Shapoorji Pal­lonji group’s real es­tate arm plans land mon­eti­sa­tion pro­gramme for debt re­pay­ment

Mint Asia ST - - News - BBY I DYA S APAM

Shapoorji

Pal­lonji group’s real es­tate arm plans to mon­e­tise about 100 acres of land over the next two years to raise about ₹ 2,000 crore, bulk of which will be used to re­pay debt.

Shapoorji Pal­lonji Real Es­tate is also in the process of rais­ing an­other $200 mil­lion eq­uity un­der its mid-in­come hous­ing plat­form, Joyville, from ex­ist­ing in­vestors—in­ter­na­tional Fi­nance Cor­po­ra­tion, Asian De­vel­op­ment Bank and Stan­dard Char­tered Pri­vate Eq­uity whose real es­tate busi­ness is now part of Uk-based Ac­tis.

“We have a big land mon­eti­sa­tion plan. While we have a strong de­vel­op­ment pipe­line, equally im­por­tant is our as­set mon­eti­sa­tion plan. We have so many as­sets to mon­e­tise,” Venkatesh Gopalkr­ish­nan, chief ex­ec­u­tive of­fi­cer at Shapoorji Pal­lonji Real Es­tate, said in an in­ter­view.

As part of its as­set mon­eti­sa­tion pro­gramme, the com­pany plans to di­vest about 20-25% of legacy lands, which it owned for years, and sell a fully-leased 2 mil­lion sq. ft soft­ware park called SP In­foc­ity in Pune.

The land parcels in­clude 30-40 acres in Pune, 25 acres in Kolkata and 30-40 acres in Mum­bai.

Cre­ated in 2016, the Joyville plat­form had raised $250 mil­lion in its first round.

The funds have been uti­lized in three ex­ist­ing and four forth­com­ing res­i­den­tial projects.

“We can’t hold on to land end­lessly,” said Gopalkr­ish­nan. He de­clined to dis­close the to­tal debt. Shapoorji Pal­lonji Real Es­tate has an out­stand­ing debt of over ₹ 4,000 crore, said two peo­ple fa­mil­iar with the mat­ter. The com­pany plans to trim the debt to about ₹ 1,500 crore over the next one or two years, said the two peo­ple cited above, who did not want to be named.

“We have one eye on debt. It is not very high. Con­sid­er­ing we have around 90 mil­lion square feet of de­vel­op­ment in the pipe­line and so much of land hold­ings, we are com- fort­able. But, at the same time, we don’t want to go out of pro­por­tion,” said Venkatesh Gopalkr­ish­nan. Mean­while, Shapoorji Pal­lonji is also sharply ramp­ing up its res­i­den­tial busi­ness af­ter a slow pace of launches in the last one year. The com­pany plans to start about 15 new projects span­ning both mid-in­come and lux­ury hous­ing over the next year, com­pared with only five in the last 12 months. The forth­com­ing projects will mainly in­clude new hous­ing projects, be­sides a few com­pris­ing new phases of ex­ist­ing projects. The com­pany is also de­vel­op­ing about six mil­lion sq. ft of com­mer­cial space in Pune.

INDRANIL BHOUMIK/MINT

Liq­ui­da­tion scheme: As part of its as­set mon­e­ti­za­tion pro­gramme, Shapoorji Pal­lonji Real Es­tate plans to di­vest about 20-25% of legacy lands.

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