Five years in the past, Bangalore-essentially essentially essentially based property magnate Irfan Razack, who received prominence by driving the divulge in India’s tech capital, determined to enterprise into Mumbai’s extremely competitive property market. It seemed an extended shot. Would his Prestige Estates Projects be in a set to replicate its south India success in the nation’s financial hub against entrenched immense names—all billionaire-owned—equivalent to Lodha’s Macrotech Builders, Godrej Properties and Oberoi Realty?
Defying skeptics, Prestige has since then made considerable inroads in Mumbai and its signature impress of a flying falcon now adorns billboards showcasing a slew of upcoming residential and industrial initiatives. These extend your complete diagram from tony South Mumbai to an office complicated in midtown Mumbai to instant-growing heart-class suburban enclaves additional north. It has 11 initiatives—six of them with partners—defending roughly 32 million square toes, with completion slated in levels, starting up in 2025 except 2031.
“Now we dangle the market, we now dangle got the investors, we now dangle got the impress.”
Razack’s approach? He noticed a uncommon opportunity to rep a foothold by scooping up distressed initiatives from money-strapped builders, while building an exact team with local knowledge and connections. “Now we dangle the market, we now dangle got the investors, we now dangle got the impress and we now dangle got the management that’s capable of delivering the numbers,” says Razack, 70, who's Prestige’s chairman and managing director.
Certainly, the numbers grunt for themselves. In the fiscal year ended March 2024, Prestige notched up document sales of 210 billion rupees ($2.6 billion) with Mumbai accounting for 15%, up from nearly 7% two years earlier when annual sales had been merely below half that at 103 billion rupees. In the present fiscal year, Razack expects a 54% surge in Mumbai sales to 50 billion rupees, even as he’s plotting Prestige’s expansion into other cities past its southern stronghold, which beneficial properties a immense presence in Hyderabad.
The company’s stock has been on a creep, closing at 1,870 rupees in unhurried September, up 58% in 2024 and bigger than triple its year-in the past level. The rising fragment impress boosted the wealth of Razack and his siblings to $6 billion, earning them a quandary, after a decade-long hiatus, in the ranks of India’s 100 Richest, a list that factors half a dozen other multibillion dollar property fortunes this year.
Prestige’s increase has been fueled in share by India’s crimson-sizzling actual property market, which is making the most of growing urbanization, an infrastructure buildout and the fashion to make investments in property. The nation’s property sector might possibly potentially extend tenfold to $10 trillion in asset price and that of linked providers and products by 2047 from below $1 trillion lately, essentially essentially essentially based on a September document by actual property consultancy agency Colliers and the Confederation of Proper Property Builders’ Association of India.
Razack had long harbored the dream of accelerating into Mumbai. On the opposite hand it took a confluence of things to pave the formulation for his entry. India’s actual property reforms of 2016 ushered in long-demanded transparency and accountability. The chance to collect websites arose when rising funding charges precipitated a liquidity crunch and mission delays, compelling distressed builders to undertake a fireplace sale of their land parcels. The auction of websites entangled in honest disputes and the growing fashion of redevelopment, wherein older constructions are torn down and rebuilt, equipped other openings, albeit with some element of risk.
Prestige obtained sure prime land parcels from prominent developer DB Realty, whose two outmoded billionaire cofounders had been embroiled for years in a telecom scandal. While they had been acquitted for lack of proof after seven years, DB Realty’s initiatives stalled.
“The websites that Prestige took on had been obtainable to all people but Razack determined to design shut the danger and that’s what noteworthy him from the rest,” says Anuj Puri, chairman of Mumbai-essentially essentially essentially based Anarock Property Consultants. (It has Prestige as a shopper.) “He partnered with the categorical folk on the ground to rep approvals and land clearances,” adds Puri.
Razack additionally worked laborious to woo Mumbai’s brokers and their agents. In 2022, he flew 200 of them to Bangalore for a weekend essentially to showcase Prestige’s marquee initiatives and constructions. “We felt they'd rep a impress attachment most productive if they might think our merchandise,” says Zayd Noaman, Prestige’s executive director and Razack’s nephew (he’s the son of his younger sibling Noaman). That used to be a precursor to a pre-begin event held in Also can 2022 on the grounds of Mumbai’s racecourse for 2,500 realtors, giving them a sneak top of Prestige’s upcoming initiatives adopted by dinner.
