre,
the developer has leased out about
235,000 sq ft (rest of the space sold)
of space across corporates and other
players like vfs, gia, hdfc, Chorus
Call Conferencing, apm Terminal,
Cable & Wireless, hrd Diamond.
“We are in Trade Centre for over
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six years now and quite satisfied the
way things have moved so far,” says
Manish Agnihotri, company secretary,
apm Terminal. “As an owner of
this building, the Wadhwas are professional
in their approach and always
ready to listen to their tenants. Even
as a structure, the building lives up to
our expectations”.
“As a developer, they have always
believed in creating inspirational creations
with lots of innovations,” says
renowned architect Shakti Parmar.
“While putting emphasis on design
and quality, they have always kept
in mind sustainable developments
and hence always inducted the latest
technologies in their structures
which are efficient in all aspects.
They have never compromised with
their vision of ‘Landmarks Planned
with Passion’”. Parmar has been
involved in many of the Wadhwa
group’s projects.
“While designing our projects,
we put emphasis not only on the
aesthetics, but also performance
aspects. Our core strength is planning
and detailing in such a way
that we create efficient and innovative
projects where our customers
feel privileged. We want to give our
best to build products, which stand
out in the market and satisfy our
customers,” says Vijay Wadhwa, 64,
chairman, Wadhwa group which, in
the last 45 years of its real estate journey,
has delivered 10 million sq ft of
projects across commercial, office, it
and residential segments in Mumbai
and mmr region.
Apart from commercial office
space where it boasts of over 70 multinational
clients, the company
has an it Park (carpet area leased:
6,60,000 sq ft) in Vashi as also two
malls – Reghuleela Mall, Vashi
(leased: 3,50,000 sq ft) and Reghuleela
Mall, Kandivli (leased: 44,000
sq ft). The company also has significant
presence on the residential
front with landmark projects (delivered)
like Solitaire, Powai, Imperial
Heights, Goregaon, Aquaria Grande,
Borivali, The Address – Ghatkopar
(80 per cent delivered). In fact, 70 per
cent of the company’s total portfolio
(delivered) is made up of residential
projects.
Makhija: leading from the front
Currently, it is executing projects
(primarily residential) involving
about 8.0 milion sq ft (carpet:
5.3 million sq ft) of development
in Mumbai and mmr regions. Some
of the landmark residential projects
being executed are W-54 in
Matunga, Atmosphere in Mulund,
Aquaria Grande in Borivali and
Courtyard in Thane. These projects
will be executed in the next two-four
years. Besides, there is also a pipeline
of about 40 million sq ft of developments,
which will be brought under
execution over a period of the next
8-9 years. The majority of this will be
part of a 450-acre integrated township
project in Panvel, Navi Mumbai.
The company has already got special
township clearance for Phase I of
this project and is expected to start
execution in the next few months.
No compromise
Wadhwa started its real estate journey
way back in 1970 in a modest
manner in Mumbai. His family had
shifted to Mumbai from Mathura,
UP, where he was born and where his
and other Sindhi families had found
shelter just before Partition. His
father, Vasudeo Wadhwa had a small
electrical shop in Old Delhi’s Bhagirath
Place and would struggle to support
a family of seven (three sons,
two sisters and a wife). But Wadhwa
Senior was conscious about providing
education to his kids. Despite his
modest income, he sent Vijay, the
eldest child, to Scindia School, Gwalior,
where he studied alongside
scions of the wealthiest families.
“Despite all sorts of financial
difficulties, my father never compromised
on our education. I owe
everything to my father for what I
am today. I learnt a lot from his values,
dedication and passion,” says
Wadhwa, who started taking interest
in his father’s business at an early
stage, even before he could complete
his education.
In 1964, when the business was
in bad shape, his father decided
to try his luck in Mumbai. Many
of his friends had done so. Mumbai
proved to be lucky too. Wadhwa
Senior’s business fared relatively better,
enabling the family to move into
a one bhk flat in Mumbai’s Khar suburb.
By then, Vijay had finished his
term in Scindia School and started
living in Mumbai. While helping
his father run his small business, the
possibilities in the field of construction
attracted him. Building materials
were doing well. At 18, he egged
his father on to get into the construction
line. In 1970, the father-son duo
identified a plot of land in Mumbai’s
Prarthana Samaj area and constructed
Vijay Chambers, a building
of residential flats. However, it was
not a cake-walk, as they had to face
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difficult market conditions and buyers
were hard to come by. In fact,
they had decided to abandon the
entire project midway. But, their
perseverance prevailed and they
managed to sail through.
