Godrej Properties will spend the next two years focusing on executing the projects it already has instead of starting more and more new projects, company officials said in a post-earnings interaction with investors. They also said their focus will continue to remain on the residential market for the near term.
The most important objective going forward will be to get all of the recently added projects launched in the upcoming quarter, the company management said.
“We believe this will dramatically accelerate our bookings and earnings growth trajectory in the years ahead,” said the company.
Two years ago, it said, Godrej Properties was more focused on business development, but has now shifted its focus to the execution of projects and to ‘plug holes’ in its current portfolio.
“We now feel clearly for the next two, or three years, the kind of growth we want to do can happen entirely from projects already in our portfolio,” said the company.
It currently has nearly 27 projects and several big projects on its hands, including one in Sector 101 Gurgaon, the Raj Kapoor’s bungalow project in Chembur, Mahalunge, Ananda in Bangalore and a plotted development in Mumbai.
These projects which are in different stages of approval, according to the company, will see its completion before the end of FY 2024.
The company further said that it will focus on gaining market share and on outright ownership for high economic interest in projects.
Fill in the Blanks
A second area of focus will be to round off its portfolio, especially in its newer markets.
The company continues to be the strongest in its original market of Mumbai, with a relatively lower presence in newer markets such as the National Capital Region and Bangalore. Therefore, the company will try to round out its offerings in these cities, officials said.
“There are gaps in the portfolio that need strengthening, such as the number of projects in Bangalore or Noida, as a couple of examples. Those are areas that we will be continuing to target from a business development perspective,” it added.
It will, officials said, prefer to focus on a couple of cities at a time, before moving on to newer regions. Even then, they said, it would be interested in only the top cities of India.
“We entirely want to focus on the top five, six markets, which are Mumbai, Bangalore, Pune, which we're already in, Ahmedabad and Calcutta, where we're in at a smaller scale, and possibly add Hyderabad to that,” said the company.
“I don't think we are thinking of group housing beyond these for the moment,” it added.
Commercial Market
When it comes to the commercial real estate space, Godrej Properties is not interested in going for very large-scale, high-volume projects.
“We're not focused on IT park type of developments where we're doing, you know, front office, headquarter type of positioning.. We're happy to do them on a more moderate scale..We have a more boutique strategy. I think we'd like to do only very high-end office developments,” the management said.
Meanwhile, the second quarter of FY24 was the real estate developer’s most successful quarter in terms of new booking, with year-on-year growth of 109% to Rs 5,034 crore achieved during the quarter.
The quarter's booking figure is also nearly equal to its annual booking three or four years ago, it noted.
“This strong growth was due in large part to the extremely strong response to some of our new launches during the quarter. Govind's Tropical Isle in Noida was GPL's most successful ever launch, achieving a booking value of over Rs. 2,000 crores from 1.5 million square feet of area sold,” it said.