Anand Piramal
Anand Piramal

As land prices fall, this is the best time to grow our portfolio: Anand Piramal

'We are happy to look at any good land parcel that fits into our strategy''We are also looking to raise more capital this year. Our plan is to deploy that into good residential and commercial projects'

Mumbai: Consolidation in the real estate sector due to the current liquidity crisis coupled with a prolonged slowdown, and regulatory changes, have opened up a huge opportunity for expansion for Mumbai-based Piramal Realty. Boosted by the strong sales in the last financial year, clocking around 3,400 crore and having sold over 1,000 units within a span of one year, the Piramal group firm is in an aggressive expansion mode. Anand Piramal, founder of Piramal Realty and executive director of Piramal Group, spoke to Mint on falling land prices, rising distressed in the market and how it has provided an opportune time to double its real estate portfolio. Edited excerpts from the interview:

How has been the performance been in the last one year, especially in terms of your residential sales?

Overall we had a great year. We ended sales with 3,400 crore. This would make us the second-largest developer in Mumbai and also among the top five in the country. What helped us succeed is our understanding of the market. We launched our Mahalaksmi project last year. This was a grand success as we understood the market, location was great and we were able to provide a very good offering to customers. Our sales increased four times compared to last year . And two-third of the sales came from our projects in South Mumbai ( Byculla and Mahalakhsmi) and the rest from Mulund and Thane. All our projects have slightly exceeded by expectations.

How do you see the entire consolidation in the real estate industry currently? Do you see this is an opportunity to expand or slow down your business?

Many developers have gone through very difficult times. Customers have also realised that to complete a project it takes a lot of financial muscle and expertise. The other trend that is happening is the process of the NCLT and the bankruptcy code has actually come into play faster than people thought it would. At the aggregate level, 90% of the developers will struggle. A number of them have actually exited their land holdings. After a long time prices are rational, particularly land prices. Effectively land prices have reduced by 10-15% since the last five years. We feel this is a good time to double down our real estate portfolio. Our current plan is to double our portfolio to 30 million sqft in the next one year.

What are the kind of projects that you are looking out in the market?

We are seeing all kind of projects available in the market. Projects that are brown field, projects that have all approvals in place and not yet started. Any good land parcel that fits into our strategy we are happy to look into. Earlier land owners outside the real estate sector wanted to sell. Now developers are more in the market to sell.

Would you be looking at outright sale or pursue a joint development agreement (JDA) model?

The model we will follow depends on the projects that we are looking at. We are looking for both. When the partner is right , we are open for JDA. We are selective about doing JDAs. But if the partner is right we will certainly explore it. We are also looking to raise more capital this year. Our plan is to deploy that into good residential and commercial projects.