Speaker 1: You're with us here on the Business Today podcast.
Speaker 2: I'm Ababakaya and joining us today is Diman Shah, the
Speaker 2: co founder and co CEO of luxury home brand It's Brava,
Speaker 2: which is growing from strength to strength. It's actually completed
Speaker 2: its tenth year this year and we're celebrating the anniversary. Congratulations, demand,
Speaker 2: thank you, thank you very much. Phenomenal growth. I want
Speaker 2: to kick off by saying that everyone's watched how the
Speaker 2: Brava story has gone from zero to a thousand crores in.
Speaker 1: Just ten years.
Speaker 2: It is absolutely phenomenal. So today we're going to dive
Speaker 2: in and understand how this happened.
Speaker 3: Sure, sure, absolutely, very excited. Thank you for having me.
Speaker 2: So tell us when you first began and was this
Speaker 2: pre covid was it? Did you already have the seeds
Speaker 2: of thought pre covid? You know, where did you first
Speaker 2: begin to think about creating this concept?
Speaker 4: So absolutely pre covid.
Speaker 3: Let me start with that, you know where, Like like
Speaker 3: you said, we're completing our ten years and yeah, we started.
Speaker 3: The seeds of thought were way before COVID. Actually this
Speaker 3: had nothing to do with COVID. Actually, COVID just accelerated
Speaker 3: what we thought and saw coming the way India lives, etc.
Speaker 4: I'm sure we'll get to that through the course of
Speaker 4: the conversation.
Speaker 3: But very simply, you know, I was my brother and
Speaker 3: I were working abroad.
Speaker 4: I was in New York.
Speaker 3: He was in London and New York and we were
Speaker 3: investment bankers and came back, went to go out, fell
Speaker 3: back in love with Goa. We had you know, growing
Speaker 3: up as children, you go but fell back in love
Speaker 3: with GOA. Wanted to buy something of our own, and
Speaker 3: we just didn't like anything that we saw.
Speaker 4: Right.
Speaker 3: You had a lot of local builders. You had a
Speaker 3: few guys from Delhi at the time, even then, and
Speaker 3: they were just doing unimaginative stuff. Right there just wasn't
Speaker 3: anything that we loved.
Speaker 1: And the dream, isn't it.
Speaker 2: It's the dream to own your own home and to
Speaker 2: find something that you can love and you can call
Speaker 2: your own.
Speaker 3: Absolutely lucally, and you know, the dream for us was
Speaker 3: actually to build a true luxury brand. It wasn't real estate.
Speaker 3: We weren't planning on building a real estate brand. What
Speaker 3: we wanted to build was a true luxury brand. We
Speaker 3: happened to see the gap in the market, which was
Speaker 3: real estate which was building homes one of the kind
Speaker 3: homes and go other people had never seen before, layering
Speaker 3: on a whole host of other things like service management.
Speaker 3: You know, we manage your homes end to end. We
Speaker 3: have a twenty four x seven conciage. We had that
Speaker 3: from day one.
Speaker 1: Probably a little ahead of its time, a very.
Speaker 4: Ahead of its time. No one had heard of there's
Speaker 4: no one had experienced this.
Speaker 3: You know, our buyers, our people, their professionals, their bankers,
Speaker 3: their lawyers, their entrepreneurs, their industrialists, and I mean we
Speaker 3: realized true luxury lies and removing a lot of this friction, right,
Speaker 3: which is what we started doing for them, not only
Speaker 3: building what we like to consider and I think others
Speaker 3: consider as well, some of the most beautiful homes in
Speaker 3: the world, but layering on really really robust services around it,
Speaker 3: from you know, airport pickups and drops. We fully manage
Speaker 3: your home, say your housekeeping, your pool cleaning, your landscaping,
Speaker 3: and everything in between. We have a very strong in
Speaker 3: house F and B program. All of it gets layered
Speaker 3: on top, right and uh, and that's what people want, right.
Speaker 3: That's when when you're building out a luxury product, you
Speaker 3: have to cater to all of that and we've done
Speaker 3: that from.
Speaker 1: Day one fantastic.
Speaker 2: So, you know, did you have to put in some
Speaker 2: of your own money? Did you find early investors?
Speaker 1: What did it take now?
Speaker 3: So I it in the early days, it took a lot.
Speaker 3: We actually uh convinced our father and he very generously agreed,
Speaker 3: and we mortgaged his house kind of loan and uh
Speaker 3: we uh and that's how we started the business.
Speaker 2: Right.
Speaker 4: We bought a parcel of land.
Speaker 3: Uh. We used some of the you know money we
Speaker 3: had through this kind of loan to build, built our
Speaker 3: first home, sold it, built our second home with money
Speaker 3: from that sold it, filed our third home, and so
Speaker 3: on and so forth. And then I want to say,
Speaker 3: close to ten homes into what we were doing is
Speaker 3: when we started actually getting external investors. Right, People started
Speaker 3: believing in our story. People started seeing that what we're
Speaker 3: doing is completely different. Indian real estate hadn't seen anything
Speaker 3: like this.
Speaker 4: Right.
Speaker 3: Imagine these massive homes, right, luxury high end homes, fully furnished,
Speaker 3: fully managed, fully serviced, delivery of homes ahead of time.
Speaker 3: This was you know, just as the cusp of yeah,
Speaker 3: and just on the cusp of Rara coming in Rara
Speaker 3: hadn't yet come in.
