Sobha Group’s chairman on building a real estate brand

For a man that helped build some of the Gulf region’s and wider world’s most iconic landmarks and palaces, PNC Menon cuts a modest figure.

“I would not say I’m associated with the rulers, it would be too much of a statement,” he says of his work, which has included palaces for the leaders of Oman and Bahrain, the Sultan of Brunei, and other high profile families.

Since its founding in Oman in 1976 as interior design firm Services & Trade Co, Menon’s Sobha Group has gone from strength to strength, and broadened its operations in the process.

In 1995 the company formed its engineering and contracting unit, in 1998 it launched its Dubai real estate unit and in 2005 an IT technology unit, before moving into architecture in 2008.

And Menon has been there every step of the way, ensuring Sobha’s participation in project after project from Muscat’s Sultan Qaboos Grand Mosque, to the Qasr Al Sarab Desort Resort in Abu Dhabi and the Kempinski Hotel at Dubai’s Mall of the Emirates.

But while the chairman is modest with regards to his work, his contribution has been clearly valued. In 1995, the Kerala-born entrepreneur – alongside his family – became one of the few Indians to be granted Omani citizenship, enhancing his already strong ties with the Gulf region.

That same year he launched Sobha India, which now has a market capitalisation of roughly INR37.7bn ($587m) and lays claim to being the country’s third largest real estate developer by total square feet delivered. And the following decade took the firm further into the Gulf region where it is now undertaking several major projects.

Perhaps its most significant to date are the two that now command the majority of the chairman’s attention, forming part of the extensive Mohammed Bin Rashid City master development named after Dubai’s ruler.

The first, the $8.5bn District One in partnership with government-owned Meydan Group, includes more than 620 units in its first and second stages. The first handovers began in mid-2017.

The second, the $4bn Sobha Hartland, is 90 per cent sold out in its opening phase of apartments. The first of the villas and quad-homes of the 344 total units are scheduled for completion by December 2018.

Menon insists his work does not place him into contact with Sheikh Mohammed directly – instead he deals with developer Meydan – but he describes the projects as “one of the greatest opportunities of my life” in what can surely be no understatement for a man who has been in the real estate industry for nearly five decades.

On top of being an opportunity for a hopefully sizeable return as part of a master development that will eventually host the world’s longest indoor ski slope, tallest residential building and largest dancing fountains, Menon also sees it as an opportunity for the group to elevate itself to the level of the Gulf region’s major real estate developers like Emaar Properties and Damac Properties.

“I’m not saying I’m competition in any way to Emaar – they are too big. We are new. We’ll take another three to four years for us to be compared because we’ve got to deliver what is happening now.”

To get there, the Indian with a reported wealth of more than $1bn, suggests money will only be part of the story. It is clear, as he reaches to show the company’s ranking as the number one brand in Indian real estate for the third year running as part of a Brand X report by Track2Realty, that he is seeking something just as valuable – brand recognition.

“If you ask me the dream, yes, we would like to be one of the most respected brands in the region,” he says.

“I’m not talking the size of the company, I’m talking the brand value of the company.”

The chairman believes Sobha is closer now than it has ever been after taking its first steps in Dubai in the 1990s.

“Of course I need time, I’m no magic man,” he admits. But it is clear that the chairman believes his goal could be in reach between 2020 and 2022.

Project plans

Outside of the firm’s two major Dubai projects, Sobha is pursuing other developments in the GCC region to achieve this objective.

One of them is the 53 million sqft Firdous Sobha resort on a natural island on the coast of the UAE emirate of Umm Al Quwain.

The Dhs25bn ($6.8bn) project is planned to be connected to the mainland by a bridge and will include four and five-star resorts, an 18-hole golf course, two villas communities, apartments, retail space and a marina with canals and lagoons throughout. The company has also signed a deal to manage a 9-square-kilometre development in Saudi Arabia and Menon reveals it is in talks for a 1,000sqm project in Oman.

“I’ll have some clarity yes or no by the end of October,” he says, declining to give more details. “It could be 70 per cent yes and 30 per cent no.”

Outside of brand recognition, PNC Menon has a number of other objectives for the future.

Some he admits, like plans for mega affordable Dubai housing project he first mentioned in 2016, have had to be put on hold and are unlikely to see much traction until the firm makes more progress on its current project portfolio in 2019 or 2020.

The same is true of expansion to other geographies beyond the firm’s GCC and India base with a number of markets being considered, even if Menon finds it hard to hide his affection for the UK capital London where he owns prime real estate as a personal investment.

“There is a thinking we need a third geography and whether we look at the east or west is a question. So again, any further thinking will be in the second half 2019,” he says.

However, a seemingly more immediate concern is diversifying the firm into a new sector that is less affected by market movements.

It is no secret that the property market in Dubai in particular has suffered in recent years, with consultancy Asteco reporting average quarterly sales price reductions of 3 per cent for apartments, 2 per cent for villas and 2 per cent for offices in the second quarter.

Despite these figures, Menon believes the worst is now over as the emirate enters what he describes as the positive half of a five year cycle that has seen the sector rise and fall in 2.5-year increments.

“The media always says the market has not come back but for me the market is back in the first quarter of this year,” he says.

But it is clear his heart also desires a less cyclical business area that will offer reliable revenue when the real estate market is not faring as well.

“I’ve been all my life in a cyclical business – now I’m feeling why not a little bit of a break? I need another business that is not cyclical, so we are looking at it. We are not taking any decision [yet] and hopefully we should have some clarity by the first quarter of next year.”

On top of these ideas, it would appear that the businessman is also planning for a future where he may take more of a backseat role after steering Sobha Group for so many decades.

When asked of his intentions, he says there is a clear professional succession plan in place after he retired from the Indian side of the business in 2012 to allow his son to take over.

By next April, Ravi PNC Menon will also take a larger role in the wider business with the two acting as co-chairman.

However, there is a sense that it will be difficult for the 69-year-old to hang up his boots altogether.
“I am addicted to my work and my business and it gives me a tremendous amount of pleasure,” he says. “I would like to continue doing something because I started very young. If you ask me go and sit somewhere and retire and read a newspaper or book, it’s not possible.”

But Menon, who confides that his older sister is currently dealing with the effects of dementia, is also aware that there may come a point when he needs to let go: “So long as the head and body is working, I’d like to continue until the last day,” he says.

And with an eye on his legacy, the businessman – who has committed half of his personal wealth to the Sri Kurumba Educational and Charitable Trust to help people in his native Kerala – appears to have one more surprise planned to give back to a region that has taken him under its wing.

“I have a big dream for Dubai also which I’m keeping confidential for now and hopefully, Inshallah, I’ll be able to achieve that with the blessings of God,” he says.