Singh, who made billions in real estate

10.12.2010 13:29
From the window of his 9-storey office Kushan Pal Singh looks down at the Jantar Mantar, an astronomical observatory, built in 18 th century Indian ruler, famous for its diplomacy and the monuments he left behind.

A stone observatory - one of the most accurate and reliable scientific tool that allows astronomers to measure time, to determine the location of stars and planets and predict eclipses. Jantar Mantar "inspired me," said Singh, head of the DLF, the biggest company in India, engaged in real estate. "I was inspired by the man who introduced and made the Jantar Mantar, bestselling centuries later. If he can so predict favor of his creations in the future, then why do not we start doing something ahead of time?"

If you listen to Singh, from his words, it appears that only those DLF and deals. The Company builds homes, offices and shopping malls across India, putting into practice the plans of airports, hotels and cinemas. Singh, who has 75 years, do not just want to make the economic boom in India, he wants to be the defining trend of the country by erecting modern city in which middle-class Indian can live and work. And it requires a lot of money.

That is why on July 5 the company participated in the lists of the National Stock Exchange and Bombay Stock Exchange. The initial offer of 10% of the company closed in mid-afternoon and brought revenue of $ 2.24 billion and the next 3 weeks DLF share price rose by 9%, which amounted to $ 24.5 billion market value company at $ 3 billion more than General Motors. "Frankly, it confuses me a bit. I would not want that wealth was something that would make me famous. I am proud that the fruits of labor of 25 years ago have brought benefits to the country. And in these cases would be famous .

Like it or not, the state, which Singh has earned - this is the first thing that attracts attention. Yes, and the company itself is worth attention. After all, DLF, perhaps, the growing real estate developer on the developing market in the world. Average annual economic growth of India's stand at 8% 4 years now, ensuring the prosperity of millions of Indians, which greatly increases the demand for real estate. And prices soar to the heavens.

2006 study (conducted by Federation of Indian Chambers of Commerce and Industry and the company Ernst & Young) have shown that the total revenue from property sales increased by 30% per annum and this growth rate was maintained during the previous three years. Since 2004, land prices have tripled in some areas, and rental of offices in Mumbai and New Delhi has become more expensive than in Paris, Hong Kong or Manhatton (data for 2007). And, as predicted by experts, the increase did not end there.

So for example, Merrill Lynch believes that by 2015 the Indian real estate will rise to $ 90 billion, which in 2005 amounted to $ 12 billion in an interview with Singh, who is better known by his initials KP, shared this optimism.

"With prosperity comes great opportunities," he said. And soon you'll need 100 DLF, as many will work. "Here is what Singh on how to DLF has become a leader in the market. The company was founded by his stepfather Singh Chaundhumom Raghuvendrom in 1946. a year before the release of England.

Title DLF translated as "Land and Finance Delhi. In the past, civilian employee Raghuvendra bet on the fact that hundreds of thousands of refugees after the division of Hindus and Muslims need housing in the area of the Indian capital. He persuaded the farmers to send him their land in exchange for a promise of cash payments in the future, borrowed money for the resettlement areas and sold them to great advantage during the influx of immigrants.

But the good times ended in 1957 when the Soviet government became a monopolist in the real estate, completely displacing private firms from the market. At this time son of a landowner KP studied science and then went to the UK to engage in aeronautical engineering. Some time later, he returns now as an officer of Indian Army. Military life was hard for him and Singh began planning to continue their studies in London.

Once he was summoned to a colonel, learned of his intentions and said: "You can go, but then proslyvesh coward." Singh remained after've always said that in business it is very useful experience and discipline that he learned in armii.K the time he began working in the DLF in the real estate sector in 1960 was completely unsustainable. In order to survive the company began working with two companies from the USA for the production of electric motors and auto batteries. During this time, Singh has learned a lot about how Americans do business.

In 1980. he invented a new scheme which will help transform India. "I was hungry. A better things in life do when they feel hungry." His plan was to purchase Gurgaon, dry plains in the state of MUG, located along the border of New Delhi. If he could buy enough land and then convince the authorities to change their laws, then perhaps he could even surpass the success of his stepfather. By 1981, however, the company acquired a total of 40 acres. Y Singh could not negotiate with the authorities and get permission to use the land for commercial purposes.

One hot summer day, he sat at the well, disappointed and wondered "What is there in this country, generally can be done?". Suddenly approached by a driver drove up the overheated car asking for some water. It was Rajiv Gandhi, son of Prime Minister of India, which itself soon becomes the leader of his country.

