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How Mr. KP Singh Of DLF Group Helped Build Gurgaon Into One Of Asia's Largest Private Township


By Sanjay Sharma, Section History of Gurgaon
Posted on Mon Mar 21, 2005 at 07:35:25 PM EST

Meenakshi Radhakrishnan-Swami writes in the Business Standard as to how illiterate farmers helped KP Singh create India's biggest real estate firm: Kushal Pal Singh (now famous as KP Singh of DLF, i.e. Delhi Land and Finance) came on board his father-in-law’s real estate company in the early 1970s. Almost single-handedly, Singh converted a sleepy, rural settlement of Ahirs and Jats into DLF City, which is probably Asia’s largest private township — and, in the process, built DLF into the country’s leading real estate firm. The story of Gurgaon is inseparable from the story of Mr. KP Singh.

When Mr. KP Singh first started exploring the possibility of property development in Gurgaon, everybody thought he was crazy. The family owned just 25 acres of farming land there. They didn’t have much money and banks were “prohibited” from lending for real estate development. All they could bank on was the goodwill DLF had created. As Mr. KP Singh says ...

I set about identifying myself with each family whose land I wanted to buy. A team of 70 to 80 people were deputed to find out everything about these people: the size of their families, how many children, who was good in studies, any family disputes... every little detail. I did everything it took to persuade these farmers to trust me. I spent weeks and months with their families — I wore kurtas, sat on charpais, drank fly-infested milk from dirty glasses, attended weddings, visited the sick....
To understand why this was important, it’s necessary to understand the landholding pattern. The average plot size in Gurgaon was 4 to 5 acres, mostly held by Hindu undivided families. Legally, to get clear titles, they needed the consent of every adult member of these families — that could be up to 30 people for one sale deed. Getting the married daughters to sign was tricky — often, the karta would refuse to share the proceeds of the sale with them. So Mr. KP Singh would travel to their homes and pay the daughters in secret.

Remarkably, Gurgaon’s farmers sold him land on credit. He would pay one farmer and promptly take the money back as a loan and use that to buy more land. The firm’s goodwill made them willing to act as bankers for DLF. But it also meant he had to be extra careful about interest payments. Come rain or shine, the interest would be hand-delivered to each farmer on the third of every month at 10 a m.

  • Eventually they bought 3,500 acres of land in Gurgaon — more than half of it on credit, without one litigation against DLF.
  • At last count, the group had developed 20 million sq ft of residential space, 3 million sq ft commercial space and 1 million sq ft retail space in the Harayana district; it’s working on a million sq ft of workspace each in Chandigarh and Kolkata; is considering extending to Mumbai, Hyderabad, Pune and Bangalore; and has been declared a Superbrand.
At present, company sources value the DLF Group’s assets at between Rs 15,000 and Rs 20,000 crore — and Singh, who is also group chairman, owns 98 per cent of all this.

(Click on "Full Story" for more.)

In the 1970's it is not as if the Delhi government hadn’t realised the need for space. But it was going about it the wrong way. It wanted to create satellite towns such as Panipat, Sohna and Aligarh and have people move from Delhi. Not surprisingly, that didn’t work. Nobody wants to leave their home — there are emotional bonds, after all. And most people don’t like to travel more than they can commute easily.
DLF, too, realised that Delhi was bursting at the seams.

But rather than satellite towns, they believed in the concept of “ring towns” — areas that were within commuting distance, but far enough to lessen the burden on the city.

For Delhi, that meant areas like Noida, Gurgaon, Ghaziabad and Kondli.

They chose Gurgaon.

Their strategy was simple: give people compelling reasons to move. They offered them the “walk to work” and “walk to leisure” culture — a complete township with offices, leisure facilities, schools, hospitals and shopping complexes. All the facilities, for a fraction of the cost. But even back then, the big task was to persuade people to move.

People were hesitant initially to move. Distance and infrastructure were the biggest hurdles. So DLF provided free transport to the site to potential buyers and offered various discounts and price-offs. Bank finance was exorbitant — and difficult to obtain. So DLF created their own finance schemes. Buyers could pay in instalments spread over five to 10 years; they also allowed payments that were linked to the rentals they received ...anything to make them buy.

Infrastructure was key, of course. They lobbied for — and secured — a change in the route of National Highway 8, so it passed closer to the township and made it more accessible. And in the meantime, they provided their own security and other facilities.

From DLF’s earlier projects, they had also learnt of the importance of names. Hauz Khas was initially promoted as “Hauz Khas Enclave” — the suffix gave the impression that the new project was just an extension of the existing areas and, therefore, quite close by. Similarly, when they started what is now known as DLF City, they called it DLF Qutub Enclave. Linking the name with a familiar landmark (the Qutub Minar, 12 km away) encouraged potential homeowners to believe the township was not too far out of town.

DLF started off by selling residential plots.

But people needed to be convinced that others were also moving into the area. So KP Singh started building row houses all over Gurgaon. The hustle and bustle of construction everywhere did more to convince potential buyers than any marketing or promotional activity.

After a few years, DLF realised what people wanted were green, open spaces, wide roads and play areas. Those were not viable with independent plots.

So DLF built their first apartment complex, Silver Oaks. Surprisingly, the group housing option didn’t prove popular. They advertised extensively to educate buyers about the advantages of flats — the better access to facilities and security as well as the benefits mentioned above.

  • Today, there’s an apartment revolution.
In brief ...
15-Aug-31 - Kushal Pal Singh is born in Bulandshahr, Uttar Pradesh
18-Sep-46 - Raghvendra Singh sets up Delhi Land and Finance, ahead of Partition
6-Mar-54 - KP marries Raghvendra’s eldest daughter Indira
1957 - The Delhi Development Act is passed, making land development a state monopoly. DLF starts to lose steam
1971 - KP leaves unsuccessful DLF business Willard India to join the real estate company
1979-80 - KP begins buying land from farmers in Gurgaon
1981 - Haryana Urban Development Act implemented; DLF gets the first licence
1985-86 - DLF sells its first plot in Gurgaon
2005 - DLF City is Asia’s largest private township; more planned in other cities

From The Business Standard - March 22, 2005 - by Meenakshi Radhakrishnan-Swami
Building on a Dream
< Property Deals & Hunting Are Getting A Boost From Internet In Some Markets | Gurgaon's Metro Dreams - Without Strong Action From Mr. Hooda Metro Will Remain Just A Dream >

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