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Tata Realty eyes Rs 11,000 crore topline in residential real estate in next four years, to focus on premium luxury projects

Tata Realty eyes Rs 11,000 crore topline in residential real estate in next four years, to focus on premium luxury projects

Tata Realty and Infrastructure Ltd (TRIL) has outlined its plans to launch 9 million square feet of residential real estate inventory over the next four years. With a strategic focus on achieving a topline of Rs 11,000 crore, TRIL aims to capitalize on the demand in the real estate market.

Sanjay Dutt, the Managing Director and Chief Executive Officer at TRIL, stated that the company’s primary emphasis will be on premium luxury projects, which will constitute approximately 70 percent of the planned residential inventory. TRIL recognizes the demand for high-end housing options and aims to cater to the discerning needs of this segment of buyers.

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In addition to premium luxury projects, TRIL also intends to allocate a significant portion of its residential inventory to aspirational affordable housing and mid-segment projects. This diversified approach allows the company to tap into different customer segments and cater to their specific preferences and budgetary requirements.

By aligning its residential offerings with varying price points and market segments, TRIL aims to capture a broader customer base and maximize its revenue potential. The company’s strategic plans reflect its commitment to meeting the evolving demands of the real estate market and positioning itself as a prominent player in the sector.

» Residential Real Estate

Sanjay Dutt, the Managing Director and Chief Executive Officer at TRIL, stated that the majority of their upcoming residential launches will be concentrated in key cities such as Bengaluru, Mumbai, and Delhi NCR. These cities hold significant potential in terms of real estate demand and market dynamics.

In addition to their focus on the Indian market, TRIL has plans for expansion beyond national borders. They intend to launch a project comprising 36 villas in the Maldives, capitalizing on the growing interest in luxury real estate in that region. Furthermore, TRIL has a mixed-use project in Sri Lanka in the planning stage, highlighting their intention to explore international opportunities.

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The company’s strategic approach involves targeting both domestic and international markets, with a focus on prominent cities in India and selective ventures in neighboring countries. By diversifying their geographical footprint, TRIL aims to leverage opportunities in different markets and broaden their portfolio of real estate offerings.

40 percent topline to be in Mumbai

According to Sanjay Dutt, TRIL’s MD and CEO, out of the anticipated total topline of Rs 11,000 crore in India over the next four years, approximately 40 percent will be generated in Mumbai. The company will focus on three segments: premium luxury, mid-segment, and aspirational affordable housing. The premium luxury segment will constitute around 70 percent of the offerings, while the remaining 30 percent will be dedicated to the aspirational affordable and mid-segment categories.

In Mumbai, TRIL has plans to launch two residential projects, one in Mulund and another in Andheri. The Mulund project involves redevelopment, while the Andheri project is a greenfield development. Additionally, the company intends to introduce a new phase in its Thane project.

Apart from the key cities of Bengaluru, Mumbai, and Delhi NCR, TRIL aims to launch further phases in cities where it already has a presence, including Bhubaneshwar, Noida, Gurugram, Bahadurgarh, and Bengaluru. The average price per square foot for these launches is expected to be around Rs 12,000, which is a significant increase from the Rs 6,000 to Rs 7,000 range seen five years ago, and even higher than the subsequent rise to Rs 10,000 per sq ft.

TRIL’s strategy involves strategically targeting specific market segments in various cities, taking into account the demand dynamics, pricing trends, and growth potential of each location. By diversifying their residential offerings and expanding into multiple cities, TRIL aims to capture opportunities in different market segments and maximize their revenue potential.

Exiting cities at the right time

According to Sanjay Dutt, exit strategies are just as crucial as entering the real estate market at the right time. TRIL plans to maintain its presence in the residential real estate sectors of Delhi NCR, Kolkata, Bhubaneshwar, Cochin, Mumbai, and Bengaluru. The company has constructed a total of 51 million square feet across 17 cities for residential projects.

However, TRIL is strategically choosing to exit certain cities. For instance, they have already sold out and exited the Nagpur and Goa markets. They are also in the process of exiting markets in Kasoli (Himachal Pradesh) and Lonavala. Additionally, in the Maldives, TRIL intends to sell out and exit within the next two years. These strategic decisions align with TRIL’s focus on optimizing their market presence and capitalizing on growth opportunities in select cities while divesting from others.

International markets

TRIL plans to maintain its focus on two strategically located countries, Sri Lanka and the Maldives, which are in close proximity to the southern tip of India. While the company had primarily engaged in social housing projects in the past, it is now venturing into luxury developments in the Maldives, specifically in Male city.

TRIL is also in the planning stage for a mixed-use project spanning 2.5 million square feet in Colombo, Sri Lanka, contributing to its international goals totaling three million square feet. Additionally, the company has plans for a low-rise luxury villa project comprising 36 units in the Maldives. TRIL intends to develop and eventually exit these international markets in a timely manner.

Commercial goals and new businesses

TRIL’s immediate focus revolves around office parks spanning 10 million square feet. The company is also exploring new business avenues like warehousing and logistics, although this will be pursued at a later stage and not in the short term. TRIL expresses a strong interest in B2B (business-to-business) ventures.

Regarding commercial construction, TRIL will primarily concentrate on Delhi NCR, Mumbai, Pune, Bengaluru, Hyderabad, and Chennai. On the residential front, the company will maintain its focus on Delhi NCR, Mumbai, and Bengaluru, as previously mentioned by Sanjay Dutt.

TRIL is actively involved in plotted development, with an ongoing project covering approximately 140 acres in Bengaluru. The second phase of this development is scheduled to be launched this year, contributing to the company’s target topline of Rs 11,000 crore. While TRIL intends to explore Real Estate Investment Trusts (REITs) at a certain stage, it is not an immediate priority.

In terms of commercial real estate, TRIL has already constructed 7.5 million square feet, with an additional 2.5 million square feet under construction. Going forward, there is potential for an additional 9 million square feet in this segment.

TRIL’s diverse portfolio and expansion plans encompass various segments of the real estate industry, demonstrating its commitment to growth, innovation, and exploring opportunities across multiple sectors.

Challenges in real estate

According to Dutt, there are several challenges in the real estate industry, particularly in land acquisition. Some of the major challenges include acquiring buffer areas of defense land, obtaining environmental clearances, and navigating ad hoc rules and regulations, particularly related to coastal zoning. Additionally, the time required for obtaining approvals has increased, leading to a rise in construction costs by approximately 15 percent.

While the digitalization of land records has improved record-keeping, there are still numerous clearances involved in the process. Cities like Delhi, Gurugram, and Bengaluru are witnessing the development of many tall buildings, which further adds to the complexities of obtaining approvals. Specific requirements, such as wind tunnel testing, have also become more stringent and time-consuming.

These challenges in the real estate sector highlight the importance of navigating through complex regulatory frameworks, obtaining necessary clearances, and managing construction costs effectively. Overcoming these hurdles requires collaboration between industry stakeholders and government authorities to streamline processes and ensure a conducive environment for real estate development.

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