Sankey Prasad, CMD, Colliers India, who sold his profit making project management and design & build solutions provider Synergy Property Development Services to Colliers in 2018, says that the merger with Colliers helped both Synergy and Colliers achieve greater heights. In an exclusive interview with Sanjeev Sinha, he talks about his entrepreneurial journey and shares his business outlook. Excerpts.

Please share your entrepreneurial journey in Synergy and getting Blackstone’s first investment in India in your company.

I started my entrepreneurial stint by setting up Synergy Property Development Services (Synergy) in early 2003. With a will to succeed, my team and I led the company to phenomenal growth, achieving a CAGR of 20% YoY whilst evolving the company into an international Project Management and Engineering Consultancy Services company employing over 1000 construction professionals across India, the Middle East, Africa and South Asia. In seeking to grow the company, in 2008, I entered a strategic partnership with Blackstone Group, one of the most significant real estate private equity funds in the world, which had just entered India. The partnership enabled Synergy to undertake turnkey projects which helped increase the company’s turnover. Over a decade, Synergy successfully delivered more than 150 million sqft of quality real estate development. It has been recognized several times for its accomplishments in India and was awarded ‘Project Management Firm of the Year’ and ‘Company of the Year’, by several forums.

You sold your profit-making firm to Colliers in 2019 and is now a majority shareholder in the company. How has the journey been?

In September 2019, Colliers acquired a controlling interest in Synergy and merged its operations in India. I remain a significant shareholder of the combined business under this partnership model and lead the combined enterprise as Chairman & Managing Director for Colliers India operations offering the entire spectrum of real estate services, including Transaction Advisory, Capital Market Investment Services (CMIS), Valuation & Advisory Services (VAS), Real estate Management Services (REMS) and Project Management (PjM).

A civil engineer by qualification, and with nearly 40 years of experience globally and in Indian real estate, I continue to be an advisor to Developers, Occupiers, Investors and Govt. bodies as part of my role as Chairman & Managing Director Colliers India business. Colliers has operations in over 60+ countries worldwide and being part of a larger team of real estate professionals helps leverage the international experience and network of clients.

Also Read: Old vs New Tax Regime: Which regime is better if your salary income exceeds Rs 7.5 lakh & 15.5 lakh?

Soon after the merger was announced we had to face the COVID challenge along with the rest of the economies. How did you manage the situation?

It has been a great experience transitioning the business and operations to become part of one of the largest global real estate firms. The strong orderbook we had from Synergy and continued patronage of our long-standing clients helped us navigate this challenge without many concerns. With this merger, our clients stood to benefit the most, as today we offer a bouquet of services which included Project Management, Facility Management, Transaction Advisory, Capital Markets and Valuation services. Industry leading systems and procedures that were formulated in Synergy are today benchmark in the industry and have been adopted globally within Colliers Project Manamegent. The journey so far has been highly rewarding with increased client engagements, new service line offerings and with great career growth opportunities for our team of professionals. Our collective efforts have helped Colliers India become one of the fastest growing professional services companies in the APAC region.

What is your vision for Colliers India?

Colliers India is at the forefront of the real estate industry, leading the way and backed by an exceptional track record. It is a place where market leaders are made and with strong dynamic leadership, enterprising solutions driven by a great execution plan, our people are empowered to deliver greater, enduring value for clients with a common vision of taking the company to the leading position in India in the next 5 years. My vision is to scale up organically and surpass the growth target of 5X of current revenues within the next 5 years and be recognized as the No.1 real estate and investment management firms in the country. 

What is your outlook of the sector?

Looking at global disruptions, occupiers and investors are expected to step ahead with caution. The next few months will see continued reassessing of portfolios.

If I were to look back, 2022 has been one of not just recovery, but also sustained growth. However, when looked at in greater perspective, the year 2022 saw a duality in the economy and market. One, being the rise in real estate market forces, with demand even treading back to the pre-pandemic levels. The other facet being the economic concerns such as the rising inflation, global recessionary pressures, volatile input material costs and geo-political challenges.  Despite the fear of recession looming, economic indicators still hint at relatively strong growth and positive outlook for India. Stakeholders will resort to a long-term approach and reposition themselves beyond the recession and inflation irregularities. With the pandemic no longer having a material impact on businesses, the evolving growth story of the sector is expected to remain intact, but with caution.

How do you see the Indian residential, commercial and warehousing property market shaping up in the coming quarters in the backdrop of global recession?

In the next few quarters, housing sales are likely to be impacted especially in the affordable and mid-range segment compared to 2022. This is led by a rise in the cost of construction and a hike in home loan interest rates. With sentiments turning weak due to recent lay-offs in the technology sector, there could be some hold-offs on home buying in the short term. While 2022 closed on a high note, the India office market is likely to see some rationalisation in demand in 2023. Many domestic and international companies and tech majors have started reevaluating their workplace strategies, from establishing campuses to acquiring sizable office buildings around metros, in light of the hybrid work paradigm.

The warehousing and logistics sector now plays a critical role in giving a thrust to supply chain infrastructure across businesses. Improved retail market sentiment amidst festive season and higher online spending is expected to add to short-term demand addition. Quick commerce is becoming increasingly popular in tier I cities with deliveries within minutes. Moreover, with rising focus on the same day delivery, e-commerce players are redesigning their supply chain centres closer to customer’s location. Hence, even tier II cities are likely to see significant traction in warehouses.

Do we expect foreign investment to slow down?

The investments in Indian real estate have been consistent for the past few years and hence have the potential to grow due to the structural change in demand for capital. Private equity investment in the Indian real estate market reached $4.9 billion in 2022, showing a 20% increase year-over-year, despite facing challenges such as high interest rates, inflation, and economic concerns. The year 2023 is expected to witness improvement in the capital environment, with both domestic and global funds continuing to invest in the Indian real estate sector. However, they may follow a cautious approach due to global headwinds, which are likely to abate by mid-2023.