Nirmal Lifestyle, the mega mall in Mulund, has created waves in Mumbai and beyond. Dharmesh Jain, the company's chairman and managing director, shares his vision of modern but affordable townships with Aruna Rathod
Nirmal Lifestyle, your mall in Mulund, is so popular that it has even become a must on the itinerary of tourists and non-resident Indians. What went into creation of such a happening place?
We always felt that things should be kept simple for a lasting effect, and when we did our research before drawing up the blueprint for the mall, we found that the biggest premium [from the customers' point of view] was on open space. So we went ahead and left a lot of open space, with all the activity scattered around it.
Malls are the new spaces for urban convergence, and our philosophy is, just come and enjoy yourself - shopping is a by product. The idea has clicked, and we are all set to replicate the same philosophy wherever we do business. We are working on a few more world class malls.
The realty sector is abuzz with activity - builders are slashing prices of properties even as interest rates are falling. Is this the right time to buy or are we yet to hit rock bottom?
As far as the interest rates are concerned, it's an initiative taken by the government and the financial institutions to kick-start activity in the housing sector. The government had simultaneously approached the housing industry and requested the builders to drop prices, so that homes become more affordable. We have responded positively to this appeal and all builders have cut prices to the best of their ability.
The drop in interest rates and the correction in prices have led to a spurt in enquiries over the past few weeks, and we expect the conversions to materialize in the days to come.
As far a further drop in prices is concerned, the threshold level after factoring the land price and construction cost has been reached, and there's little scope for further cuts. In that sense, for the end-user, this is the right time to buy before prices rebound.
Is the drop in prices just in response to the government's appeal or is there also the influence of the unfavourable market conditions?
Actually, it is both. As the market is throwing up a new situation, the industry is responding with new initiatives to meet it. For instance, while there has been a slowdown in the premium sector, we have witnessed a sharp spurt in demand in the Rs25 lakh to Rs50 lakh segment. The great Indian middle-class, a bracket that was not earlier attended to, is now being addressed by the real-estate sector and there's a whole new wave of development in this market. Areas like Thane and the extended suburbs, which have these affordable homes, are registering good business.
While big builders are looking for enquiries, affordable housing schemes by small builders and agencies like Maharashtra Housing & Area Development Authority (MHADA) are getting a huge response. Is this the era of affordable homes?
More than anything, it's an idea whose time has come. Budget-conscious home buyers are looking for good deals and developers are tailoring homes to meet the demands of this segment. And not only is this happening at the bottom-end of the market, but value addition is being done at the higher end to create a new niche across the spectrum of the market.
We at Nirmal Lifestyle identified the potential in the affordable-homes segment four years ago, and when everyone was buying high street properties, we concentrated on building land banks for our affordable housing schemes.
And now that the time is right, we are also ready to roll out our township projects, which will offer low-cost homes with all the amenities of a premium township. We have plans to create such townships in Thane, Kalyan, Dombivili, Pune and Indore. The first such Lifestyle City will come up near Thane, with 5000 apartments, priced from Rs10-30 lakh. Hopefully, we will set a new, world class benchmark with this project.
Even the advertising by builders these days is more about rates and deals, and less about lifestyle and amenities, that used to be the focus till recently. Is the taste of the consumer changing?
People want a complete package. The consumer is educated and is clear about what he wants. A good home, greenery, open spaces, a club house, proximity to retail spaces - it's all very important. Moreover, malls have become the spaces for urban convergence and a magnet not just for shopper, but even the in-house residents of the complex. Now, within this package, different aspects are highlighted for different target groups, and getting the mix right is a constant learning process.
Which media works best for marketing real estate?
The print medium is still the mainstay of real-estate marketing, generating almost 80 per cent of the response for a project. Much of the rest comes from hoardings. Though there is some activity on television, radio and online, the returns in terms of response from the electronic media are still low.
Right from your company's emblem of a penguin to your signature mall complex in Mulund, and for that matter, even promoting Mulund itself as a destination, hasn't Nirmal Lifestyle been a very branding conscious construction company?
Real-estate development is like selling the most expensive product in the market. Even a Mercedes car costs less than the average flat in the city. So while Mercedes can be all about the brand, we thought - why not create branded real-estate and sell it like a brand. This was the idea behind creating the City of Joy, which began with the Mulund complex. People identify with brands and recognise them.
As far as promoting Brand Mulund, we must say that our attempt to do something unique in the marketplace paid off and we got the opportunity to create change. Our first challenge was to sell Mulund and then the City of Joy, and I am glad that as a company we have been able to upgrade the image of Mulund.
Mulund is my home, and the thought of doing something for it goes back to my days in Podar College, when my classmates used to ask me whether Mulund comes before or after Thane. Today, everyone knows where Mulund is.
We wanted the best for Mulund, and did world class things here - whether it was our first lease deal with McDonalds, where we asked them to set up their biggest outlet, or our agreement with PVR, where we offered all they needed to set up the finest multiplex in the city.
We are now approaching the hotel business with the same seriousness, and have tied up with the Accor Group to develop five world-class hotels in Mulund.
Hasn't the image of Mulund suffered a severed setback with the recent forest land issue?
The matter is in presently in the court, so I can't talk much about it. But I must say that the builders as well as the home buyers in these projects have got a raw deal. Most of these projects have come up where industries used to exist for the past 30 years. Now, when someone comes up with a ruling that's over 50 years old, there's little the builders or home buyers can do to check the titles of that period. Practically, we cannot undo the development, and I am sure the courts will see that viewpoint.