To the Vatika Family
Dear Stakeholders:
I was promoted as the Managing Director in April 2012. After being elevated to a position which entailed significant responsibilities towards our stakeholders, I initiated into my role by first interacting with various customers, associates, and employees to understand where the pain points were and what kind of change we should undergo to enhance our credibility as a trustworthy and reliable developer.
Interacting with so many people (more than 500 in the first 100 days in office) gave me an invaluable insight and I realized two things immediately:
- There was a trust deficit and lack of communication in our industry
- Our customers, our employees, and our associates believed that our company could lead the way in initiating the much needed change that our industry requires
I felt that it was an opportunity. Over the last few years, I have been working non-stop with my senior management and teams to turn Vatika around making more changes in the company than in perhaps our 29 year history. And I am not quite done yet.
I do think we have achieved certain milestones in the past few years where we have improved our delivery standards as well as our customer service among other internal processes.
I would like to elaborate a little bit more about 'us' as I think it is important in these challenging times, and given the nature of our industry, to understand one another better and establish mutual expectations where the journey and the result lead to a satisfying experience for all parties involved.
About 'Us' as People
I wanted to start this note by describing 'us' as a group of people. All of you have experienced us through one department or another; but there are many others who work tirelessly to create value for all of us.
We are an extremely young company with an average age of 34 years. We are also an unconventional company simply because of our people. As a practice, we have never recruited from the real estate sector but rather from other industries primarily because we understand that the real estate sector is a new one and needs maturity, systematic thinking, and clarity in thought which is reflective in other matured industries such as manufacturing, banking, insurance, travel and hospitality.
Our people, who are our strength and brand ambassadors, understand the
definition and value of customers, service, & quality albeit differently and are used to evaluating and disagreeing with the practices followed by our industry. Instead, as a group, we constantly engage, debate and formulate systems and processes which add transparency and efficiency to the entire real estate cycle.
Simply put, through constant engagement, we are used to "unlearning" and "learning". In fact, every year we have a system of revisiting our existing practices and bucketing them into "Irrelevant", "Needs Improvement" and "Holds Good for Now".
We are confident that by thinking unconventionally we are in a powerful and unique position to create products that will deliver superlative values to all our stakeholders.
Our Values
Our value system is actually fairly basic and simple. Our vision is "To be the most well respected real estate company". This vision statement is what defines our path and our journey. Our values stem from our vision. As a company, we want to earn respect for the work we do and the way we deal with our stakeholders. From that thought emerges our obsession with "Value of Commitment" and "Value of Relationships".
When we induct people into our organization, we explain to them the meaning of the phrase "Commitment" and the "Power of Commitment". We understand that our industry is affected by external factors which are sometimes beyond our control. However, that does not mean that our commitment waivers even for a second. Our commitment, which could be delayed, can never be withdrawn or negated. We stand by our
When we induct people into our organization, we explain to them the meaning of the phrase "Commitment" and the "Power of Commitment". We understand that our industry is affected by external factors which are sometimes beyond our control. However, that does not mean that our commitment waivers even for a second. Our commitment, which could be delayed, can never be withdrawn or negated. We stand by our commitments irrespective of the financial or non-financial implication it may have on us.
commitments irrespective of the financial or non-financial implication it may have on us.
Similarly, another important aspect which is ingrained in every person within our company is the "Value of Relationships". I want to take a moment and elaborate this point: As people and as a society, we think we understand relationships; or we believe that relationships can be perpetual only with family members or friends.
But, there are many other people where one forges relationships without viewing it through that lens. We believe that we, as a company, have forged productive and long lasting relationships with our customers, our contractors and our associates.
On a personal front, when I was getting married in 2003 and was compiling the list of people I wanted to share the occasion with, I realized that majority of the people who constituted the list were contractors, architects, vendors and bankers, people I regularly engaged with in my role. After all, they were the people I invested most of my time with and formed lasting relationships with. And, I am thrilled to mention that they continue to be my good friends even today!
Product Quality
Quality for us is not just a physical outcome; it is instead a process that starts with the thought itself. Quality for us as a company is an obsession. That is why we handle only so many projects under design and execution during a financial year.
Our quality of design is our strength; our team of architects, vendors and
our suppliers who ensure consistency and evolution of design as per changing preferences of our customers are our strength; and lastly, our project management team who are committed and devoted to the quality of the physical spaces they deliver. They believe and understand that every apartment or office space being built needs individual attention since our customers have invested their hard earned monies with us based on trust.
Quality for us means reputation. And that says it all.
Deliveries
For every business, and real estate is certainly not an exception, the basic criteria of evaluation of any service provider has to be delivery, delivery and delivery. We cannot, as an industry, constantly rely on rendered images, brochures and promises. We need to constantly deliver.
At Vatika, we have always focused on 'successful' deliveries: Both Quality & Quantity. We are one of the few developers who are into 6 different businesses and each one of them has a history of deliveries. Not only have we delivered in millions of square feet, we are also one of the very few who have delivered sizeable townships totaling almost 1400 acres in the last five years with an obsessive focus on habitation.
For us, the emphasis has always been on our commitment and the needs of our customers.