Speaker 4: So, you know, Raira has been really good for the industry.
Speaker 3: I think it's just helped him create creating a lot
Speaker 3: of confidence. It weeded out all your fly by night
Speaker 3: kind of guys and you know, your true credible players
Speaker 3: thrive in Arera environment. When we started out, Rara wasn't
Speaker 3: really so real estate had a bad name actually if
Speaker 3: you think absolute. So people were seeing what we were
Speaker 3: doing and saying, hey, wow, right, and you know, place
Speaker 3: like go Up. That's where our journey started. Now whre
Speaker 3: in several other locations. But so we know, we've been
Speaker 3: really fortunate with the partners. We've had people who've taken
Speaker 3: you know, a chance on us in our early days,
Speaker 3: the ghost Rage family, the Berman's, the you know in
Speaker 3: several other right, and now we have more institutional style capitals.
Speaker 3: We have a couple of private recuity funds. But that's
Speaker 3: how it all started. And you know, I think we
Speaker 3: just literally built no pun intended, brick by brick, right,
Speaker 3: That's that's how That's how we did it.
Speaker 2: So you said you didn't want to become a real
Speaker 2: estate brand, but you obviously had to build to probably
Speaker 2: show proof of concept, to create sort of a model,
Speaker 2: you know, prototypes, so to say, in terms of what
Speaker 2: you were looking to build, and then it's just evolved
Speaker 2: into that as you've gone ahead. Now you've actually raised
Speaker 2: quite a bit of institutional capital recently. Tell us about that,
Speaker 2: and tell us you know what the plan is in
Speaker 2: terms of the rollout and the kind of infantry you're
Speaker 2: looking to build going ahead.
Speaker 3: Right, So let me answer this by putting some numbers
Speaker 3: in in in context. First, we now currently have about
Speaker 3: four hundred and fifty homes under construction. These are various
Speaker 3: stages of construction, like from early summer in the pre
Speaker 3: launch stage, pre design stage, and summer close to completion.
Speaker 3: Four hundred and fifty homes under construction, four hundred of
Speaker 3: which approx. Four hundred fourteen of which are already sold,
Speaker 3: maybe a bit more actually now.
Speaker 1: And give everyone the price point of these homes.
Speaker 3: Yeah, yeah, So these homes eighty percent of these homes
Speaker 3: in an average price point of about fifteen to sixteen crows.
Speaker 3: About twenty percent of these homes in the average price
Speaker 3: point but five to six cross.
Speaker 4: That's broadly the breakup today.
Speaker 3: We have, in addition, delivered about one hundred and eighty
Speaker 3: five homes now close to two hundred homes in addition.
Speaker 4: To what we have under construction. So that's just the
Speaker 4: context of where we are.
Speaker 3: This is across locations Goa, Alibag, Casoli, and we're launching
Speaker 3: Karjat very soon as well, so that those are the locations.
Speaker 4: So right now, everything i'm telling you is.
Speaker 3: Actually spread across three locations, right because Karjat is to
Speaker 3: be launched. So you know, the way, what we realized
Speaker 3: is the way to actually scale this business is to
Speaker 3: be deep in a location rather than just being in
Speaker 3: several locations. Right, that strategy doesn't really work it according
Speaker 3: to us. So when we wanted to, you know, when
Speaker 3: we receive some inbounds to raise capital, we were very fortunate, again,
Speaker 3: very high quality kind of private equity partners, et cetera
Speaker 3: approached us. We didn't really need to raise too much capital. Again,
Speaker 3: fortunately we you know, we're a profitable company, et cetera.
Speaker 1: Have you been profitable from get go?
Speaker 4: No, No we haven't.
Speaker 1: Okay, we'll come back to that story.
Speaker 3: Yeah, we haven't been profitable from the get go. We
Speaker 3: actually grew into profitability and we'll come back to it
Speaker 3: and I'll explain why there's newance to why.
Speaker 4: Et cetera.
Speaker 3: And so we're very fortunate we got we're partnering with
Speaker 3: Hillhouse in India, which is alta capital led by Sid Gupta. He's,
Speaker 3: you know, a legendary investor, understands real estate, understands luxury.
Speaker 3: Him and his team, you know, work closely with us.
Speaker 4: So we raised one.
Speaker 3: Hundred million US dollars in capital, primarily, like I said,
Speaker 3: for growth, because we're profitable. So this was all growth capital.
Speaker 3: The strategy is to go deeper, you know. And now
Speaker 3: I'll segue a little because it's all linked. We started
Speaker 3: with brand is Brava. What is Brava does? Is we
Speaker 3: just like you know, we spend some time talking about
Speaker 3: we build beautiful homes. Right the average selling price in
Speaker 3: Isprava is fifteen to sixteen cross. We've just sold a
Speaker 3: home for one hundred crows. Wow, thank you, thank you.
Speaker 3: So you know, no we can't you know, even the
Speaker 3: even the ten crow home, we can't. We really maintain
Speaker 3: really strict confidentiality. So I wish I could that I
Speaker 3: wish I could, but we can't. So but your average
Speaker 3: ticket is fifteen to sixteen cross, everything between ten cross
Speaker 3: to one hundred Cross is where Esprava operates. But if
Speaker 3: you take away to averages fifteen to sixteen Cross. We
Speaker 3: then layered onmo is a very high end luxury management
Speaker 3: and rental brand. So what Lohono does is then manages
Speaker 3: these homes and rents them in short in a short
Speaker 3: term format, again literally at the upper end of the
Speaker 3: band super luxury. Like I started with, we are a
Speaker 3: luxury house. We put out brands that are only in
Speaker 3: the luxury segment. We recently then launched the chapter.
