Future Group unit to furnish new homes

The company hopes to tap a niche segment by tying up with builders and helping them design and furnish apartment

After building a retail empire with revenues of around `10,000 crore, Kishore Biyani is eyeing a piece of India's booming real estate sector--putting finish- ing touches to new homes.

The Future Group has tied up with developers in various cities including Lavasa Town- ship near Pune, Nirmal Lifestyle Ltd in Mumbai, Aparna Constructions and Estates Pvt.
Ltd in Hyderabad and Omaxe Ltd in Delhi to undertake projects such as furnishing apartments to providing fitted kitchens.

“You name the big builders and we are working with them, both on helping them finish certain homes before possession, or working with the home owners“ on furnishing, said Mark Ladham, who used to work for home solutions retail- er B&Q before Future Group hired him six months ago as president of its home division, comprising Home Town, Furniture Bazaar and Home Bazaar. Ladham said B&Q used to handle around 40,000 homes annually, helping builders and home owners to design and finish their apartments. He expects Future Group will be handling more than that in India five years from now.

You look at the demand and you look at the home ownership projections over the next five years in India. We are really on the low end of that curve, Ladham said. “The demand is going to triple if not quadruple in the next five years. (Home owners) need people to come and finish off their homes’.

Typically, homes in India are bare shells when handed over to buyers, who then need to complete the rest of the furnishing on their own or through local contractors, where reliability can be an issue. This is the niche that Future Group wants to enter.

Biyani, founder and the chief executive of Future Group, said the home division, could become the second biggest revenue earner for the company in the next five years, propelled by the latest venture--Home Town Design and Build Services. That would put it behind the flagship Big Bazaar supermarket division that has annual sales of around $1 billion (`4,532 crore).

This could be the most promising business for us going forward, Biyani said.
Home Town Design has received orders from various developers for about `700 crore and he expects the business to clock `1,000 crore in revenue by the June fiscal year end. In the next five years, Biyani expects around `5,000-6,000 crore in revenue from the venture. While Biyani declined to disclose the investment being planned in the venture, Ladham said it would be “significant.

We are more into how much investment is needed to get this thing off the ground.
We are looking at this with a view like China over the next five to 10 years, said 48-year- old Ladham. “All our product developments, all our contractors' developments, all our sys- tem developments are with a five to 10 year view of the Indian market, so you can imagine it's going to be a significant in- vestment’.

The company is offering its services to “thousands“ of homes even as it focuses on tie-ups with reputed international suppliers, building a network of local contractors and training.

The biggest focus for us right now is that we are in the midst of undertaking a huge training and development programme with our contractors and their workforce, Ladham said. “The quality of workman- ship and quality of skill of workers is going down rather than going up. The demand is going up, so the good guys are getting thinner and thinner and even more stretched.

Future Group is aiming to fill a gap in the market, he said. Developers want to do what they do well, which is taking a piece of land and developing nice properties, Ladham said. “The quality of the work they are doing is improving so, therefore, the aspirations of the home owners are no longer just the apartment, they want their apartments to be also finished to that level.“