MUMBAI: Realty major Lodha, listed as Macrotech Developers, expects its integrated smart township Palava City spread over nearly 5,000 acres near Mumbai to scale up and generate revenues worth $1 billion, or over Rs 8,000 crore per year, in the next few years, led by the development of residential and commercial properties including offices, a life sciences hub, warehousing & industrial spaces, said a top company official.
The development at Palava City started in 2010, with phase 1 covering 300 acres that was sold out and delivered to nearly 20,000 families in 4-5 years. In 2014, the company started with phase 2 spanning 1,000 acres with over 75 million sq ft of developable area, of which over 20 million sq ft is complete. Currently, the project has nearly 175,000 residents.
“Palava is experiencing a boost in economic activity with an increasing number of jobs, whether through life sciences, back offices, training centres, Industrial, or warehousing facilities. It is strategically located, and with some of the large infrastructure being developed in the vicinity, we are positive of a significant jump in consumer traction, potentially witnessing annual revenue of $1 billion in the next few years,” Abhishek Lodha, MD & CEO, Lodha, told ET.
The developer has so far monetised nearly 400 acres of our land at Palava, either partially through joint ventures or on an outright basis to end users. Currently, it has two joint ventures: one with Morgan Stanley Real Estate Investing (MSREI) for a 72-acre development and another pan-India platform with Bain Capital and CDPQ’s arm, Ivanhoe Cambridge, for a 110-acre land parcel in Palava City.
“Palava is now self-sustaining because we have already acquired a large chunk of the land. The cash flow that Palava generates sustains its growth and hence requires no significant investments. Sometimes a few hundred crores here or there and nothing substantial, and that is the magic where you can scale up to this extent without having to make huge investments,” Lodha said.
The company is currently developing nearly 5.5 million sq ft of warehousing and logistics space in Palava, which has seen substantial traction from several end users such as Skechers and Schlumberger, etc.
Along with the expected revenue growth for Palava, Lodha itself is also likely to witness major traction in sales going forward. In the ongoing financial year, Palava’s contribution is expected to be around 15% of Lodha’s sales of more than Rs 14,500 crore.
