Hiranandani appoints CEO for independent venture
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Bengaluru: Niranjan Hiranandani, co-founder and managing director of Mumbai-based Hiranandani Group, has appointed Jackbastian Nazareth as chief executive of his independent enterprise, Hiranandani Communities.
Hiranandani Communities will develop large residential projects, offices, resorts and industrial townships across different cities. Nazareth, former chief development officer at Bengaluru-based realty firm Puravankara Projects Ltd, will be based out of Mumbai and oversee various projects that will take off under the Hiranandani Communities brand.
With Hiranandani Communities, there are now three clear and separate business lines run by brothers Niranjan and Surendra Hiranandani, the latter also co-founder and managing director of Hiranandani Group. Niranjan will run Hiranandani Communities on his own with his team. Surendra Hiranandani and daughter Neha have been running House of Hiranandani with projects in Chennai, Bengaluru and Hyderabad. Together, they continue to own and run their home-grown real estate business in Mumbai, under Hiranandani Developers Pvt Ltd, that includes large mixed-use developments in Powai and Thane, and projects in Chembur and Kandivali.
“There was a need to create a separate entity as the growth potential is huge. Surendra and I continue to work together for projects under Hirandandani Constructions, with ownership distinction among the various businesses,” said Niranjan Hiranandani, managing director of Hiranandani Communities.
“With the kind of volume and scale we are looking at, it would be physically impossible for me to manage this, and we needed to bring in someone at the CEO level,” Hiranandani said.
An outsider CEO is probably a first in the Hiranandani Group, which has till now pretty much managed the entire real estate business with its own family members.
Hiranandani’s son Darshan is a director in H-Energy Pvt. Ltd, a subsidiary of Hiranandani Group. The firm is building liquefied natural gas (LNG) regassification terminals and will also be bidding for airports.
Nazareth didn’t respond to calls and text messages.
“First-generation developers, who have built institutions over the years, are increasingly hiring professionals to run the companies. As you bring in third-party investors, you need to bring in more professional managers, something that we have seen companies like DLF and K Raheja Corp. doing in the past,” said Anuj Puri, chairman and country head at property advisory JLL India.
Niranjan Hiranandani, 66, has for a while now been acquiring land and aggregating projects that will be launched and come under Hiranandani Communities.
In the pipeline are projects that include a 550-acre resort development in Khandala and Alibaug, two in Pune and Nashik, and two in Ahmedabad. In 2014, he also bought two townships, spread across 157 acres in Chennai and 588 acres at Panvel in Navi Mumbai that had been stalled, and then re-launched them subsequently in 2015.
The Chennai and Panvel townships belonged to Hirco Plc., an investment company that raised around $350 million on the Alternative Investment Market (AIM) in London in 2006 to invest in real estate projects in India that were going to be managed by the Hiranandanis. Niranjan Hiranandani was then Hirco chairman; he resigned from the board towards the end of 2010. Ties between Hirco and Hiranandani soured when the projects were not completed, prompting lenders to take action to recover their money. Hiranandani later bought the projects through auctions conducted by the lenders under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).
In Ahmedabad, one of the two projects is an international financial services centre as part of the Gujarat International Finance Tec-City (GIFT CITY) at Gandhinagar, Gujarat.
Hiranandani Developers is currently in the last leg of concluding a large transaction, in which it is selling 4.5 million sq. ft of office and retail space in its flagship project, Hiranandani Gardens in suburban Powai, to Canada-based Brookfield Asset Management Inc. for $1 billion.