Wednesday, February 1, 2012

Building Dreams - R. Vasudevan

Mr. Vasudevan’s exclusive interview has been featured in the ‘News’ Section of – India’s first Daily News Portal dedicated to the Construction and Infrastructure business.

Here is the log of the article. You can read the article by clicking here

With over 22 years in the business and 100 completed projects in his kitty, R. Vasudevan, the visionary behind the successful EPC and real estate company Vascon Engineers Limited, is the apple of the eye in the construction industry. In an exclusive interview with Debajyoti Samal, he speaks about his business, future plans, the current real estate scenario, rising interest rate, his life and his love for golf.

What are the major projects that are being carried out by Vascon Engineers and what is the total area under development?
On the residential front, Vascon has ongoing projects of around 2.3 million sqft and upcoming projects of around 4 million sqft, to be launched in the next one year. Last year, we had achieved a target of about 7-8 million sqft of EPC development and this year, the company has targeted the same number, despite the slowdown. Currently, Vascon Engineers is working on two major projects in Pune. One is Forest County, a residential project at Kharadi in Pune with 2, 3 and 4 BHK apartments of 1,000 and 2,000 sqft each and the other one is Windmere Duplex and Windmere Apartments at Koregaon Park in Pune with 3,000, 4,000 and 8,000 sq. ft. apartments. The company is also planning to start Vista - Phase III at Nashik, with an area of 100,000 sq ft.  The company is also working on commercial projects such as Ruby Mills in Mumbai, V-Tech IT/Commercial Park in Nashik, Neelkanth Palacia in Mumbai and Legislative Assembly Complex in Chennai. Upcoming projects of the company include the Chennai Project of 1,573,570 sqft and Panache Heights of 584,850 sqft in Hyderabad.          
Vascon Engineers is responsible for a number of landmark projects in the city of Pune. Why is the 8th largest city in India so attractive for both commercial and private real estate customers?
Reason for this is the fact that Pune’s growth is driven by various sectors. Sectors like auto, auto auxiliary, IT and ITES have made their mark and played a major role in boosting the infrastructure development at every nook and corner of the city. Moreover, Pune has a number of educational institutions, which are best in the country and are definite crowd-pullers. The pleasant climatic condition of Pune and the close proximity to Mumbai, the financial capital of India, are two vital factors that make Pune the most preferred choice for both commercial and private real estate customers. While there are so many plus factors, there are some drawbacks also. Improvement in connectivity is needed, as the public transport system in Pune is in bad shape. Considering the fact that Pune has a number of MNCs, there is an urgent need for an international airport, within the vicinity of the city.
In the long-run, what kind of potential for urban development do you see in the growing metropolitan regions like Pune?
In terms of growth, Tier-II cities are way ahead of metros. Look at Navi Mumbai and Panvel, and even Pune, the way these satellite towns have been developed and at the fanatical pace they are growing, are the best examples of urban development. The huge land bank of these cities helps urban planners to work on the modalities easily and also reduces the pressure on land.
In one of the interviews you had mentioned that you have made a mark in construction of green buildings. Could you please tell us what are the green building projects you are working on currently?
One Earth, the new corporate headquarters that we have built for Suzlon Energy Limited has been awarded the highest level of LEED Certification – Platinum (from LEED India). At Vascon Engineers, we have always been inspired by a single vision – to make our world a greener, happier and abundant place. Building the greenest building in the world is merely another expression of that resolve. It is our way of committing to a future without harmful emissions, of reducing our carbon footprint, of creating a sustainable, profitable alternative, and of giving Pune a reason to walk tall. Some of our projects are recipients of Five Star rating, and awarded 96 out of 100 points from GRIHA.
It has been a year now that Vascon has taken over GMP Technical Solutions. Do you believe that this union has garnered any positive result so far? If so, how would you rate this success and can you also tell us how it will help the realty sector?
Vascon successfully took over GMP Technical Solution with a cash outflow of Rs 62.63 crore. I believe the union became extremely successful so far. GMP Technical solution is a company engaged in the manufacturing of modular clean room partitions and office partitions, apart from offering HVAC, electrical and building management solutions. Any union of this kind sets both long term and short term goals. In terms of achieving short term goals, it has been a valuable deal as we are using the services of GMP Technical Solution in all our construction activities in some form or the other. We also set long term targets, in terms of growth, wider productivity, operating speed etc. We have been strengthened by the technical and intellectual resources of a young company. I can rate 50% success for Vascon Engineers and 50% for GMP, so far.
Vascon Engineers is designing and constructing HDIL’s commercial complex in Kurla (Mumbai), which you intended to complete in 18 months. Did you meet the deadline?
No, the deadline of this project has not yet been met.
Why is the delay? Could you tell us the reason? Is the new deadline set?
The delay was due to some last minute design changes. Although, we were almost at the verge of meeting the deadline, the client insisted a change at the very last moment. No, not yet. But the project will be completed without any hitch now.
Could you elaborate impact of rising interest rates on the realty industry?
Yes, the rising interest rates are badly affecting the industry, especially, the EPC and the real estate segment. The buyers as well as the developers and builders are equally affected by the rising rates. For example, two years ago, the price which a buyer had to pay for a 1 or 2 BHK apartment has now been increased 10 to 20% and is now beyond the reach of the potential buyer in this segment. The escalation in property prices and interest rates in the last two years has brought the realty sector to a grinding halt. Neither the demand has decreased nor the supply. In fact, the soaring migration of people in big cities is taking the urban realty market by storm. But the rising interest rate has dampened the spirit of the potential buyers, who are now reluctant to buy property. As a result, the developers or builders have hit a roadblock. As far as reduction of prices by builders and developers are concerned, the builder is bound to stick to higher price, unless the government hikes the Floor Space Index (FSI). However, the state government's recent decision to hike the FSI by 0.33 in the suburbs is a welcome move.
So who do you think is responsible for this escalation?
No one. In my opinion, it's just a matter of time. I hope the interest rate will go down to its usual level. Government measures should be implemented to bring the rates down. In the interest of the industry, long term approach should be adopted.
Talking about Mumbai, where some of your bigger projects are being developed, the changing social fabric and the widening gap between the rich and poor has pushed the city to the back seat. As a developer, don’t you feel the poor and the middle class has the right to get their space under the urban skyline? Do you agree that it’s high time Mumbai needs an integrated plan for bridging this gap? Your views.
I have spent more than 25 years in Mumbai. In all these years, I spent a lot of time commuting to and fro, from my office. Lately, I have realized that the majority of Mumbaikars are forced to live in suburbs due to skyrocketing property price and are forced to spend a lot of their time, mapping long distances between their home and workplaces. Thus, the gruesome commuting affects their productivity.
Yes, I agree there is a wide gap between the rich and the poor. The government needs to think over this disparity. In order to get better infrastructure and better standard of living for the people, the government should encourage redevelopment or rehabilitation projects, which should have a clean and corruption-free approach. Land cost should also be reduced to make way for the construction of affordable housing. 
Do you also have plans to develop affordable housing schemes in Pune?
Building affordable housing depends upon how FSI has been fixed.
More and more developers nowadays are influenced by foreign architects and their designs. Do you think it’s worth hiring foreign architects for Indian projects? Do you favour such obsessive attitudes?
The knowledge must spread. We do not mind taking inputs on something which we never experienced. There is nothing wrong in sharing knowledge, thoughts, ideas and exploring new architectural elements while constructing a building. But in the hindsight, there are drawbacks also. Although, the designs the foreign architects make attract eye-balls, it is not always at par with the Indian climate and living conditions. For example, the glass façade they use extensively on most of the building construction in Dubai is mostly irrelevant in Indian living conditions.

