Quite a design rethink done to stay relevant, says Prestige Group CEO

Consumer needs and requirements have changed, and differ from city to city. We need to take into consideration what the people of a select city need and then do it accordingly, Venkat K Narayana said

Real estate major Prestige Group reported a sales milestone of Rs 21,040 crore for FY24, marking a growth of 63 per cent year-on-year (Y-o-Y), as it declared its operational results for the fiscal year and fourth quarter on Monday. Its sales for the March quarter touched Rs 4,707 crore, up 21 per cent Y-o-Y. It also sold the highest number of units in FY24 totalling 10,068 units. VENKAT K NARAYANA, CEO of Prestige Group, talks about the company’s growth drivers and vision, in an interview with Aneeka Chatterjee in Bengaluru. Edited excerpts:  

Which of Prestige’s business segments are poised to drive growth in the coming quarters?
 

All the segments. In all the segments where we are present, there is great growth potential, including in geographical markets. We are now in residential, office, retail, hospitality, property management, maintenance division, and to some extent, warehousing and data centres. Together these make the backbone of economic growth. As the gross domestic product (GDP) of the country is growing, there is a need for enough infrastructure to support industries. And we have the infrastructure capability. We are bullish on all our verticals.

Is there a shift in consumer behaviour to premiumisation and how are you catering to it?

There has been a huge shift. Consumer needs and requirements have changed, and differ from city to city. We need to take into consideration what the people of a particular city need and deliver it accordingly. Additionally, post-Covid, there has been a significant shift wherein people are willing to pay a premium for facilities and amenities. Consumers prefer larger homes now. Even in terms of amenities, we provide rooms and working spaces in the clubhouses. Hence, quite an amount of design rethinking happened to stay relevant and cater to the changing needs of the customers.

Recently, you partnered with Abu Dhabi Investment Trust and Kotak AIF to develop projects in India. Can we expect similar collaborations in FY25?
 

No, we just started with this and are happy about the collaboration. This is only the beginning. We partnered for four residential projects. Once we launch these projects and get going, we will strengthen this relationship with more projects. We keep signing quite a few deals every year. Either we buy lands or we do partnerships. Let’s see how it goes.

What are your investment plans for FY25?
 

Our residential sector has done extremely well for FY24. As of December, we have done over Rs 16,000 crore, and have crossed the first nine months of FY23 limit by almost Rs 3,000 crore. Now we must sustain what we have done for FY24 and grow on that. Therefore, we need to do land acquisitions in different regions and cities to ensure we maintain the momentum and growth. However, we have an adequate land bank for FY25. Our focus is on converting lands into projects. That’s where the core strength of the company lies.

There are close to a hundred ongoing projects across segments, cumulative of 180 million square feet – under construction and planning. But acquiring lands and making strategic investments is part and parcel of our business. Whenever there are opportunities, we have been buying land and taking over projects from asset reconstruction companies. This process will continue for some more time. The kind of investments needed for land acquisition would be about Rs 6,000 crore.

Where do you want to see the Prestige brand in three years from now?

Our growth projection is to increase market share from the present 4 to 5 per cent to about 10 per cent. Given the pace of consolidation in terms of supply, we believe there is tremendous potential to grow the residential business in the existing as well as newer markets. Moreover, there are a lot of micro markets within the cities where we are not present, like Thane, Vashi, and Navi Mumbai in Mumbai, which have high sales velocity. Likewise in Hyderabad, we are not present across many micro markets. We need to add more projects in existing cities and expand to new markets.

What are Prestige’s expansion plans within and outside India?
 

Geographically, NCR (national capital region) is a market. We are developing a hotel in Aerocity, which is one of the largest hotels with a convention centre and office space. It is one market where we have not launched a residential project yet. It’s a market with huge growth opportunities, and we are already tied up with good land parcels in NCR. In FY25, we hope to start scoring from this market.

Apart from South India, where we are already present, our focus is on Mumbai and Pune, where we recently expanded. There are no plans to go international at this point. The markets we are present in – South India, Mumbai, Pune – have great opportunities. At present, the idea is to expand, consolidate, and stabilise in these markets and grow on what we have been doing.