Keystone Realtors, the listed arm of real estate developer Rustomjee Group, plans to invest Rs 1,000 crore by the end of 2023-24 to launch projects with a combined saleable area of 2.5 million sq ft in the Mumbai Metropolitan Region (MMR). “Our exposure towards redevelopment could reach the 30 percent mark and we plan to remain active and expand our base in MMR for the next few years,” Boman Irani, managing director of Rustomjee Group, told Moneycontrol.
Real estate to grow in next fiscal?
Asked if he was confident that the demand will sustain in the next fiscal amid rising home loan interest rates and other factors impacting homebuyers, Irani said, "It is difficult to predict growth, but I see there is a lot of interest to buy homes in MMR. There is still a dream to own a house in MMR and there is a lot of enthusiasm."
On rising interest rates, Irani said that one also should consider that salaries have gone up, too, and there is a lot of infrastructure in the pipeline to boost real estate in MMR. Irani spoke to Moneycontrol about his company's expansion plans on the sidelines of a function announcing the receipt of the occupation certificate (OC) for its last tower at Rustomjee Seasons project in the Bandra Kurla Complex (BKC) Annexe area in Mumbai that was launched in 2015.
Seven launches in MMR
The seven launches the company plans by the end of next fiscal in MMR will be mainly residential with minimal construction into retail or commercial. Of these, one project will be in the Dombivli and the rest are expected in Mumbai’s periphery.
Irani said, "We plan to launch seven launches. Of these, four projects will be redevelopment projects, two could be joint development, and one is outright purchase in the Bandra area of Mumbai. The areas that we are largely focusing on for these launches could be micro-markets like Dadar, Bandra, Mahim, Versova, etc."
The above locations have good connectivity with the operational and under-construction metro corridors along with the suburban railway.
Not looking to construct outside MMR
According to the company, Rustomjee Group wants to leverage its position of being a dominant player in the MMR market and is not looking at launching projects outside the region for the next few years. The company will focus on planning and launching projects with an emphasis on connectivity via metro and other infrastructure projects.
Redevelopment to be focus
The company’s prime area of interest in the days ahead is redevelopment projects, where developers and residents of apartment builders collaborated to rebuild or renovate ageing buildings. "Around the time of our IPO (initial public offering) launch, our exposure to redevelopment projects was 11 percent and in the coming months it is expected to be around 30 percent," Irani said.
He added, "This does not mean that the exposure will go on increasing, it all depends on how many more joint venture and joint development projects we get. But one thing we are clear is that we have institutionalised redevelopment."
Also read: Rustomjee Group has bagged the project to redevelop Basant Park in Chembur
At least 50 percent focus on mid and aspirational segment
Elaborating on the seven planned launches, Irani said that two of them will be in the luxury segment where the price bracket will be Rs 10 crore plus, and the balance will be in two price brackets including Rs 1-3 crore in the mid segment and Rs 3-7 crore in the aspirational segment.
1 BHK apartment is like Maruti car
On the company's take on constructing 1BHK apartments in the post Covid-19 era, Irani said, Do I see Mumbai as a 1BHK market? The answer is no.
"I think Mumbai is 2BHK or now going towards 2.5 BHK market. That half bedroom could become the study room, home office, whatever other use the family needs. When we constructed Rustomjee Seasons in Bandra, we came up with a concept of ‘my spaces’. Those half bedrooms we had kept for the families to decide on whether to keep for their entertainment, use as a store room. Now, we are seeing that turning into, say, a home office, study room, or even as a guest bedroom."
Irani added, "This concept of Mumbai being a market of 2 and 2.5 BHK will reflect in our upcoming seven launches in MMR.1 BHK is like your Maruti car. It is your entry towards buying a home, and the way we make our 1BHK is that we do not make them tiny. We make them in such a way that a married couple can stay there for 8 to 12 years comfortably and thereafter they can move to, say, a 2BHK."
Company debt
The company during its Q3 earnings call in February 2023 had said that it had made net repayment of Rs 416 crore of debt, including Rs 342 crore from the IPO proceeds. The gross secured debt as of December 2022 was Rs 517 crore and net debt Rs 100 crore.
The company has completed 32 projects, has 12 ongoing projects and 21 planned ones.
Also read: Rustomjee Group-run Keystone Realtors to focus on homes between Rs 1 crore and Rs 7 crore
On March 24, Keystone Realtors was trading at Rs 446.85 a share at 15.56 on the National Stock Exchange, up 0.60 percent from the previous close.
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