Godrej Properties, the real estate development arm of Godrej Group, expects to surpass its business development guidance of Rs 15,000 crore for the current financial year, driven by a robust deal pipeline and ongoing consolidation in the real estate market across the country, said Pirojsha Godrej, executive chairperson, Godrej Properties.
The developer is keen on acquiring new projects that can be launched as soon as possible, rather than just picking up land parcels to beef up the portfolio.
“Our whole idea has been to do business development for projects that we plan to develop immediately. In that sense, we are not using a typical model of land banking or keeping land for later development, etc. And we now feel we have a portfolio that can deliver the kind of growth we want over the next two to three years,” Godrej told ET.
Last week, the developer forayed into the Hyderabad property market with the acquisition of a 12.5-acre land parcel in the Rajendra Nagar locality. This project, with an estimated 4 million sq ft development, holds a revenue potential of Rs 3,500 crore based on the current business assumptions.
This latest acquisition has pushed the developer’s count to seven additions so far in this financial year, with an estimated booking value of Rs 11,925 crore. Prior to this, the company added one group housing project in Bengaluru in the December quarter with an estimated booking value of Rs 1,250 crore.
Godrej is confident the company will significantly exceed its booking guidance of Rs 14,000 crore for the current financial year and deliver its best-ever annual performance in terms of cash collections and project deliveries. The company expects to deliver over 12.5 million sq ft in the ongoing financial year.
The new business development will be more targeted towards key markets that the company believes its portfolio still needs strengthening in.
“The aspiration is not to do a kind of business development very disproportionate to the sales we are doing,” he added. The company has launched eight new projects or phases across five cities in the first nine months of this financial year.
The December quarter marked Godrej Properties’ highest ever quarterly sales for the second quarter in a row, witnessing a total booking value of Rs 5,720 crore with 4.34 million sq ft of area sold. The developer’s consolidated net profit grew 6% year over year to Rs 62 crore in the quarter to December. Total income for the period surged 43% to Rs 524 crore.
Industry experts believe the ongoing market consolidation in favour of large and established developers will gain momentum owing to their better execution ability and access to liquidity in the current market environment than that for smaller developers. This is expected to offer more such opportunities to these developers, helping to increase their market share.