His Persona
What’s your favourite hobby? If we are not mistaken you play a lot of Golf.
Mr. Vasudevan:
As I have said earlier, when I was in Mumbai, I spent most of my time travelling to my workplace. I had little time to do any recreational activity. But here, in Pune, the situation is different. Now I have more spare time to follow my fitness regime. Yes, I do play Golf, and spend at least two hours every day for fitness activities.   
You are a successful industry person… Is there anything that you miss in life?
Time. I have devoted a lot of quality time to my work. I miss time when it comes to giving it to my personal space.  
What is the most important thing that changed your life?
Venturing into business from general office work was the biggest life changer for me.
What is your most cherished possession?
The company I formed is the most cherished possession in my life. It has grown from one to 800 people. This gives me immense satisfaction. 
What skill do you think every man should have?
Compassion and care are two things that a man should give unconditionally to people. Be it an employee or client, you need to make all of them happy.
How much of a perfectionist are you?
I am passionate about my work. I love my work and on the basis of that if you call me a perfectionist, then I am a perfectionist indeed. 
Are you a tough boss?
Considering my last two answers, I would say I am a tough boss in this regard (laugh).
Three things you can’t live without.
Family, friends and loved ones.
Not any material thing? Like your Blackberry.
(Laugh) For me material things are irrelevant.
The entrepreneur, who has inspired you the most.
I don’t have a role model as such. But to be successful one needs to have an eye for detail and has to be a good PR or HR person. That makes one a good entrepreneur.

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