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Kunal Premnarayen – His Outlook on India’s Real Estate Sector and the ICS Group as told to Ajay Kumar

ICS Group,  engaged in real estate, hospitality and financial services sector has planned major projects of expansion in realty and hospitality business. Holding company of the Group, ICS Realty has collaboration with Old Mutual Property, Bentel Associates, Mantis International of South Africa and Secure Parking of Australia. Kunal Premnarayen, CEO, ICS Group in a candid chat with Ajay Kumar, elaborated in details about his  expansion plans.

            Kunal Premnarayen - His Outlook on India's Real Estate Sector and the ICS Group as told to Ajay Kumar

 Here are the excerpts :

Please tell about your Group in detail.

The group was established by my father Deepak Premnarayen. He is possessed with the expertise to select the sector for business where potential for future expansion is available. We have already engagaed in road construction. Six years back we left road projects. This was the NOIDA Toll Road Project where my father is still on the Company’s Board of Directors. This being a very tough sector, our decision to come out of road projects was a strategic one. At present, we are engaged in financial services, real estate and hospitality sectors.

There is much emphasis on infrastructure sector in India and yet you say road construction is a  tough sector. Any specific reason behind it?

This is a different industry. Bureaucracy plays a major role here. We have the Chinese example before us where huge investment is being made in road projects. India is yet to reach that level. Our Chairman explored different areas for development. Real Estate is one of them. Although we are there in this sector, but we are not developers. We are in businesses which are complementary to each other.

You said, you are in real estate sector but not a developer. What type of services do you provide?

We are engaged in the activities like designing, property management and development, car parking management, asset management, corporate finance and hospitality.

Does the car parking management also form part of real estate business?

In Mumbai, Delhi and other metro cities, car parking is already is an issue. We took it as a profitable and independent service business. Even if you are able to manage your car park well, there are other challenges due to lack of better design and construction. Hence, on the design level we incorporated the best international methods in car parking business. We entered into car parking business about 10 years back. We have tie-up with Secure Parking Corportation, an excellent car parking solution company of Australia. In India we have clients like,  EMMAR-MGF, Sahara, Inorbit, Oberois and Phoenix High Street. In this sector we have almost 45 operational projects.

Did you constituted joint venture in architecture for this reason only?

ICS Group has tie-up with South Africa’s leading retail architecture company, Bentel Associates International. In the year 2002, Bentel Associates India was established. Bentel is presently providing its services to projects spread over more than 4 Crore sq ft in retail space. Projects like Retail, IT Park and Mixed Use Properties are included in it. 

Who are your big clients?

We have many big corporate clients. We are working with big developers like Prestige Group, DB Corp, Sudhil Mantri, South Consortium, etc. Some of these projects have been completed, while some are under construction. We have about 30 clients accross the country.

How do you visualise the growth of real estate business  in India?

Real estate business has vast potentials to offer in India. Huge potential can be seen in residential sector. As a company we are focusing on real estate space. There has already been improvements in office space. As such, this is the right time to invest in office space in Delhi or Mumbai. As regards shopping malls, high cost of commercial property in large cities is causing impediments. However in the secondary and tertiary cities the situation is not similar.

Is your Real Estate Fund capable for investment in the Indian projects?

We  developed our first retail focused real estate fund in the year 2008 in collaboration with Old Mutual Property of South Africa.The fund known as Triangle Real Estate India Fund LLC presently possesses an amount of US$ 70 mn (approx Rs.375 Crores). Listed on Mauritius Stock Exchange, Triangle fund has invested in three major retail projects in Aurangabad, Nagpur and Coimbatore. At Nagpur we have received great pre-launch response. In the next two years we will have other nine sites.

How much amount of money you plan to collect from foreign for the future projects?

We are in the process of raising US$ 200 mn (approx Rs.1350 Crores) with our associate Old Mutual Property. We will mainly concentrate on institutional investors. We are focusing on Asia, Middle East and South Africa. But due to the downslide in value of Indian rupee this process might be tough.

Do you believe that the international economic depression has affected the Indian real estate business?

Certainly, the Indian business has been affected. Foreign investors are looking towards the risks of their investments. However, with opening of retail sector for the foreign investors the situation will change. Keenness in the policy decisions is a good thing. But it will take at least two years for its effect to become visible. Both the hospitality and shopping centre business are extremely dependent on debts. However the good thing is that India is still growing at a rate of 5-6 per cent.

Summary: ICS Group led by Group CEO Kunal Premnarayen has interests in real estate, hospitality, asset management and financial services. ICS Realty is the Group’s holding company for real estate ventures and apart from investment, it provides strategic direction to facilitate growth of the various real estate businesses.