Without any advertising, we sold around 250 apartments in our Vaikunt project in Thane in the first phase in just three months where we hope to sell only 75 units. In the second phase, we have sold 30 units. There has been a 25 per cent appreciation in prices since the launch of the project in September. We have seen a good uptake. You are right, there is a slowdown in the market and it will take two to three years if it has to come back in a big way. But, there is a good demand for projects of reputed brands. People feel with approval issues and cashflow problems, only good developers can execute and deliver their promises.
You were predominantly a residential developer. Why did you shift towards commercial properties?
We are pretty bullish that if India grows at 8-10 per cent, commercial properties should do well. We want to have a healthy mix. If residential would provide good cashflows, office properties will give positive yields and annuity like income. We are looking for land parcels in Mumbai for both commercial and residential projects. We are also open to joint ventures if our vision and values match with that of our partner’s.
Will you consider moving beyond Mumbai?
No. Ours is a Mumbai-only strategy. We will do projects that are within two hours from our office in Lower Parel. We believe geographic concentration will bring good results. Besides, it is a local business and understanding the complex approvals in one region is extremely important.
Piramal Realty outbid other players in the past to buy land parcels. Do you think you overpaid for some parcels?
No. Whatever we bought have given us good returns. In Mumbai, if you buy a good land parcel, there is value in it.
Do you think land values have become more rational now?
Now that distress in the system is pinching people, they’re offering good deals than they would otherwise have given. Land prices would have become a little bit rationalised.
What is the vision for your company?
In five to seven years, we want to be known as India’s most admired real estate company not in terms of scale and profitability but the role played by it in improving people’s lives and the country’s progress.
How will you achieve it?
One of our initiative is Piramal Assurance wherein we can buy back the property from the buyer at a five per cent discount to the market value between now and the possession of the project if he or she is not happy with the progress of the project or changed their mind for any reason. The value of the property will be done by two independent valuers.
Besides your existing projects, are you looking to launch more projects?
Yes, we will launch the Mulund project in the next couple of months. We’re evaluating two to three land parcels.