Bangalore: The Hiranandani brothers, co-founders of one of India’s largest privately held real estate companies, are separately eyeing new opportunities for growth, seeking to venture into new business segments or untapped geographies.
Surendra Hiranandani, the younger of the brothers who manages his own firm, is set to launch his first redevelopment project in Mumbai.
That’s a departure from his company House of Hiranandani’s focus thus far on building residences in Bangalore and Chennai, staying away from Hiranandani Constructions Pvt. Ltd’s stronghold Mumbai.
Elder brother Niranjan Hiranandani, who manages Hiranandani Constructions, on his part, has bought land with his own money in Pune and Ahmedabad, new markets for him. Niranjan said he hasn’t decided yet if he wants to launch projects on these lands under a separate entity spearheaded by him or as a part of the group.
The explorations by the Hiranandani brothers reflect the new optimism for India’s depressed real estate sector, with property analysts seeing a revival this year spurred by an expected rebound in the overall economy.
“2013 is going to be a year of growth, where we see demand coming back with RBI (Reserve Bank of India) reducing interest rates,” said Niranjan Hiranandani, co-founder and a managing director of Hiranandani Constructions. “It is difficult to tell how prices will move, but there will be a 10-15% increase in the year.”
Economists widely expect the central bank to pare its policy rate when it meets on 29 January to review monetary policy, an expectation that’s holding out hope to industries such as real estate and auto where interest rates can sway buyer decisions.
Surendra Hiranandani’s House of Hiranandani plans to launch its first redevelopment project in Chembur, a Mumbai suburb, this year, involving a mid-sized housing society.
The real estate company is negotiating both housing society and slum redevelopment deals in suburban and south Mumbai, Surendra Hiranandani said. “We have more projects in line for launches, but approvals are taking a whole lot of time,” he said. He’s also a co-founder and a managing director of Hiranandani Constructions.
House of Hiranandani, formerly Hiranandani Upscale, will also launch high-end residences in Bangalore and add new phases in existing projects in Chennai and Bangalore this year. It is also eyeing the national capital region, India’s largest property market by size, particularly Gurgaon, Surendra said.
Hiranandani Constructions, too, handles redevelopment projects in Mumbai, but Neha Hiranandani, director at House of Hiranandani and Surendra Hiranandani’s daughter, said “we will choose our projects wisely and appropriately” so there’s no overlap.
The brothers have always worked in great synergy to maintain separate businesses and yet avoid any overlap or conflict, said a property consultant who didn’t want to be identified.
“While Hiranandani has always been a known real estate brand in Mumbai, it has been accepted in other cities as well,” the consultant said. “However, with more locations being added now, it would be interesting to see what kind of projects they come up with, and at what pricing.”
Niranjan Hiranandani said a market survey is being conducted to decide what projects to launch on the lands he has bought in Pune and Ahmedabad. The medium-size land parcels are suitable for being developed into housing projects or even as special economic zones, he said.
“There are various factors at play in a property market, such as the location and size of the project. If it’s a large project, mid-income housing works well,” said Ambar Maheshwari, managing director, corporate finance, Jones Lang LaSalle, a property advisory. “If there’s an established real estate name such as Hiranandani involved, they can command a premium in terms of prices over other projects in the area.”
Being privately held, the Hiranandani companies don’t reveal numbers. Meanwhile, Niranjan Hirandani expects the dispute with daughter Priya Hiranandani-Vandrevala to be settled in a few months.
She sought arbitration claiming a business association agreement was violated jointly by her father and brother Darshan, resulting in losses to her. The chief arbitrator in the dispute filed in October 2010 is Cherie Blair, wife of former British prime minister Tony Blair. “A settlement in the arbitration case is expected sometime in April-May,” Niranjan Hiranandani said.