Speaker 2: Okay, before you get to the chapter, So if I
Speaker 2: wanted to, let's say, go and rent out a Lohano
Speaker 2: stage in Goa, what would be the average pricing? It
Speaker 2: could be seasonal, but what would be the average pricing.
Speaker 3: Anywhere between thirty to forty thousand rupeas a night for
Speaker 3: a three bedroom to a four bedroom home. We have
Speaker 3: six bedroom homes, we have ten bedroom homes, and we
Speaker 3: don't have anything less than a three bedroom home.
Speaker 2: And what's the kind of inventory or the number of
Speaker 2: rooms you have when it comes to.
Speaker 4: So a lot? Okay, no, no, let me let me
Speaker 4: quantify it for you.
Speaker 3: We have in India alone, we have over one thousand
Speaker 3: rooms really in India alone, we have over one thousand rooms.
Speaker 4: Wow.
Speaker 1: And so this is not just in those three locations.
Speaker 3: No, no, this is I mean we're in Kashmir where
Speaker 3: in Rajasthan where Isprava and Chapter don't operate, okay, and
Speaker 3: there we take over really one of the kind properties.
Speaker 3: You know, people have built great assets over time. In Rajasthan,
Speaker 3: we have, you know, some properties that are part of
Speaker 3: the royal families.
Speaker 4: You know, as a pool, et cetera.
Speaker 3: So we are all really high quality assets that we
Speaker 3: then kind of you know.
Speaker 2: And you and you fill up the capacity. I mean
Speaker 2: really you're seeing.
Speaker 3: That much demand, you know, and this can be a
Speaker 3: segment on its own, right, No, no, no, but you know,
Speaker 3: if you think about Indians, right, all of us, we
Speaker 3: don't we do one out of ten trips or holidays
Speaker 3: with just us and our spouse, right when not like
Speaker 3: the West, the West they do nine out of ten
Speaker 3: trips is just the person in their spouse. In India,
Speaker 3: only one out of ten is you and your spouse.
Speaker 3: Nine out of ten trips is actually you in a group, right,
Speaker 3: You with family, you with friends, You with family and friends.
Speaker 4: We're very social.
Speaker 3: We like to holiday We're generous, we're large hearted, we
Speaker 3: like to be together, we.
Speaker 4: Like to you know, that's who we are.
Speaker 3: So very high end villas work really well because your
Speaker 3: swimming pool is yours, it's private, just for your group.
Speaker 3: You're in a living area that's yours, private just to
Speaker 3: your group. So you're not in a hotel sharing it
Speaker 3: with one thousand other people. Right, You're part of a
Speaker 3: very small community. It's only your pool, only your living room.
Speaker 3: You want to eat breakfast at four pm, you can
Speaker 3: eat breakfast at four pm. F and B is tailor
Speaker 3: made and catered to you. We Indians, we're also foodies.
Speaker 3: We love food, we love.
Speaker 4: Eating at different hours and different times, etc. Et cetera.
Speaker 3: You're able to cater to all of that as long
Speaker 3: as you crack service, which is something I think we've
Speaker 3: done really really well.
Speaker 4: Yeah.
Speaker 1: Absolutely.
Speaker 2: I mean it's very refuted in the industry. Everyone knows
Speaker 2: what in it. Bravaar Lahono's experience.
Speaker 3: Will be exactly exactly. So you know, when you have
Speaker 3: all of that right, the market just keeps growing.
Speaker 4: Right.
Speaker 3: You look at your super rich in India, your Bollywood stars,
Speaker 3: your cricketers, your industrialists, your low they only want to
Speaker 3: stay in luxury serviced villas. Almost nobody goes to a
Speaker 3: hotel anymore in that segment.
Speaker 4: I mean they do. There's a use case for hotels
Speaker 4: as well.
Speaker 3: Right, But when you want true privacy, when you want
Speaker 3: true luxury, when you want a very differentiated experience, you
Speaker 3: will do you know, a luxury villa kind of stay.
Speaker 2: Okay, So is it just the celebs the man or
Speaker 2: are you also seeing, like you said, you know, a
Speaker 2: larger segment.
Speaker 4: Right, seeing a massive segment.
Speaker 3: I was just using celebs as an example, but a
Speaker 3: massive segment right. In general, Indians are loving staying in
Speaker 3: luxury villas, right, and we are literally in most geography
Speaker 3: is the only real game in town.
Speaker 4: At that end of the segment.
Speaker 3: There are the villa company, but they're not service sing
Speaker 3: and they're not servicing. You know, it's it's a very
Speaker 3: you know, kind of hit and misservice level. Our service
Speaker 3: level is actually very elevated.
Speaker 1: So that's clearly your us USB.
Speaker 3: You know, we have two kind of very strong rights
Speaker 3: to win in this business in Lohono. Number one is
Speaker 3: the best product. We have the best home spirit. No
Speaker 3: one can no one in India has better homes than
Speaker 3: us on the Lohana platform and number two US service
Speaker 3: is insanely good. So I wouldn't say our service is
Speaker 3: like how I said about product the best in India
Speaker 3: because you go to a hotel and many hotels have
Speaker 3: great service, right Joe Buroi for the four seasons and
Speaker 3: so on and so forth, they all have great service.
