Abhishek Lodha is the Managing Director of the Lodha Group, a Mumbai-headquartered developer which made its global foray with high-profile projects in the UK. 'India Global Business' caught up with him to get an update on this international vision, plans for the group's luxury London developments and the Brexit effect on the property market. What was the motivation behind the Lodha Group's expansion to the UK We started in London in December 2013, early 2014 and the idea was to establish a business which builds on our success and learnings in India and allows us to operate as an Indian multinational by operating in one of the most competitive, most expensive as well as the highest quality markets in the world.
Over the last three years, we are developing two of London's most prestigious developments - No. 1 Grosvenor Square, which was the Canadian High Commission and before that the American Embassy, and Lincoln Square, which is close to the London School of Economics and Royal Courts of Justice. What we are trying to achieve is world-class quality. We have put in a lot of effort and money into the design, into the marketing content, brought in the best names from across the UK as well as internationally. How has this UK expansion panned out Now we are the stage of delivering the products. At the site at Lincoln Square, the core is up to the fifth and sixth floor now and Grosvenor Square concrete has started to be poured. We are doing well on sales. Lincoln Square is pushing at £150 million of sales in the last 12 months and Grosvenor Square has done about £50 million, so together we are close to £200 million on the sales of the two sites. And, this is in a very difficult external environment in the aftermath of the Brexit referendum last year. An Indian company by origin, we formed a very successful UK operation, we have a great management team here which operates independently with over 40 people working here right now. We are very proud of how much we have been able to do so far and we look forward to growing on this success and building out our business. What impact is Brexit likely to have on the UK property market Quite frankly, we are very confident about London and its attractiveness as a great place to live and work. If you ask Londoners, how many have bought a place here or decided to work here because the UK is part of the European Union (EU) - I think the answer would be a very small percentage. People live and work in London because it's a place which is very well connected, its time zone, language, great infrastructure, social amenities, culture, education and healthcare. Those are very constant and growing. To me, London is the finest city in the world and it will continue to be a huge magnet for talent and business for many, many years to come - irrespective of whatever short-term impact on account of the referendum. What made you choose the UK as the Lodha Group's first international market We as a company wanted to showcase ourselves on the international stage and when we evaluated many different markets, including New York and Singapore, we felt London was the right market for us to enter for many reasons - the size, as it is a very big housing market; and there are very few large developers so there was a big opportunity for us to come in and become a large development company here. The quality of work in London is the best in the world. It is much better than what New York or other countries have. So it's really a place where we can learn a lot to take back to our Indian business but at the same time we can showcase that an organisation with Indian roots can perform at a global stage. What is the kind of buyer your properties in London are attracting The buyer is someone who has very strong roots in London - somebody who works or has a business here or somebody with family connection or studied here. It means that people who know the city well are buying with us, which means that our product must really be among the best products in the city. Indians constitute about 15-20 per cent of the buyers. It's a very diverse audience but the common theme is very strong roots in London. We have seen a few families buy homes for children who plan to study in London, there are alumni who are buying because they know the area and love the area, there are people who work with law firms or other professional services firms in the nearby area. What is the kind of housing in demand in London The focus is on the need for more affordable housing in London and that is something we are very supportive of. Over time, as these two projects mature and we have more higher level of sales, we will grow the business across different price points. We don't only want to be segmented or focussed on the top end of the market. We want to be doing large scale schemes at lower price points. But at the moment we are focussed on these two projects, with Lincoln's Square completion in 2018 and Grosvenor Square end 2019. What sets your group's developments apart Our focus on design and quality of product I believe are not really common. As an organisation, we are very focussed on making sure that we do all that we can to deliver world class design and exceptional quality in everything that we do, besides the point what the price point may be. The idea is to make sure that we deliver exceptional quality and exceptional design. One of the interesting things about development and construction is the fact that when you do something, it is going to be around at times for centuries and often decades. That ability to make a difference to people's lives by doing it well - you can do it badly and it will be there and you can do it well and it will be there - and through generations people enjoy, get a superior quality of life and work environment and that makes them more productive, makes them happier. That impact you can have on people's lives by doing real estate well, is quite phenomenal. Do you feel the group's projects are contributing to the India-UK relationship The UK-India relationship is a very old relationship. It is one which has many aspects to it and the fact is that UK companies go to India and do business there and help strengthen the relationship. Equally, when an Indian companies like us come over here and generate employment, it definitely strengthens the relationship. I think commerce and business relationships are a key cornerstone of any strong international partnership. What is it like being a developer in a reformist India today India is going through very important change. The leadership of the Prime Minister will go down in history books as transformative for our country and GST (Goods and Services Tax) is just one such step. Whether it's GST or RERA (Real Estate Regulatory Authority) or demonetisation, he is taking very bold measures which he thinks will make the country a better place - a place where there will be more opportunities for people, where the economy will support a larger percentage of the people and poverty will reduce. Being a developer in India today is very interesting, because all these things are strengthening the economy, they are causing demand to grow and at the same time, it makes it incumbent upon you to be better managed, more efficient and do things in a more transparent fashion. All this is good for a company like ours because we are at the top end of the pyramid. We found RERA to be very welcome. Now that we have studied it in great detail, and also registered our projects, we found that we were already doing all those things. But it is good now that the whole industry has to do them, because it will separate the men from the boys and will reduce the credibility deficit. This bill is good because it will stop affecting the credibility of the industry as a whole. How would you want people to view your projects We would want them to want it. After seeing it they should feel that this is really the very best that they can have. Whether they buy it or not, because that is governed by many different reasons, at least they should really deeply want it.