PNC Menon - built to last

Philanthropist PNC Menon may be 64, but his plans for some of the Gulf’s biggest residential projects remain undimmed
By Claire Valdini
Fri 12 Apr 2013 06:17 PM

Hundreds of neatly dressed school children sit in a semi-circle attentively listening to their teacher as she tells them a story. Next door, young widows and retirees are quietly reading or studying, and further down the road patients wait to see the doctor at their local hospital. Nestled in the heart of the lush green paddy fields of the Palakkad district in Kerala, this scene is unlike any other in the area — its running costs are fully funded by the Indian businessman, PNC Menon.

The Dubai-based entrepreneur, who made his millions building palaces for the Gulf’s ruling families, is as passionate about his philanthropic causes as he is about his business, Sobha Group of Companies. But rather than donate to existing charities, he founded and fully funds the Sri Kurumba Trust, a CSR project that aims to improve the lives of 11,000 people in the Keralite villages of Vadakkenchery and Kizhakkenchery. The initiative currently educates 741 students, provides a home for nineteen senior citizens and eighteen young widows and their 28 children and treats an average of 85 patients at day.

“I was widowed with two children in my arms and I came here not knowing where my life would go,” says Sandhaya, the first ‘adopted’ widow at Sobha Hermitage.

“I was given two options; either live in Sobha Hermitage where I could be educated and my children would attend school or go back home to my family and be paid a monthly salary. I chose to come here because I wanted to be educated to be able to stand on my own two feet,” she says via a translator, adding that her recently acquired qualifications have enabled her to begin teaching and earn a salary at Sobha Academy.

Sitting in his plush villa in Dubai’s Emirates Hills, surrounding by the gleaming glass and metal structures with which the emirate has become synonymous, Menon’s message is still the same. “When you reach a certain point in time, money cannot make any difference in terms of luxuries. I don’t think I need another house in my life.

“God gives opportunities for some people to make money while others do not make any. When an opportunity is given to you, you should not take it for granted. I don’t think sharing is an obligation, I don’t think it’s a charity. We owe it to society,” he says, adding that he will eventually give 50 percent of his fortune away to fund charity projects in India and Oman.

While there is no doubt that Menon’s philanthropic projects occupy a large proportion of his time, he remains equally committed to building his estimated $600m empire. There are plans for two multi-million-dollar real estate developments in Dubai, a new three-star hotel company to launch, a new furniture company with global ambitions and Menon will also lend a helping hand to his son Ravi’s business, Bangalore-based Sobha Developers, which he set up in 1995 to cater to India’s rapidly growing middle class and their appetite for luxury homes.

“Work is important to me. Today, I am 64 years old and so long as I have my health, I have no retirement plans,” he says. “I work long hours and I enjoy every bit of it. My telephone is kept nearby and my calculator is part of my body,” he laughs, referring to the pocket calculator he pulls out at regular intervals throughout his interview.

Menon has come a long way since he boarded a boat from his home in Kerala to Oman following a chance meeting with Sulaiman Al Adawi, a captain in the army of the Gulf state, nearly four decades ago. Together the pair borrowed OMR3,000 to set up an interior decoration firm, Services & Trade Group. The company started off small; winning small interiors contracts for shop fit-outs before taking on larger projects, which eventually led to it constructing several royal palaces across the Gulf region.

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Services & Trade Group dominated Oman’s construction industry in the 1980s and following on from its success, Menon launched Sobha Engineering & Contracting, a contracting firm named after his wife, in 1991. Four years later he established Sobha Developers, which listed on the Indian stock market in 2006. Sobha Developers, which is now chaired by Ravi, has completed more than 300 projects, with a further 43 currently under construction, employs 2,800 people and operates as a fully backward integrated company, meaning it designs, constructs and even manufactures the building materials required for a project.

Under Ravi’s leadership, Sobha Developers plans to expand its operations to another three more cities in India, tapping into the country’s growing demand for luxury property. “We sold Rs20bn worth of property in the last calendar year and we have a presence in eight cities with plans to expand to three more within the next year,” he tells Arabian Business. “We are looking at Hyderabad, Calicut and Cochin — we are just awaiting approval, which we should hopefully have by the first quarter of the next financial year.”

