Storeyed Success
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THE INDIAN REALTY market has been sluggish for some time. But that does not mean that everything associated with it is in the same state of stagnation. A classic case is the Mumbai-headquartered ANAROCK Group, the specialist real estate consultancy and services firm that was launched barely five years ago. It has flourished like very few other businesses. Since starting out in the middle of 2017, its net revenue has soared 10 times the initial investments of Rs 350 crore, and its employee base has expanded to more than 2,000, from the 250 people it started out with Anuj Puri launched ANAROCK Group by buying the residential business of Jones Lang LaSalle (JLL) whose India operations he headed.
Today, ANAROCK’s business operations have expanded in all directions. From residential, retail, hospitality, and project management to helping the government monetise its land parcels, the company is involved in almost every aspect of the real estate business.
The Birth of ANAROCK
“We launched ANAROCK when there was an obvious opportunity in the real estate market. The Real Estate Regulatory Authority, Goods and Service Tax and demonetization had happened in close succession. Together, these measures highlighted the need for ethical real estate players, both among developers and consultancies. Also, the ‘big boys’ of Indian real estate consulting business were focused more on the commercial real estate — which, in terms of supply being constructed, is a mere16 percent of the overall Indian real estate market even today,” explains Puri, adding that the residential segment commands the rest of the business which is what his venture focused on initially. “ANAROCK is more of a B2C model, heavily focused on digital and tech marketing, and is highly scalable,” he says.
Though ANAROCK is barely five years old, it does not technically fit the definition of a startup. “ANAROCK was not a classic startup in the commonly understood sense of the term. We bought out JLL Residential — JLL India’s entire residential team — which had around 250 people. We initially launched in eight cities,” explains Puri. Overall, the acquisition, opening of offices, onboarding teams, and setting up the technology centre cost ANAROCK about Rs 350 crore. “We have witnessed a very satisfactory 10x growth at the end of five years. And net basis.
We maintain a healthy cash flow,” Puri says with pride. The company did not raise any capital in its initial years, but it may do so in the next one year or so. It is also scouting for players in the proptech space. “In the next 12 months we may bring in outside capital to leverage the proptech space, on which we are extremely bullish and already very active in,” Puri says, adding that they may acquire non-scaled proptech startups with more firepower and merge it with ANAROCK.
Business Spread
In the residential space, ANAROCK works with the Piramal Group, House of Hiranandani, Brigade Group, Lodha, DLF, Puravankara, and Signature Global, among many others. In the retail space, it has a number of projects with DLF Malls, Phoenix Group, and Prestige (now Blackstone) as its clients. Also, it has longstanding relationships with conglomerates like Future Group, Reliance, and Tata Group and brands like Hamleys as well as mall developers like Olympia, Nexus etc. In the hospitality space, HVS-ANAROCK — a partnership between ANAROCK and HVS — works with hotel groups such as Intercontinental, Marriot, Oberoi, and Taj. In many cases, its services often start long before the marketing stage and begin with land or asset valuation and acquisition and project funding. In the project management space, Mace-ANAROCK — a collaboration with Mace — works with St. Regis hotel at Delhi airport, all Piramal buildings in Mumbai, Phoenix Mall in Kolkata, RMZ, and Palais Royale Mumbai, and BITS School of Management in Mumbai. “We help the government monetise land parcels near airports and railway stations within the consulting space,” Puri says. Recently, ANAROCK was selected in a tough bidder round to help sell the previously stalled Amrapali housing projects in NCR. The National Buildings Construction Corporation has also retained ANAROCK to sell 10,000 units in these projects, which are now being completed after remaining stuck for years.
Talking about ANAROCK Commercial, Puri says, “Two years ago, we launched our commercial vertical, which in a short span, has delivered some of the biggest transactions in Mumbai and NCR with Raheja Universal and SS Group. In its first year of operations, ANAROCK Commercial executed India’s largest commercial lease deal in terms of revenue for Dream11 in the iconic One BKC.” Through its investment banking vertical, the company has successfully managed marquee transactions and deals including the recent one between Tata Realty and the Canada Pension Plan Investment Board. This was one of the largest JVs in the commercial office space in the country and was valued at $700 million. ANAROCK Capital was also the sole advisor in India’s largest ‘single building’ commercial office deal between Blackstone and Nucleus Developers. Data centres have been another focus area where the team has advised a large investment platform for India Data Centres, where the ticket size was $500 million.
The Next Five Years
While the company has clocked a 10x growth in revenues in the past five years, it aims to double this over the next five years. But Puri is not in favour of adding much manpower as he takes his business to more than 50 cities, including new cities abroad. “We will not be relying as much on hiring people as on deploying more technology going forward. For instance, we are currently developing a soon-to-be-launched digital distribution platform that shows all properties for any real estate asset in any part of the country. This is how we will grow. In terms of hiring, I envisage a maximum growth of up to 5,000 people (over next five-year period),” he says.
As part of ANAROCK’s plan to expand to at least 50 cities, many new additions may be via the virtual route and via its technology platforms. Many of these new cities will be in the untapped Tier-2 and Tier-3 cities. “Internationally, we will primarily target the GCC and have plans for London, where we have one of our main partners already operating. Digitally, we are also eyeing the US and Canada,” says Puri. Why the big focus on the GCC? “It is because the GCC culture, both socially and in a business sense, is very similar to that of India. Also, the region has a massive Indian diaspora,” he says. Another key reason is that the GCC countries do not offer permanent residency. Indians working there will return home and settle down one day.
Reminiscing about the massive success over the last five years, Puri says, “It has been an exhilarating journey, which began with several advantages that helped us avoid the usual startup pains. Among these was the fact that most of our top leadership team had worked together for 10-15 years, and everyone hit the ground running from day one.” Going ahead, he looks forward to ANAROCK making an incremental impact on what remains a largely fragmented market. “We will target meaningful growth and avoid proliferating just for the sake of it,” he says
(This story was published in the print edition of BW Businessworld Dated 4 July 2022)
