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Taking The Long View

Sobha Group founder and chairman, PNC Menon, is a first-generation billionaire entrepreneur who forged a wildly successful trajectory for his real estate business. And while succession plans have been drawn up for the Dubai-based business, he isn’t done just yet

Varun Godinho

Sobha Hartland, located in the Mohammed Bin Rashid Al Maktoum City, is a sprawling eight-million-square-foot gated community with big ambitions. It’s a project which is the launchpad for Sobha Realty to potentially become a $1bn company. Sobha Group chairman, PNC Menon, says, “We currently do $700m. We are not overambitious.”

How does it plan to get there? With an average population growth rate of 5 per cent, Menon says that Dubai’s real estate market size is pegged at Dhs25bn ($6.8bn). Sobha is angling for Dhs2.5bn ($680m) of that pie in its direct real estate business. The other Dhs1bn ($272m) is by way of the group’s ancillary businesses like construction, design and manufacturing which will generate another Dhs1bn. “That together amounts to around $1bn.”

Importantly, this isn’t the only billion-dollar company within the Sobha Group. Menon’s son, Ravi, heads up the group’s India operations which is run independently from the UAE-based company. The Indian arm is already listed on the Bombay Stock Exchange and Menon says that it too will become a billion-dollar company in the next 3-5 years. And if that wasn’t enough, at the age of 70, he now plans to set up another business – though he has no idea of what it will be. “I need to find a business other than real estate to make my life, not my living. Real estate is a cyclical business. I should have something that is not too cyclical. One thing that I’m clear is that if the [new] business does not have enough potential to reach a billion dollars, I will not get into it.”

THE MAKING OF A CONGLOMERATE

Sobha began in 1976 as a furniture-making and interior-designing business in Oman that then grew into fitting out government buildings, hotels and even palaces across Oman, Brunei and the UAE. Some of its most significant projects are Muscat’s Sultan Qaboos Grand Mosque, Dubai’s Kempinski Hotel at the Mall of the Emirates and projects in the palaces of Brunei.

By 1995, Menon decided to move the business further upstream and began real estate development by setting up the India division which focused on construction in India. But there were bitter business lessons to be learnt in the country of his birth. “There’s corruption, political interference, and also governmental interference like tax authorities. They’re like vultures. People in India have started to feel that India is not that great a place for businessmen. While we all have opportunity in India, the process and management of doing business in India are extremely painful.” By 2011, he decided to return full-time to the Middle East and left his son in charge of the operations in India, while he set up a real estate company in Dubai. They acquired the land at the Mohammed Bin Rashid Al Maktoum City in 2011 and by 2014 began construction.

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August 2019