By Beatrice Thomas
Legendary developer PNC Menon is taking on his biggest challenge yet: District One in Dubai’s Mohammed Bin Rashid City
PNC Menon doesn’t mince his words when describing his involvement in Dubai’s Mohammed bin Rashid City project.
Almost three decades after his entrepreneurial journey began, and at the age of 65, the founder of the Sobha Group of companies says it is “the most exciting thing to have happened in my life”.
Menon says in terms of land size, the 4.2 million square-metre (sqm) District One, which is being built in a joint venture with Dubai developer Meydan as the first phase of the overall city, was the biggest single project the company had ever embarked on.
“It’s a dream project for me,” he says in the surroundings of his Dubai home in Emirates Hills. “Both of us, we are so committed to this project and we are making sure this is one of the best projects on earth.”
“A lot of it is driven with a lot of passion. For me this is a dream and we would go to any extent to make sure this is well planned.”
For Menon to be as enthusiastic today about the company’s projects says much about the man whose rags-to-riches tale is the stuff of business legend.
From humble beginnings running an interior decoration firm in the Sultanate of Oman, today the Sobha Group is a fully backward integrated, multinational, multiproduct organisation spanning the UAE, Oman, Qatar, Bahrain, Brunei, Tanzania and India with interests in real estate, construction, building services, architectural and engineering design, retail and software.
With an annual turnover of $600m and 31,000 employees, it has delivered 60 million square feet (sqft) of projects, with land holdings of 240 million sqft.
“We have a lot of experience,” Menon says, modestly.
Sobha Developers currently delivers about 8 million sqft annually. “[District One] is 12 million sqft of build and infrastructure, so that should not be a challenge in terms of delivery,” he says.
The $5.7bn mammoth project announced last November by Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum will include the world's biggest shopping mall, more than 100 hotels, a Universal Studios franchise and a public park larger than London’s Hyde Park.
It will also feature 1,500 luxury villas, seven kilometres of manmade lagoons and beaches, as well as retail, leisure and sports amenities.
Menon believes there are two things that would distinguish the development from others.
“The first thing is the location,” he explains. “This is about a two-kilometre radius from Burj Khalifa and if you ask me, it’s the heart of the city, downtown. Any city in the world, I’ve not seen a large parcel [of land] like this in the heart of the city. So, that was the biggest thing for the project.”
The second attraction was its low density. With 35 percent of the total project area allocated to buildings, 65 percent will be kept for open space in a bid to create a green community, he adds.
Menon has previously said that the project would take up to seven years to finish, and reiterates during this interview that he believes it is a five to seven-year timeframe.
However, he says if Dubai wins the right to host Expo 2020, Sobha "might finish it much before 2020”.
Concurrently with District One, Sobha is embarking on its own development, Sobha Lifestyle, a $3bn urban, mixed-use development on the other side of Mohammed bin Rashid City. Covering 743,000sqm, it comprises 280 villas, 13 high-rises, entertainment, a shopping mall and two schools.
Menon says Sobha Lifestyle was the result of some careful planning back in 2008. But, it is also reflective of Menon’s business savvy.
With most of Dubai’s development world in a tailspin, Menon saw an opportunity. In February 2012 it was announced he had bought land at Meydan City to build what would become Sobha Lifestyle. While the sum was never disclosed, he had purchased in a buyer’s market.
“I was a very optimistic person,” Menon explains.
“Dubai is going to be the future - I strongly believed. At some point in time when others were waiting and watching, I thought this is the time to enter, because I strongly believed in this city and the ruler.”
Today, he says Dubai remains a sustainable economy, and one of the most sustainable cities in the Gulf. It has a strong tourism sector and is turning into a financial capital, with a burgeoning healthcare sector.
“It is the only international city between London and Singapore, with 90 percent of its 2.1m people representing almost every nation in the world,” he says. “It is where the east meets the west. There is no other city that I can name which saw this kind of pace of development. This has been accomplished by Sheikh Mohammed bin Rashid Al Maktoum despite many challenges.”
Not surprisingly, with Sobha working on two of the biggest residential projects to come out of Dubai in recent times, which together are valued at a staggering $10bn, Menon says there was nothing else on this kind of scale on the horizon in the Middle East in the short term.
However, Sobha will continue to look at further opportunities in the Middle East, as well as India. “I think peace is going to come and I am very optimistic about that, also Iran, Iraq, Syria,” Menon says. “All those countries will become very powerful sooner or later. I think I see peace coming in and it’s very good news for all of us. There’s going to be huge opportunity, especially in Iran and Iraq. I expect in another year or two we’ll have clarity on it.”