“This project was a big learning
curve for us as we had tried to
enter into a completely new area of
business and that too in a place like
Mumbai, where we had just come
in from a small place like Mathura,”
recalls Wadhwa. There was no looking
back since. The money realised
from the sales of Vijay Chambers
came in handy to work on various
projects in South Mumbai, which
included Vijay Deep at Malabar Hill,
Ritu Apartments at Ban Ganga, Silver
Beach at Shivaji Park, etc. By the
early 1980s, the Wadhwas started
getting recognition in Mumbai’s
realty market. Buyers started appreciating
their work and their commitments.
All through the 1980s, they
ramped up their portfolio in Mumbai’s
western suburbs, though in a
gradual manner.
In 1992, the three brothers
involved in the business under one
umbrella decided to separate amicably.
While Vijay and his youngest
brother Manoj remained in the real
estate business pursuing their interest
separately, his brother Deepak
got into the marble and granite business
and is based out of Bengaluru.
Manoj’s Wadhwa Constructions is
engaged in the real estate markets of
Mumbai and Pune.
Sanjay Chhabria, Wadhwa’s
nephew (son of his brother-in-law),
who was with the company for several
years, separated a couple of years
ago to form his own venture, Radius
Developers, which has also been
showing its aggressive intent in the
Mumbai realty market. However, his
nephew’s exit has been well-substituted
by his son-in-law (daughter’s
husband) Navin Makhija, 34, who is
leading the company from the front
now, as its managing director. Navin
has been with the company for the
last 15 years now. A commerce graduate
who also pursued a course in
opm (owner/president manage Programme)
from Harvard University,
Navin was joint managing director
of the company since 2010.
Backed by its impeccable track
record of innovations, construction
quality and delivery schedule,
the Wadhwas have certainly carved
a niche for themselves. In fact, the
company has today emerged as one
of the most reputed developers. Even
as buyers and customers are reposing
tremendous faith in the company’s
projects (in the sluggish market,
the Wadhwas continue to command
premium), it has developed a strong
ecosystem of business partners that
include architects & design consultants
(such as Hafeez Contractor,
James Law, Aedas, lpa and Sitectonix)
contractors (l&t, mft, hbo+emtb
and Sterling) property consultants/
brokers (jll, cbre, Knight Frank,
Brookfield), as also financial partners,
such as Piramal Fund, iilf, kkr,
il&fs, Indiabulls Financial Services,
Bank of Baroda, icici, hdfc, Yes
Bank, Bank of India and others.
Strong product portfolio
Even in this difficult market condition,
the company has never faced
any problem for funding as financial
partners have felt more comfortable
in financing/investing its projects,
which are always well received in
the market. Moreover, much of this
funding is based on lease rental discounting
since the company earns
around H280 crore annually through
its solid portfolio of rental-yielding
office and commercial assets. The
company has leased out around 2
million sq ft (carpet area) of assets
(office, it, retail & hospitality), which
are well backed up by a strong tenant
base (around 70+ mncs).
“The presence of rental-yielding
commercial assets in our portfolio
is something that makes our business
model quite attractive. This has
helped us tide over the challenging
market condition more effectively,
while others struggle. Going forward,
we will continue to pursue this,”
says Wadhwa.
“Our well-recognised market presence
with a strong product portfolio,
efficient construction and execution
capabilities, have helped us develop
a strong loyalty base of customers,
vendors, investors and business
partners. Going forward, we would
like to leverage our strengths to take
the company to the next level of
growth,” says Makhija.
“We are extremely pleased with
our partnership with Wadhwa and
have found them to be diligent
partners with a sharp focus on execution
and a strong design of sensibility.
We also rate them extremely
highly on planning and site facilitation
with an emphasis on customer
acceptability. In my personal interactions
with Navin, I have found him
to be engaging, with a great sense
of vision and drive to continue to
grow the group’s legacy and emerge
as one of the preeminent developers
in the city today,” says Khushru
Jijina, managing director, Piramal
Fund Management, which has
sanctioned about H700 crore in the
Wadhwas’ five projects.
“We partnered with the Wadhwa
group to recapitalise a major residential
project in Mumbai. The group’s
customer-centric approach and focus
on execution prompted us to choose
Wadhwa as our first real estate partner
in India,” says Ashish Khandelia,
director, kkr, which had invested
H127 crore in one of Wadhwa’s major
residential projects – The Address, in
Ghatkopar, Mumbai.
