Bangalore: Tata Realty and Infrastructure Ltd will concentrate on office and retail projects that may sometimes include residences, ending a potential conflict with another group firm that focuses on housing.
Managing director and chief executive Sanjay Ubale said this in a phone interview after Tata Realty launched its second residential project, in Nagpur, on Monday. It launched its first residential project in Kochi in August.
Tata Realty was set up to primarily execute infrastructure projects and function as a fund, whereas Tata Housing Development Co. Ltd was meant to specialize in developing and selling properties, primarily residential projects. But in 2010, Tata Realty started showing an interest in residential projects as well. The parent group finally asked the two firms to iron out their differences, making it clear that Tata Realty couldn’t specifically pursue housing projects.
“These two projects in Cochin and Nagpur can be developed because they are coming up on land that the firm had acquired quite a while back, though they have been launched only now,” said Ubale. “However, after these, we will concentrate on non-housing projects and residential development may be a part of it.”
Tata Housing does not have any ongoing project in Kochi and Nagpur, said a company official who didn’t want to be named, though it developed a project in Kochi many years ago.
The company develops affordable homes under the Shubh Griha brand as well as high-end residences.
Tata Realty’s two residential projects—Capitol Heights in Nagpur and Tritvam in Kochi—will come up on a total area of 18 acres at an estimated cost of about Rs.950 crore.
Tata Realty is also developing the Ramanujan IT City in Chennai over 25.27 acres, a shopping mall in Amritsar, an IT park in Goregaon, Mumbai, and the Pune-Solapur highway enhancement project under National Highway Development Programme (phase III).
Om Ahuja, chief executive of JLL Residential Pvt. Ltd, a part of property advisory Jones Lang La Salle, said that while small markets such as Kochi have a lot of growth potential, job creation will be a determining factor in how demand for real estate pans out in smaller cities.
“Only if there is substantial demand will we see national developers entering these markets; or else, they will remain in the hands of a few local players,” said Ahuja. “In terms of pricing, appreciation of land parcels is typically better than rise in prices of apartments in these markets.”