While Ravi oversees the Indian operations, his father continues to supervise the Gulf-based business. Earlier in the year, Sobha acquired 8 million sq ft of land in Dubai’s Meydan City on which it plans to develop Sobha Lifestyle, a residential project with 280 villas, thirteen apartment blocks, a retail complex and schools. It will soon also announce plans for a second major real estate project in Dubai, says Menon.

“I feel there is huge potential in Dubai,” he says. “This is my retirement home. I could have gone anywhere else in the world but I choose to stay here. Dubai is a very well connected city; I am a businessman, I am looking at the future of my business in Africa, other Middle Eastern cities and it’s easier to operate here than anywhere else.

“The city’s potential is enormous; there is no other city like this in the world. If you leave London and travel towards the East this is the only international city you reach before Singapore and Hong Kong. It’s a great place to work, live and do business because it is so centrally located. It’s already ready but we have to wait for the growth to happen, which will happen,” he adds.

Menon isn’t the only man banking on Dubai’s real estate rebounding amid a surge in the emirate’s tourism and retail sectors. Several developers, including Emaar and Nakheel, have announced new projects in recent months, driving up real estate prices in well-located areas of the city. While the Sobha chairman says he isn’t concerned that property prices are rising too quickly, he does believe developers should play a greater role in helping to curb speculative buyers.

“I don’t want what happened in 2004-2006 to happen again because it’s not good for the country to have any control over prices. While it is all market driven — the man on the street decides — we should avoid speculators,” he says.

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“Sobha has a policy, even in India, that we don’t sell to speculators. If someone asks for ten apartments in India we won’t sell to them. We will not sell more than two units [to one buyer]. If three brothers come along and we genuinely feel that these brothers are buying in three different names, we don’t mind but if someone wants to buy ten apartments we won’t sell. It’s the same [in the UAE] because it’s not good for business,” he adds.

Not content with two real estate projects on the go, Menon also plans to make the company’s first foray into hotels with his newly established hotel management company, Strada. The three-star plus management company has already identified land in Mohammed Bin Rashid City for its first property, a 250-room hotel, and hopes to manage up to 100 hotels across India, Africa and the Middle East. Sobha will initially inject 25 percent of the equity required for the first three hotels (two in Dubai and one in Abu Dhabi) before bringing in outside investors, says Menon.

“I really feel that within the three-star hotel segment there is a gap in the market and it’s where investors can make a reasonable return on their money,” he says. “Initially to make sure we build the brand, part of the equity — about 20-25 percent of the equity — in the first four projects will be put in by us but later on we are not planning to put in any equity,” he explains. “We plan to be 100 hotels in the next fifteen years. Currently we are looking at the Middle East, India and the Far East and probably Africa.”

Menon also plans to invest up to $100m over a five-year period to launch a mid- to high-end furniture company, which will manufacture furniture in Italy and allow buyers to customise a basic design using up to 200 different fabrics. The first PNC showroom will open before the end of the year in Dubai. “We have a five-year plan where we expect to have twelve showrooms around the world, starting from the Middle East, India and then Far East and then slowly to Europe. It will be funded from our cash flow with equity of at least $100m over the five years,” says Menon.

“For the time being these plans will keep us busy,” he continues. “We may expand (Sobha Developers) to other Gulf countries slowly. Saudi Arabia may be a country that we look at for real estate but I don’t want to spread myself too thin.”

Several weeks before speaking to Arabian Business in Dubai, Menon said he would give 50 percent of his fortune away to charity projects in India and Oman. At the time he was coy about revealing the financial details of his plans then but today he remains even more tight-lipped, clearly concerned about the increased media attention any further details will have on his family. “I don’t want to go into numbers,” he says.

“He’s too big a man I think,” he laughs when asked if billionaire Warren Buffett has called him and asked him to sign up to his Giving Pledge. “But what he says is correct, after a certain point people should give it to charity, you don’t need that money. We are looking at the numbers for putting up another two schools and a hospital in the rural district of Bangalore. We have started doing the research already and we plan to break ground at the beginning of 2014 with the first students joining in 2016,” he adds.

Menon clearly enjoys being a busy man.

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