Godrej Properties on land-buying spree; to acquire Rs 15k cr projects

Seeking to encash strong housing demand, realty firm Godrej Properties will acquire multiple land parcels this fiscal having sales revenue potential of around Rs 15,000 crore post-development.

Last fiscal, Godrej Properties was very aggressive on land acquisition and added 18 new land parcels with sales potential of Rs 32,000 crore post-development.

In an interview with PTI, Godrej Executive Chairman Pirojsha Godrej said the company will continue to add new land parcels for future developments, but it will scale down the pace.

Asked about the FY24 guidance for new business development, which means outright land purchase and joint development agreements (JDAs) with landowners, he said, for now it has been set at Rs 15,000 crore in this fiscal.

However, Pirojsha said the company would easily achieve higher numbers.

On reasons behind setting a lower target for new business development, Pirojsha said, "Last year was an exceptional year. Not necessarily we will have such numbers every year."

Further, he added: "We don't even want to add Rs 30,000 crore worth new projects every year. To achieve sales bookings of Rs 14,000 crore in a year, we dont need to actually add new projects worth Rs 30,000 crore."

Pirojsha Godrej said the company is in discussion with many landowners across major cities for both outright purchases as well as entering into JDAs.

On the performance during the last fiscal, he highlighted that it was very strong on all important metrics like sale bookings, cash collections from customers, completion of projects and new business development.

Sale bookings rose 56 per cent last fiscal to an all-time high of Rs 12,232 crore and almost all were housing properties, he said.

Cash collections grew 41 per cent to Rs 8,991 crore last fiscal year, while project deliveries touched a record 10 million square feet.

Godrej Properties added "18 new projects in FY23 with a total estimated saleable area of nearly 29 million square feet and total estimated booking value of around Rs 32,000 crore."

Among big-ticket deals in FY23, the company acquired an 18-acre land parcel in Kandivali, Mumbai for Rs 750 crore to develop a luxury housing project with an estimated revenue potential of about Rs 7,000 crore.

Regarding the current fiscal, Pirojsha said the company has set a target of Rs 14,000 crore worth of sale bookings for now.

The cash collection target has been set at Rs 10,000 crore for current fiscal, while the deliveries of projects would rise to 12.5 million square feet, he said.

Asked about the market, Pirojsha said the recovery in the real estate sector has been very good post second wave of the COVID pandemic despite increase in interest rates on home loans.

He expected demand to sustain in the coming years.

Pirojsha noted that the Delhi-NCR market has been performing very well in terms of both sales volumes and pricing.

To encash this, he said the company plans to launch many projects in Delhi, Noida and Gurugram.

Godrej Properties, an arm of business conglomerate Godrej Group, is one of the leading real estate developers in the country. It mainly focuses on Delhi-NCR, Mumbai Metropolitan Region, Bengaluru and Pune for development of residential projects.

During the full 2022-23 fiscal, the company's net profit increased to Rs 571.39 crore from Rs 352.37 crore in the previous year.

Total income also grew to Rs 3,039 crore last fiscal from Rs 2,585.69 crore in 2021-22.