Realty firm Godrej Properties plans to launch a new luxury housing project in Delhi’s Ashok Vihar this year, which has a potential to generate about Rs 8,000 crore sales revenue, executive chairman Pirojsha Godrej said.
Mumbai-based Godrej Properties Ltd (GPL), which is part of business conglomerate Godrej group, is waiting for some pending government approvals to launch this 27-acre luxury residential project in Delhi-NCR, its best performing market last fiscal.
In February 2020, Godrej Properties had acquired nearly 27 acre land parcel in the national capital for Rs 1,359 crore to develop a luxury housing project. The land parcel belonged to Rail Land Development Authority (RLDA). The built up area is estimated at over 3 million square feet.
Asked about the launch of the Ashok Vihar project, Pirojsha Godrej told analysts: “I think we have been making steady progress on the approval. There are one or two issues that are still outstanding. So we’re hoping for a Q3 launch on that. .”
As per the conference call transcript posted on the stock exchanges, the GPL’s executive chairman said that the Delhi-NCR market has been “really doing very well, both from a volume and pricing perspective.”
“So while, obviously, we are frustrated with the delay and eagerly looking forward to kicking off that project from a pure financial returns perspective, I think the project only looks better now than it did a year or two ago,” Pirojsha observed.
On future land bank in Delhi-NCR, he said the company does not have the practice to create large land banks.
“In NCR, we have some plotted projects. We have some remaining phases of existing projects. Ashok Vihar itself is like Rs 8,000 crore-plus booking value opportunity. And of course, it is one of the focus markets for new capital deployment as well ,” said Pirojsha.
The Delhi-NCR market contributed around 40 percent to the GPL’s sales bookings during the last fiscal year, which stood at Rs 7,861 crore. Even in the first quarter of this fiscal year, the company clocked a booking value of Rs 847 crore in the Delhi-NCR market out of total sales bookings of Rs 2,520 crore.
In May, the company launched a small luxury project ‘Godrej Connaught One’ near Connaught Place in central Delhi. Before that, it had launched a project at Okhla in South Delhi. The GPL has strong presence in Gurugram, Noida and Greater Noida market and has added projects in Badarpur and Sonipat as well.
Pirojsha said the company is confident of delivering strong growth in NCR for the next couple of years.
“But obviously, for sustained long-term growth, I think we have to continue to fire from the BD (Business Development) side as well,” he told investors.
For the future business development, Godrej Properties buys land outright and also forms joint ventures as well as enter into joint development agreements (JDAs) with land owners to develop real estate projects.
“So we see decent opportunities to add significantly to the portfolio and are looking at some interesting things in NCR as well,” Pirojsha said.
Recently, in an interview with PTI, Pirojsha Godrej said that the GPL is looking to add new housing projects worth about Rs 15,000 crore this fiscal year by purchasing land outright and by forming joint ventures with landowners.
He said the company had a “solid” first quarter in terms of sales bookings, which jumped five-fold to Rs 2,520 crore during April-June 2022 — the highest ever first quarterly sales.
He expects sales momentum to continue in the remaining quarters of this fiscal despite a hike in interest rates on home loans and an increase in housing prices.
“We had laid out Rs 10,000 crore as our goal for booking values during the current fiscal year. We have already achieved 25 percent of our target which is a good start, especially considering that sales in the third and fourth quarter are generally strongest, ” said Pirojsha.
Asked whether the company would revise its sales booking target upwards, he said the company would like to “stick with this for now.”
The GPL clocked a sales booking of Rs 7,861 crore during the 2021-22 fiscal year and has set a target of Rs 10,000 crore for FY23.
The company is targeting to launch about 20 residential projects, including new ones and new phases in the ongoing projects. It expects to deliver 10 million square feet area during the current fiscal as against 6.5 million square feet in 2021-22.
On acquisition of new land parcels for future development, Pirojsha said: “The pipeline is super strong.”
The company is looking at “exciting” and “some big” opportunities for outright purchases of land parcels as well as joint ventures with land owners, across all four focus markets — Mumbai, NCR, Pune, Bengaluru.
“So I think I’m quite hopeful. We will have a large number of big announcements in the next few quarters,” he said.
Pirojsha said the company has not given any guidance on new business development but would like to add projects with gross development value (GDV) of Rs 15,000 crore this fiscal year to sustain growth in sales bookings.
In February, he had announced plans to invest Rs 7,500 crore over the next 12-18 months on the development of new projects.
Pirojsha said the company has started utilizing the surplus cash and invested Rs 500 crore in the first quarter to acquire new projects. “Most of the funds are still available which we will be deploying over the coming quarters”.
Established in 1990, the GPL has successfully delivered around 22 million square feet of real estate in the past five years. It currently has around 192 million square feet of developable area in 86 projects across India.
The company focuses on four key markets — Mumbai Metropolitan Region (MMR), Delhi-NCR, Bengaluru and Pune. Besides these cities, the company has presence in Chennai, Kolkata, Kochi, Ahmedabad and Chandigarh and Nagpur.
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