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Sanjay Chhabria: Mumbai realty's go-to man

His two-year old firm, Radius, is developing 12.5 mn sq ft in Mumbai; that's a fourth of what DLF, the country's largest realtor, is developing

Sanjay Chhabria

Raghavendra Kamath  |  Mumbai 

Sanjay Chhabria of Radius Developers
Sanjay Chhabria of Radius Developers

Sanjay Chhabria, 45, managing director of Mumbai-based Radius Developers, comes across as calm and seasoned. However, his two-year-old company seems in a hurry.

Radius is developing 12.5 million sq ft of properties in this city and its suburbs, across some 15 projects. That is a fourth of what DLF, the country’s largest realtor, is developing. Radius is also looking to launch three or four more of such projects, through joint ventures (JVs) or management contracts.

Yet, what really sets it apart from other developers is that the company has taken bold bets by doing joint developments (JDs) with some stressed real estate For instance, Radius has done a tripartite venture with DB Realty. The latter's promoters, Shahid Balwa and Vinod Goenka, were embroiled in the telecom spectrum scam. Radius owns 49 per cent in DB Realty’s MIG Colony Redevelopment Project in the locality of Bandra, paying Rs 325 crore as deposits. Delivery is expected by the end of 2018.

Radius has also taken a development management contract of stressed developer Hubtown’s premium housing project at Hughes Road in southern Mumbai, one of the country’s most expensive localities. Radius will get 15 per cent of the revenue as fee.

Recently, it also entered into a JV with Rohan Lifescapes for a luxury housing project at Hughes Road. Initially, Rohan announced a tie-up with US-based Trump Organisation for the latter’s first project in the country but this did not take off, due to approval issues. “Whatever we do, we want to do a good quality job; people should live happily in their properties. We also like to own nice assets which give us good annuity income,” Chhabria told Business Standard.

Who’s he?
Chhabria was earlier MD at The Wadhwa Group, one of the biggest developers in this city. Related to Wadhwa promoter Vijay Wadhwa, he set up Radius after a separation in the family. “I had a 20-year stint with Wadhwa Group, where I supervised 50 to 60 projects,” says Chhabria. Adding: “We can buy only in adverse times. In times of boom, we cannot buy.”

Will it work?
Says a CEO of a Mumbai-based non-bank finance company (NBFC): “They’ve taken fairly big bets and, after Lodha and Piramal, are the most aggressive ones. How they execute projects remains to be seen.”

“Considering they are trying to build their company, the strategy is right. When you are a young company but with vast experience of promoters and a good set of professionals, the JV and JD route is the best,” says Sanjay Dutt, MD at Cushman & Wakefield. Adding: “If you’re taking money from NBFCs and fund projects, it’s risky but if you adopt the JD route, you save a lot as 70 per cent cost is land cost.”

What about associating with stressed such as DB Realty and Hubtown? Does it tarnish the image?

“No. It’s about sharing area with all these developers. When selling and construction rights remain with Radius, people believe it. We will deliver the projects,” is Chhabria's reply.

According to sources, Radius already has Rs 3,500 crore of debt and this could trouble him when markets are down. Chhabria replies that of the said amount, Rs 2,500 crore is from lease rental discounting, and they do not put in much equity, as 60 per cent of his portfolio is management contracts, where they get 15 per cent of sales.

He also denies that the company is biting more than it can chew. “Once we cross 20-30 per cent of sales, we get courage to take more management contracts. We take only good locations and where all permissions are in place.”

He says Radius leased Rs 1,200 crore of office assets in 2015-16. It sold homes worth Rs 1,800 crore in the year and plans to double this in FY17.

How does he plan to bring home buyers to his projects when the market is in a prolonged slowdown? Chhabria says the company is coming out with sizes and prices which are easy on buyers' pockets. For instance, in its recent Central Park project at Chembur here, studio apartments were priced at Rs 14,000 a sq ft, while market prices in the area are between Rs 18,000 and Rs 20,000 a sq ft. In its Hughes Road project with Hubtown, the company is developing more of two -bedroom and three-bedroom apartments, rare in the locality.

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First Published: Tue, May 10 2016. 00:41 IST