New reality bites BK Modi

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: BK Modi is known for his unconventional business strategies. At a time when Indian companies were wary of entering into joint ventures with foreigners, he got into India big ticket names such as Olivetti, Alcatel, Telstra and Xerox.

Over the last few years, Dr Modi has shifted base to New York from where he is masterminding his group’s foray into new business areas. And one business he is totally focused on these days is the business of lifestyle. His company Bou-gainvillea Multiplex & Entertainment Center’s first project is the Noida Entertainment Centre (NEC), which promises to be a complete family entertainment centre spread over an area of 2 acres. NEC went in for the best names in the construction industry. The construction is being done by Shapoorji Pallonji & Co while Jones Lang LaSalle is the project consultant and Holford Associates of Dubai is the architect.

Dr Modi here too has adopted a business model that defies the rules of the real estate industry. As much as 70% of the 1.70 lakh sq ft built-up area has been given out on lease rental to well known brands. His company did not sell any empty shops to prospective buyers. Unlike most real estate developers who sell their property even before their begin construction and then link the payment plan to the progress of construction, Dr Modi decided to invest his company’s money in constructing the basic structure and then inviting prospective lessees/ buyers to see the property before leasing or buying it. The strategy paid off. PVR Cinemas, the pioneer in the multiplex cinema complexes, will open its first 8-screen mutiplex in NEC, spread over an area of 60,000 sq ft while Haldiram’s will open a food outlet over a 30,000 sq ft area. The Rs 100-crore project is expected to open in August-September this year.

“Our strategy was an anti-thesis of the construction industry practice. We invested our own money and then invited companies to come and see the complex before taking a decision. That made a big difference,” says NEC’s CEO, Aditya Sikri, adding that other brands which have decided to lease shops include Titan, Fab India and Archies.

Bougainvillea has now lined up three more shopping-cum-entertainment projects in Mumbai, Chandigarh and Ludhiana. The company has already acquired 4.5 acres of land at Vashi, near Mumbai.