Piramal Realty aims for Rs1,350 crore of sales in fiscal 2017
Bengaluru: Mumbai-based Piramal Realty, the real estate arm of the Ajay Piramal Group, expects to clock around Rs1,350 crore of sales in 2016-17, its first full-year sales outlook, even as the real estate sector has still not come out of the downturn, said a top company executive.
The realty firm launched its first project last September—a 32-acre residential venture in suburban Thane—and now has three residential projects and one commercial office project underway.
Launched in 2012, Piramal Realty is led by Ajay Piramal’s son Anand Piramal, an executive director in the group, and backed by private equity firm Warburg Pincus and investment bank Goldman Sachs Group Inc. Warburg Pincus invested Rs1,800 crore in the company and Goldman Sachs pumped in Rs900 crore in 2015.
“We have already done around Rs850 crore of sales this year and hope to achieve Rs 1,350 crore of total sales this year. We are happy that we are investing in quality, selling at a slight premium to others and have sold without much aggressive advertising,” said Anand Piramal in a telephone interview.
Earlier this month, Piramal Realty appointed N.M. Gattu, formerly with DB Realty Ltd, as the company’s first dedicated chief financial officer as it goes out to buy more land, eyes faster expansion and growth.
This year, the firm plans to launch a new 8.5-acre residential project in Mumbai suburb Mulund, expand its office portfolio and buy distressed land parcels in and around Mumbai.
Piramal said that with significant stress in the (real estate) system, this is a good time to look for land parcels as sellers, too, are becoming more rational about price expectations.
“The capital we raised from institutional investors is used to fund our projects. We are under no pressure to buy land and will look at new opportunities at the right price. We want to deliver long-term, economic value to our shareholders,” he said.
Over the last three years, the real estate sector has witnessed a slowdown in sales and rise in unsold inventory in almost all cities.
In the April-June quarter, unsold stock in Mumbai Metropolitan Region (MMR) rose to 266.7 million sq. ft, up 33% from a year ago, Liases Foras Real Estate Rating and Research Pvt. Ltd said.
The April-June quarter witnessed a shift in (buyer) preference, from lower-priced, more affordable homes, towards residential units priced above Rs 50 lakh. However, for homes in the luxury segment, priced at Rs2-3 crore and above, sales remain elusive.
“Even though sales continue to remain slow in Mumbai, we are expecting project launches to gain momentum towards the end of this year. Though home buyers want ready projects or the ones nearing completion, we believe developers who offer attractive payment plans will attract sales,” said Pankaj Kapoor, managing director, Liases Foras.