Exploring & understanding growth and challenges in Mumbai's real estate: Insights from Jay Goenka, Executive Director of Dynamix Group

Interview with Jay Goenka, Executive Director of Dynamix Group, shared valuable insights into the growth trajectory, current and upcoming projects, evolution of the Mumbai real estate landscape, leadership challenges, and advice for aspiring entrepreneurs in India's real estate industry.

Q1) Could you elaborate on the key strategies that have propelled this growth of Dynamix Group over the past 7-8 years, under your leadership? How do you envision sustaining this momentum in the coming years?

A: My focus at Dynamix over the last 8 years since I joined its leadership team has been to unapologetically keep things as simple as possible. The business of real estate in Mumbai and the Mumbai Metropolitan Region (MMR) is complex – it is an industry plagued by constant exogenous factors, most of which are unpredictable. Regulatory change to sentiment changes and everything in between has an outsized impact on the sector, which is why keeping projects, their approvals, and their financing as simple and straightforward as possible is fundamentally risk-mitigatory. This is good for our projects, which in-turn, is good for our customers and for us. Over the past 8 years, we have focused on commencing projects which fit this criterion, allowing us to launch 7 projects, the first of which has just received its Occupation Certificate, with the remaining soon to follow suit. Using this experience and learning, we intend to keep working on and launching projects on our existing portfolio of land, which is predominantly situated in Mumbai’s Western Suburbs. We focus on building projects and catering to segments in which we see inherent market depth – which in Mumbai’s Western Suburbs usually means 2 and 3 bed apartments with high quality amenities. We hope to continue adding projects to our offering in this segment and to continue delivering to the highest standard and before time.

Q2) As a leader in the real estate industry, could you highlight some of the current & upcoming projects you're looking forward to at Dynamix Group? What distinguishing features or innovations can potential investors expect from these ventures?

A: We have 7 ongoing projects, 4 of which are in Mumbai, 1 in joint venture in Mira Road, 1 in Thane and 1 in Goa. These projects are at various stages of development, with some at the stage of excavation and others completed. They are a mix of villas (in Goa) and apartments (across Mumbai and MMR) ranging from 1 bed to 3 beds. These projects are replete with high quality amenities, from exceptional club and leisure facilities to home theatres, libraries and gyms. We provide most of our apartments with air conditioning and fitted kitchens as well, making the consumer’s journey in finishing and inhabiting their apartment a lot easier. Our endeavour is to give our customers wonderful lifestyles in a special community. We are in the process of bringing 3 new projects to launch, one in Goregaon, one in Thane and the third in Kandivali and in keeping with our ethos, we will keep things simple for us and for our customer in the process of building and delivering these projects, which we hope will raise the standard of quality and experience for their inhabitants.

Q3) Reflecting on your tenure, could you share insights into the evolution of the Mumbai real estate landscape from the time you assumed your role to the present day? What notable shifts or trends have you observed, and how has Dynamix Group adapted to these changes?

A: I have watched Mumbai’s real estate sector has transformed since I joined the business. Back in 2013, when I entered full-time, the business was done differently. The regulatory framework was in a constant state of flux – and not of the gentle kind. Rules would see a sea-change extremely often, leading to a high degree of complexity in planning and building projects – a factor which contributed to the immense pain which the sector felt in the years from 2013 through 2019. And because there was constant regulatory uncertainty, it became neigh on impossible for developers to provide certainty

to customers, leading to the well-documented challenges the sector faced, the alleviation of which necessitated the introduction of RERA. Uncertainty surrounding regulations cause uncertainty in delivery to customers and therefore caused uncertainty with respect to project financing for lenders. It was a vicious circle and all stakeholders ended up losing out as a result.

