MUMBAI: In a major consolidation exercise, leading property developer Godrej Properties Ltd Monday said it will develop six projects of a Pune builder in what it called an “equity investment platform".
The company did not name its partner, but two people familiar with the matter identified it as Pune-based Solitaire group. The Godrej group firm will develop Solitaire’s six projects spread across 300 acres, this person added on condition of anonymity.
A Godrej Properties statement to BSE said the six projects, with a development potential of 25 million sq. ft, includes housing projects, plotted development as well as mixed-use and township projects. The statement added that this is a first-of-its-kind equity platform investment, and is in alignment with Godrej Properties’ strategy of deepening its presence across leading real estate markets.
“This single partnership will dramatically enhance our presence in the Pune market, cementing our presence across key growth areas within the city. We believe this sets us up well to establish a leadership position in Pune’s residential market and fits perfectly with our strategy of growing our business across the country’s leading real estate markets," Pirojsha Godrej, executive chairman, Godrej Properties, said in the statement.
Questions emailed to Solitaire group remained unanswered.
“This is the kind of takeover that we will increasingly see in the real estate sector. This is how consolidation will happen and the market will move on. The NBFC liquidity crisis has only expedited the consolidation process, and made it worse for many developers," said Anuj Puri, chairman, Anarock Property Consultant Ltd, a real estate advisory firm, adding “more such instances of developers taking over large portfolios of other developers" are likely to come up in the near future.
The transaction comes at a time when the property market is undergoing a phase of consolidation where several local builders or smaller size real estate firms and landowners are forging alliances with bigger corporate and branded developers. Regulatory reforms in the recent years and a prolonged slowdown in the housing market have led to these partnerships among developers for faster execution and help repay their piling debts.
In the last one year, another Pune-based firm Kumar Urban Ltd has scaled down its development and sold a big chunk of land to another local developer to repay debt. Other developers like Nirmal Ltd and Peninsula Land Ltd are focusing on developing some land parcels on their own while partnering with other developers for larger plots.