At the present time, Prestige has its like team of 150 sales folk in Mumbai and has expanded into the neighboring metropolis of Pune, a rising tech hub, with a million square toes of business location, as it scouts for land for residential initiatives. Razack insists that Prestige has retained its level of interest on providing mid-profits housing. “We operate in the 75 lakh rupees [$90,000] to the two crore rupees [$240,000] segment for Bangalore and the two crore rupees to just a few crore rupees [$360,000] segment for Mumbai,” says Razack. “That mid-profits segment is our bread and butter.”
Razack’s moves appear to dangle received over investors, with most analysts having a “buy” advice on Prestige’s stock. “They've been very aggressive when it comes to increase and they've delivered very successfully,” says Pankaj Kumar, research analyst at Kotak Securities in Mumbai, which charges Prestige’s shares as an “add.” Says Kumar: “That is an organization with a excessive sales tempo. They assemble rapid and they sell rapid.”
Prestige confronted a actuality check in the quarter ended June, with sales falling 23% from a year earlier to 30.3 billion rupees even as debt piled up to nearly 82 billion rupees.
Unfazed, Razack attributes the sales dip to a delay in securing approvals and a slowdown in mission launches everywhere in the weeks-long national elections held earlier this year. Despite that, he illustrious in a assertion asserting the quarterly results, “we mute crossed a commendable sales pick of Rs 3,000 crore [$360 million].”
For the present fiscal year, Razack has function the target of a 30% sales extend and is assured of meeting it. “I don’t dangle any doubts about this,” says Razack. “It’s very with out complications doable. On the opposite hand it requires a bunch of level of interest.”
With 300 performed initiatives below his belt, Razack believes that he’s poised for the greatest leap in his occupation with a $7.2 billion mission pipeline. Prestige has 92 million square toes in ongoing initiatives, the most among listed traffic. And it has 91 million square toes in deliberate initiatives for which approvals are pending, the second-largest among listed traffic. Says Razack: “We’re pouring 65 million tonnes of concrete all over assorted initiatives.”
One of Prestige’s blistering increase is the corporate’s ballooning debt, which is one of the best among listed traffic. While Razack says that a debt-equity ratio of 0.68 is manageable, he’s taken steps to shore up capital. The company raised 50 billion rupees in August from a non-public placement of equity to institutional investors, that is also long-established partly to pare debt. Earlier in April, Abu Dhabi Investment Authority and Kotak AIF, a fund below a subsidiary of Kotak Mahindra Bank, agreed to make investments 20 billion rupees in four residential initiatives in Bangalore, Goa, Mumbai and the National Capital Plight (NCR), which encompasses Delhi. Three years in the past, Razack had decreased escalating debt by selling a portfolio of Prestige’s industrial assets to U.S. deepest equity giant Blackstone for over $1.2 billion.
While Prestige is predominantly considered as a builder of homes and offices, it expanded into the hospitality sector in 2001 with a five-smartly-known person resort and spa in Bangalore that's managed by Singapore’s Banyan Tree Lodges & Lodges. Since then, it has grown the portfolio to nine hotels with Marriott World managing five of them in Bangalore and Kochi. There are plans so that you can add six extra below assorted Marriott brands in Bangalore, Mumbai, NCR and Goa over the following five years. Razack is gearing up to list the hospitality industrial after securing board approval in June for an IPO.
One more buzzing segment is retail outlets—Prestige opened Bangalore’s first one, the Dialogue board Mall, two an extended time in the past. Razack successfully lobbied the local authorities to amend a legislation that required cinemas to be located at ground level, securing permission to field a cinema multiplex on parts of the third and fourth floors. In 2008, Prestige opened its first excessive-end mall, UB Metropolis in Bangalore. The company now operates five retail outlets and is having a think to assemble ten extra, from Chennai to Goa.
“Prestige has a meaningful presence all over all asset classes—be it residential or office or retail or hospitality,” says Zayd Noaman. “We additionally dangle the flexibility to enact all over assorted areas.”
Now Razack is working on Prestige’s next immense expansion into the Delhi national capital field. The company is building an integrated township that entails residences, colleges and hospitals with a faulty fashion price of about 100 billion rupees, on a 25-hectare quandary in Ghaziabad, a tier-2 metropolis. Prestige is additionally building a residential complicated, a trade center and two hotels in assorted Delhi neighborhoods. One more residential mission has been earmarked for Noida, merely begin air Delhi.
