Piramal Realty to focus on the mid-market segment – plans to invest Rs. 3,500 crore in Mumbai.

Piramal Realty, the Piramal Group’s real estate development arm, plans to invest over Rs 3,500 crore in the Mumbai Metropolitan Region (MMR) residential project over the next 3 years with a strong focus on mid-market segment, said a top company official.

Goldman Sachs and Warburg Pincus are investors of this enterprise which is entering the mid-market compact housing segment as part of its 32-acre township Piramal Vaikunth project in Thane, with five-acre development.

Of the estimated total investment of Rs 3,500 crore, the company will invest Rs 1,500 crore to develop this five-acre plot to 2 million sq ft. The company will offer 1 and 1.5 bedroom apartments for Rs 60 lakh to Rs 80 lakh with 350-500 sq ft configurations.

“The blend of the right product, location and ticket size ensures good results and this is evidenced by our recent launches in South Mumbai. Luxury will do well, but this is also a good segment, with the consumer preferring compact units right now,” said Anand Piramal, Piramal Group’s Executive Director. “A combination of internal accruals, debt and some of the equity would support the planned project.”

By July, the company plans to launch 3 more projects – including location like Mahim, Thane, and a proposed tower at Byculla – and it will include compact housing as an integral part of all its projects. Omkar Realtors & Developers concluded a joint development agreement with the company last month, in a 2.2 million sq ft residential project spread over 4 acres in Mumbai’s Mahim region.

It plans to add 10 million sq ft projects in 2020 to its current development portfolio of 17 million sq ft. Projects such as Mahalaxmi and Byculla from South Mumbai continue to contribute 50% of the company’s portfolio.

In the first 3 quarters of the financial year 2019-20, sales of Piramal Realty crossed over Rs 1,250 crores, out of which Rs. 450 crore was achieved in the quarter ended in December. In the first nine months, the company saw a growth of more than 50 per cent over a year ago for ongoing projects. In the 2019-20 financial years, Piramal expects the company to complete sales valued at around Rs 2,000 crores led by ongoing work and new launch projects.

He said that the company will continue to explore new land parcels for residential and commercial development in the Mumbai Metropolitan Region (MMR).

“We also received offers for outright sales and co-development from landowners. Many owners have now lowered their expectations to the reality of the industry. In addition to the landlords, lenders are also pursuing projects to be completed,” said Piramal.