As a part of its strategy to establish itself in the NCR market, Hero Realty, the real estate arm of automobile major Hero Enterprises, said it will partner with land owners to develop residential projects. The company said it is looking at an IPO in the next two years.
The firm said it currently has three joint development projects, where one party provides land and the company develops and sells projects.
“The Delhi-NCR market will be a key focus area for us going forward. Land accounts for about 40% of the total project cost. We will be undertaking joint development with land owners and go on an asset-light model,” Dharmesh Shah, CEO of Hero Realty told FE.
The company said it will invest over Rs 1,500 crore over the next four years to develop projects on 40 lakh sq feet in markets like Gurgaon, Noida and Mohali, among others. The funding will be largely through internal accruals, he said.
Shah said that Hero Realty will deliver about 15 lakh sq feet this year through various ongoing projects. It has projects in Haridwar, Mohali, Ludhiana, etc.
Shah said that it will also be undertaking plotted development through its entity Hero Earth, with focus on major cities in North India. “There is a dearth of quality developers in the plotted development space. We are hoping to capitalise on that”. The company said it is also looking at acquisition of distressed assets.
“Overall, we are looking a turnover of Rs 5,000 crore in 12-24 months,” he said. Residential sales currently accounts for a bulk of its sales.
Asked if the company plans to enter the commercial segment, Shah said its focus is largely on residential.