“Delhi NCR is intelligent as a market on legend of of the persevered will increase in property costs,” notes Ajay Sharma, managing director (valuations) of Colliers India in Mumbai. (Prestige is a Colliers client.). “Unusual entrants wish to be cautious given the cyclical nature of the market.”
A looming question is whether or now not the property market joyride is sustainable. “There’s nothing on the horizon to imply a slowdown but we discontinuance wish to witness if the present increase will likely be sustained,” says Sharma of Colliers. “For Prestige, the following three or four years will likely be well-known to assemble self-sustaining money flows,” says Parikshit Kandpal, senior analyst at Mumbai-essentially essentially essentially based HDFC Securities. “All of it is dependent on how exceptional capital they can usher in.”
One more distress for Prestige, says Zayd Noaman, is to “ensure that that we withhold executing with out faltering and with out delays.” To rep sure that closing dates are met, the corporate retains quite lots of capabilities in-dwelling, from mission and construction management to inner rep and landscaping; it even manufactures doors.
The family’s entrepreneurial roots date relief to 1956 when Razack’s father, Sattar Razack, opened a men’s garments retailer, making bespoke shirts, trousers and industrial suits, in Bangalore. Razack and his two younger brothers joined the family retailing industrial after school. They veered to actual property in the Eighties when Razack equipped the family dwelling and started purchasing and selling in actual property—purchasing for and selling land. He additionally did a joint industrial fashion along with his father-in-legislation.
In 1986, the three brothers and their father function up Prestige Estates and Constructions with seed capital of 40,000 rupees (the the same of $3,250 on the time). The first mission used to be a 10,000-square-foot office building, then larger initiatives adopted. As Bangalore morphed from a sleepy town into India’s sharp tech capital, Prestige flourished as it constructed homes and offices for the growing tech crowd.
Razack says he chose the falcon because the corporate impress as it denotes agility, grace and flee. A statue of the hen adorns his office desk. And the corporate’s Bangalore headquarters is housed in a building called Prestige Falcon Towers. Razack went on to list Prestige in 2010, raising 12 billion rupees in an IPO oversubscribed 2.three times. Over the following couple of years, the corporate constructed quite lots of iconic constructions in Bangalore’s luxurious residential market, along side Kingfisher Towers, where the metropolis’s uber-rich like luxurious pads.
Razack prefers dealing with just a few handpicked landowners on quite lots of initiatives. As an instance, Prestige is co-growing 20 million square toes in Bangalore with a single landlord. “We’ve never chased land,” asserts Razack. “Land has repeatedly chased us,” he says, relating to being courted by landlords purchasing for a fashion partner. “He is a huge dealmaker,” says HDFC Securities’ Kandpal. “He has an ogle for catching inclinations. His impress of land acquisition is additionally the lowest among traffic.”
Despite Prestige’s growing footprint, Razack maintains a agency grip on minute print. “In this industrial you wish to be hands-on,” he says. “It is doubtless you'll perchance’t merely take a seat for your air-conditioned office and question things to happen. They received’t.” His weekly time desk entails two days of visiting Prestige’s construction websites. He’s continuously accompanied by his brother Rezwan, who's joint managing director, and nephews, Zayd Noaman and Faiz Rezwan, an executive director responsible of contracts and initiatives.
While Razack is making efforts to groom the following generation, it’s now not but obvious who might eventually prevail him. Ten relatives—five from the following generation, along side his daughter Uzma—work in assorted parts of the industrial. For leisure, Razack prefers adrenaline-pumping actions. He’s bungee jumped and climbed glaciers. In 2017, he went skydiving shut to Las Vegas all over a U.S. roadshow when he mentioned to nephew Zayd: “Skydiving is on my bucket list—in the event you plod, I’ll advance.”
Razack additionally enjoys long-distance driving—he’s pushed via North The US, South The US, Europe and Australia apart from to navigated India’s Atal Tunnel, the arena’s longest excessive-altitude tunnel (9 km at 3,048 meters) in the Himalayas. The chairman says these drives give him time to ruminate. His philosophy? “You might want to mute be begin to the complete lot…you wish to dangle a really begin mind.”