Speaker 3: But our service is up there, right, but our product
Speaker 3: is unmatched, unparallel. You combine the two, it becomes very impotent.
Speaker 3: And that's why we're winning.
Speaker 1: Okay, fantastic.
Speaker 2: So now chapter you sink I interrupted your course the
Speaker 2: next leg of growth.
Speaker 3: Right, so you know the way we think about it
Speaker 3: is Isprava is our super luxury and Lohono kind of
Speaker 3: layers on top of everything. And then the chapter is
Speaker 3: our luxury brand. Right where your average ticket size between
Speaker 3: four to six cross, so call it five cross. These
Speaker 3: are fully furnished like in Isprava home really beautiful homes,
Speaker 3: very techingable. Though you kind of design your entire home
Speaker 3: with us on an iPad.
Speaker 1: What fun.
Speaker 3: People are loving it and think about it, right, you
Speaker 3: get a three bedroom home with a private swimming pool,
Speaker 3: fully furnished.
Speaker 1: Fully backed up, fully done for you.
Speaker 3: Every fully serviced with by Lohono for five cross right
Speaker 3: and go our Alibag or Karajats right.
Speaker 2: And but tell me something this trend and I think
Speaker 2: that's why we touched upon COVID earlier because clearly the
Speaker 2: second home or the holiday home trend came about during
Speaker 2: that time or accelerated during that time. Do you think
Speaker 2: today people I mean a clearly the demand is still there.
Speaker 2: I want to ask that question, but are people also
Speaker 2: looking for this, you know, within their city of residents
Speaker 2: because we're seeing luxury booming across metros. Are you going
Speaker 2: to continue to focus on the second home market or
Speaker 2: are you also looking at new segments?
Speaker 3: No great question, I think. So let me actually just
Speaker 3: kind of tweak what you said, right, We actually don't
Speaker 3: view ourselves as a second home or you know, holiday
Speaker 3: home kind of player at all. Okay, and I'll tell
Speaker 3: you why again. I'll just give you some data points.
Speaker 3: Thirty to thirty five percent of people who buy from
Speaker 3: US are using these home as primary residences. I define
Speaker 3: a primary residence as someone who's using spending nine to
Speaker 3: twelve months in a Really now, look at places like Alibag,
Speaker 3: you look at even places like goa right, these are
Speaker 3: becoming real. They're not holiday destinations anymore. Right, people are moving.
Speaker 3: Ninety percent of our homeowners are not investors, right, ninety
Speaker 3: five percent actually are not in These are end users.
Speaker 4: Number one.
Speaker 3: Number two is again i'll link back to you know
Speaker 3: how we are with family, et cetera. One person might
Speaker 3: buy the home, but between eight to nine months in
Speaker 3: a year, you have someone from the family living in
Speaker 3: the home.
Speaker 4: Okay, So that's point one.
Speaker 3: Point two is another thirty percent of our homeowners use
Speaker 3: these as semi primary owns.
Speaker 4: Ok.
Speaker 3: What we define as a semi primary home is someone
Speaker 3: who uses their home four to six months in a year.
Speaker 3: So the majority of our homeowners are primary and semi
Speaker 3: primary homeowners. Now, the amazing thing about that is, you know,
Speaker 3: I say this over and over again, but our cities
Speaker 3: are becoming unlivable. Right for six months in the year,
Speaker 3: you can't breathe the air and deli traffic in Bombay
Speaker 3: roads I have dug up every single day. There's something
Speaker 3: or the other going on. We're a big city growing fast.
Speaker 3: You have to build infra on the fly, right, I
Speaker 3: get it. It's not easy to build the kind of
Speaker 3: infra we are building. But that also makes the cities
Speaker 3: a little unlivable. Bangalore has a traffic problem and so on. Right,
Speaker 3: I think so the cities are becoming more and more
Speaker 3: and more unlivable, which means really wealthy Indians are saying, hey, look,
Speaker 3: of course my primary residence is my city, but I'm
Speaker 3: going to also have a home in Alibag or Goa
Speaker 3: or the hills where my family will go, I will go.
Speaker 3: You combine that with the fact that you look at
Speaker 3: our central government and you look at state governments. The
Speaker 3: kind of jobs they have done when it comes to
Speaker 3: infra is unbelievable. It's been unprecedented over the last ten
Speaker 3: to fifteen years, the kind of growth we've seen in infra. Right,
Speaker 3: I use Goa as an example. You have two international airports.
Speaker 3: It's a small state, right, A small state like that
Speaker 3: has two international airports. These are world class airports, both
Speaker 3: of them. You look at Ali bad right, the kind
Speaker 3: of connectivity that you're getting by road, by water, by
Speaker 3: you know, it's unbelievable, it's unprecedented. No one has seen
Speaker 3: something like this. Suddenly, all these look at Karjat Karjats now,
Speaker 3: I mean sitting here in Bombay, right, will be in
Speaker 3: South Bombay, will be in Karjatan sixteen minutes.
Speaker 4: Wow.
