Milind Korde, managing director, Godrej Properties Ltd, talks to Pallabika Ganguly on the various joint venture projects that the company will be soon launching
Pallabika Ganguly (ML): What is the current scenario in the real-estate sector for both residential and commercial properties?
Milind Korde (MK): We see a lot of demand in the residential segment compared to the commercial sector. The upper middle class population is expected to grow to 500 million in the next 10 years. They will all require housing. This will create a boom in the residential market. Our only consideration is that prices may go up due to this huge demand. Developers might not be able to meet the demand due to the delays in supply, mainly caused by factors like regulatory permissions.
Commercial office space has also started showing positive signs after the slowdown. Currently, there is low supply in commercial space as most developers have converted their commercial projects into residential ones, as there was a lot of demand in this segment.
The retail sector will still take time to grow in India as there are some issues like location of malls, (the) rent versus revenue (problem) and (inadequate) footfalls.
ML: How much area are you currently developing across the country?
MK: We are currently present in 11 cities, (we are) developing around 83 million square feet (sq ft). We have recently added around a million sq ft of land. Around 85% of our projects are joint ventures. We have just entered Gurgaon, where we are developing 1.1 million sq ft. It is a joint development (residential) project, where the land belongs to the Frontier Group and we will share revenues. We will be developing two and three bedroom, hall & kitchen (BHK) apartments. Currently, real-estate prices in this location are Rs3,500 per sq ft. We are still in the planning stage of the project and have still not finalised the prices of the apartments.
We are also developing a project in Mangalore, spread over four acres. The residential portion is around 6-7 lakh sq ft. We are developing a 24-floor tower comprising three and four BHK flats; the average size of the apartments would be 2,600 sq ft. We are developing over 240 apartments. We will be launching the project soon, at around Rs4,000 per sq ft.
ML: Can you talk about your Pune and Thane townships?
MK: We will be soon launching two townships - Bhugaon (at Pune) and another at Thane. The Bhugaon project is spread over more than 100 acres. It is also a joint venture like our other projects. It will be a mixed development (project), consisting of bungalows, apartments and institutional buildings.
The Thane project is spread over more than 10 acres; we have recently added more land for this township. We would take two-three months to launch the project and six-nine months to book the revenue and profits.
ML: How has the progress been at your Garden City project at Ahmedabad?
MK: We will be launching Phase III soon. We have already sold 19 buildings. The township will be spread across more than 250 acres. We have already completed development of more than 1.5 million sq ft (in both Phase I and Phase II).
ML: In terms of redevelopment of old buildings in Mumbai, which are the projects that your company is focussing on?
MK: We are focussing on tapping the cluster redevelopment segment in the island city and redevelopment projects in suburban Mumbai. We are looking at several projects at the moment. Godrej is trying to give a new makeover to old buildings in terms of modern amenities like parking slots, etc. We feel we can leverage our expertise in these kinds of projects.
ML: Are you looking at affordable housing?
MK: Some of our projects are targeting the affordable housing segment like the Prakriti project in Kolkata. We are developing 1,000 sq ft flats for Rs2,200 per sq ft.— Pallabika Ganguly