Prestige Estates plans to launch a middle-income housing project in Noida and a commercial office project in Gurugram.
South India-focused developer Prestige Estates Projects Ltd is set to enter the national capital region with two projects this financial year, said Venkat K. Narayana, the chief executive of the real estate firm.
Prestige is planning to launch a middle-income housing project in Noida spread across 22-acres and a commercial office project in Gurugram by the end of March, said Narayana, adding that the NCR projects will be through joint development agreements.
“There can’t be a better time for us to diversify our portfolio and enter new markets such as the NCR. Our strategy is long term,” he said. “We are also actively looking at growth through acquisitions, both in the office and residential space.” Prestige Estates is also actively exploring the Mumbai realty market.
Prestige will be among a host of large developers to have entered NCR. These include Godrej Properties Ltd, Tata Housing Development Co., Mahindra Lifespace Developers Ltd and Shapoorji Pallonji Real Estate.
“There are many big developers from the South who are looking to enter NCR because land owners and developers here are sitting on large land parcels, but are unable to develop them. This has thrown up many opportunities,” said Santhosh Kumar, vice-chairman, Anarock Property Consultants.
“Despite the pain NCR has gone through, the office market is still doing well and there is high demand for housing, which is what financially sound developers like Prestige would cash in on,” he added.
The company is, however, yet to complete the ₹2,000 crore office property deal with Singapore’s sovereign fund GIC Pte Ltd, even after seven months of signing a term sheet to sell a 40% stake of its office projects portfolio. The transaction was expected to close within 60-90 days, the company had said then. Narayana said the talks are still on with GIC, but did not divulge any further detail.
Prestige is prepared to explore fund-raising options in case of a delay in the GIC deal, analysts cited Prestige’s management as saying in the June quarter earnings call. “The deal for office space expansion with GIC Singapore is still at the due diligence/negotiation stage and clarity on the same may emerge in another 3-4 months,” said Adhidev Chattopadhyay, analyst at ICICI Securities Ltd.
According to Narayana, real estate investment trusts (REIT) are a good, tax-efficient route to tap the public markets given the company’s diversified assets, stable cash flows and the ability to scale.
On the fund-raising front, Prestige had earlier this year announced a Rs 2,500 crore residential joint venture agreement with HDFC Capital Advisors Ltd to build a mid-income housing portfolio.
The first project under the alliance will comprise 185 acres at Sarjapur Road, Bengaluru, for which about Rs 256 crore will be drawn from HDFC.
Narayan said the project is in the planning stage but will serve mid-market home buyers.
Last month, with the inauguration of its premium residential project Lakeside Habitat, the Bengaluru-based company also crossed the milestone of developing 100 million square ft in its three-decade long journey, which is significant in the current real estate scenario.
Prestige is in the process of building 57 projects with developable area of around 62 million square feet and has a pipeline of 31 upcoming projects spread over 43 million square feet, according to the 2017-18 annual report. It is also aggressively pursuing value-accretive opportunities for and take over of projects in key markets with high potential to spur its growth.