What a Customer Mean to Us
| Are we perfect? | Naturally Not |
| Do we understand the customer's expectations? | Absolutely Yes |
| Are we concerned about customer service? | Absolutely Yes |
| Are we investing and improving our service? | Absolutely Yes |
When I joined this industry, I was struck by its peculiarities:
- Sales efforts were low because every person wants to own a home and ventured out to do so by engaging with brokers and companies
- Client servicing was practically non-existent in the industry. Servicing was more reactionary than proactive
- Very little processes were followed
- Shortlisting a home was easy; buying a home and processing the paperwork was a nightmare
- There was no concept of a lifecycle value of a customer
At Vatika we have attempted to address each and every concern that plagues this industry. First of all, we are extremely aware that this is the only industry where a customer keeps making payments and gets the product after a few years and that too depending on the developer, sometimes quality of the delivery can be an issue.
We started reviewing our processes a few years ago from the perspective of the customer and initiated active engagement with a few hundred customers who we believed would provide us with valuable insights into improving the services and the much required level of transparency.
Whether it is the sales' interactions; the telephony service; the email response time; interacting with our customers physically; providing details; ensuring a system of online account management; transparent pricing and publicly available agreements; or tracking customer requirements, we have come a long way since we started.
We have identified formal benchmarks in customer service in other industries; invested in training our people; made substantial investments in technology (implemented salesforce.com); and have installed a strong feedback real time system throughout the company. I am satisfied with the efforts and the results thus far and understand that we still need to achieve many more yardsticks.
We are progressive and sensitive by nature and I am confident that we are on the right path with the right attitude.
Current Scenario
Our commitments to our buyers are backed with careful planning and implementation, which to a large extent are also dependent on certain deliverables by the State agencies towards infrastructure development, planning and execution. We all, as a society and as buyers of real estate pay heavy EDC/IDC charges, among other taxes to the State agencies during various stages of the property development phase.
There are innumerous planning errors and execution delays by the State agencies, which in turn cause delays on our part to our customers.
We sincerely regret delays. It is not our intention and neither our purpose to delay our projects.
There are no financial or non-financial reasons that make sense for any company to defer deliveries to its customers. After all, we do have a price contract with all our customers, which make delays financially unviable for us as a company and of course for our customers.
A word of caution though: There are a few customers who assume leadership over an issue, taking complete advantage of a communication gap between a service provider and a buyer and then seek to take advantage for a personal gain by rallying a few dozen customers behind them. We have yet to encounter a 'leader' of an issue who has not sought to extract an individual advantage from the company. We at Vatika believe in transparency and integrity and do not ever assume that one person represents many. We instead constantly strive to engage with every customer individually.
I want to reassure you that at all times, our endeavor and our focus is to ensure timely delivery of our projects, while being optimistic about no major upheaval in plans induced by State actions like re-alignment of major roads, permit passage of gas lines etc., which invariably have larger impacts than are ordinarily conceivable.
Importantly, I cannot reiterate enough that we remain committed and will continue to deliver to all our customers and there is no cause of worry. At Vatika, we are grateful for the trust reposed in us and we will always live up to your trust and to our commitment which we are constantly conscious of.
The Future as I see it
Before I give my view on real estate for the next couple of years, I would like you to take a moment and understand the following dynamics:
- Commercial leasing of office spaces is at an all time high
- Rentals of mid income housing have been rising year on year reflecting sustainable demand
- Customers can buy homes that equal 5-7 times their annual incomes because then the interest can be serviced appropriately
- In Gurgaon, the definition of a working couple is where they jointly earn somewhere between 20-25 lakhs annually
- Hence, homes priced around 1.0 – 1.5 crores will always be in demand for both purchases and rentals
The Gurgaon market is in an interesting place right now. Rationality has prevailed and prices are reasonable. The end user market along with the investor market is now at the forefront while the traders have vacated. Good quality real estate will continue to deliver reasonable returns to all the stakeholders. Abnormal or extremely high returns should not be expected anymore.
As far as the industry goes, the Future is quite predictable. Companies who consistently and effectively focus on Quality and Service will prevail. Others will not. Customers and other stakeholders should choose to work, invest and associate with companies who understand and focus on these relatively simple but basic twin objectives.
Concluding Remarks
These past few years have been challenging; our company has confronted the following like many others in the industry:
- Ill-planned and unexecuted much needed infrastructure by the State Agencies
- Overbearing regulations (currently real estate is regulated by 22 different government bodies and hence it should not be a surprise that the sector itself is awaiting the Real Estate Regulatory Bill)
- Cost escalations
- Unfavorable tax regimes
- Increased number of approvals along with longer waiting times
While there is no question or doubt that these events did reduce our performance and affect our deliveries, we have been able to adapt, meet the new rules and regulations with confidence and have performed fairly well despite all the unfavorable events.
But we could not have weathered these challenges without the unwavering support of our stakeholders. And for that, I am deeply and sincerely grateful.
We are much stronger, leaner and effective. And our focus on you and your expectations will never waiver.
I also want to assure you that the company is built on the foundation of Integrity & Relationships. This is what I have learned over the years and I am committed to carrying this legacy forward.
Thank you,
Gautam Bhalla
Managing Director