"Rajiv Gandhi was a beacon of hope for India," recalled Singh, who was rewarded in full for the water when Gandhi announced area mug free from the constraints of land use for commercial purposes. "Honestly, I was not hard to convince him. We soon found a common language." Their two-hour dialogue on that day until the car cooled Gandhi was "the birth of an entire policy on urban development in India."

Over the next two decades, DLF has acquired 3,500 acres in Gurgaon and started building the first modern commercial buildings, including office General Electric and, later, offices for the manufacturer of cellular phones from Ericsson and the Swedish food giant Nestle. The company also built luxury apartments and houses. Land that cost Singh $ 65 per acre at today's rate can be sold at a price of $ 4 million per acre. The meeting with Gandhi "was a success on the one hand," said Singh. "But it was not just luck. It was an opportunity to fight."

In Singh's been pretty good advisers. For example, Jack Welch, former head of General Electric, became his ally, after Singh had helped him on his first visit to India in 1980. In his autobiography, Welch described Singh as "a tall, gentle and aristocratic." He and his friends were that India itself and the people that we love. There were a lot of opportunities, "says Welch. Singh picked up a lot from him about how to do business.

A DLF meanwhile experienced a regular growth in consumer demand. The company's assets in 31 cities now account for 530 million square meters. m. of land, which will be used for business development. DLF like to plan on a grand scale. Last year the company began work on a shopping mall in Gurgaon India. This will be one of the 5 biggest complexes in the world.

The recently opened a new technology park in Chennai. Among the tenants including IBM, and Symantec. Guide DLF actively engages with leading foreign companies to develop airports (collaborating with Fraport AG, owner of Frankfurt airport), hotels (Hilton) and industrial buildings, urban hubs (Nakheel). "We are cooperating with the best," says CEO Energy Group DLF Rajiv Talvar. "We want to use India's best global practices."

In recent years, Singh has handed over many of their daily responsibilities for managing the company to his son and vice-chairman Rajiv Singh, DLF (48 years), who studied engineering at the Massachusetts Institute. Daughter Pia (36 years), a graduate of the University Wharton degree in economics, operates retail business.

Her elder sister Renuka is an international business. K.P. said he plans to retire the company and focus on golf, on his art collection (he is the biggest in the country) and travel more.

"He's a perfectionist, which will change the heaven and hell, if it so desires," said Pia, who recalls how her father almost settled in the hospital ward where his wife was lying with serious injuries in an accident with a helicopter, which killed four people .

"This case shows the father does business. He literally from all declined for two years." As analysts, among them there are many who are not sure about the continuation of the same pace of development of the company in the future. In recent years, questions have been raised the real value of land acquisitions DLF, in particular because 35% of the land under the accounting records listed as "ready to buy, but not yet purchased.

Also, they have been reviewed by the fact that more than half possessions DLF is located in New Delhi, Gurgaon and Mumbai, as these cities are projected to lag behind in development for years to come. Guide DLF does not agree with these arguments. "Maybe these guys are bad idea of what an aggressive business," said Singh.

Nevertheless, the biggest threat to the prosperity of this sector in India is related to external factors such as the collapse of real estate and stock markets. American tycoon Sam Zell, who visited India in April, said the local manager that they are on the "brink of excess" and that the economic boom ended in bankruptcy. Indeed, recent events lead to the fact that making a real estate is becoming harder and harder. For example, prices for the last 6 months decreased by 20% and the Reserve Bank of India has increased by 6 times the interest rate over the past 18 months.

Singh believes that "Development in India ... will be the biggest economic boom, which nobody has yet experienced. And it will not last three or four years, and all 20 years or more."

This trend will be supported by macroeconomic forces, such as demographics, which analysts generally do not take into account in their forecasts. India will soon leave behind China, not only in terms of population, but also by age. Every third Indian under the age of 15 years. As soon as the country becomes richer and more urban (the number of people living in the city was 461 million in 2025, compared with 286 million people in 2007), the demand for housing will continue to grow.

Will need millions of square feet for offices. Analysts have estimated that currently office space in India is less than in a large American city. Accordingly, increase the demand for infrastructure. Will need 320 billion dollars. investment in roads, ports and bridges by 2012.

Singh recalled that the earlier philosophy of India has been "thinking about the small, do a little house and never think about what we can do something bigger and better ... And I want to ask you, what can prevent us from being the best?".
Content tags: Overseas property
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