Speaker 3: Ten years ago it would take you sixteen minutes to
Speaker 3: reach Bandra, right, I mean pre ceiling, it would take
Speaker 3: you nineteen minutes to reach Bandra. So the infra and
Speaker 3: the work that you know, our government has been doing
Speaker 3: over the last ten to fifteen years has also made
Speaker 3: a lot of these locations not holiday destinations, but also
Speaker 3: semi primary and primary home destinations. People are realizing, Hey,
Speaker 3: when the air is unbreathable in Delhi, I'm going to
Speaker 3: my old you know, my parents who have retired can
Speaker 3: go stay in my home and go off for four months, right,
Speaker 3: and they come back to Delhi and I can be
Speaker 3: in and out and my kids can be there my
Speaker 3: you know. So when you combine this great infrastructure growth
Speaker 3: with Indians getting richer and hence wanting to invest in wellness,
Speaker 3: in their children, breathing better air and just a quality
Speaker 3: of life, right, the market actually is growing exponentially and
Speaker 3: demand is really strong, really firm, and it's not just
Speaker 3: a holiday destination or holiday asset anymore.
Speaker 4: It's actually a very real asset that you use.
Speaker 2: I'm so glad you explained that yeah, and I want
Speaker 2: to talk further about, you know, what you're envisioning for
Speaker 2: the future. You know, you've already talked about how much
Speaker 2: development we've seen in the last few years. But before
Speaker 2: we do that, let me rewind a little bit and
Speaker 2: come to that past to profitability piece more to understand
Speaker 2: your own journey as an entrepreneur, as somebody that you know,
Speaker 2: people are aspiring to hear your story as to how
Speaker 2: you've created a space or a niche in this market,
Speaker 2: how you've built it up to this scale, and actually
Speaker 2: in a very very short amount of time, you know,
Speaker 2: tell us what that journey was like.
Speaker 3: Yeah, So, you know, I think the first five to
Speaker 3: seven years, like any business, right, Firstly, I think overnight
Speaker 3: in a business is a decade. You know when when
Speaker 3: you hear about a business growing, you know, when people
Speaker 3: in passing and not talk about us something in general,
Speaker 3: say oh they've grown so fast overnight, right, or you
Speaker 3: know this business is overnight is a decade in business, right,
Speaker 3: The quickest you can get anywhere is ten years. And
Speaker 3: you have to know that and clear and be clear
Speaker 3: about that.
Speaker 4: Right. No, I mean, I mean.
Speaker 2: Most of the success stories we're seeing today, most of
Speaker 2: them are about a decade. You may hear about them
Speaker 2: and that acceleration period maybe two three years, but it's.
Speaker 3: Taken a decade, right, And there's so much battling that
Speaker 3: happens underwater, that's you know, invisible, and there's just and
Speaker 3: especially when you're doing something different, there's it takes a
Speaker 3: lot of convincing. Right, you have two and then you'll
Speaker 3: have you'll have the visionary investors, You'll have the in
Speaker 3: visionary clients will say, yeah, that's different. Actually, I'm willing
Speaker 3: to bet on this, right, I'm willing to come in
Speaker 3: in some way, shape or form and partner with them.
Speaker 4: Right.
Speaker 3: And I think the first five to seven years we
Speaker 3: were not profitable. We've always investing in growth. Real estate
Speaker 3: has a nuance which is that you might sell a
Speaker 3: home today, but if it's under construction, you can't book
Speaker 3: the whole thing on your P and L. So there's
Speaker 3: a POC, a method of accounting, etc. I won't bore
Speaker 3: you and your viewers with that, but so it takes
Speaker 3: time for it all to play out in your P
Speaker 3: and L. So on our P and L, you know,
Speaker 3: first five to seven years we were not profitable. And
Speaker 3: then I mean but we always knew that there was
Speaker 3: a clear path and it was just a function of
Speaker 3: the P and L catching up to the audible kind
Speaker 3: of a thing, and the moment that happened, right, we
Speaker 3: swung fully into profitability and you know, we will continue
Speaker 3: to be very profitable going forward.
Speaker 2: You both and you and your brother are both incredibly young.
Speaker 2: You've both been featured on the forty under forty I
Speaker 2: think multiple times now, so as young leaders. I mean,
Speaker 2: clearly you must have had enough energy and drive to
Speaker 2: run around the country and sort this out. But what
Speaker 2: were some of the unique challenges you possibly faced dealing
Speaker 2: with regulators, investors, you know, uber, luxury clients.
Speaker 4: Yeah, you know.
Speaker 3: It's a good question, and again we could do a
Speaker 3: whole segment. Yes, Look, I think it whether you're a
Speaker 3: young or you're old or your middle ages an entrepreneur,
Speaker 3: I think you face similar challenges. Challenge number one is,
Speaker 3: and these all good things, right, is when you grow right,
Speaker 3: and you continue to grow, and you're so focused on
Speaker 3: growth your first when your team is ten people or
Speaker 3: twenty people, right, it's actually almost easier when you have
Speaker 3: twenty people and you'll all sit in one room and
Speaker 3: the culture is the same. Everyone's working in such a
Speaker 3: focused way towards an end goal. Everyone is hearing you
Speaker 3: talking to clients or talking to anyone, so everyone's kind
Speaker 3: of picking up. There's a lot of osmosis and reverse osmosis.
Speaker 3: I'm sitting in a room hearing someone on my team
Speaker 3: talking and learning something from them. They're hearing me talking
Speaker 3: and learning from me, and setting the culture and learnings
Speaker 3: is easier when that twenty person team becomes one hundred and.
Speaker 4: Then a thousand people.
Speaker 3: Right, That's actually a big challenge because how do you
Speaker 3: ensure that a certain value system, which, by the way,
Speaker 3: in our group, in the ISPRAVA group, is super crucial. Right,
Speaker 3: we live by a value system which we're really dedicated to.
