Mahesh Savani | Outlook Business
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Soumik Kar

Where the rich are investing 2015

Mahesh Savani
This diamond merchant switched from gems to real estate just in time

"Land goes through its cycles but it pays off if you hang in there" — Mahesh Savani, promoter, Mitul Group

Mahesh Savani looks at you with a poker face and says, “My business is buying land,” when asked what he does for a living. Sitting in his large office in Surat’s upmarket area, Vesu, he speaks of four areas in the city where he buys land. “Actually, this covers the entire city,” he adds with a laugh. The method here is quite simple: to track economic development in these pockets. The moment a new factory comes up or if there is a plan to have a road expansion project, Savani puts his money in land there. “The idea is only to track the business that is doing well. That has a direct bearing on the land price,” he points out.

That explains why half his wealth is parked in land. “I manage to conclude at least 12 land deals each year. The approach is to buy land in an area, where things are looking good and just hang in there,” says Savani. If you were in his position, there would be little reason to complain given that return is seldom lower than 35% each year. 

Savani’s allocation strategy changed quite dramatically in 2004, when 75% of his wealth came from the diamond business. He foresaw the slowdown in the diamonds business and decided to get out. “There was no point fighting it out since the situation was extremely challenging.”

He goes back in time to explain that the return he made in the diamond business between 1990 and 2000 was as good as what land today generates. Of course, land prices too have cooled off and he concedes that returns even two years ago were far more attractive. “Land goes through its cycles but it pays off if you hang in there,” he thinks. So far, that has worked rather well for him.

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