Want To Bring Back Joy Of Home Ownership: Mohit Malhotra, NeoLiv
Mohit Malhotra, the founder and chief executive officer (CEO) of NeoLiv has the vision to transform the way the real estate industry is operating in the present times. With a successful track record at Godrej Properties as CEO and managing director (MD), where he led several growth and sustainability initiatives, Malhotra's inspiration to establish NeoLiv stemmed from recognising a unique opportunity in the residential sector.
In this exclusive interview with BW Businessworld, Malhotra shared his vision for bringing back the joy of home ownership, discussed NeoLiv's approach to addressing industry challenges and highlighted the company's unwavering commitment to environmental sustainability and corporate governance. Edited excerpts:
What inspired you to establish NeoLiv?
First, when I looked at the industry I saw real estate, especially the residential sector, at the cusp of a major upcycle. The last ten to 12 years have seen a down cycle in the industry. Now, it’s at the beginning of a major upcycle, which could last the next eight to ten years. So, I saw a great opportunity here. The second thing I saw is that due to the last downturn, 60 to 70 developers had gone bankrupt and the rules of the industry had changed after an era. So, there was a massive vacuum that had got created in the industry. If you look at the major markets like Delhi/NCR, you can’t name more than five to six credible developers in the industry today. So, the combination of seeing a massive opportunity and this vacuum inspired me to start this new venture.
Could you elaborate on how NeoLiv's integrated platform, which combines fund management and development, sets it apart from the traditional real estate industry?
The way we have conceptualised the business is very different from how the industry is operating today. So, if you see the real estate industry today, especially residential, you’ll see developers and builders who build houses for consumers and you have fund management companies that raise equity capital from the investors and deploy capital. I saw an inherent weakness in this model because if you are a fund manager, you are relying on third-party developers for execution, which is inherently a risky situation. If you are a pure developer, then you are always struggling for equity capital, which then sometimes leads to delays in the project or non-completion of the project.
So when we envisioned NeoLiv, we decided we’ll do both fund management and development. So it’s an integrated platform. Similar to platforms you must have seen in the warehousing space or commercial space but nobody has done it in residential space so far. That is how we uniquely conceptualised this platform.
Can you share your vision for sustainable and eco-friendly living?
One of the key features of NeoLiv is environmental, social and corporate governance (ESG). We want to focus on it in a very big way. When I was the MD and CEO of Godrej Properties, the company was ranked number one for sustainability. I want to replicate all the good things I’ve learned there and maybe more. We want to set higher standards of corporate governance in the industry. In all of our projects, we want to make sure that sustainability is at the front and centre. Right from designing the projects to execution, we’ll make sure that sustainability is the main focus area.
How was your experience as an MD and CEO of Godrej Properties?
The experience has been phenomenal as most of my professional life I’ve spent in Godrej properties. I joined them in 2010 and it was a small business back then. We grew almost 30 times in the last 12 years. I had a phenomenal run, as I grew very rapidly with the company. I was the MD and CEO for six years and in those years, I took a USD 1 billion company, in terms of market cap to almost USD 6 billion.
How do you plan to apply your experience with Godrej Properties to improve the customer experience at NeoLiv?
At NeoLiv, we want to make sure to satisfy consumer needs. We first wanted to understand what are the biggest problems that consumer faces today in the real estate industry. For this reason, we employed a brand consulting company and interviewed many consumers. One key insight that came out of this was that the relationship between the developer and customer today is full of distrust. There is a major conflict in that relationship, which is robbing the joy of home ownership. Homeownership should be the biggest moment of joy for a consumer but this whole experience leaves them robbed of this joy and it gets very frustrating for them in the end. So the company's vision is to bring back the joy of homeownership for our customers. We want to shift this relationship of conflict to a relationship of partnership.
What are the key trends that will shape the future of real estate in India?
The first key trend in my mind is that the stress of getting a home on time will vanish and we’ll move to a space where it’s more about the living experience. The second trend is it’s going to be a high equity business, so either publicly listed companies having their own balance sheet or having an integrated platform like us is the way forward in our business. And third, is the huge use of technology, and fourth is the big focus on ESG. All these factors are going to drive the industry.
It’s interesting that while there is significant emphasis on achieving ESG goals in the real estate industry, the working conditions of labourers at construction sites, which are often inhumane, are not given much attention. What is your perspective on this matter?
You are right. ESG is not just about building sustainable buildings but has a big element of social. How you are impacting your labours, who form a very big part of the industry, and their living conditions in the labour camp, are important elements, which should be focused on. So, this is something we would definitely like to work towards.
