Pirojsha Godrej: In many ways, real estate is a service industry

Image: Vikas Khot

Pirojsha Godrej

Q. How would you differentiate Godrej Properties from other developers?
Pirojsha Godrej: The Godrej brand is a big advantage for us. That said, we have focussed on going much beyond that over the last few years. There are two key areas in which we would like to differentiate ourselves – the quality of our product and quality of service provided. On the product front, we have done a lot of work to make sure that our capabilities on the quality, design and engineering fronts result in creating buildings that can be differentiated. In many ways, real estate is a service industry. There’s a long value chain where you are associated with your customer in a way that is quite rare when compared to other industries.

Today, segmentation is on hygiene factors. Somebody will be considered a great developer if they don’t cheat their customers, deliver on time and fulfil all their commitments. With this, they will already have done enough to distinguish themselves from the relatively elite group of developers.

Q. What have you learnt from your other companies?
PG: There’s a lot that we have learnt, but there is a lot to learn afresh. We’ve been a relatively small player until the last 10 years; as a group, we focussed on growing this business tremendously and now it’s one of the larger property companies in the country.

The things that benefit us other than the brand, which is a massive advantage, are generally our understanding of the ways to do businesses, the importance of having good people and having processes around things. Apart from this, we learnt how to run a business in a more systematic way than is common in the real estate sector and handling the business in an ethical manner.

Q. You do not take payment in cash and that is now becoming an industry practice.
PG: That’s something we’ve done throughout. We would rather not be a real estate company if we have to compromise on our governance standards. I think this is the direction that the country is heading in and the sector is heading towards the same.

Q. Can you talk about international investors APG? How does the deal work?  
PG: We have a broader strategy of not buying land ourselves but partnering with land owners to allow ourselves to develop in a more capital-efficient manner. We developed many distinct models with the same strategy, and one of the models is the partnership with APG and other international investors. We have created this investment platform of which Godrej Properties is a part; we can go out and buy land or do joint ventures with land owners.  So, the logic is that we’re doing projects that require high upfront investment which we would not want to do from our balance sheet, but in a way similar to a normal joint venture.