‘ LodhaUKisasBritish as Cadbury is’
LONDON: They are doing only luxury and only Central London. Lodha has arrived in London. After the acquisition of the landmark MacDonald House at 1 Grosvenor Square in prime Central London from the Canadian Government for over GBP 300 million (₹3,100 crore), Lodha UK has launched their flagship development ‘No 1 Grosvenor Square’ in the heart of Mayfair, in close proximity to the Buckingham Palace.
London is a dream destination for India’s affluent class. Still many were sceptical about Lodha group’s overseas expansion and saw this as something “unusual”, given that very few Indian developers have ventured abroad and sustained themselves profitably. Moreover London market is tough with the British housebuilding market dominated by a few developers with large landbanks and constrained by a lengthy and complicated planning process – factors that have stymied plans by new entrants in recent years. In addition there was Brexit and other political uncertainties.
That doesn’t deter Lodha group to have a clear focus on this market which they feel is underserved. Namrata Kohli caught up with the young Lodha scion, Abhishek Lodha, Managing Director of Lodha group in London to find out the plans of Lodha UK
Is it true that your group scouted properties at hotspots like Singapore, Hong Kong, Dubai before zeroing in on London. Why London?
We did a reasonable amount of ground work and yes it is true we wanted to venture into one of the global cities. London was right for various reasons. It’s in a good time zone from India and we have a deep proximity and connect with the UK. Besides it’s a very structured market and there is an undersupply of housing. London is a 200,000-apartment-a-year market and central London’s property market grew 6% year-on-year last year.
The UK market has been facing its own challenges with Brexit, weakening of pound, political uncertainty and other issues that it is contending with.. Were there any kind of apprehensions on entering the London market?
These global centers have been through it all in last 400 years- policies and governments come and go but markets such as London have been resilient enough. The internationalization of things has if anything helped UK – if you look at a long term perspective, then a global Britain is a better Britain. We like this trend of UK getting integrated with the global economy. We don’t say that Europe is not important but then Europe is not everything. At Lincoln Square we have already done GBP 130 million (₹1,060 crores) worth of sales after Brexit. London is one of the most resilient markets in the world.
There have been reports in the UK media that London’s real estate developers could face aggressive competition from Lodha Group, which is planning a £3billion push into property in the capital. What are your targets what kind of investment, homes, time frame do you have in mind?
We are doing all categories ranging from mid-market to super-prime and are here to serve multiple price points and asset classes. We have just launched one of the most expensive projects in the world and in our portfolio as well, 1 Grosvenor Square at the most prized address of Mayfair. This place is characterized by its splendid period architecture, leading art galleries, auction houses, wine merchants, five star hotels and clubs. The smallest are studios and the biggest are 5 bedroom units, a total of 42 units at a price range of GBP 7.5 million (Rs 60 crores) to GBP 68 million (Rs 554 crores) and will be completed by Dec 2019. The area is one of the most cosmopolitan, high net worth areas in central London, attracting a good mix of UK based purchasers and overseas investors.
The Lincoln Square project has a total of 202 units from two bedrooms to penthouses starting from GBP 3.5 million (Rs 28 crores). This project will be delivered by 2018 end. Lincoln Square is located in the legal heartland between Lincoln’s Inn and The Royal Courts of Justice and is adjacent to world class educational institutions including the London School of Economics and King’s College London. The profile of Lincoln Square customers mainly consist of successful bankers and barristers. The project has been one of the star performers of the London residential market with over 78 units worth almost GBP 130 million sold since its launch in May 2016.
The original plan was to invest close to 3 billion pounds into the London but that was in 2014 that we had plans to spend £1.8bn on assets and a further £1.2bn on construction but this has slowed down. Now as the market settles, we will decide future course of investments.
What is the USP that you as an Indian developer bring to the UK market?
We are based in London, operated out of London, run by people who know London – everything is done locally. We have a staff of 35 people served by local population. The effort is to deliver hi-quality as quality is our DNA.
You have said this before that if we can keep growing in London and Mumbai, and that is enough to reinvest our profits, then there is no reason to be elsewhere. Is there a broader strategy to create business in the two cities?
We are pretty much focussed now in Mumbai and London. Pune is another market but that’s it for now. London and Mumbai are very unique and exciting markets to be in. Each has its own challenges and advantages. London is a much more mature market and here it’s much harder to differentiate as even the base level is so much higher. India is a much younger market and there is opportunity for growth in every segment but the issues are supply chain and regulatory process.
How are you faring with your Trump project at Mumbai?
It’s going well and in Mumbai we have sold 60% even though we are two years away from completion. There is interest not just from Mumbai investors, but from buyers from all over India.