NDTV: Can you tell us why have you chosen India for an initial public offer (IPO)?
Emaar MGF: As you understand that any company that is looking for growth, India is definitely the target. Due to our cultural and market proximity with India, we think it is the ideal thing for us to create value for our shareholders in this critical market. The size and potential of the market is also a factor that led to entering into Indian market.
NDTV: The market environment is pretty good looking at the boom in India’s real estate sector. Has that been the primary consideration?
Emaar MGF: We think in our evolution as a company today, Emaar MGF needs to be a public company to take the next step. The transparency, public visibility and corporate governance have become more prominent. With India’s upbeat real estate story, we think it is necessary for large companies to be in public domain. We chose this timing as we thought it is right time for us to make the transformation.
NDTV: Do you think choosing India has any significant links to the way you view India as part of your global strategy.
Emaar MGF: We are operating in 17 countries and none of them has size and potential of India. India is our ideal choice as we always say that India is our China because of our proximity and understanding.
NDTV: Five years from now, how significant will India become for your overall world operations?
Emaar MGF: We’ll be looking at 25-30% of our total revenue coming from India. We are optimistic to say that it could be more than that as the opportunities available in India are very exciting.
NDTV: Why is that you did not do too much of developing already before taking the IPO route?
Emaar MGF: We have concrete plans on ground as we have presence in 26 cities and we have many projects being marketed and conceptualised. There is no ideal time for an IPO and for us IPO is only one step ahead in our journey. We have received excellent response and faith from customers wherever we have launched new projects.
NDTV: Could you elaborate more on you presence in metros?
Emaar MGF: We started with the metros so majority of our land is in metros. The natural expansion is in tier-II cities so there is clearly an opportunity in tier-II cities. Our next expansion plan will focus on tier-II and tier-III cities. As India moves ahead, each micro market will become important due to a new breed of consumers created in every part of the country. We want to be present wherever we feel there is demand for our homes and offices and we guess this is just the beginning for us.
NDTV: Do you feel there could be little peripheral pressure coming in for the entire property market?
Emaar MGF: It all depends on your market strategy. If you look at the Indian market then as a market it has just started moving. It will go through its soft cycles but the medium and long terms trend is absolutely positive taking into account the sub prime crisis. This country has all the right elements and we would say sometime an adversity could become an opportunity.
NDTV: What will be your segmentisation in India?
Emaar MGF: Within India or any other world market, we are driven by customer requirements. As a result we think our products have to really align itself with market requirements and demand. The market would determine what should do and if we are smart enough we have to read that and act on it.
NDTV: What is your strategy towards mixed construction space?
Emaar MGF: We are focusing on four verticals. These are residential, IT and SEZs, retail and hotel, and all of these verticals have significant investment plans. In terms of segmentisation we are selling homes starting from Rs 30 lakh to Rs 20 crore, which will cater to all price points. We are not in low cost housing and we cater to middle income housing which is the largest Indian segment in terms of growth.
NDTV: What is size of your retail real estate development business?
Emaar MGF: We have close to about 850 stores, which are growing very fast. We hold franchise for over 90 brands with specialisation in middle income segment. Currently, for Emaar MGF, retail real estate development holds great importance looking at growth plans of retailers in the country. We believe that the opportunity within the retail sector is really compelling.
We are introducing a new concept called mall of the city like Mall of Delhi and Mall of Punjab, etc. These new generation malls will have one million square feet of space having best of entertainment and leisure facilities. In our view the mall developers are dependent on the success of retailers so we work closely with our retail partners. Before designing a mall we talk to retailers in advance and ask them for their preferences.
NDTV: When you want to locally design a mall, would you look at partnership that helps you design mall?
Emaar MGF: We have a global design center in Newport Beach, California that runs all our projects. The original concepts are created there and then it comes back to ground to local consultants and then the feedback goes back. We are dealing with already existing suppliers of the services.
NDTV: Is there a supply chain that Emaar MGF can boast of at this stage?
Emaar MGF: If you look at the Singapore market then we have complete supply structure that links all 14 countries all together. Though it is very complicated yet it works very well.
NDTV: Are we looking at initiatives in providing properties linked with golf courses?
Emaar MGF: We are building golf courses in Mohali, Punjab and Hyderabad. We are also looking at a golf course in NCR. We want to make sure that Emaar communities will have everything for customers. We have one arrangement with Fortis where they will be opening 100-bed hospital in Emaar community.
NDTV: What would be challenges for Emaar MGF?
Emaar MGF: We face challenges everyday in every country including land acquisition, bureaucracy and human resources. We know these problems are tough but at the same time we also know how to deal with these situations.
NDTV: What the size of you declared land bank?
Emaar MGF: At the moment we have little over 13,000 acres in 26 cities as per our IPO document, which includes all four verticals.
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