Riding the wave in real estate

When Krishn Kumar Sharma was a young man, he had but one ambition; to own a motorcycle. “From there it became a scooter, then a Maruti and today here we are,” he says, expansively indicating his Mercedes. It’s not the only car he owns. Whether it’s a Jaguar or Toyotas, he has, in his own words, “quite a few cars. So yes, you can say I have done well for myself.”

Sharma, 50, is one of the owners of the SG group in Amritsar which is involved with, as Sharma puts it, “the three most basic needs of man; roti, kapda aur makaan (food, clothing and housing). His SG group is into property development (he uses the word colonizer), owns a textile processing unit and runs a hotel in Amritsar. And to think that when Sharma started his career, in the mid-80s, he was into tyre re-soling, his family business. “Why does one switch businesses? Because more lucrative options come along, and that’s what happened to me.” Sharma switched from tyre re-soling to running an electronics showroom towards the end of the 1980s and remembers how Texla TVs used to sell like hot cakes as they were priced quite competitively. Texla is a Punjab-based group that has since diversified into different businesses.

Sharma’s foray into real estate began as a property developer and no, it had nothing to do with foresight. “This was the time when extremism was at its peak and a lot of people from the villages were moving to cities. They needed homes to stay in. This was how our journey began.” His group has currently developed more than 10 “townships” in and around Amritsar, with more in the pipeline. Sharma took Mint for a spin around these residential areas, on the outskirts of Amritsar and proudly pointed out to all the amenities he provides.

“The roads are at least 7 ft wide, there are parks, some of which serve as playgrounds, the others are meant to just sit in… I have visited developer colonies all over India, be it DLF or any other big builder, and we provide the same facilities and the same kind of layouts.”

He admits that it was a completely different deal when he started out in 1990. “People wanted serviceable homes that is. A lot of our clientele later on was older families moving out from the walled cities as living standards improved. Earlier we did not have to think about things like the width of the road to accommodate big cars. Today, a customer wants to know what the approach is like, how many green zones are there, etc.” For Sharma, the initial years of real estate were akin to feeling in the dark. A lot of streamlining, he says, happened after the Punjab Urban Development Authority (PUDA) was set up in 1995. “Yes; there were guidelines to be followed, licences to be acquired, but the enforcement with zeal started only post 1995. You could say in many ways, we and PUDA grew up together.”

The real estate sector in India, according to the January 2016 sectoral report of the Indian Brand Equity Foundation, is the second largest employer after agriculture and is slated to grow at 30% a year over the next decade. It is considered to be one of the direct offshoots of the growth of corporate environment in the country. Sharma is not very aware of the economic reforms of 1991 that have contributed to the real estate boom, but he does know that certain decisions were taken by the government that made this growth possible. According to Sharma, the breakdown of the joint family set-up, more disposable income and migration; all subsets of India’s economic growth, are the major factors that have fuelled change.

“But at the same time, I can tell you that the ease of doing business which was there 25 years ago has drastically gone down. There was a time when we had but a handful of government departments to deal with; today, there are more than 40. Whether it’s real estate, my textile processing unit or hospitality, I spend more time dealing with red tape than running my business.” Over the past few years, real estate has had a difficult run, but Sharma says his group has by and large remained insulated. “We never tried to expand our business beyond Amritsar. Today, there are several big names who have come here, but our first-mover advantage means the locations we had, no one else did.”