Puravankara to build on commercial realty
BENGALURU: Residental real estate-focussed developer Puravankara Ltd said it will undergo a strategic transformation by increasing its investments in commercial projects as it sees huge business opportunities in that segment.
“We have over 95% of the business coming from residential and mere 5% from commercial,” said Ashish Puravankara, managing director at Bengaluru-based Puravankara Ltd. “By 2020, we plan to have 35% of our portfolio as commercial.”
The company plans to have 4.5 million sq ft of commercial projects by 2020 across Bengaluru, Hyderabad, Pune and Mumbai.
“We are negotiating some deals for commercial development, including joint development, and hoping to close them soon,” said Puravankara.
The first project to be launched under the new initiative will be a built-to-suit office space in Pune, which will be spread over 33 acres. The company has so far built 1 million sq ft of office space across Bengaluru and Hyderabad.
The company is also looking to lower its net debt, which stood at Rs 2,350 crore at the end of December 2016.
Earlier this week, the developer sold a 20-acre land parcel in Hyderabad and its stake in three subsidiaries that held the land to generic pharmaceutical company Hetero Group for Rs475 crore.
“This is in line with our plans to make the balance sheet stronger and improve capital structure through debt reduction,” said KuldipChawla, CFO at Puravankara. Of the funds raised, the company will deploy Rs 450 crore to reduce debt. It will reduce the interest burden for the company by Rs 50 crore .
The company, which has a debt-equity ratio of 0.74, said that it may look at further monetizing its assets. “We have land in Cochin and Cominbatore. We will evaluate the potential of development versus sale and revenue potential before taking a decision,” said Puravankara.
Puravankara has in its portfolio 23.7 million sq ft of residential properties under construction, with 6 million sq ft expected to be delivered by the middle of this year. It had a land bank of 75 million sq ft as on March 27.
“We have over 95% of the business coming from residential and mere 5% from commercial,” said Ashish Puravankara, managing director at Bengaluru-based Puravankara Ltd. “By 2020, we plan to have 35% of our portfolio as commercial.”
The company plans to have 4.5 million sq ft of commercial projects by 2020 across Bengaluru, Hyderabad, Pune and Mumbai.
“We are negotiating some deals for commercial development, including joint development, and hoping to close them soon,” said Puravankara.
The first project to be launched under the new initiative will be a built-to-suit office space in Pune, which will be spread over 33 acres. The company has so far built 1 million sq ft of office space across Bengaluru and Hyderabad.
The company is also looking to lower its net debt, which stood at Rs 2,350 crore at the end of December 2016.
Earlier this week, the developer sold a 20-acre land parcel in Hyderabad and its stake in three subsidiaries that held the land to generic pharmaceutical company Hetero Group for Rs475 crore.
“This is in line with our plans to make the balance sheet stronger and improve capital structure through debt reduction,” said KuldipChawla, CFO at Puravankara. Of the funds raised, the company will deploy Rs 450 crore to reduce debt. It will reduce the interest burden for the company by Rs 50 crore .
The company, which has a debt-equity ratio of 0.74, said that it may look at further monetizing its assets. “We have land in Cochin and Cominbatore. We will evaluate the potential of development versus sale and revenue potential before taking a decision,” said Puravankara.
Puravankara has in its portfolio 23.7 million sq ft of residential properties under construction, with 6 million sq ft expected to be delivered by the middle of this year. It had a land bank of 75 million sq ft as on March 27.
