Leading realty firm Prestige Estates Projects Ltd is foraying into the Delhi-NCR market and has tied up with local developer Ace Group to launch its first housing project in Noida with an investment of around Rs 500 crore on construction.
In its last 32 years of operations, the Bengaluru-based Prestige Group has completed 236 real estate projects comprising nearly 125 million sq ft of developable area, mostly in south India.
"We are entering into Delhi-NCR which is a key real estate market in the country. We have formed a joint venture with Ace Group to develop this mid-income housing project," Prestige Group CEO Venkat K Narayan told PTI in an interview.
Ace Group owns around 15 acre land in Sector 150, Noida, Uttar Pradesh. The total development potential in the upcoming project is estimated at around 2 million sq ft, comprising more than 1,000 units.
Asked about the investment, Narayan said the land is already owned by joint venture partner and the cost of construction is estimated at around Rs 500 crore.
The construction cost would be met largely through sales and advances from customers, he said.
"We are targeting to launch this project in this calendar year," he added.
The company is yet to decide on unit price, but the rate is expected to be around Rs 5,500 per sq ft.
Prestige and Ace Group would share project revenue as per an agreed ratio.
Narayan said the company is looking for more projects across all real estate verticals in the Delhi-NCR market.
He highlighted that the company achieved sales bookings of Rs 1,016 crore in April-June quarter despite slow demand and expressed confidence that the momentum would continue in the remaining quarters of this financial year.
Prestige Estates had given a sales booking guidance of Rs 5,000-6,000 crore for the 2019-20 fiscal year.
During the first quarter of this fiscal, the company launched three projects with 6.57 million sq ft of developable area.
It delivered four projects having 10.33 million sq ft area, of which three projects were housing projects consisting of 3,892 units.
Prestige posted a net profit of Rs 123.9 crore over a revenue of Rs 1,567.4 crore during the April-June quarter.
Narayan said the company is currently constructing 48 projects having nearly 50 million sq ft developable area. As many as 36 projects are in pipeline with 55 million sq ft of development potential.
Last year, Prestige Estates had partnered HDFC's arm HDFC Capital Advisors to set up a Rs 2,500 crore fund to develop affordable and mid-income housing projects across the country.
The platform would enable Prestige Group to develop projects worth Rs 10,000 crore.