Prestige Group to invest Rs 2,000 cr on 4 new housing projects in Bengaluru, Hyderabad, Goa
Realty firm Prestige Estates Projects Ltd will develop four new housing projects in Bengaluru, Goa, and Hyderabad with an investment of nearly Rs 2,000 crore amid a recovery in demand for residential properties. The Bengaluru-based company will develop nearly 3,400 housing units in these four projects over the next three and a half years.
“We have launched four new housing projects in the last few months. We are getting very good traction in all these four projects. We have already sold 50 percent in Hyderabad,” Prestige group Chairman Irfan Razack told. Elaborating on these four projects, Prestige Estates Executive Director-Business Development Swaroop Anish said the company launched a middle-income housing project ‘Prestige Tranquil’ in Hyderabad early this month.
The project, which is spread over nearly 8 acres and comprises 906 units, will be developed with an investment of around Rs 825 crore including the land cost, Anish said. Prestige Estates has started construction work on two housing projects in Bengaluru in joint development with landowners.
The first one ‘Prestige Primrose Hills’ at Kanakpura Road is an affordable housing project, which is spread over 15.5 acres having 1,680 units. The project cost is pegged at around Rs 475 crore. The second project in Bengaluru is located at Whitefield named Prestige Waterford. The company is constructing 689 units in this nearly 17-acre project at a cost of around Rs 575 crore.
In Goa, the company is developing a 2-acre project ‘Prestige Ocean Crest’, comprising 106 units, with an investment of nearly Rs 90 crore. According to an investor’s presentation, Prestige Estates clocked 9 percent year-on-year growth in sales bookings to Rs 1,123.3 crore during the July-September quarter despite the COVID-19 pandemic.
Its sales booking in the first six months of 2020-21, however, declined to Rs 1,584.4 crore from Rs 2,042.5 crore in the corresponding period of the previous year because of the coronavirus-induced lockdown. According to PropTiger.com, housing sales in eight major cities fell 54 percent year-on-year in January-September 2020 to 1,23,725 units.
However, the demand is gravitating towards those real estate players who have a better track record of executing real estate projects on time without compromising in quality. Meanwhile, Prestige Group is selling a large portfolio of its commercial assets — office, shopping malls, and hotels — to global investment firm Blackstone for over Rs 9,000 crore.
The term sheets between the two parties have already been signed and the deal is likely to be concluded next month. Prestige group will utilize a major portion of sale proceeds to reduce its debt. Its net debt stood at Rs 8,667.6 crore at the end of the second quarter with an average borrowing cost of 9.65 percent.
Prestige Estates Projects recently reported a 40 percent fall in consolidated net profit at Rs 93.8 crore for the quarter ended September. It had posted a net profit of Rs 157.2 crore in the year-ago period. Total income stood at Rs 1,916.7 crore in the second quarter of this financial year, as against Rs 1,962.7 crore in the year-ago period. Prestige Group has so far completed 247 projects covering 134 million sq ft area. In the housing segment, the company has completed 118 projects and is currently developing 30 more projects.
It has completed 36 million sq ft of office space and 15 million sq ft area is under construction. In the shopping mall segment, 7 million sq ft has been completed and another 3 million sq ft area is under construction. In the hotel business, the Prestige group has 1,262 keys and is developing 1,229 keys.