By Raghavendra Kamath
Tata Realty & Infastructure (TRIL), a unit of Tata Sons, is looking to develop about 20 million sq ft of commercial properties besides launching new residential projects in top cities of the country. Also, recently media reports said that the company is looking to sell its infrastructure projects and raise fresh debt. Sanjay Dutt, managing director and chief executive, TRIL, discusses the company’s plans and outlook on the sector in an interview with Raghavendra Kamath. Excerpts:
With the IT sector in a slowdown mode, what is giving you the confidence to launch new commercial projects?
Contrary to the belief that Covid led to hybrid spaces and brought down the demand for office spaces, it has not. Most of the IT companies were already following the remote work model and non-IT companies have started it after Covid.
Companies have realised that work environment should be more appealing and useful. They are opening cafes, recreational spaces and so on. Hence, the demand has not fallen. Companies and staff have realised that they can’t effectively work from home.
Increase in demand, repurposing of office spaces and better employee work environment has led to 40 million sq ft office leasing in 2020 and 2021 in top 8 cities. As a result, office stock will go up from 650 million sq ft to 1.2 billion sq ft in 2030. So, the demand is sustainable for 10 years.
There have been reports that TRIL is monetising two roads and Dharamshala Ropeway projects. Can you throw some light on that?
We don’t want to comment on infrastructure projects.
What are your plans in residential and commercial real estate spaces?
We are working on designing and implementing 10 million sq ft of commercial real estate from our existing land bank. Fresh capital will go in for another 10 million sq ft. In residential, we will be launching in Mulund and Andheri West in Mumbai, and in Bengaluru, Chennai and Gurugram (new phase) in the first quarter of 2023.
What is the company’s growth target for FY23?
We have a growth target of 25% in FY23, but we are already ahead of that. I think we will be 30% higher than last year.
How many land parcels have been acquired under partnership with Actis and CPPIB?
We are actively pursuing four opportunities.
Your peers say that TRIL is outbidding other developers for new land parcels. What do you say on that?
We are acquiring land for commercial real estate projects in select markets where office demand is high. We are very selective and focused. We have signed a platform with CPPIB where Rs 2,000 crore is allocated for growth, which has to be deployed in 12 months. People want to work with Tatas. Several land owners /partners want to partner with us.
Interest rates are going up. Do you see any headwinds after the festive season?
Inflation is an early sign of buoyancy. Inflation is an indicator that ability to afford houses will go up. Rise in incomes will make homes affordable. The inventory in residential properties has come down and so has inventory of developers.
Input costs went up sharply in recent months. What is the situation now and how did you deal with it?
Inventories have come down and prices are going up. We are increasingly standardising our formats. We are leveraging our scale through procurements. Metal costs have stabilised. We have increased prices by 10 to 15% to mitigate rise in input costs and looking to increase prices by similar amount in the future.