Bengaluru-based listed real estate firm Prestige Estates Projects Ltd is planning to launch projects across Delhi, NCR, Bengaluru, Hyderabad, Chennai, Mumbai and Goa this year. The company also intends to get into the senior living segment, said Irfan Razack, Chairman and Managing Director, on the sidelines of the 21st CREDAI Natcon (The Confederation of Real Estate Developers Association of India's National Convention) that recently concluded at Sharm El-Sheikh, in Egypt.
The company plans to develop a luxury housing project in Central Delhi in partnership with a Delhi-based company TDI and is also scouting for more land in Delhi-NCR to develop more housing projects. “If something comes which is viable, we will definitely do it,” he said.
KG Marg Project
"We have taken one very high-end residential development in KG Marg, Delhi. It's a JDA (joint development agreement) with TDI. We have just done the initial term sheet and have also made the initial payment to Indiabulls to clear some debt," Razack said. The land size in KG Marg is about an acre, he said.
“It's all under the planning process. But it will be a luxury high-end development. We hope to launch this project in this fiscal itself," he said.
Hotel project in Aerocity, Delhi
The Aerocity project is a commercial project that will comprise two big hotels and will be completed by 2025-26.
“The project is still under construction and is likely to be completed by December 2025. This is going to be India's biggest hotel – A Marriott Marquis and St. Regis. That's a capex project,” he said.
Noida Sector 150
The company is partnering with ACE Group for a mid-income housing project in Sector 150 Noida. "The approval for Noida Sector 150 has been stuck for a long time. We are waiting for approvals for launching a 15-acre mid-income housing project," he said, adding “The sports city issue is taking some time to get sorted out.”
Goa projects
The company is completing a development called Prestige Ocean Towers. “These are primarily villas. We've got villas and managed residences in north Goa. “We will be launching a project in Morjim where we have a 75-acre plot. We will be doing a hotel along with the Marriott-managed residences. These are still in the planning stages.”
Razack said that there is demand for housing products across the country. "There is a huge demand for housing. We have a strong brand to capitalise on. The sector is going through consolidation. So, there is immense growth potential," Razack said.
“We are in Hyderabad, Chennai, Mumbai, Bengaluru. These are the big metros that we are in. Apart from that, we are looking at NCR. These are the only cities that are there. We are not looking so much at Tier 2 cities except Goa,” he said.
Strong pipeline
“We have a strong pipeline for housing projects. The will include projects in Hyderabad, Mumbai and Chennai because there are three big approvals that are coming from these three cities. And these will give us the numbers. Of course, in Bengaluru we may have two to three launches. In Hyderabad we have the Prestige City and in Mumbai we have the Ocean Towers, as well as the Prestige City project in Mulund. These projects will drive the numbers for the next two quarters. In Bengaluru, we also have some plotted developments and some residential apartments,” he said.
The company has also diversified across various segments — residential, office, retail, hospitality, property management and warehouses — with operations in more than 12 major locations in India. Prestige Group has completed 285 projects spanning a developable area of 170 million square feet and has 54 ongoing projects across segments, with a total developable area of 75 million square feet.
Senior living segment
The company is looking at the senior living segment “seriously”.
“The segment has a huge potential. The way we want to do senior housing is not just a label. Now if you do senior housing, it has to be a dedicated senior housing. It will be a hospitality product, where people will be taking care of the seniors. They can live there as long as they pay the rentals. It's more of a rental product. There'll be no capital investment for seniors," he said.
The company is currently working on a pilot in Bengaluru. “We have the land and are working on the design.”
“Once that succeeds we will replicate it in other cities. The need for this segment is huge because today we have a huge young population, and a lot of them are overseas. Their parents are getting old and someone needs to take care of their parents.”
Warehousing
The company has done one project in the warehousing segment in Bengaluru. “But we have got land… we are waiting for approvals,” he said.
Retail
During the quarter the company opened a new mall in Kochi called Forum Kochi. “That's doing very well, we received some great response. We have also completed an office building in Hyderabad. That's in the Prestige Hi-Tech City during the quarter and now that leasing will also get done. By December, we should lease out the full building,” he said.
“We currently have three malls – Forum, South Bengaluru; the other is Forum Kochi, then Forum Rex Walk. All around 2 million sq ft. These three are ready, they are trading now. So the Forum brand itself in retail is pretty strong. And I think in the next five years, we'll have another 10 million sq ft of retail in various cities – Hyderabad, Chennai, Bengaluru,” he said, adding at that time we could look at monetising it, either with a REIT or again with some tie-up with our current partner.
The company is bullish on retail. “Several properties are currently under construction. We've got one in north Bengaluru, another one in east Bengaluru, one is coming up in Chennai, and then Hyderabad,” he said.
Overseas projects
The company has no plans for any overseas projects because “there's enough and more to do in our country and I believe that there's a lot of demand here. The potential is huge. The brand is strong. And there's a lot of consolidation happening here in India. And I believe that there is a lot more than what we have done, we can do over here.”
Plans to take over stuck projects
The company has taken over stuck projects such as Prestige City in Mulund, Mumbai. “We're doing Prestige Nautilus at Worli, Mumbai, which was a stuck project with an erstwhile developer. We will also be developing Ocean Tower at Marine Lines once approvals come in,” he said.
The company evaluates each project carefully and “only if we feel it's feasible and it's not very messy, we touch it. I'm not going headlong into any stuck projects. We have to see that ultimately the existing customers are taken care of properly and that the project is delivered. That is important,” he said.
Can’t ignore the affordable housing segment as it brings maximum volumes
Affordable housing will always have potential in India because “that's where the demand actually comes from and it’ll keep coming from there. That’s the reason why we cater to all segments. We're not stuck only in luxury. Everything depends on location and where demand is coming from. But I believe if you want volumes, it should come from the affordable and mid-income segment,” he added.
“Supply in the affordable segment is robust. We can't ignore that segment because that's the segment from where you get the maximum volumes,” he said.
NRI segment
The demand from NRIs is robust because of the exchange rate. “But it's not so significant. We have a marketing office in Dubai which markets our projects across the region,” said Razack.
On RERA
The Real Estate Regulatory Act (RERA) is one of the catalysts that has infused confidence among homebuyers which, in turn, has led to increased demand, he said.
“The only concern for me is infrastructure and speedy approvals … if these things are addressed, the cost will go down. When the cost goes down, the affordability barrier anyway would have been addressed,” Razack added.
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