Unlike some real estate developers who are grappling with liquidity issues, Godrej Properties is planning to deploy around Rs 6,000 crore over the next two years into buying land, signing development management contracts and launch 17 new projects.
"We have Rs 3,000 crore cash in our balance sheet. We will deploy Rs 5,000 to Rs 6,000 crore over the next two to three years. This would be largely for residential – majority for residential. We are looking at the downturn in the sector as a great opportunity to pick up high quality assets at deep discounts and we are following the counter cyclical investment strategy. We are in talks with many other companies across the country to pick up land parcels," Mohit Malhotra, Managing Director and CEO, Godrej Properties Limited, told Moneycontrol.
The company is planning to launch close to 17 projects in the top four cities.
"Close to 17 new launches are planned for the financial year FY 2020 in the top four cities - NCR, Mumbai, Pune and Bengaluru. Nine launches are happening in Q4 itself in these four cities. This year, we have signed closed 8 projects and we are in talks with many new projects which we could expect to announce in the future as and when these get completed," he added.
Asked when would real estate sector finally see shoots of recovery, Malhotra said that the downturn in the sector has already lasted close to eight years.
"We are now at the bottom of the cycle. When does that recovery happen difficult to answer but my personal view is that over the next two years we may see a positive change in the environment. It all depends on how the macro economy is doing and there is no disruption because of the global issues such as corona virus," he said.
He is optimistic that the segment to recover first would be the residential segment.
"The residential sector should see the fastest recovery, specially the mid-segment. Subsequently, the luxury segment will show signs of revival,” he said.
In February, the company entered into an agreement to purchase land in the micro-market of Chandivali, Mumbai. Spread across approximately 3 acres, the project will offer 0.45 million square feet of saleable area comprising primarily of residential apartments of various configurations with a small amount of retail space. The land parcel is located close to the suburb of Powai
The same month, it acquired a land parcel from Railway Land Development Authority in Delhi’s Ashok Vihar area for 1,359 crore. The land parcel is spread across 26.58 acre. “This will be a luxury development spread across 3.3 mn sq ft. We are currently in the design phase of this development. We will like to target to launch it next financial year,” Malhotra told Moneycontrol.
In December, Godrej Properties added four new residential projects to its development portfolio. Three projects are located in MMR and one in Bengaluru. The four projects added approximately 1.18 million square metres (12.70 million sq. ft.) of new development potential.
In January, the company launched Godrej RKS at the iconic RK Studios, Chembur, Mumbai.
"We acquired the project last year and launched it this year. We plan to do an iconic development there considering the quality of the land parcel. It will be a luxury project," Malhotra said.
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