Godrej Properties plans Rs 7,500 cr investment in next 12-18 mths to acquire, develop new projects

Godrej Properties, the largest listed realty firm in the last fiscal in terms of sales bookings, acquires new projects through outright purchase of land parcels and also forming joint ventures with land owners

Sitting on a huge cash pile, Godrej Properties plans to invest around Rs 7,500 crore over the next 12-18 months on acquisition and development of new real estate projects. In an interview with PTI, Godrej Executive Chairman Pirojsha Godrej sounded upbeat on the growth potential in the housing and commercial real estate segments especially in four major markets — Mumbai Metropolitan Region (MMR), Delhi-NCR, Bengaluru and Pune — where the company has a huge presence.

“We will invest USD 1 billion (around Rs 7,500 crore) over the next 12-18 months on development of new projects,” Pirojsha said, adding that the planned investments would be in mix of equity and debt.

Godrej Properties, the largest listed realty firm in the last fiscal in terms of sales bookings, acquires new projects through outright purchase of land parcels and also forming joint ventures with land owners. Pirojsha said the company acquired three projects in the third quarter of this fiscal and the pipeline is strong. “Q4 should be good for us in both sales bookings and new project acquisitions. We are likely to close many deals this quarter,” he hoped.

In March last year, Godrej Properties had raised Rs 3,750 crore through Qualified Institutional Placement (QIP) process as part of its objective to strengthen the company’s balance sheet and future business growth. Its net debt is mere Rs 313 crore as on December 31, 2021. The debt equity ratio is also only 0.04.

When asked about entering into new cities, Pirojsha said: “We are interested in Hyderabad. But its not our top priority. There are huge opportunities in top four key markets where we have a major presence.” The company intends to enter Hyderabad in a big way and not just for development of one or two projects, he said.

On operational performance, Pirojsha said the company is likely to achieve an all-time high sale bookings in the 2021-22 financial year, beating the last year’s record of Rs 6,725 crore. “We will have decent growth in sales bookings this fiscal,” he said.

During the first nine months of the current 2021-22 fiscal year, the company has clocked a sales bookings of Rs 4,613 crore — up 13 per cent from the year-ago period. Out of the total sales bookings, residential properties contributed Rs 4,559 crore and commercial Rs 54 crore.

Pirojsha expressed confidence of achieving its highest quarterly sales bookings during January-March 2022, beating previous record of Rs 2,632 crore, on the back of launch of 10 new projects. He noted that the residential market has revived strongly after the second wave of the COVID pandemic.

Mumbai-based Godrej Properties Ltd, which is part of business conglomerate Godrej Industries Ltd, plans to launch two housing projects in the national capital in the next 2-3 months. Recently, Godrej Properties Ltd reported that its consolidated net profit in December quarter nearly trebled to Rs 38.95 crore. Its net profit stood at Rs 14.35 crore in the same period of 2020-21.

Total income increased to Rs 466.91 crore in the quarter from Rs 311.12 crore in the corresponding period of the previous year. Net profit jumped multi-fold to Rs 91.68 crore during the first nine months of 2021-22 from Rs 2.19 crore in the year-ago period. Total income rose to Rs 1,063.12 crore during the April-December period of this fiscal year from Rs 757.01 crore a year ago.

Earlier this month, the company announced plans to invest Rs 700 crore in D B Realty but later cancelled the proposed deal after its minority shareholders and other stakeholders raised concerns. “There were concerns with the structure of the investment as well as with the slum redevelopment business in general,” Pirojsha had said.

Established in 2010, Godrej Properties has successfully delivered around 20 million square feet of real estate in the past five years. It currently has around 186 million square feet of developable area in 81 projects across India.

Besides the four major focus cities, the company has small presence in Chennai, Kolkata, Kochi, Ahmedabad and Chandigarh.

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