Listed real estate firm Prestige Group anticipates 14 million square feet (mn sq ft) of development across all of its projects in FY2022-23 and plans to launch five residential projects in Bengaluru spread across 8-10 mn sq ft this fiscal, Venkat K Narayana, Chief Executive Officer at Prestige Group told Moneycontrol.
He said, "We plan on completing 12 projects across residential, commercial, and retail segments. On the residential front, we plan to complete six projects with a total inventory of 6,000 plus units. And, four commercial projects spanning 2.2 mn sq ft are scheduled for completion in this fiscal."
Recently, the company launched Prestige City near Sarjapur Road in south-eastern Bengaluru. Prestige said it has about half a dozen projects coming up in the city. "We hope, given the traction for our products, and the numbers, we should be able to sustain and grow on that in the next two-three years."
Overall, the company delivered close to 15 mn sq ft last year. In the coming years, the company intends to deliver 8-10 mn sq ft of launches in Bengaluru. And, in the last five years, the company delivered over 17 mn sq ft.
“Despite COVID-19-related issues, and RERA, our commitments have been consistent and we have been able to deliver on time. That has helped build traction for our projects and we have a robust launch pipeline ahead,” he said.
Currently, the company has 65 mn sq ft of projects under construction, of which almost half is in Bengaluru.
The company is also planning to develop a warehousing portfolio and has acquired multiple land parcels around Bengaluru.
Currently, the Prestige Group is operating one warehouse in Bengaluru. Two more warehouses are planned for construction. "Besides these, we hold a huge land bank of over 375 acres, which can definitely be explored for creating a bigger warehousing portfolio in the future. Right now, we are restricting ourselves to Bengaluru," Narayana added.
Plans to expand base
Having clocked more than Rs 10,000 crore in sales last year, the company is looking to increase the momentum of its launches. For the launch pipeline this fiscal, Narayana said Prestige has already acquired land across India for close to 16-20 mn sq ft of projects.
“For this fiscal, we have kept around Rs 1,500-2,000 crore towards business development growth in the residential segment,” he added.
The investment planned for this financial year is around Rs 7,000 crore across multiple asset classes. "Of this, we have already invested around Rs 2,500 crore in this financial year and launched close to 10 mn sq ft of assets in the first quarter," Narayana said.
The proposed launches would take place in Hyderabad and Bengaluru. Additionally, the Prestige Group intends to broaden its presence in Mumbai, where it has recently entered, and in other areas including Delhi-NCR. "We will start by launching a residential project in Noida later this year and continue to look for suitable locations and land parcels across Delhi and Gurugram. We also have significant new launches in Mumbai planned for the upcoming quarters," Narayana added.
Apart from the residential market, Prestige Group is working on 24 commercial projects, 14 of which are already underway. The remaining projects will be launched during this fiscal year. "These projects will be seen in all major cities such as Bengaluru, Mumbai, Pune, Hyderabad, and Delhi. We are looking at upwards of 40 mn sq ft of commercial projects in our ongoing and upcoming commercial portfolio," Narayana said.
Work on AIF continues
Earlier, Prestige Group had set up two $500-million real estate-focused alternative investment funds (AIFs) to purchase land for its residential business. The funds targeted institutional investors and high networth individuals (HNIs).
Narayana said the company is currently working on the documentation for the proposed fund to streamline an efficient functioning mechanism. "We will soon be ready to apply for the necessary approvals, post which we look to deploy funds towards the acquisition of strategic land parcels, without burdening PEPL with debt," he added.
Prestige said a large portion of the proposed fund will be allocated to cities, such as Bengaluru, Hyderabad, Chennai, Mumbai, Pune, and Delhi-NCR, where the company already has a strong interest and numerous planned launches.
Depreciating rupee and rising prices
With prices headed north due to inflation, especially concerning unsold inventory, Prestige said they have increased prices across the board. For some projects that have been 60-50 percent sold, the company has increased prices slightly in order to sustain the margins, Narayana said.
Prestige said a weaker rupee does get positive attention from Non-Resident Indians (NRIs) and foreign investors. The NRIs are in an advantageous position with regard to remittances and are keen on investing in new projects.
"Additionally, with the depreciation of the rupee and recent volatility in the capital markets, people who were earlier investing in the capital markets are beginning to appreciate the value of stable real estate investments. This provides momentum to the real estate sector. However, at the same time, a fluctuating currency makes the cost of raw material high, especially related to high-end luxury homes and hotel assets, which is heavy on international consultants, architects, and goods," he added.
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