Since its inception in 1990, Godrej Properties has aspired to be among the nation?s top three real estate companies, while continuing to be among the most trusted names in the industry. Continuing its expansion spree to become a pan-India player and living up to its brand name, Godrej Properties approached the capital markets early this year to raise Rs 469 crore. Nikita Upadhyay caught up with Milind Korde, MD, Godrej Properties, to discuss the company?s growth strategy and future plans. Excerpts:
Godrej Properties has evolved a joint development model for its projects. How has this helped you in the pursuit of a pan-India presence?
Of our total land under development, i.e. 82 million square feet, only 2.8 million square feet is with the group companies. This is at a 46-60% revenue share model. The rest of our projects, we jointly develop with land owners. Real estate is a regional game, so these land owners are with us in the entire process. Sometimes, we also partner real estate funds and private equity players by offering them some stake ina project.
How beneficial has been your move to focus on the mid-market and afforable housing segments?
For the residential segment, the demand is strong, driven by real buyers, investors and high net worth individuals. We have a huge focus on the mid-market segment, which is in the range of Rs 25 lakh-Rs 50 lakh. As a strong brand, we go for landmark developments. Real estate is a volume-driven game and we are a part of the big story in the mid market segment on a pan-India basis and supplement it with high margin growth from the high-end segment. We also have a growing focus on huge townships projects.
We have done township projects in Ahmedabad and Kolkata. We are working on such projects in Mangalore, Bangalore and the recent one at Gurgaon. We are also focusing on our township project in Pune and Kalyan in Mumbai.
Other big developers are betting on the redevelopment projects. How do you look at it?
Redevelopment projects are another focus for us. In a city like Mumbai, there is a huge opportunity for redevelopment. There are a few projects in the island city and some in the suburban areas, which we are looking at. These projects require huge upfront investment, but due to their higher floor space index are very lucrative for any developer.
What are the investment plans of the company?
Investment for us is an ongoing activity. We continue to invest and change our plans, according to the opportunity. It is usually a small sum in the form of advance and in the residential segment money comes in as the project proceeds.
We have a debt of Rs 500 crore and Rs 800 crore as the equity within the company. We still have Rs 210 crore from our IPO proceeds.
What is the progress on your Vikroli project, where you are developing 35 acres of prime land?
It is our largest project in Mumbai till now. We are really lucky to get this single large stretch of land and we can do wonders with 35 acres. We will do high-end residential projects, commercial, and some retail constructions. We are also going to construct a five-star hotel at Vikhroli.
