The Hindu Business Line : ‘A single-point contact for property services’

With large commercial and retail complexes coming up in the country, facility management service has become an industry to reckon with, to efficiently manage the non-core activities in a property. Property Solutions (India) Pvt Ltd, part of the Kalpataru Group, is one such company that provides integrated solutions for property development as well as upkeep.

In an interview with Business Line, Ms Anuradha Gandhi, Business Head, Property Solutions India, discusses the nature of services being offered for large commercial and retail properties and how the company distinguishes its services from peers. Excerpts from the interview:

What are the pre-construction and post-construction services offered by Property Solutions India?

Pre-construction service is nothing but project management. Our role starts during construction where we act as a one-point contact for various services to co-ordinate with civil contractors or architects of the client to ensure that timelines are adhered to and the project is executed as per budget. We generate MIS on a regular basis so that the client is aware of the development of the project. Project management also has another aspect wherein we take up complete turnkey projects that include our own design and execution.

The post construction service is nothing but facility management services or, in other words, property upkeep. This is mainly offered for commercial and retail space as well as premium residential projects. For this segment we have more than 2,500 people hired by us on a contractual basis. The others, such as the supervisors and technical staff, are on our own rolls. Overall, we have about 150 employees on our rolls.

So one facet of project management involves being a contractor to a developer?

Yes, this includes execution of the contract, including interiors. But the construction activity is outsourced by us. For the facility management we have our own team.

We are not yet into broking/property consulting. However, we plan to take this up by next financial year. At present, we, however, conduct land audits, which verify procedural aspects and not the legal issues.

Does the company predominantly derive its business from Kalpataru Properties or from external clients?

Our facility management business is a profit centre with more than 100 independent clients other than Kalpataru. About 80 per cent of the business comes from external clients. In Mumbai, we have Wipro, L&T Infotech, Reliance, i-flex, Siemens, Prudential ICICI as major clients for property upkeep.

The project management service was introduced only about a year ago. Under that we have ongoing projects for a chain of budget hotels and the Ambani School in the Navi Mumbai SEZ. We have also done a couple of malls.

What has been your growth in the facility management business? What is the business potential?

Our revenue has grown by over 100 per cent CAGR over the last three years. We are strong in the Western region and established in Bangalore, Hyderabad and Chennai. We also have a presence in New Delhi and Gujarat.

The market is still at a nascent stage. It, however, holds great potential especially with the increase in large-sized properties, as it provides a single-point contact for all services. So a client does not have to deal with 20 different vendors. This is also viable in terms of cost. We also take care of the statutory compliances as far as workmen are concerned.

How are your contracts structured? Do they provide for cost increases?

Our facility management services are typically one-year contracts with payments on a monthly basis. Of course we do provide for escalation clauses to provide for unprecedented increase in costs; any increases, specifically changes in minimum wages, are also agreed upon by the client.

What would be your market share and the edge you possess over the others?

We have a substantial market share as far as the western region is concerned and compete with the top players, especially multi nationals. However, except for the top players, not too many are into project management services. Hence we have a niche there.

We derive a majority of our volume from integrated facility management (IFM) services as we have been in the business for eight years. However, we are confident that project management will be on a par with our IFM services in terms of volume in the next three years.

Another advantage is that we have a strong human resource team hired by us directly. We, therefore, have better control over people and their services. We also spare our clients of all procedural and legal hassles of labour compliances.

Feedback to blproperty@thehindu.co.in

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