The next big opportunity in real estate is going to be in redevelopment, given the premium some locations carry in cities like Mumbai. On the day its quarterly numbers were announced, FinancialExpress.com spoke with Keystone Realtors managing director Boman Irani. Keystone Realtors operates under the brand Rustomjee and went public in November 2022. The company’s main focus is on redevelopment, with 16 out of 19 projects in the pipeline.

The company announced its third-quarter results on February 11. It reported a consolidated income of Rs 485.82 crore, down from Rs 533.33 crore in the same quarter the previous year. Consolidated net profit of the company was reported at Rs 15.07 crore, while net profit stood at Rs 30.22 crore in the same quarter the previous year. Why the perceived decline? Irani clarifies.

Here are some snippets from the conversation with Irani. He reaffirms the statement from the company. “First, our pre-sales grew by 40% year on year. We have done Rs 863 crore this quarter, and we have done Rs 2,174 crore in pre-sales overall this year, which is within striking distance of the Rs 2,226 crore that we did last year. So, within 9 months we have almost done everything we did in the last year. Our guidance for the year was Rs 3,000 crore and we are well on our way to cross that,” Irani said.

“Second, our EBIDTA in nine months for FY25 has increased from Rs 96 crore to Rs 225 crore, which is a 133% growth, and our PAT is up from Rs 81 crore to Rs 121 crore in 9 months. Again, that’s a growth of 50%. Further, we are given a guidance of eight project launches this year. We have already crossed five launches at about Rs 4,027 crore in terms of GDV. We are in the process of launching three more projects in this quarter, which will allow us to cross our guidance of Rs 6,000 crore that we had given you, last year.”

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New projects by Rustomjee

Rustomjee will be launching its Dombivili redevelopment project this month which is worth Rs 1,600 crore, and it plans to launch two more projects worth more than Rs 1,000 crore. “Overall, we are very happy with what we have done,” Irani said.

“We have seen a huge upside coming our way, in terms of the redevelopment projects that we are doing in the last 24 months. Of the 19 projects, 16 projects are in the redevelopment space. So, we continue to be asset-light. We continue to be market leaders in redevelopment,” Irani added.

The company has said that its efficiencies have improved, citing an example of how a project in Bandra West, Mumbai, went from signing of the development to notice to vacate in 170 days, compared to the nine months such a process usually takes.

Speaking about the floor space index in Mumbai city, Irani said there is a lot of infrastructure work going on in the city, which may increase ready reckoner rates. The company is in constant dialogue with the ministry to not raise rates too much. He expects about 5% to 10% is probably on the cards. Looking at returns from real estate investments, he says, one would be better off investing in high-end properties if you are looking at a substantial increase in value, rather than in affordable housing.