Godrej Properties plans plotted land development foray
- India culturally dominated China for over 2,000 years, says Rajnath, citing academic
- Yamuna Expressway sale: Jaypee submits proposal in Supreme Court
- No pressure from Centre on Gujarat election dates: CEC Achal Kumar Joti
- GSTN starts offline tool to record inputs sent to job workers
- Bitcoin is ‘Enron in the making’, Saudi prince Alwaleed says
Mumbai-based real estate company Godrej Properties Ltd is planning to enter the plotted land development business to expand its footprint and brand presence to more cities. The company is actively scouting for large land parcels on the outskirts of Bengaluru, Pune and the National Capital Region (NCR), a senior executive said.
The new business will be funded by Godrej Residential Investment Programme (GRIP) II, a $275-million investment platform set up by Godrej Properties along with a consortium of investors led by Dutch pension fund asset manager APG Asset Management NV in early 2016.
“We are evaluating multiple land parcels across cities to enter into plotted land development. We are in advanced talks with multiple people and we want to make this as an important vertical and asset class for us,” said Mohit Malhotra, executive director, Godrej Properties. The company has already signed term sheets to buy a couple of land parcels of over 25 acres each in Bengaluru and Pune, and is conducting due diligence.
Malhotra said the company is open to starting the business either by forming joint ventures with land owners or through purchase of land in partnership with its investors.
In plotted land development projects, land plots are sold to customers after developing the surrounding area with basic infrastructure. Other than DLF Ltd and Unitech Ltd, few large realty firms have entered this segment. It has largely been a stronghold of local builders and land owners particularly in cities like Delhi – NCR and Bengaluru.
“Inherently, Indian consumers like land. There is a big need from the consumers' side. Particularly in Noida and Greater Noida, people like plots where they can build houses, the way they want. What people want is if they can get the benefit of owning the land,” said Malhotra. He also said the company has identified plotted land development as an opportunity to expand its presence in Bengaluru where there is a growing demand for such projects.
In November, Godrej Properties started its first villa development project called Godrej Golf Links at Greater Noida. The 100-acre project saw sales of over 6 lakh sq. ft of villas with a booking value of over Rs300 crore on the first day of launch.
“Our plotted land development project will be one step below our Golf Links project. We will not be developing houses or villas. However, we would be building townships and gated communities and selling land plots within it,” he said.
According to consultants and property advisors, there is demand for plotted land particularly in tier II towns depending on the location, accessibility and connectivity to the main city areas.
“In smaller towns, plotted land is a popular concept and people live in independent houses. So, for a developer which is trying to make a national footprint and is already present in various forms of housing projects, this would open up new markets and opportunities,” said Fali Poncha, Director, residential and land, Knight Frank, a property advisory firm.
However, the business is profitable only if developers get into the volume game with land size as much as 100 acres as the margins are lower compared to other residential projects, Poncha said.