We want to build up a new portfolio Prestige 2.0 and monetise it by way of a REIT or IPO: Irfan Razack, Prestige Estate

  • Kunvarji Realty
  • 01/02/2024

We want to build up a new portfolio Prestige 2.0 and monetise it by way of a REIT or IPO: Irfan Razack, Prestige Estate

Source: The Economic Times

Irfan Razack, CMD, Prestige Estate, says “momentum will continue in the next financial year also. But again, it all depends on your location, the type of product, the type of pricing that you have on the product – that is what will give you success. Of course, the players who have delivered in the past, they have benefited, including our company and we have consistently focussed on delivery and that is what has given confidence to buyers to come to us to get their housing needs.

Let us just talk about the overall demand environment and how it really has shaped up as we step into 2024. Do you believe that it is only likely to sustain? Give us an on-ground picture.

But talking about your company specifically, the FY24 presale guidance is of around Rs 16,000 crore. You have already managed to do almost 70% of that. Are you looking at upping the guidance? Maybe you are likely to do 18,000-20,000 crores? Irfan Razack: Yes, probably that will happen because this quarter has nearly ended. We are at the end of the month and end of the quarter, and we should touch that 16K that we had anticipated this quarter itself. So, whatever we get in the following quarter is a bonus and we hope to touch 20,000, this is what we have been saying and hopefully we should be able to do that. And, of course, that is a function of new launches and function of new product coming in and that depends on the approvals that we get for various projects and if we do get that we should be able to achieve, but at least we have reached the target that we had initially projected for the year in nine months itself.

Talking about over delivering on your targets, there was also this target of doubling sales by FY26. Are you likely to do that as well earlier than expected, maybe FY25?

Irfan Razack: I mean, let us take it year on year because now the base has really grown big. You see, when we did the Rs 10,000 crore turnover two years ago, people thought that it was a record and then we went in with Rs 13,000 crore last year and we had guided some 20% increase on top of that, which was like you said, rightly, Rs 16,000 crore and this will be surpassed, we will be hitting 20K. But then when the base grows so big, so high, now the question is how to sustain it, how to make sure that the right product comes in, the right type of supply comes in and the demand is there, that is one thing great.

People are willing to commit, people are buying, and if we offer, like I earlier said, the right product at the right location at the right price is a recipe for success. And if we keep doing that, I do not see any reason why this base should not grow. Obviously, we are looking at different geographies. We have not opened our account in NCR. Hopefully, in the next financial year, we should open our account in NCR.

And where is it that you are going to see the most growth potential in terms of the MMR region? You have your eyes on the north as well. There is a maiden project in Noida. Can you tell us a little bit about how your sales mix is going to evolve? Irfan Razack: We are pretty strong in Bangalore, that is our base and then we did a large launch in Hyderabad which was the Prestige City, Hyderabad, and that has met with a huge response. It is a fairly large development of 13 million square feet and that has been launched and has met a very good response and the sales are on week on week and it is a big responsibility for us to start the work and complete it within the committed timelines.

It will be really a sense of achievement we will get to create such a big township and today's scale matters. So, wherever we are doing work, we are scaling ourselves up. We have also increased the management bandwidth because you need people to actually execute and make sure things happen and also take care of the customer requirements and demands. So it is a mixed bag. See, we have to be at it. The team has been working hard, they are pretty charged up and that is what is taking us to the next level and to the next and we do hope with the tailwinds the market is giving us and the type of reward we are getting rewarded for it, I believe that the best is yet to come.

Yes, there is a lot of responsibility as well that comes with delivering those kinds of projects. But other than the one that you mentioned, talk to us about what the land acquisition pipeline looks like in FY25-26, which are those big launches that we should expect from you or watch out for? Irfan Razack: Now, like you mentioned Mumbai, one of the best residential developments, of course, it is a luxury development. It is the Prestige Ocean Towers in Marine Lines that I would rate it as a landmark development that will happen for the skyline of the city of Mumbai and that will be followed by Prestige Nautilus and we will also have one component of the Prestige City in Mulund, which is the Prestige Forest Hills, even that will be launched during the next financial year. Now, these are the ones that will really increase the base for the company for next year.

Apart from that, in Bangalore, we have a continued pipeline. We have the Rain Tree Park in Varthur, which will again come in next year. And the next quarter, there will be a few developments that will be launched where the approvals will come in like the Kings County which is a plotted development, again, a Sunset Park plotted development again and Prestige Somerville which is apartments again in Whitefield. So, there is a very robust pipeline.

In Chennai, we have the Prestige Pallava Gardens. Again, we are waiting for the approvals and then, of course, like I said, NCR, we have an eye on NCR and Delhi and there we believe that there is a potential and there is a big vacuum and if we get our act right there, we should be able to get great numbers even in that region. Also give us an outlook then in terms of what the sense is when it comes to luxury residential demand. Do you believe that we could see an uptake that the premiumisation trend is well growing?

Irfan Razack: Luxury always will be a niche market. It would not be that market which just anybody and everybody can buy. We have to be measured, but then there is demand for luxury and if we are able to get the right product, like we have KG Marg in Delhi now, we have got a very good property there, that is going to be a high-end luxury. We have talked about the Ocean Tower in Mumbai and, of course, Bangalore, entirely luxury, the inventory that we had is completely sold out and we are trying to see whether we can generate something but at the moment I do not see any visibility there. So, it has to come from Hyderabad, Mumbai, and Delhi because even in Hyderabad, in Banjara Hills, we have got a beautiful plot of land which we have tied up, which is called the Prestige Rock Cliff, even that will come in the luxury segment.

But yes, we have to tread carefully. Luxury segment will not be a runaway sale but the people who are committing to it are high-net-worth individuals. They are individuals who are well-informed and will take their decisions and at the end of the day they have experienced the luxury that Prestige has already built in the past, so they have that confidence and I do believe that luxury also is something that will pick up in the near future.

A quick question on the office and mall portfolio. You, of course, had sold a substantial part of it to Blackstone but what is the plan to kind of revive that and what is the outlook when it comes to that space as well?

Irfan Razack: After what we did with Blackstone, it has given us the firepower to do what we are doing and in especially commercial offices, we are building a substantial number of offices across the country. We are doing work in Hyderabad, in Bangalore, Chennai, as well as in Pune. Now in Pune, we are just completing a building in the Kharadi region, which is a million square feet and that has been pre-leased to Bank of New York Mellon, so that is an ongoing process.

Even in Bangalore, our vacancy levels are as good as near zero. Of course, there will always be some movement and whatever product that is coming and getting completed, we are getting clients who are sort of pre-committing themselves. I believe that we want to build up again a big, solid, new portfolio, which my team calls it Prestige 2.0 and that portfolio at some time or the other we would like to monetise it by way of a REIT or an IPO.

Yes, hospitality is also doing extremely well and we are just now opening the Moxy, the airport in Bangalore and we have a big pipeline of new hotels coming up and there will be a huge surge of rooms that we will be building across the country, including in Aerocity in Delhi, which will be the largest convention centre and hotel, a convention centre of 225,000 rooms, which will keep the dream of our prime minister to have all our events in India and not go outside and that is a hotel that we are looking forward for which will be a Marriott Marquis and a St. Regis Hotel that will get ready in 2025.",

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