‘“We Are Bullish Of The Future”’ Trammel Crow Company

‘“We Are Bullish Of The Future”’ Alexander J Darragh, Senior Managing Director International, Trammel Crow Company

Alexander J Darragh, Senior Managing Director International of Trammel Crow Company, spoke to Realty Plus Editor Vinod Behl about his assessment of Trammel Crow Meghraj’s one year operations in India, their strategy to develop business in fast emerging but competitive Indian real estate market and their future business plans.

Q. It is one year of Trammel Crow Corporation-Chesterton Meghraj alliance. How has been the going so far?

Last year when Trammel Crow Meghraj (TCM) was set up, we set out to try and extend our technology and best practices from the US to Trammel Crow Meghraj in India so that they can provide better services to our clients who we refer to India and also to their own clients they already have. About ten US staffers of the Trammel Crow Company (TCC) have been here to in India to work with our partners. There were trips ranging anywhere between 2 weeks to 6 months, involving training and it has members of Trammel Crow Meghraj in India come over to the US again for probably two weeks for revaluating operations with our clients so that they can take those learning and apply back to the clients in India. We are very pleased with the performance of Trammel Crow Meghraj during the last one year.

Q. How has been the integration of TCM into TCC’s global operating platforms in terms of knowledge, technology, expertise and skills?

Talking of technology, we brought over here technology programme called Service Express which is facility and property management programme which we integrated in one of the buildings which we manage for Unitech. And we have training done by the technology staff back in the US as well as our facility and property management staff from the US and Canada as well as our team here in India. We had training sessions where we had people come here and talk to TCM personnel about transaction and project management and about the expectations of the international clients, what they are looking for in terms of market information, service level, reporting, documentation in order to ensure that we can provide and meet the expectations of our international clients. We have referred several big clients here and they have been looked after very well by TCM because they have an immense amount of local knowledge of the real estate market conditions, great connections with the developers and the contractors and the people who have worked locally in India. And we have combined their knowledge with our knowledge and training about some of the global players in real estate and their practices and procedures and we used that to raise the service level for our clients as well as the clients of TCM. We have also been recruiting lots of new people in the company, those with a varied background, dealing with not only Indian clients but also multinational corporations, so that we are able to broaden the skill base inside the organization.

Q. What has been your experience in terms of business operations in the past one year?

The business has grown tremendously. The Real Estate market in India is booming and as a result, the deliverance is well above what it was last year and we will have to maintain the profitability as we make more investments in the business. So we are very bullish of the future.

Q. You have been into different segments of operations. So which particular real estate segment has been the most growth oriented in the last one year?

We have seen growth across all three segments- Brokerage, Retail, Investment, Project Management which is primarily construction services as well as facility and property management. A lot of opportunity in the future will be in project management because it’s very difficult to deliver projects here. We also look at the mall activity in India as a huge growth area for us. Beyond that we see a huge growth in Facility Management and we are making inroads into that area as well.

Q. What has been the experience working in a developed market viz-a-viz emerging market like India which is dogged by outdated property laws and lack of regulation transparency?

We are mostly working with corporate clients who are able to deal with top developers in India. Their practices are very transparent, very professional, and even they are at scale with the global developers. So we are not actually facing those issues because we aren’t directly buying and selling properties of our corporate clients. TCM is involved in all aspects of the real estate market. Their expertise in understanding the challenges of the Indian market is one of the reasons why they are successful. So far none of our clients have had any issues with the Indian Real estate market.

Q. There are obvious advantages of working in the Indian property market as well. The macro economics are very strong, the entry barriers are low and moreover the returns are high. So do you think these factors overweigh the inherent challenges in an emerging market like India?

Most of my experience is on the corporate side. But clearly India is an attractive place to be in because of growing demand and the infrastructure does pose challenges but its also means that there are opportunities. So people who have good local market knowledge should get the kind of returns they are expecting. So the key is that you should know the local market well, the trends, traditions, culture, government regulations and where the investment is to be made. Those handling our operations in India have all this knowledge and that’s how we are able to help our clients.

Q. What has been your strategy to develop your business and skills as well as raising the quality of service offering?

Our foremost strategy has been to integrate TCM with TCC. We treat them as another part of our company, just that we are in different countries. So they have complete access to the best practices and procedures that we have to offer. They are linked to every aspect of our operations and talk to our experts. We have been recruiting new people in our organisation and have been constantly raising the level of service offerings.

Q. How has been your experience with regards to your competitors in the Indian Real Estate Market. How is your business model different from your competitors?

We have great competitors in this market like CBRE, Cushman & Wakefield, Knight Frank etc. Our difference from the Trammel Crow standpoint is in three ways. One is we are truely committed to customer service and we measure that frequently through independent surveys. And if some customer is not happy, we take corrective measure at the top most level. Also we work on a global basis and work out total client relationship across the world. That helps us to do large transactions, large projects in some parts of the world and small ones in the other parts of the world. As such we are in a position to give higher level of customer satisfaction.

Q. About 80 percent of your corporate customers use TCC for their real estate requirements outside the US, How have you been able to leverage this for building strong base in India?

We made several reports here of different clients we have been looking after, for individual transactions, for outsourcing. We are also involving TCM staff for research not just in the Indian market but also for some of the global research. We are very confident that over a period of time as we use TCM into our system in the US, our customers there will use more and more of TCM in India.

Q. Overall how attractive do you think is the real estate market for the foreign investors?

India is a varied and complex country. The real estate market and the infrastructure is booming and the prices are increasing. The infrastructure ability to support growth varies from city to city. So we certainly see our clients looking at second tier cities now and moving out of main cities of Delhi and Bangalore into Chandigarh, Pune and some of the other second tier cities. I think TCM’s real estate knowledge in the second tier cities is much greater than our competition because they are the first to research the market conditions there. This well researched information in turn is helping our clients make the most of the opportunities in tier two cities. We really look forward to providing our clients information about these cities so that they continue to look at these cities as destinations of opportunities. In addition we are finding that clients are increasing the level of complexity of business activity that they have here in India and therefore taking advantages of some of the skilled labour force in comparison to markets in Philippines or down in South America where labour can be as cheap if not cheaper.