Here's why Menda brothers' RMZ Corp is set to enter its next growth phase

Raj Menda and Manoj Menda of RMZ Corp are the only two tycoons from this city to feature in the GROHE Hurun India Real Estate Rich List for 2018, apart from Embassy Group chairman Jitendra Virwani. 

However, the siblings’ journey has not been easy. Arjun Menda, their father (an IIT-Kharagpur graduate), had got into the real estate business in 1980. However, the brothers started by working with K Raheja Group, overseeing its southern operations in the late 1990s. In 2002, they parted ways with Raheja and launched RMG Corp.

It now has a presence in Bengaluru, Hyderabad, Delhi, Mumbai, Pune, and Chennai. With ownership of a little over 30 million sq ft of real estate assets, it serves around 200 enterprise customers. The portfolio has Rs 21 billion in annual rental income.

“The company has a completely professional approach towards every matter and both brothers are credited for it. It always sticks to client commitments and has always given a lot of importance to specifications,” says Satish B N, managing director at Skydealz India Property Services.

Manoj Menda

Adding: “If you observe, most of their employees are working with the company for many years. So, retaining and rewarding key talents are prime contributors to their success.”

According to the Hurun India list, the brothers improved to a joint nine this year, as compared to their ranks of 16 and 17 last year. 

Each (both hold the position of corporate chairman of RMZ Corp) has a net worth of Rs 59 billion, it says. The report pegs the total wealth of the top 100 Indians in realty at Rs 2.36 trillion, up 27 per cent compared to 2017. Mangal Prabhat Lodha of the Mumbai-based Lodha Group is first. 

Early movers

Informed sources say while RMZ is a relatively new entrant to the Bengaluru real estate market, which has many established entities, the brothers’ early moves in the commercial segment have paid hefty dividends.

“RMZ started operations in the city when the information technology services market was slowly picking up. With demand for office space rising, along with exponential growth of the city, both brothers smartly tapped the booming office leasing market,” says the promoter of a mid-sized realty firm, who wished not to be named. “In that sense, they are far ahead of the curve as compared to many city-based developers.”

RMZ’s key focus on developing prime commercial properties across India is testimony to the fact. “The commercial market in Bengaluru has done extremely well. The annual absorption of 11-12 million sq ft of office space is two and a half times higher than Chennai or Hyderabad. As smart businessmen, both brothers have tapped the opportunity,” says Satish B N.

Other pluses

Apart from sensing the next business opportunity, clear delineation of responsibilities has helped. According to a long-time manager with a global private equity fund, Raj Menda has devises corporate strategy and Manoj Menda has an engineering brain, with an eye for design and architecture. “In that way, both brothers played to their strengths,” the person said.

And, this strong growth curve and a professional approach has attracted many global private equity giants — Qatar Investment Authority (QIA), Baring Private Equity Partners and AIG, among others — to invest in various projects of the firm. 

As with successful business houses, it has had to face competition. According to reports, RMZ bought back $1 billion (around Rs 70 billion) of shares from QIA  and Baring PE to thwart a hostile bid from cross-city peer Embassy Group. There are also rumours in the market regarding friction between the brothers, which Business Standard couldn’t confirm.

The Indian commercial realty market is at the next cusp of growth, with the emergence of many co-working operators. RMZ has again taken a lead in this, with the launch of ‘CoWrks’ to tap the rising wave of start-ups here. As India prepares to see the listing of many Real Estate Investment Trusts in the coming days, RMZ seems placed to enter into its next growth phase.