Speaker 4: Small things. Right.
Speaker 3: Of course, everyone says, right, or you treat your clients
Speaker 3: like their gods, you do, but you need to treat
Speaker 3: your vendors like their gods as well. Right today, I
Speaker 3: mean anecdotally, whenever I'm in go I'm they often right.
Speaker 3: Once a week, bed ten to fifteen days a month,
Speaker 3: I will ask our vendor for taxis right?
Speaker 4: Are you being paid on time? You know?
Speaker 3: And I almost do that as almost like an audit,
Speaker 3: right to make sure that the value system of our
Speaker 3: company is translating on ground.
Speaker 4: Right. Is the taxi vendor being paid on time?
Speaker 3: Is the the you know, the guy who does our landscaping.
Speaker 3: Is he taken care of? And all of that is
Speaker 3: super crucial, right. You cannot lose the essence of who
Speaker 3: you are.
Speaker 4: Are you doing the right thing on ground? Right?
Speaker 3: We we really truly follow every rule in the book.
Speaker 1: Right.
Speaker 3: And but when you're a thousand people or eight hundred
Speaker 3: people or six hundred people, there might be one person who's,
Speaker 3: you know, in the interest of time and not because
Speaker 3: he's intending to do something or she's intending to do something,
Speaker 3: just because they're under pressure on time, might take a shortcut, right.
Speaker 4: But as a brand, that's you can't take a shortcut, right.
Speaker 3: So I think that's challenge number one, making sure that
Speaker 3: you're always doing the right thing or living by your
Speaker 3: value system, whatever that might be, because that's the only
Speaker 3: way you kind of transition from being a brand to
Speaker 3: an institution. And that's something we are really keen to do, right,
Speaker 3: to build an institution that you know, goes several hundred years.
Speaker 4: I think that's point one.
Speaker 3: Point two is the right people, right, having being able
Speaker 3: to attract the right leaders, being able to empower those leaders,
Speaker 3: being able to give them space and latitude and autonomy
Speaker 3: to success, succeed and fail, and you know, kind of
Speaker 3: step in and help them and handle them. You have
Speaker 3: to be incredibly patient because you keep thinking, hey, I
Speaker 3: can jump in and do that right, because you've been
Speaker 3: doing it right, so you think, hey, I can kind
Speaker 3: of It'll take me one hour rather than two hours,
Speaker 3: right for that person. But I think it's really important
Speaker 3: and it's been challenging to be able to say, no,
Speaker 3: let it take two hours. We're going to stand by
Speaker 3: this person and let them grow as well, because that's
Speaker 3: how the organization can grow. So clients are always you know,
Speaker 3: clients can be demanded. But again we're very fortunate our clients,
Speaker 3: and especially at the luxury end of the market, your
Speaker 3: clients are actually lovely.
Speaker 4: Uh. They they work closely with you. They become like
Speaker 4: your partners.
Speaker 3: A lot of our clients actually in our early days
Speaker 3: became investors because they just really bought into what we
Speaker 3: were doing and said, hey.
Speaker 2: And I know that one or two early clients that
Speaker 2: you do talk about, yeah, yes, tell us the story.
Speaker 3: Yeah yeah, no, So There's been a lot of people
Speaker 3: who have been really really supportive.
Speaker 4: Right.
Speaker 3: You look at Sunil Gavaska, the cricketer, he's a client,
Speaker 3: bought a home. He's been truly truly supportive. He's and
Speaker 3: then incidentally, I'm now married to his niece's family now
Speaker 3: and all of that. But uh another day, Yeah, that's
Speaker 3: that's for another day. But but but but.
Speaker 1: But you know, and I know the you just had
Speaker 1: your second baby.
Speaker 2: Yes, so congratulations, wishing you both, you know, all the best,
Speaker 2: and so wonderful to see your family grow.
Speaker 3: Thank you so much, thank you so so you know,
Speaker 3: someone like him then Chris go Paralo Christian was an
Speaker 3: early buyer. Uh uh in he bought one of our
Speaker 3: early homes, right and uh again, just so supportive.
Speaker 4: We were kids, right when we were in.
Speaker 3: My late twenties starting our business, and to have clients
Speaker 3: who were not just clients, but you know, kind of
Speaker 3: even taught us, taught us a lot about our own business,
Speaker 3: right because they's had the experience. And there are countless, right,
Speaker 3: Rohan Lamba and Chris Gopalo, Krishna and people like the
Speaker 3: pagol I mean, I could keep naming them. They're all
Speaker 3: entrepreneurs and professionals, and you know, they've all been such
Speaker 3: great supporters and we've learned so much from them, and.
Speaker 4: That's the big advantage of our business.
Speaker 3: Actually, we are really privileged to meet and work with
Speaker 3: such great people who you've not just not just become
Speaker 3: your clients and friends, but you learn a lot from them,
Speaker 3: right you just sit down over dinner, and I mean
Speaker 3: I find myself picking their brains consistently and constantly, right like,
Speaker 3: no matter, how did you do that in your business?
Speaker 3: Or you know, the person might not be an entrepreneur,
Speaker 3: might be a professional, so hey, how do I think
Speaker 3: about this? Or how would you think about it? And
Speaker 3: there's a lot of learning. So we're really really fortunate.