Since then, things have changed dramatically. In Mumbai and Maharashtra, the regulatory frameworks governing development (i.e. the Development Control and Promotion Regulations 2034 and the Unified Development Control and Promotion Regulations, respectively) are clear and stable. RERA has fostered a huge amount of confidence in the consumer (and also the developer) whereby a customer can reasonably assume that the home promised to her will be delivered in the time committed and to the standard committed. And with this, lenders have also regained a lot of lost confidence and have started lending to credible names. And a new crop of foreign lenders are taking large positions in the sector, reflecting global confidence and India’s heft in the world. Developers, carrying lots of scar tissue from the experiences of 2013 through 2019 are a lot more circumspect with respect to the work they take on and manner in which they do it – being careful not to over-extend themselves. The result is visible for all to see – a thriving sector where customers are happy, bank NPAs are low, and developers are building well in a manner that is fair but ambitious, echoing the trajectory our great nation is on, under its extremely able leadership.

Q4) Every leader faces pivotal moments that test their grit. Can you recall a particularly challenging project during your tenure as Executive Director? How did you navigate through it, and what did you draw from the experience?

A: As I suspect most would be, I too was extremely excited and very optimistic about joining my family business and taking up a leadership role. I joined the business with gusto and having studied economics at the London School of Economics as an undergraduate, assumed the rationality of capital markets and the fact that all

stakeholders in the economy (which included the business I was about to lead) would act accordingly. I assumed that the fact that we had been in business for over 50 years, had delivered over 30,000 homes, had a recognised brand and excellent land assets, which we wanted to develop ‘simply’, would make raising debt financing a walk in the park. The business was (and continues to be) solid, the assets offer great security and our ability to build and sell is well known – what’s not to like? I was so, so horribly wrong. I met over 150 lenders – big and small, sophisticated and not – over 5 years. Every single one of them said the same thing: We like you, we know that your business is good, and we know that we will make money (and most importantly, get our money back) in lending to you. But you have a legacy problem and capital markets are tight, so why would I stake my career or reputation on taking a deal with your name on it to my bosses, when I could just as easily lend to any of your peers at the same rates and not have to deal with your baggage? Thank you, but no thank you.

This went on for years. It was unfair and it used to upset me. But I thought to myself that had I been in that lender’s position, I would probably do the same, so I cannot begrudge him. All I can do is prove him wrong. So, we worked harder and assumed that if we keep trying and proving ourselves, things will eventually change. It reminded me of a Japanese proverb I had come across ‘Nana korobi ya oki’ which roughly translates to ‘fall down seven times, get up eight times’. We continued working relentlessly and the industry – which is a small one – noticed. We finally had our first new lending in June of 2021, from one of the best names in the business. And after that, new doors opened. Today, we bank with some of the most marquee names in the country (and the world) and are proud to say that we were the ‘risky’ bet that paid off. We hope to continue building on this and build deeper relationships with those we work with already and new lenders who we hope to be able to work with. And we never forget the challenges we faced in becoming ‘bankable’, which is why we always will try to put our very best foot forward and cherish the relationship we have with our lender, as we have experienced first-hand how difficult it is to secure.

Q5) What advice do you have for aspiring entrepreneurs, particularly in India's real estate industry? How can they navigate challenges and seize opportunities in a dynamic market environment?

A: I would say that it can be a very tricky industry because there are a lot of players, but what can set you apart is studying the industry, the regulations, past orders, anything you can get your hands on and having a firm grasp of the nuances presented in these documents. If your basic understanding of the industry is strong, you are able to navigate the hurdles with greater ease. When I was learning the ropes, I made sure I was able to answer any question that was directed at me with the latest information – of course it isn’t easy but at the end of the day, you’ll be talking to customers, for whom owning a home is an emotional experience, they need to know they are speaking to something with acute insight into the making of their home. You’ll speak to banks and other institutions, and they need to be reassured that you are worth investing in. Having irrefutable knowledge of your industry is what will make you bankable in their eyes. From there, opportunities will present themselves when the time is right.

These questions are tailored to elicit insightful responses from Mr. Jay Goenka that would provide valuable insights to the readers of Business Today.