While other developers aspiring to go global are tying up with international brands, PNC Menon, founder and Chairman Emeritus of Sobha Group believes in organic growth of the brand. In an exclusive interview with Ravi Sinha at his Dubai office, he explains how Sobha has the inherent resilience to succeed anywhere in the global market. Focus on quality & don’t break the law is his mantra of global brand leadership.
Ravi Sinha: Real estate has traditionally been a micro market business. Whosoever tried to become national player failed. How could Sobha buck the trend in India?
PNC Menon: First of all, it is about our company’s philosophy. Philosophy is that you don’t break any laws; we do not cheat taxes; we do not deviate from the plans; and we do not at all compromise on the quality. And we do everything ourselves. We do not give it to outsiders and that is how we have complete control over quality. And as long we are in a position to transfer that knowledge to team of professionals with checks & balances you can go anywhere in the world and do business as a brand.
Ravi Sinha: Most of the brands won’t go for in-house expertise as lesser liabilities saves you during slowdown. Sobha, on the contrary, has done better in downturn. Is it because of backward integration?
PNC Menon: Backward integration definitely helps and my reason for backward integration is that I have total control over quality. I come from that industry where I had been into contracting for the last 40 years. Real estate for me is only for the last 20 years. I have since beginning worked on very high-end contracts, including design. So, I have the knowledge coming from the grassroot level of contracts. Eventually I thought I should do real estate also while doing contracts outside.
I must admit here that contracting is not a great business because there is huge competition. Even if you are selected after so much of competition they will still negotiate the price. So, you cannot deliver the quality. I am not at all keen on contracts now. In India we are still doing contracts but in the Middle East I don’t want to do contracts. Similarly, I cannot give my contracts to somebody else because that is the main strength of this company.
Ravi Sinha: Of late, there is quest among the Indian developers to go global and emerge international brands. How do you position yourself?
PNC Menon: I have a feeling that if you want to be a global player, in India also there are only a few destinations. The main metros, like Delhi, Mumbai, Chennai, Bangalore and a few other destinations like Hyderabad. You cannot go to more than 10 destinations. Even though opportunity is there, we have got 650 districts, and we can do at least 100 districts. I don’t know but my son looks at it very differently. And he is quite capable with his business plans. But my personal view is not more than 10 cities in India.
In Middle East we won’t do business in any other destination than Dubai. Any geographical expansion has to be in any other country. And we have got huge bandwidth. People believe in brand Sobha because they know half of my wealth goes to charity, and if you are doing that you won’t cheat. That is the difference between others and us.
Ravi Sinha: So, what are your global plans now?
PNC Menon: There are two beautiful places that are good for the real estate, even though market is not doing well. One is the UK and I think we should be there in the UK, possibly in 2020. That will be the first move. Another move I would like to make is in the US where I find huge potential. I am raising a team of hardcore professionals for the future expansion. Finding right profession is also challenging in your expansion plans.
Ravi Sinha: There are certain Indian companies that wanted international recognition and hence have tied up with global brands. Are you also looking at that model or you want Sobha to be a brand with which others aspire to associate?
PNC Menon: I believe in organic growth and would not like to go to any other brand. I am not in a hurry. First, I am looking at selling Dubai and Indian products in the UK and the USA market. It will be purely sales offices. But that will be the beginning of our long-term global plans. As a brand we are already accepted. Today, Dubai is an international city and you can ask any buyer in this market.
Ravi Sinha: Brand Sobha has international acceptance now. Which are the other global cities you would like to test the waters now?
PNC Menon: China is going to be a big market for us, like India, Saudi Arab, UAE and UK. If you ask me honestly these are the five places where we could have 80% of our sales happening. We don’t want to go to 50-60 countries. We would better focus on these five geographies, starting with UAE, India, Saudi Arab, China and UK.
Ravi Sinha: As of now, you have plans to start your marketing offices in these key geographies. But moving forward, would you also explore real estate developments over there?
PNC Menon: Not in China as it is a very different kind of market. It is difficult, because of the language problem and then their philosophy. I will not compromise with my philosophy. And I am not here to fight with people. For real estate developments, I would look at UK and over a period of time would definitely go to the US.
Ravi Sinha: The focus would be only on the residential developments?
PNC Menon: I have been successful only with that. I only know how to make beautiful houses. I am not saying I will not do commercial real estate at all but primary focus will be residential real estate. We have mastered in this segment. There are many more steps to be climbed but we have reasonable level of expertise with residential developments.
The world is changing fast and tomorrow dynamics could also change. For example, now we are seeing advent of new technology like robotics in construction. So, we will be straightaway getting into robotics for construction, with no headache or hassles.
Ravi Sinha: Sobha as a brand has gone for an image makeover in Dubai market with a new logo. Indian identity remains with the existing logo. Don’t you think it would confuse any global buyer?
PNC Menon: We have to explain it to the audience. The brand name Sobha remains the same, only there is some change in the style pattern of logo keeping in mind the global audience.
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