Speaker 2: You know, you've always spoken about building a legacy, and
Speaker 2: we've seen this boom in luxury real estate in India,
Speaker 2: especially in the last few years. And every day now
Speaker 2: we're hearing of new projects coming up. Of course, and
Speaker 2: as usual, the market will always wonder when.
Speaker 1: There's a boom, like this, is it a trend? Is
Speaker 1: it going to bust? Is it?
Speaker 2: As you said, you know, back in the day, real
Speaker 2: estate didn't have a great reputation, So how would you
Speaker 2: answer this or approach this question. Is luxury real estate
Speaker 2: here to stay? Is it something that's going to be
Speaker 2: around for the long term.
Speaker 3: Yeah, So I'll give you a short answer and a
Speaker 3: long answer. The short answer is yes, absolutely, it is
Speaker 3: here to stay. The long answer is Look, firstly, I
Speaker 3: think I think luxury. The word luxury and the term
Speaker 3: luxury is perhaps one of the most misused terms.
Speaker 4: Of this decade.
Speaker 3: Right today, everybody just adds the word luxury right to
Speaker 3: anything they do, right, But I think true.
Speaker 4: Luxury is here to stay.
Speaker 3: I think there are people across the country doing unbelievable
Speaker 3: work across sector. I'm not just saying real estate, hospitality,
Speaker 3: real estate, F and B, and those people are truly
Speaker 3: changing the game. And if and you know, I think
Speaker 3: the way to think about this is, is India growing
Speaker 3: as a nation?
Speaker 4: The answer is yes. Do you have line of sight
Speaker 4: on that growth?
Speaker 3: The answer is yes, we're almost in And I almost
Speaker 3: don't want to say it out loud because I don't.
Speaker 4: Want jinx anything.
Speaker 3: But just think about us as a nation, one of
Speaker 3: the largest consumer markets in the world, a very stable, balanced,
Speaker 3: sensible government in place, right, and then we're a democracy
Speaker 3: at that on top right, and then we have this
Speaker 3: really nice federal structure right between center and state where
Speaker 3: you have diversity as well, and everyone is there's a
Speaker 3: lot of balance, there's a lot of thought. There's a
Speaker 3: lot of focus on infrastructure growth. I think we as
Speaker 3: a nation have realized that we need infra structure growth
Speaker 3: to become to go where we want to go. So
Speaker 3: there's so much focus on that. Right, you have a
Speaker 3: big consumer market. You have a really really robust and
Speaker 3: I mean you know this better than me, really robust
Speaker 3: entrepreneurial ecosystem. Right, so you have a lot of great
Speaker 3: companies that are either startups or legacy businesses that are
Speaker 3: doubling down doing better. You know, again, we're unique as Indians.
Speaker 3: We place a huge emphasis on education, so we're aspirational,
Speaker 3: We're growing.
Speaker 4: I think the next decade.
Speaker 3: Two decades, maybe even three decades is clear in my mind,
Speaker 3: it's our time, right And I know you probably hear
Speaker 3: this day in and day out from everyone you talk to,
Speaker 3: but truly I believe it. I think it's our time
Speaker 3: and as long as that happens, the luxury end of
Speaker 3: the market, I think all segments will grow. We're talking
Speaker 3: luxury because we're talking luxury, but I think if you
Speaker 3: build a true luxury product and service or whatever you're in,
Speaker 3: luxury is here to stay. Luxury the state is here
Speaker 3: to stay. Luxury hospitality is here to stay. Not only
Speaker 3: is it here to stay, is here to thrive. It's
Speaker 3: here to thrive.
Speaker 2: Is it even as an investment option or as a
Speaker 2: pure experiential.
Speaker 4: One hundred percent is both?
Speaker 3: I mean again, and I know you've not asked this,
Speaker 3: but I'll give you numbers, right and on the investment
Speaker 3: part in most of the markets we work, right, Just numbers, Okay, great,
Speaker 3: So I'll give you some if you just paint a
Speaker 3: brush across all my markets that I operate in in
Speaker 3: Isprava and chapter right, keeger of underlying land is anywhere
Speaker 3: between twenty five to thirty percent. Really, that's insane if
Speaker 3: you think about it right over the last five years
Speaker 3: and going forward as well.
Speaker 2: That's fantastic that you're mentioning that, because everyone's only looking
Speaker 2: at the retail price, not looking at the underlying.
Speaker 3: Sat exactly, and think about it, right, Aba, Look, when
Speaker 3: not operating, like we said, in your big cities and
Speaker 3: your big cities, land is already really expensive, right, but
Speaker 3: you know you operate in a place like Aliba, Goo Goa,
Speaker 3: Casoli or Kajat.
Speaker 4: Right, these are all where you know Bombay and you
Speaker 4: know we're sitting in Bombas. Let's use Bomba as an example.
Speaker 3: Right, so where Bombay was in the sixties, Right, it's
Speaker 3: where in its growth story. It's it's on day one
Speaker 3: and in some places day zero, it's only going to grow.
Speaker 3: So you're already seeing twenty five to thirty percent. Yeah,
Speaker 3: in micro markets. Now, if I really double clicked on this,
Speaker 3: right and I gave you micro market data, that CGR
Speaker 3: goes up to fifty percent, maybe even sixty percent in
Speaker 3: certain micro markets, but your average is twenty five to
Speaker 3: thirty percent, And so it makes a great investment. Hey,
Speaker 3: what I'm not counting on top of that is you're
Speaker 3: getting a rental yield. So I mean it's just a
Speaker 3: no brainer.
