New Delhi: Kaushik Sengupta is among the most wanted people in the country.
Sengupta, 47, has not broken any law though. He just happens to be in the right job at the right time.
“On an average, every day I get at least one call from a placement agency offering me a job at double my salary,” says Sengupta, vice-president, sales and marketing of Eros Group, a New Delhi-based real estate firm. He joined Eros three years ago from the paint industry, lured by higher compensation in what was then a booming industry.
Moving up the ladder: Omaxe chief executive officer, corporate strategy and finance, Arvind Parekh’s salary has doubled in the last one-and-a-half years since he joined the real estate firm. (Madhu Kapparath / Mint)
Despite recent blips, the industry is still booming. And Sengupta’s story is fairly commonplace in one of India’s fastest growing sectors of the economy. Salary levels in the real estate business have been growing at 25-30% a year over the past two years, driven largely by the shortage of people at every level, as a hitherto predominantly unorganized business transforms itself into a more organized one.
That’s evident from the number of real estate firms that tapped the capital market last year—developers, including DLF Ltd, Omaxe Ltd and Puravankara Projects Ltd, raised around $3.7 billion from share sales in 2007—and the number waiting to do so in 2008, with the initial share sale of Emaar MGF Ltd set to open either late January or early February.
Salary growth is relevant only to those people who stayed on in their jobs—those who switch end up making much more, sometimes almost three times their previous salary. In a context where real estate rates in some markets have tripled or quadrupled over the past three years, no one thinks such salaries are out of place.
According to the eighth annual Asia-Pacific salary increase survey by Hewitt Associates, a global human resources services company, companies in India reported the second highest average salary increase in the Asia Pacific region after Sri Lanka, with average salary increases of 14.8% in 2007.
Growing industry
“Real estate is a growing industry—it offers a lot of challenges and the salary levels are four-five times that of (the) manufacturing sector where I come from,” says Arvind Parekh, chief executive officer, corporate strategy and finance, Omaxe, also a new entrant to the industry. Parekh’s salary, for instance, has doubled in the last one-and-a-half years since he joined Omaxe.
Parekh’s previous job was with Jindal Stainless Ltd, where he was director, finance.
Salaries of chief executives in real estate firms range between Rs40 lakh and Rs4.5 crore a year, far higher than salaries for CEOs in more established sectors.