Bengaluru: Real estate firm Prestige Group plans to develop housing plots and sell individual office units to investors, a top company executive said. Both the strategies are expected to generate quicker cash flows and attract investors. The Bengaluru-based developer is revisiting the plotted development strategy after nearly two decades.
In Hyderabad, Prestige has a 41-acre plotted project, which was acquired in an auction some time ago, CEO Venkat K. Narayana said in an interview. It will also sell a sizeable number of plots, across 40 acres or so, at its 180-acre integrated township off Sarjapur Road in Bengaluru.
Plotted development projects costing ₹25-80 lakh per plot have seen robust demand, even as apartments struggled to find takers. Mumbai’s Godrej Properties Ltd also launched its first plotted project in Bengaluru recently. Investors are buying plots from established developers, who have recently entered this segment, prompted by the swift sales and easy exit from a sales point of view.
Prestige, which has over 6 million sq. ft of office space across nine projects under development, according to its investor presentation, plans to launch two commercial office projects in Bengaluru, where it will sell portions in so-called strata sales. Both projects are a little over 3 million sq. ft each.
“Strata sales in our office projects will ensure some cash flows. Also, we don’t need to own everything we develop. There is a lot of investor interest in buying office space today. Going forward, we plan to own around 75% of our office portfolio and sell the remaining 25%," Narayana added.
Ultra-rich individuals are seeking a larger pie in India’s booming commercial office real estate, as the sector gets more organized. They are not only buying office space directly from developers, but also investing through fund houses that buy rental assets, besides eyeing real estate investment trusts (REITs), which make such investments secure and yield better returns.