Bengaluru-based Prestige Group has cashed in on the good sales momentum in real estate and is also expanding its geographical footprint. The company expects to close FY22 with a Rs 10,000 crore of top-line and may plan to list the hospitality part of the business once it reaches some scale in the next five years, Irfan Razack, chairman and managing director, tells Shubhra Tandon. Excerpts.
How has the year been in terms of new launches?
It is business as usual, and launches have happened at a good pace. We are very sure that we will hit the Rs 10,000 crore mark in terms of top-line for this year ending March 2022. That will be sustained by good product, good quality launches and, of course, past deliveries done by us.
What is the plan for FY23?
We would like to sustain the momentum; Rs 10,000 crore is a tough number, and we would not like to slide down from here.
How big is the hospitality piece for Prestige and where does the JW Marriott Bengaluru Prestige Golfshire Resort & Spa property fit in?
Prestige is present in all asset classes — residential, offices, retail and hospitality. With this property, we have 670 rooms with Marriott and another 660-odd rooms with other brands like Hilton and Oak Wood and Banyan Tree. So, that gives us 1,200 rooms which are already trading. There are 10 other hotels in the making, which are either in planning stages or under construction in different cities like Mumbai, Delhi Aerocity, Kochi, Bengaluru and Chennai. By 2027 this will give us another 2,200 rooms, taking the total tally to 3,400 rooms.
What is the bigger plan on hospitality?
The main gameplan is to create a big hospitality asset base, which will lead us into creating a hospitality company. Hospitality is a capital-intensive business, so there will be a lot of capex spend that will go on these, and initially there will be a spike in debt. However, we can go to the public or markets to raise capital, which will sort of ease stress on the balance sheet and also gives us the bandwidth to expand more. But that is beyond 2026-27, when most of these assets are done and dusted.
What kind of investments are you planning in hospitality?
In this (JW Marriott Bengaluru Prestige Golfshire Resort & Spa) hotel, we have invested 600 crore without the land. Of that, around 300 crore is debt and the rest has gone from our internal resources. I don’t want to take on too much debt and then not be able to service it. Hospitality is an asset which has the longest lead in terms of repayment. In office or retail, you can just discount it on your lease rentals, but that does not happen in hotels.
What does the year look like for your retail business?
Retail, as in malls, we just did a deal with Blackstone and hived off eight of our malls; we hold 15% stake in those malls even now. Maybe if Blackstone goes into REIT, then we will be holding units along with them. Apart from that, we are completing two malls by August. One will be in Bangalore, which will be about one million square feet in Prestige Falcon City. Another one will be in Kochi of 8,00,000 sq.ft. There are a few more planned.
Any plans for a REIT by Prestige?
Since we have already done this large transaction with Blackstone, I will take a backseat now and allow Blackstone to do the REIT. I will create more assets and maybe at that time will look at a REIT.
