Raymond Realty has expansion plans for several parts of Mumbai

To develop 17 msf of saleable area in next five years

After its maiden residential project in Thane near Mumbai, the real estate arm of the textile and apparel major Raymond is looking to develop residential properties in South Mumbai and central and western suburbs of the city.

Raymond Realty plans to develop 17 million square feet (msf) of saleable area in the next five years, said its  Chief Executive Officer Harmohan H Sahni.

Since the fabric of choice this time is brick and mortar, the company is currently developing 3 msf of residential properties in Thane - owned by its parent - and by the end of next year, it plans to take it up to 5 msf, said Sahni.

Of the 120 acres owned by Raymond in Thane , 20 acres are occupied by a school run by the promoter family, 20 acres sold to a mall developer Virtuous Retail, and 80 acres left for property development, of which 14 acres have been taken up by the existing project.

The company will fund its projects with internal accruals and debt, said Sahni, adding it will stick to a debt-equity ratio of 1:1.

 In the Mumbai region, the company is looking to develop the projects on a joint development model, where it will share revenues with landowners - a model popularised by Mumbai-based Godrej Properties.

Sahni said the company would develop mid-market to premium properties in the Mumbai region.

"We will steer clear of super luxury and affordable housing since these are not deep markets and will not satisfy our ambitions for growth," he added.

The company will also look at redevelopment projects of old residential buildings and family properties. Big developers, such as Godrej Properties and Oberoi Realty, are actively pursuing redevelopment projects in the city.

Raymond 's scale-up plans come at a time when national developers, such as DLF and Prestige Estates, are foraying into Mumbai realty market, and Godrej is looking to scale up in its home market as well.

Anuj Puri, chairman, Anarock Property Consultants, said Raymond Realty’s enthusiasm for the Mumbai market is understandable after the stamp duty cut and luxury housing in the Mumbai Metropolitan Region saw considerable upswing – in sharp contrast to the pre-Covid-19 times, when this segment was more or less languishing in most locations.

"The marked demand uptick during the stamp duty period naturally attracted a number of Grade A and national players to make their move. With ample supply already available, South Mumbai and the central suburbs need to be studied carefully for what still drives demand here. These markets still have the potential to perform well if buyers are presented with a good value proposition. The past scenario of oversupply must be used as a reference point. Also, imaginatively differentiated projects can perform where a cookie-cutter approach may fail," said Puri.

Sahni said its new launches in Thane would largely be three-bedroom apartments and some four bedroom apartments. Its initial buildings in Thane had mostly two-bedroom and one-bedroom apartments.

"We have received many enquiries for larger apartments. There is pent-up demand for bigger apartments. The location and the brand fit the bill," said Sahni.

The company is also looking to launch a commercial  project in Thane by the end of next year, he said, adding the company would develop around 1 msf of commercial  property in Thane.