Prominent real estate developer Godrej Properties Ltd has decided to enter into the Tier II cities in southern India, with strategic expansion plans, especially for plotted developments.
CEO (South) of Godrej Properties, Pramod Bisht mentioned, "We are very actively looking for plotted development, not just in Bengaluru but also in the Tier 2 towns in southern India like Mysuru, Mangaluru, and Kochi."
Commenting on the opportunity of expansion into Tier II cities, Bisht added that, the plotted developments helps developers to test the new markets and determine the demand for group housing.
Godrej Properties aims to release 21.9 million sq ft worth Rs. 30,000 crore in FY25 based on their investors' presentation. For delivering a real estate of 15 million sq ft during the same period, the company maintains its sales booking direction at Rs. 27,000 crore.
Bisht also mentioned, "Southern India plays a very critical role in the overall Godrej portfolio because it's a stable and steady market. It is less speculative compared to the other parts of India, and there is a strong end-user demand."
The company has maintained a strong presence in strategically developed cities like Bengaluru and Chennai, it has expanded in Hyderabad earlier in 2024. In Hyderabad it has acquired its first 12.5-acre land parcel in Rajendra Nagar with a revenue potential of around Rs.3,500 crore in February.
During March, the company has acquired three acres of land in Kokapet with an estimated booking value of Rs. 1,300 crore. The company also mentioned that, it will not stop two transactions, hinting at ongoing acquisitions in the pipeline.
Bisht also added, "Currently from these two land parcels in Hyderabad, we are looking at premium to luxury launches. But historically around 20-25 percent of sales come from the southern market - so assuming the market remains strong, we will be looking at similar numbers from southern India in FY25."
At present, our focus is on introducing premium to luxury launches in Hyderabad's two land parcels. However, analyzing the previous trends shows that about 20-25% of sales come from the southern market. Therefore, if this market continues its robust growth trajectory, we anticipate achieving comparable figures from South India by FY25.
Bisht mentioned that the first project for FY25 is Godrej Woodscape, currently under construction at Whitefield-Budigere Cross. In July, the company sold more than 2,000 homes in this project, totaling over Rs.3,150 crore.
Bisht also mentioned that, they have planned of a premium luxury project in the western part of Bengaluru in Yeshwanthpur. They also have a pipeline for a mini-township coming up in north Bengaluru. This is a mixed project situated close to Kempegowda International Airport expands across a land area of 62-acre which will be developed through joint development.
He noted that north Bengaluru has been a key driver for growth in plotted developments and villas. "Group housing activities are increasing in north Bengaluru and are expected to continue as economic activity expands. We have seen success with plots, villas, and in certain areas with apartments," he added.
In southern India, Godrej Properties plans to focus on the mid-luxury housing segment, with property prices ranging from Rs.1.5 to 4 crore.
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