Rajesh promoted Brick Eagle with a vision to deliver 1 million affordable homes in India, and has been instrumental in transforming it from a land banking company to an affordable housing ecosystem with over 1250 acres of lands under management. He has incubated 4 developers and 5 service providers in the affordable housing sector.
Team Estrade: Tell us about yourself and what led you to form Brick Eagle?
Rajesh Krishnan: I am a banker turned entrepreneur and have worked with Lehman Brothers, Nomura and Standard Chartered Bank. I started investing in affordable housing in a personal capacity which is where I learnt that affordable housing is still very nascent in India, and is a business that has a tremendous social impact with superior risk – adjusted returns. My initial experiences led me to launch a focused fund concentrating on affordable housing which is what led to Brick Eagle. We started 4 years ago as a land banking company and have now become an ecosystem for the entire affordable housing value chain.
Team Estrade: How Brick Eagle aims to accomplish its vision of 1 million affordable homes in India and how exactly you’re scaling towards it?
Rajesh Krishnan: Our strategy mainly hinges on backing local entrepreneurs who have aspirations to scale up. We realize that we cannot single handedly achieve this goal, but by partnering with 10-20 entrepreneurs in this industry, we are confident that it can be done. We have already identified 5 developers who have the ability to produce 10,000 houses a year. Today, these developers have the capacity to produce 1000 houses each per year, but we are sure that with our financial, technical and management expertise, we can partner with them to successfully produce 10,000 houses each year in the next 3-5 years. So our aim is to successfully identify and cultivate 10 such developers, who with 10,000 houses each a year will scale up efficiently towards the target of 1 million affordable homes.
“Real Estate Bill is geared towards protecting customer”
Team Estrade: What are your views on PM Modi’s ‘Housing for All by 2022′ and ‘100 Smart Cities’ schemes?
Rajesh Krishnan: I think Mr. Modi’s ‘Housing for All by 2022’ and ‘100 Smart Cities’ schemes are much needed and motivating endeavors, not just for the Real Estate Industry but also for the development of the economy and infrastructure capabilities as a whole. Our vision at Brick Eagle is in line with these schemes, and we are very encouraged and excited by the role the Government is playing in bringing housing to all in the Country. It is a great start.
Team Estrade: How do you see the new Real Estate (Regulation and Development) Bill impacting the larger real estate ecosystem?
Rajesh Krishnan: The Real Estate Bill is geared towards protecting customer interest which is much needed. In the short run, this may lead to more distress for real estate developers, because structurally developers are short of capital and now, if they are forced to put money from one project into one project, they are going to be strapped for cash, but that’s okay. That’s part of the growing pains we need to go through in order to protect the customers. It will lead to a more wholesome and well regulated environment for all.
Team Estrade: What do you think the government should do to tackle the problem of acute shortage of housing in the country?
Rajesh Krishnan: If we are serious about addressing the need for affordable housing, we need to figure out a way of providing single window clearance for affordable housing projects. We need to have more PPP style projects where the Government helps with funding Land Acquisition. Structurally, we need to figure out a way to efficiently fund real estate developers, because the affordable housing sector at large is strapped for cash. I would go a step further and say that if we are serious about delivering 60 million homes by 2022, we need to nurture tech companies which can help us deliver scale. This includes construction technologies, township technologies,e-commerce platform for sales distribution, etc. We need to nurture entrepreneurs who can provide scalable solutions in the affordable housing value chain.
Team Estrade: What are your future plans?
Rajesh Krishnan: We are looking to set up a Social Housing Fund this year, for target housing for EWS customers in the Rs. 3- 15 lacs segment. We are looking to tie up with 2 additional developers and are aiming to tie up 500 acres of land this year. We have also invested in and tied up with various service providers to help plug the gaps in the affordable housing value chain, and look to maximize efficiency and scalability with their help.
We need to nurture entrepreneurs who can provide scalable solutions in the affordable housing segment