The Hindu : O & M forays into property development

Online edition of India's National Newspaper
Tuesday, May 14, 2002

Business

Business

O & M forays into property development

By Our Special Correspondent

CHENNAI, MAY 13. Ogilvy & Mather (O&M), a well-known name in advertising, has forayed into the property development field.

O&M has stepped into this business following its acquisition of 45 acres in Kodaikanal in lieu of payment due from R. Subramanium-promoted Sterling Group.

The agency has an outstanding due of about Rs. 1.50 crores from this group.

R. Krishna Mohan, Vice-President and Head of Office, said, O&M was not diversifying into real estate. ``We are only finding an opportunity for a dead investment to earn revenue stream".

The project, which will be ready in the next 12-18 months, will see the establishment of four eco-villages in Kodaikanal. O&M has roped in Auroville Building Centre to design eco-friendly cottages. Simultaneously, it has tied up with local builders to construct them.

The company is putting in place some innovative approaches to reach out to prospective buyers. Besides aggressively marketing through the Internet, it has worked out an escrow arrangement with Indian Bank.

The objective is to ensure that the release of funds to the project is properly monitored. O&M has a tie-up with HDFC to facilitate prospective buyers to get property loan. It is also working for possible marketing arrangements with corprates like EID Parry, Godrej, Sundaram Alliance, Tata Honeywell and the like.

This is, perhaps, the second case of an advertising outfit diversifying into a totally different business. If O&M's entry into property development is by default, industry observers point to Trikaya's choice foray into like activity sometime ago.

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