THE DIARY OF Z

The other day, I had to visit Eco Space, the business complex on Outer Ring Road towards Whitefield. And what do I find myself into? A visitor’s parking lot that charges you by the hour. Whether it’s one hour or two hours, you have to pay Rs 20 for every 2 hours of parking. I spent 2.5 hours and had to shell out Rs 40, because that’s how they calculate. That’s Rs 3.75/minute of my usage.  If every other company follows suit, it might eventually become more economical to hire an auto rather than go by your four-wheeler. Not only will it decongest the roads, the pollution levels will also be down. Not to mention, the driving stress!

Rumour has it that real estate in Bangalore has headed for a slowdown. But if you look at property buying, it’s not as bad. Yes, the banning of property registration has affected the rate ‘officially’, but a lot of transactions are happening through the ‘Power of Attorney’ route. Some are just doing the deal with the sellers and waiting for the property registrations to open, so they can register.

This reminds me of an interview I had done with Irfan Razack, the head honcho of Prestige Builders in Bangalore some two years ago. Here are excerpts from it. Just one statutory advice: Take everything with a pinch of salt. Because in this business, no one can say anything for certain.

Can one never lose money in Bangalore real estate?
No. You could in the short-term. But in the long-term, you will always gain. Property is something solid. Real estate has its phases. It may take a dip or shoot up, it may even stagnate for a while, but it’s a solid asset. You can rent or keep it vacant, it’s for real unlike the stock market, which is just on paper. The scrip valued today may not even be worth the paper it’s printed on tomorrow. You can never go wrong in real estate. But don’t look as you would the stock market, but as a long-term investment.
Where does Bangalore real estate stand right now?
I have seen that once every 8-10 years, there is a high like the one we experienced in 2005. The last time we saw this was in ’94-’95. Between 1995 and 2005, prices have gone up, stagnated, normalised and now hit a high. How long will this last, I don’t know.
Has the market already reached saturation point?
Yes. 2008 is the year of reckoning. If you are looking at the rates, I would say the market has reached the saturation point. If you were to buy a property now and expect the price to go up in double quick time, it’s not possible. If people think they can make a fast buck, I would caution them.
What’s your advice to people who want to invest in property?
If you have spare money, invest, but think of it as a long-term investment and it will certainly give you a huge appreciation in the long run. The only thing needed is patience and the capacity to hold on to your property.
How is that different from playing the stock market?
For one, you need to hand it to the experts to play the market on a daily basis and then again, the stock prices are not really under your control whereas in real estate, you have a control. You can either rent, occupy or lease and we mustn’t forget that the capital value will never depreciate. It might take a dip, but will go up eventually.
What’s essential in any property deal?
Make sure the location’s good, the property’s well-built and the titles are clean. It’s best to go to a reputable agent or developer. His track record and performance will determine his reputation.
Are the prices realistic?
They are still affordable. Once you breach that affordability factor, it goes into a downward spiral and the boom goes bust. It happened the last time after the ’95 boom. And then, inflation and purchasing power went up and the real estate prices that seemed high suddenly looked affordable. It’s pure economics at play.
What are you doing to dissuade speculators?
We don’t give more than one property in one person’s name. It’s a risk. We are learning from the past when a person bought a lot of property and when the market was not as buoyant, he defaulted on payments. We don’t want that to be repeated.
Any other lessons learnt?
Don’t be too optimistic and don’t buy at a very high price. If the property becomes too unaffordable, leave it alone. Of course, location and clear titles are important, too. If your product is excellent in whichever market, it will sell, even if it’s in a secondary location. Take Prestige Acropolis on Hosur Road. The price here is almost double the price of the buildings adjacent to it.

(This piece appeared in 080, a monthly lifestyle magazine run by Explocity Private Limited)

HSR Layout is a new neighbourhood. Therefore, it’s still pristine. But what threatens its peaceful existence is the rampant illegal construction activity in the area. Though the law permits only ground + two floors, there are many constructions that are three and even four floors above the ground floor. And the worst part is the authorities are looking the other way. If they don’t crack their whip now, these buildings would become full-grown monstrocities and demolishing them would require a lot more effort and court approval. But now, it’s as easy as falling off a log. So why don’t they just do their job? Is the BBMP (Bruhat Bangalore Mahanagara Palike) Commissioner reading this?

Some good news for road transport users. BangaloreOne has tied up with www.redBus.in to offer a ‘Private Bus ticketing service’ to folks in Karnataka. You can now walk-in to any BangaloreOne centre and book bus tickets for the following bus operators: VRL Travels, Raj National Express, Praveen Travels, Kesineni Travels, Kamat Tourist, National Travels, ABT X Travels, Kallada Travels, Diwakar Travels, Sugama Tourist, SKS Travels, Golden Travels, Shama Transport, Ambica Travels, Conti Travels, Indira Travels, KRMS Travels, SS Travels, Sabharwal Transports, Saleem Travels and KGN Travels.
The service is available 24 X 7 X 365. Citizens have the option to either pay through cash/credit or debit cards (1.75% charges are applicable for credit/debit cards). However cash is accepted only between 6.00 AM to 8.00 PM.
What’s more, you can book tickets for onward, return journey and connecting buses, all at the same time. Many more bus operators will be added to the list soon. And the best part? This service is free. There is no service charge.