Speaker 4: Right. People are just like, huh, you know, why am
Speaker 4: I not doing more of this? Sure? Also with you know,
Speaker 4: with everything.
Speaker 3: Going on in the markets, right, there is a bit
Speaker 3: of volatility. You know, people are saying, you know what,
Speaker 3: and gold is now just run up so much, right,
Speaker 3: people are saying, look, what's the safe asset but yet
Speaker 3: you know something I can enjoy use and perhaps not
Speaker 3: as on fire as gold, And that's ly real estate,
Speaker 3: right Like, it's a very safe investment with the right brand.
Speaker 4: Uh. And and that's kind of why I'm so bullish
Speaker 4: on it.
Speaker 2: So since we're talking numbers as a company as well,
Speaker 2: what are the kind of margins you operate with?
Speaker 4: So look again, where we do a cost plus? We
Speaker 4: don't kind of uh that.
Speaker 2: I didn't ask you start asking number.
Speaker 3: I'll tell you what. I'll tell you what we what
Speaker 3: we do and what we don't do. We operate our
Speaker 3: business in a cost plus margin basis.
Speaker 4: Right.
Speaker 3: So what we don't do, right, and this is really important,
Speaker 3: is we don't speculate. So let's let's say we bought
Speaker 3: a parcel of land two years ago and for some reason,
Speaker 3: we launched it two years later. We're not marking to
Speaker 3: market what we perceive to be the price of land today.
Speaker 3: We take the cost of our land two years ago. Obviously,
Speaker 3: you have a holding cost and a financing cost, et cetera.
Speaker 3: We add that on top, put a fair margin on
Speaker 3: top of that, and a reasonable and fair margin, and
Speaker 3: that's how we go to market when we so so
Speaker 3: so we're very transparent, we're very fair, and that's worked
Speaker 3: for us, right, not speculating on values, not suddenly saying,
Speaker 3: hey no, I might have bought it for ten but
Speaker 3: now it's one hundred. That it's not how you know
Speaker 3: where you have to do things transparently, do it the
Speaker 3: right way, and that's how we do it.
Speaker 4: Okay.
Speaker 2: In terms of future plans, and you know you've talked
Speaker 2: about going deeper when it comes to it, brava for Lohanos,
Speaker 2: you're already global. Are there plans to further go into
Speaker 2: new cities or you know, how are the expansion plans
Speaker 2: looking for Lohanos for instance, when you're talking globally?
Speaker 3: Yeah, no, absolutely, So I know you asked me globally,
Speaker 3: but let me just quickly give us as let me
Speaker 3: give you the domestically again, we're very bullish. India is
Speaker 3: such an amazing country, right, diversity wise, and you know
Speaker 3: we have so many, so many places. Even went through
Speaker 3: the Lohono business, I realize I haven't seen and I
Speaker 3: haven't heard of, right, You're just you're just blown away
Speaker 3: consistently so. And then of course your market is here,
Speaker 3: your demand size is here, right, so we will be
Speaker 3: growing quite rapidly within India. We'll go deeper markets that
Speaker 3: we exist. We might add on a few more markets,
Speaker 3: but again the focus will be to go deeper globally.
Speaker 3: We are already across Southeast Asia. We've just launched Italy
Speaker 3: Lake Garda, so we will look at growing globally and
Speaker 3: expanding globally. Uh, these are we we we do it
Speaker 3: in a sensible way, which will we do it in
Speaker 3: a very light way where we partner. We we do
Speaker 3: a really deep vetting process with a partner and then
Speaker 3: we go deep and allow them to run the day
Speaker 3: to day while we layer on all.
Speaker 4: The Indian service.
Speaker 3: You know, a lot of people are very used to
Speaker 3: catering to your your your your guests from the west, right.
Speaker 3: It's a whole different ball game when you're catering to
Speaker 3: the you know, I'll give you a small anecdotal example
Speaker 3: in Thailand. If you ask them, hey, is this path
Speaker 3: high vegetarian, they'll say yes, well, because they won't realize
Speaker 3: that fish oil is actually not acceptable to an Indian vegetarian.
Speaker 3: Right to them, if they're vegetarian, you're having It's okay.
Speaker 3: They are very big things for Indians exactly exactly right.
Speaker 4: They don't know to make a massala cha no matter
Speaker 4: where in the world, we want a massalacha, right.
Speaker 3: So so you know, we layer on this very luxury
Speaker 3: Indian service on top of it to make sure our
Speaker 3: guests are always comfortable and the same. But the day
Speaker 3: to day, like the housekeeping, all of that we leave
Speaker 3: to very highly qualified and vetted partners.
Speaker 1: Okay, fantastic, leman.
Speaker 2: It's so wonderful to see a homegrown young Indian entrepreneur
Speaker 2: and brand making ways globally and also the kind of
Speaker 2: phenomenal growth that you've seen here, building something that you
Speaker 2: love from scratch and seeing it really just completely blossom
Speaker 2: into the thriving company that it is. What a wonderful story.
Speaker 2: Thank you so much for joining us.
Speaker 3: Thank you, Abat, thank you for having me. And it's
Speaker 3: always such a pleasure chatting with you.
Speaker 4: And you know you you.
Speaker 3: You yourself are just such a great success story. So
Speaker 3: it's a it's an inspiration to.
Speaker 4: Be here with you.
Speaker 1: Look forward to all the exciting things happened.
Speaker 4: Thank you, thank you, thank you.
Speaker 1: M HM