Ozone Group to raise about Rs200 crore to fund its maiden Mumbai project
Ozone Group has entered into a JV with Mumbai-based K Mordani Realty Pvt. Ltd to develop a residential building of more than 100 units near Bandra-Kurla Complex
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Mumbai: Bengaluru-based real estate firm Ozone Group is raising about Rs.200 crore in the next one month through a mix of private equities and debts to fund its first residential project in Mumbai, a top company official said.
In the last one year, Ozone has raised more than Rs.1,000 crore from private equity firms such as Piramal Fund Management Pvt. Ltd and Aditya Birla Realty Fund. These funds have been primarily used in financing its two township projects in Bengaluru and Chennai.
For its entry into the Mumbai real estate market, Ozone Group has entered into a joint venture (JV) with city-based K Mordani Realty Pvt. Ltd to develop a residential building of over 100 units near Bandra-Kurla Complex in the city. The project will have a total saleable area of 120,000 sq. ft. It is expected to be launched in the next three months.
“I have a financial closure for the project we are entering into Mumbai. In the next one month, we will be raising close to Rs.200 crore. This will be (raised through) a combination of non-banking financial companies (NBFCs) and private equity,” said Srinivasan Gopalan, chief executive officer (CEO), Ozone Group.
He, however, did not disclose the name the NBFCs and the private equity firms the company is in talks with.
The project is expected to be completed in the next three years. It will be sold between Rs.2.5 crore and Rs.2.7 crore per unit. He plans to earn revenue of around Rs.300 crore from the project.
Earlier this year, leading property developers from south India such as Prestige Enterprise Pvt. Ltd and Purvarankara Projects Ltd announced plans to enter Mumbai in a bid to grab a piece of one of India’s largest real estate market.
According to a report by real estate analytics firm PropEquity, Mumbai is the second largest real estate market in India in terms of sales, after Bengaluru. The city generated around Rs.340 billion worth of sales between January 2013 and December 2014, the firm added.
Mumbai becomes a natural choice for many real estate firms as it provides different micro markets catering to various budget segments, say analysts.
“Mumbai is one of the most resilient markets as compared to other cities. In many ways it is similar to Bengaluru. It is cosmopolitan, has similar IT pockets and has always been a seller’s market. If the properties are priced well and the surety for delivery is there, sales happen. That way it is far more predictable than some of the other major cities,” said Ashwinder Raj Singh, chief executive officer (residential services), JLL India, a property consultant.
Gopalan expects that entering the Mumbai real estate market will help strengthen the brand image and visibility of Ozone Group in the long run. The company is currently scouting for more partnerships with focus on building small size projects as it can generate faster cash flow compared to the larger ones with long gestation periods, he added.
“We will be looking for JV opportunities with land owners or with other developers here. Our focus will be in smaller projects. We should at least have two-three projects and should have delivered about two in the next three years,” he said.
Ozone Group is currently developing a 42-acre township Metrozone in Chennai. It is also in the process of delivering the third phase of its 160-acre project located in the suburbs of Bengaluru. Overall, the company has more than 10 million sq. ft under construction.