Mumbai-based property developer Sunteck Realty is looking to double the gross development value (GDV) of its portfolio from 30,000 crore to60,000 crore in three years on the back of boom in residential sales in the city. GDV is the estimated revenue or sale that is anticipated from the completed development. The Dubai project, with a GDV of Rs 9,000 crore, marks the first milestone on the path to achieve this goal, said Kamal Khetan, chairman and managing director.
Additionally, Sunteck is actively working to incorporate its existing investments into its GDV. It is also exploring opportunities in redevelopment projects, with the recent acquisition in Bandstand, Bandra (West) in Mumbai, reflecting this strategy, Khetan said.
“With one of the strongest balance sheets in the industry and robust operating cash flows, we are well-positioned to put more capital for acquisitions of the new projects that will align with our disciplined capital allocation and margin criteria,” he said.The company is looking to launch phases or towers in its Mumbai projects in the second half of this financial year , Khetan said. These include new phases in Naigaon, and ODC, Goregaon East; additional towers in Mira Road; new towers jn its Vasai project and new towers in Kalyan project.
With a pipeline of ongoing projects, including an uber luxury project in Napeansea Road and in Mumbai and downtown Dubai, and new projects totaling a GDV of Rs 37,480 crore, steady sales from its current developments and more projects to be added in the coming month, the company is confident to achieve a 30-35% growth in sales bookings for the next couple of years, he said.
Premium housing or homes worth more than Rs 1 crore formed 41% of all sales in the first half of 2024. NCR and Mumbai accounted for almost half of premium category sales in H1 of 2024, a report by Knight Frank India showed last month.Sunteck is planning to fund the new launches primarily through internal accruals, he added. “We maintain a strong balance sheet with a net debt-to-equity ratio of -0.01x, indicating that we are a net cash-positive company. Our gross debt is less than a quarter of our collections, supported by robust operating cash flows,” Khetan said. Sunteck is a net debt zero company.
As of June 30, the company’s cumulative net cash flow surplus stood at Rs 1,532 crore. The company plans to use the cash flows in expanding its annuity projects and doubling its development portfolio, he said. Currently, it has two leased properties, Sunteck BKC51 and Sunteck Icon, with leases secured for 29 years, generating an average return on invested capital (ROIC) of approximately 30%.They plan to begin construction on a new commercial project at Sunteck City 5th Avenue in ODC, Goregaon (W), which is expected to generate an annual rental income of about Rs 250 crore.
“A portion of our surplus cash flows will be allocated to this project. We will maintain a selective approach to commercial investments, ensuring they align with our high return on invested capital philosophy,” he said. He added: “Furthermore, we intend to use our surplus cash flow to double our development portfolio to Rs 60,000 crore within the next three years,” he said. Khetan said the Dubai project is in the design, drawing and approval stage. It is located in the prestigious Burj Khalifa Community, near Dubai Mall in Downtown Dubai. The uber-luxury development is spread across 1 million sq ft, he said
“Dubai’s world-class infrastructure and favourable tax environment have made it a prime destination for the UHNIs. We’re confident that Sunteck’s offering will meet the growing demand for uber luxury homes in this thriving market, positioning us to capitalise on the city’s dynamic growth,” he said.