HSR Layout is a beautiful city within a city. It’s self sustaining and has just about everything needed for peaceful existence: long roads, less of pollution, innumerable department stores, hospitals, clinics, gyms, beauty parlours for men and women, spas, creches, schools, and also a beautiful lake gone to seed. Just when things were looking up - the lake development authority had decided to hand over the lake’s upkeep and beautification to Christ College - the Bangalore Development Authority handed over the layout to the Bangalore City Corporation, and things went back to square one. The cleaning of storm water drains leading into the lake has stopped, resulting in a stench that can be felt miles away. The lake is gathering weeds, and there is no one to clear the manicured lawns of litter that is strewn all around. What’s more, even the security guards arn’t doing their job. Only the other day, the daughter of a high ranking government official was robbed and molested at knife point by a gang of hoodlums. Will someone wake up and do something before it’s too late?

A few years ago, a park in Koramangala was adopted by India’s richest man, Azim Premji. Go there today, and you will realise the poor state of it. Children’s amusements like see-saw, slider and so on are in ruin. The pond is home to mosquitoes. The lawns aren’t in their best finery. The security guard isn’t around. It wears an uncared-for look. Is this how Wipro wants to showcase its might to the world? Are promises meant to be broken? Has the dollar depreciation made Premji so poor that he can’t take care of the park in front of his office? Will somebody bell this techie cat?

PS: After reading this post and checking with the powers-that-be, one loyal Wipro employee informs me that ‘the lease has expired’ and therefore the company has no stake in the park anymore. Sad state. Can’t they lobby and somehow renew it?

Vijay Mallya and the jet he owns have a lot in common. Boeing as a brand is pretty much what aviation is about. Mallya as a brand is what India Inc. is all about. It takes Boeing 10 months to build a large and trustworthy piece of machinery. That’s about how long it took Mallya to create the fundamentals of an equally strong and trustworthy political party.

The story of Dr Vijay Mallya cannot be told as a single, seamless, linear tale; the nature of the man prevents any such straitjacketing.

His story jumps countries, time zones, cars and careers. From Mallya, liquor baron to Dr Mallya, national working president, Janata Party. From soirees in South Africa to rallies in Raichur, the man is a complex network of thoughts and ideas all rolled into one massive brand.

To unravel these labyrinthine ideas, we thought it best to meet people associated with each individual strand of ideation before talking to the man himself.

Prakash Belawadi, filmmaker and a Mallya watcher of sorts thinks he has great recall value. “He’s certainly one of the largest brands that Bangalore can carry,” says Belawadi. “His heart is in the right place as far as the city and the state are concerned. He bought the Kunigal stud farm, a heritage site that was in trouble. He saved the Mangalore chemicals and fertilisers factory from financial ruin. He set up a research foundation dedicated to his father. I only feel, we should own him a little more than we do now and get him to do more for the city in a structured manner.”

Mallya has been working away at achieving this structured approach to the city’s development. Biocon chief and long time friend Kiran Mazumdar says his commitment to Bangalore dates back to the 80s. “In the late eighties, as head of UB, he built the best road in the city (Vittal Mallya Road), he founded the most modern hospital of its time (Mallya Hospital) and he co-founded The Mallya Aditi School as a centre of educational excellence. He has the vision and the capacity to replicate this on a much larger scale in Bangalore today. Vijay Mallya represents the new face of India Inc. He is driven by a political passion to create a 21st century India that is powered with a strong economic engine built on education and employment.”

This passion and energy is evident in all that he has done, from creating the seventh largest manufacturer of spirits in the world to tirelessly touring Karnataka’s hinterland as a politician.

He even carefully applies this energy to combat his greatest fear: failure. “That’s why he very rarely fails,” says his friend of 20 years, Jim Rydell, vice president, USA Labs, California. “His mind is very agile; he’s far sighted and has a great sense of marketing and branding. And his energy is never ending.”

While the energies come in handy, Mallya has had to give up the one thing he wishes he had more of. “His greatest sacrifice is time,” says his political secretary Tushita Patel. “And politics is a very steep learning curve.”

And Mallya has already made his first major jab at development in Bangalore. He is almost through with building a city within a city that will take a bow this year. UB City, spread over 1.2 million sq. ft, will be the largest single development in Karnataka and one of the largest in the country.

Projects such as these and his constant public appearances have put the political whispers in the air. There is talk, and not just in the corridors of Vidhana Soudha, that he could well be the future chief minister. What would his agenda for Bangalore be if he does occupy that exalted position? “I would shake up the bureaucrats and tell them to perform or quit,” says Mallya, ensconced in the quiet luxury of his Mercedes, amidst mini television screens, wireless communication systems and a fridge stocked with Kingfisher beer. “And then I will ensure Bangalore has a captive power supply either generated or acquired.”

His mission statement doesn’t end there. “I would press for immediate implementation of the decongestion programmes like flyovers, underground tunnels, public walkways both over and under the ground, set up crime watch neighbourhoods to give the police force a boost, widen roads wherever possible and introduce Singapore-style traffic management.”

He also wants to see to it that the once-whimsical Metro railway and the crucial Bangalore-Mysore Expressway are completed. Though these appear to be on the agenda of every chief minister that occupied the rooms of Krishna and Cauvery, Mallya’s Vision Bangalore is bolstered by that one element missing in most political agendas: action. “I have great respect for the government, but what can it do if it’s populated with non-performers? You need a team with a vision,” he says, as we pull to a stop after a 55-minute drive from Vittal Mallya Road to the Bangalore airport. When he speaks about his team, he’s almost the pater familias. “I could not devote all this time to politics if it weren’t for them. My team is almost handpicked. All this - the developmental work, the party, my business, my family - is what makes me happy.” But before he leaves, he has time for one last question. “What is my greatest happiness? That I have my own Boeing.”

(This piece appeared in City Reporter, the weekly tabloid of Explocity Private Ltd and can also be viewed on their website, explocity.com)