A Marathon Journey

Mayur Shah
Managing Director
Marathon Group

Can you give us a brief profile as to how this business started and whose vision it was and how are you taking it forward?

My father was a school Principal in SMPR School and there was a construction required for the upper floor of the school and for some reason the contractor had run away. So he along with other school teachers decided to complete the construction himself. This was his first foray in to the business and eventually he completed the task. We had our ancestral property in Mulund which required redevelopment and there he got a chance to expand. So he built Purnima shopping center, his first major project which is still there.  In the early parts of 1980’s the first 18 storied building in Mulund ‘Antariksh’ was developed by us, which still stands a landmark for our company. Innovation has always been a key priority for us to sustain in the long run. Then we ventured out of Mulund and entered Nashik where we developed two bungalow schemes. My elder brother who completed his studies from US joined the business in 1983. I joined in 1988. Our company has constructed around 60-70 buildings in and around Mulund where we have a strong base. In 1990’s when the mill lands of Mumbai were fuming out with the fumes, we were the first one to construct a building a on a mill land. In 1995 at the Jai Bharat oil mill we created a 25 storey tower with a helipad on the top, which was the first building with a designed helipad. Subsequently we thought that this is one area we want to focus and went forward and bought Piramal mills. We developed the whole land which earlier was just a junk land in to a beautiful campus called the Marathon Nextgen Campus. It was the first mixed used development property in Mumbai accompanied by all the world class amenities. This kick started our journey to acquire and develop more such schemes and all the unions from the various mills of the city came to us to resolve their issue, develop the land and give the workers employment, which the Marathon Group did successfully. My father always wanted to give affordable homes to people, which he did selling flats on no profit no loss basis. 

How did the concept of Small Business Spaces (SBS) come about and how is it helping you to grow your business?

What we saw was the emergence of Small Business Spaces (SBS). These are professionals, emerging entrepreneurs or a company which is based out of the city and need a small office space here to perform business activities.  We are trying to fill up that gap where one does not need to buy or rent a larger business property. Marathon has created conceptual micro offices where a small company can get the feel of a large corporate by providing them with a cafeteria, a lounge for meeting and all the basic and the modern amenities which a office of today requires. Our main aim is to provide corporate environment even to small scale businesses. It can be said to be an outright sale business for our company where one can pay us the calculated down payment and rest can be in the form of instalments. Our major focus is on the Lower Parel region of Mumbai where most of our micro offices projects are coming up.

How much of your construction is commercial and how much of it is residential?

Right now our mix is 70:30, where 70 per cent is residential and 30 per cent is commercial. We have right now more than 1.5 million sq.ft of commercial space which is under construction and the residential land bank is about 15 million sq. ft which is approved and then we have land bank of 500 acres in MMRDA which is not yet approved.

The land which the company holds is totally paid for or does it require any internal approval?

For purchasing land we always go for inter approval and for large gestation period we always go to the major banks for finance. For residential purpose we are a very strong brand and get booking orders as soon as the project is complete. The land we acquire is done from a steady process which is the internal approval. We have also on a large scale acquired slum land for redevelopment. Right now we have purchased around 100 acres of slum land which was a private land owned by a person and will develop it under the SRA scheme.

If you look at the real estate industry many major players are in a dire state, except for Marathon. What is the strategy which your applying that is proving to be so apt for your business?     

Our primary focus has always been to acquire a land at a very low cost and that has been our strategy since we forayed into the real estate business. Due to our good name in the market, owners of private lands directly come to us for developing their property. Another reason for our good run is that we don’t have any land debt, so even if a project gets delayed by even five years it does not hamper us that much. The prolonged approval process which use to be six months now is minimum of 18 months even for big players like us. Many small construction companies suffer due to the approval process which takes as many as three to five years to fall in the procedure and the change in rules also affects their projects. I can say that we are lucky enough and have the wisdom now that can tackle all these hindrances.

What are you views on the upcoming Lok Sabha elections? Do you think the scenario might change after the general elections?   

I definitely feel that things will change after the elections and this is now going around from the past nine to ten months. People are on the wait and watch mode right now. Though the worst phase of inflation I think might be over as compared to few years back. From last November and December things are on a change and that is showing in our sales as well. I can’t say that it is doing well but initially has been better. Affordability is still an issue and people are also hoping that the government which is going to come into power may look into this issue.

Do you see any improvement in realizations? 

I can’t see or envision a rate increase as such, but the supply chock is proving to be a hindrance. The inflation data which had come earlier did not seem to matter as such. But the supply situation is currently improving and Marathon is definitely hoping for a stable matter. Local miss-match in price will happen and better days are definitely coming in the construction sector. 

What are your expansion plans? Are you planning to move out of the Mumbai as you already have some projects in Bangalore? 

After foraying it Bangalore what we found out is that, localness in real estate sector is the key to success. As you talk about Bangalore it has a huge market potential both for residential and IT parks. We do have a 25 acre acquired land in Bangalore which we would be developing keeping a mix of both residential as well as for IT and corporate purposes. Right now our major development focus is within the MMRDA region and the pockets in and around it. So our strategy is quiet clear that the Mumbai MMRDA region is 19 cities, so why to go out if you have vast area of development in your own city. Newer markets are opening up till Pune, so why to take a vast plunge outside the state.

Do you think the small business space concept can go even outside Mumbai, like even to smaller cities?

Yes I definitely think the concept will work in other cities too. The reason is small cities are growing and people working there want a corporate atmosphere, which small business spaces will provide them with. The concept has worked in Surat and Ahmadabad and just like them many Tier 1 and Tier 2 cities are getting accustomed to such office spaces. Emerging small scale business, professional like lawyers and CA’s, young entrepreneurs are all in search for such spaces.