Oberoi Realty-A simple real estate story


(hemtan100) #21

Excerpts from this year’s AR:

Real Estate bill will add tailwinds to Oberoi’s biz.

Going forward,we foresee some sectorial consolidation with the new real estate regulation acting
as a catalyst.

CMD paid a token salary of INR 1 p.m. Only income through dividends.

Mumbai real estate market has shown signs of improvement and increase in off-take of inventory.

Brand recall, strong cash flows, conservative debt practice are key strengths.

Looking at land parcels in NCR and Bangalore. This to me is a big negative!

No mention on Pune land parcel.


(hemtan100) #22

Attended Oberoi AGM and concal. A few notes:

a. Company looking at venturing into NCR and Bangalore only through the JV route where the JV partner has land parcels.
b. Strong sales in the Worli project in Q1.
c. Revenue recognition for Borivli to start in H1 FY18.
d. Mulund and Worli revenue recognition hopefully towards end of FY17. If not, FY18 surely.
e. Company able to raise debt (via NCDs’) at 9.25%. This to me is extremely cheap. HFC’s and even individual home loan borrowers get it more expensive than this.
f. Looking at mall projects in Borivli and Worli. Brilliant, more annuity income.
g. Oberoi mall to see the biggest Zara store opening up soon.
h. Worli 360 west may have a further upside if additional FSI approval obtained.
I. No change in base selling prices. Prices to see an uptick 6 months from here on. Buyer confidence slowly coming back.
j. Goregaon phase III - evaluating right now. want the new DC rules to fall in place. Q3 of FY17 a good bet for launch. 1.6 m sq ft
k. 0.2 D/E is a threshold for now. all projects spinning cash for the company.

To me, this is a AAA real estate player where FY18 should be a phenomenal year with Worli, Mulund and Borivli all set to hit revenue recognition in FY18.


(NATARAJAN) #23

(hemtan100) #24

Prior to DeMo, Oberoi planned to capitalize on the festive season (Oct-Dec). It was also expecting to see a significant uptick in Worli project.
Would be fascinating to assess the exact impact of Demo on Q3, Vivek Oberoi’s frank commentary on the same and their strategy going forward.


([email protected]) #27

(Sandeep Patel) #28

An excerpt from “The Consolidators” by Prince Mathews Thomas. The book takes us through the stories of seven super successful second-generation entrepreneurs who showed imagination, gumption and foresight in turning around the companies. Inspiring, revealing and gripping stories.

Vikas Oberoi

  • Don’t obsess about money: If you want to make good buildings, money will be a by-product. But if the intention is to make lots of money, then good buildings need not be a by-product.
  • Mistakes are good: I learnt from those mistakes, that’s why I’m here. Had my father, or we, not made those mistakes I would have never been here.
  • Follow your passion: People say greed is good, I don’t think so. People say one has to be hungry. I don’t think even that is good. Greed can make you do bad things. Hunger can make you desperate. Passion is the only thing that will never force you to cut corners for a result.
  • Understand what is important: A pilot is surrounded by around 100 meters. But he is not looking at all of them. He needs to know the destination, fuel, speed and elevation. The rest is data. That ability to split data from the noise is extremely important.
  • Discipline matters: I can actually say that I don’t have a single project that is a ghost project. I don’t have a single project in which I have not given occupation certificates to the customers, or a project which is complete but in which people are unable to stay because of regulatory issues. That has been our discipline from the beginning.
  • Keep debt minimal: So we don’t choose debt as an option. Especially when you are building a company that should last its lifetime, and not your lifetime.
  • Think ahead: There was no mall here. It would become a natural attraction for people to drive to this location. Even if this area was in the middle of nowhere earlier, now suddenly there would be things happening around the mall.
  • Live your product: Hand on heart, every apartment I have built, irrespective of the financial status it reflects, I would be happy living in it.

Source: https://www.amazon.in/Consolidators-Prince-Mathews-Thomas/dp/0143429302/ - Insightful read.

Disc: Invested. No transaction in last 30 days.


(Kumar Saurabh) #29

@spatel Read this book few days back. On a broader level including Vikas Oberoi, few patterns I saw across quality entrepreneurs who have created wealth for shareholders worth mentioning (Mr Vikas also exhibits most of them ):

  1. They were super passionate about what they were doing and it was about the experience n process not money
  2. They had huge learning and carrying experience from their parents which benefitted them and shareholders (Mr Oberoi initial fight with debt and what family went through n Now why he remains debt free)
  3. They are pioneers in industry to accept newness which can differentiate organization (on technology adaptation, quality adaptation. In Oberoi case , the 1st LEED certified mall, Samsung contract n SAP installation )
  4. They did their soul searching much early in life and by the time they turned 30, they had a decade of focused experience