After that, the next stage of the company’s growth will be the Far East, in locations such as the Philippines, Thailand, Indonesia, Myanmar, Cambodia and Vietnam. “That’s another area where there’s going to be a lot of growth,” he says.
There are also plans for a new hotel management company, Strada, with the first hotel earmarked for Sobha Lifestyle, as well as a new high-end furniture company, PNC, in what could be described as the Indian entrepreneur’s varied career coming full circle.
In what he brushes aside as an “old story now”, Menon left his home in Kerala in 1976 with 50 rupees in his pocket and boarded a boat for Oman. Following a chance meeting in India with Sulaiman Al Adawi, a captain in the army of the Gulf state, the pair would together set up Services & Trade Company with an OMR3,000 loan.
Starting off small, they won minor interiors contracts for shop fit-outs before taking on larger projects, which eventually led to work on several royal palaces, prestigious hotels and mosques across the Gulf region.
When asked whether he was a better interior decorator or businessman, Menon replies: “you need to be both.” Pointing out that he had decorated his own home, and had much of the furniture made at his factories, he says “it was time” to diversify into furniture retail all these years later.
After earlier this year saying he wanted the first store to open in Dubai by the end of the year, he is now aiming for about 12 months’ time. Further showrooms are then hopefully set to open elsewhere in the Gulf region, followed by India and other locations around the world.
Menon says there are two important factors in success.
“I believe very strongly in quality. With speed and within the budget. These three things are very important today to be successful,” he says.
“That defines the quality of what you want to do.”
However, building capital is also essential. Menon says when people come to the Middle East the “first thing they do is whatever money they make, they try to take it out”.
“In my case, I want to build the capital, to make sure that the business becomes strong,” he says. “When you have no money at all, it’s not easy. But, then over a period of time we built the business.”
Menon says he remains “very emotionally attached to Oman”, where he has citizenship, and says he often refers to the sultanate as the place that “created my spine”.
When he eventually gives 50 percent of his fortune to charity projects – a statement he made earlier this year - he says 20 percent of this would be ring-fenced for Oman.
A generous and warm man, who is engaging company and easy in conversation, Menon has made philanthropy a big part of his life. His other philanthropic endeavours include the Sri Kurumba Trust, a project that aims to improve the lives of 11,000 people in the Keralite villages of Vadakkenchery and Kizhakkenchery.
“God gives opportunities for some people to make money while others do not make any,” he told Arabian Business this year. “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,”
At 65, Menon admits his outlook for the business should be a 10-year one – around the timeframe both Sobha Lifestyle and District One would take to complete.
However, he firmly rejects any suggestion of retirement.
“No, not until I’m unable to move, mentally,” he says firmly.
As for a succession plan, Menon’s son, Ravi Menon, is, at 32 years of age, already chairman of Sobha Developers India. His son-in-law, Ajay Rajendran, is vice-chairman of Sobha Group UAE, and will be chairman when Menon does decide to retire.
Despite the strong family involvement in the business – his daughter, Bindu Menon, who is married to Rajendran, is also a director of Sobha Group in Dubai - Menon is adamant that it is not an automatic entry to the company.
“In my case, if they are not capable they should not be there,” he says. “Fortunately, both of them are equally capable. [Ravi], he’s probably one of the youngest chairmen in the whole of India.”
Sobha India is developing about 5 million sqft of real estate space annually, with a turnover of about $330m in 2011. This compared to annual turnover of $88m for Sobha UAE.
But, like everything in Menon’s philosophy, the growth has been at a steady space.
“I’m looking at 10 million sqft. But, when you’re at 5 million you cannot look at 25 million, it’s not a logical thing,” he says.
“And no excitement is there.”
Which brings Menon back to the District One project.
“The most exciting thing to have happened in my life, is the Meydan Sobha project, the most exciting,” he says again.
“This is the most exciting thing in my life, if you really ask me.”
Great article, thanks for publishing it.
Great PR Work..(..nth Series)
I hope this does not end up just like Sobha Lifestyle in Bangalore. Mr. PNC Menon spelled the same dream for this project in Bangalore when he launched the project in Dubai in 2008. Believing in his dream people like me invested in this project. 5 years later we still do not have our home ready and worst we were hit by a huge surprise in Dec 2012 when from nowhere Sobha sent us an email saying they have arbitarily changed the plans and elevations (contrary to what was signed in the SPA) and it would now cost us a another INR 1.5 crore more, that after all the delays and having a registered SPA. They took upon themselves to decide that it is their right to deliver whatever they thought fit, at whatever price they thought right and at any time that suited them. The customer has no choice. We had to initiate our legal means to get them even talk to us on this. Their reputation is definitely hit by such actions and hope none of this gets repeated here.