While various partners are keen
to strengthen their relationship with
the Wadhwas to ride over their success
story, lately even developers are
not shying away from joining hands
with them, as they consciously
believe that such a move can help
them sail through the ongoing difficult
period. In fact, for the Wadhwas
also, it is an opportune time to
leverage their brand and the track
record. In the last couple of years,
almost 70 per cent of projects that
have been launched (or due to be
launched shortly) are being undertaken
in joint development where the
company is executing the projects,
while the partners/ landowners are
bringing in the land component.
For instance, in Wadhwa’s ongoing
residential project, Atmosphere
in Mumbai, Mulund suburb, the
company has struck a joint development
agreement (50:50) with Mumbai’s
Man Infraconstruction and
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Chandak Group (landowners). Initially,
the partners were developing
this 14-acre land on their own,
but couldn’t generate the adequate
response in the sluggish market condition.
They were forced to look for
a developer which could provide the
much needed momentum to this
project and finally zeroed in on the
Wadhwas. Under the banner of Wadhwas
Group, the Phase I (700 flats)
of the project (total: 2.5 million of
saleable area) was launched in October
2014. Despite, the slowdown in
the market, the company has already
sold 70 per cent of the phase I (average
rate: H14,000 per sq ft), while
there is preparation for the launch of
phase II (about 1,000 flats).
In another instance, the company
is all set to launch one of its milestone
residential projects (luxury
sea-facing) in Mumbai’s Prabhadevi
area. The 1.8-million sq ft project to
be launched shortly is coming up in
a land parcel, owned jointly by Hubtown
(erstwhile Akruti City) and
Rising Straits Capital, promoted by
Subhash Bedi (former co-founder,
Red Fort Capital) Initially, Hubtown
and dlf had bought this land parcel
from the Thackersey family for H350
crore in 2007, just before the global
financial crisis began. The slowdown
after that saw dlf exiting the project
and Hubtown entangled not only
in the complex coastal regulation
Ghatkopar project
zone (crz) and other approvals but
also a liquidity crunch. After failing
to move the project, last year, Hubtown
backed by Rising Straits Capital
joined hands with the Wadhwas,
which has now already conceptualised
and designed the project which
the Wadhwas claim to be one of the
most unique residential projects it
has built so far.
Mega project
However, the proposed 450-acre
integrated township in Panvel, Navi
Mumbai is a real mega project where
the company has entered into a joint
development agreement with Bahrain-based
investment bank Gulf
Finance House, the owner of the
land. The Wadhwa group is planning
to construct a mixed used
project comprising residential, commercial,
retail and hotel spaces along
with schools and hospitals. The massive
project which has development
potential of over 45 million sq ft,
will be executed in phases in a time
frame of 8-10 years. The company is
planning to launch the first phase
in the next few month’s time since
it has already received the Special
Township Clearance. “One of our
major achievements has been this
clearance. It will enable us to initiate
infrastructure works. Besides, the
timing of approval augurs well with
several major infrastructure projects
finally getting initiated including the
international aiport, Mumbai Trans
Harbour Link and Navi Mumbai Airport
Influence Notified Area,” says
Makhija, who is looking to unlock
values of the company’s brand, pursuing
an asset light model. The company
is also preparing to enter the
reit market, once the guidelines
get streamlined.
“Having such a mega project in a
location like Panvel which is emerging
as a preferred destination, will
add tremendously to the portfolio
as a developer. With the government
expediting the whole process
of development in the region, players
like Wadhwa group will gain
significantly,” says Ashok Kumar,
managing director, Cresa Partners.
With all these initiatives in place,
the Wadhwas are all set to enter their
next phase of growth. With its customer-centric
approach and meticulouslydesigned
projects, the company has
uniquely positioned itself in the market.
In the last decade or so, the company
has entered into the big league
of developers which has beaten the
recent slowdown in the market since
buyers are showing them more trust.
As the market undergoes a consolidation
phase (which has already started),
and gains more maturity, developers
like the Wadhwa group will call the
shots. Backed by its impeccable track
record of execution and planning,
the company is now trying to leverage
its strengths and the joint development
model is a right move as the
land price constitutes a big chunk of
any project. Such an asset-light model
will also help the company create a
much-needed hedging mechanism
and free up more resources to ramp
up its portfolio.
Above all, it has also created a
robust business model, where it
boasts of a strong portfolio of rental-yielding
assets. This has not only
provided the company much needed
liquidity but also helped raise money
easily based on lease rental discount.
Moreover, the company is also turning
out to be a perfect candidate for
the reit market.
u ARBIND GUPTA
arbind.gupta@businessindiagroup.com
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