Shapoorji Pallonji Real Estate, a real estate division of the Shapoorji Pallonji and Co Ltd (SPCL) headed by Shapoor Mistry, is increasing its involvement in the residential segment, while earlier it dominated the commercial space. Shapoor Mistry is also the brother of Cyrus Mistry, Chairman of Tata Sons.
The company known for its iconic buildings such as the RBI headquarters, the Taj and Oberoi Hotels, has listed three key segments for growth: mid to higher residential segment in the top cities, affordable housing across the country and re-development in the financial capital , Mumbai, where real estate prices are very high.
"(Our) new land ( acquisition) has to be on the residential side to balance out our overall portfolio. There is already a lot of land on the commercial side," says Venkatesh Gopalkrishnan , Chief Investment Officer at Shapoorji Pallonji.
In the commercial segment , the group is sitting on a large land stock under the SP Infocity umbrella in the fast growing markets of Pune , Chennai and Gurgaon. "There is a lot of potential in commercial development but the market is depressed because of the slowdown in the economy. At some point of time, commercial real estate market will definitely pick up," says Gopalkrishnan.
Today, the company's share of commercial and residential real estate is in the ratio of 60: 40. In the next two years , this is expected to become 50:50. "I expect the share to change to 60: 40 in the next five to six years. We need to build our residential portfolio, relatively speaking," says Gopalkrishnan. " When the economy improves and, hopefully, goes back to eight per cent GDP growth, there will be lot of home buyers."
In recent times, Shapoorji Pallonji built the most premium project 'The Imperial' in the residential segment in South Mumbai. The twin towers comprise one of the tallest buildings in India with 60 floors. In the affordable housing segment, it has a mass housing project in Kolkata which is spread over 150 acres.
There are already big players in the affordable housing segment. Tata Housing, Unitech, Puvankara and Ashiana Housing are gradually spreading their wings to low cost to affordable housing. "The opportunity is huge. We are in the middle income and upper end of the low cost homes," says Gopalkrishnan.
So far, SP Real Estate has executed around 8 million square feet. "There is 50-60 million square feet of commercial as well as residential projects at various stages of development," says Gopalkrishnan.