Joint deals help Tata Hsg buck slowdown

BANGALORE: Unlike many of its peers in the industry the Tata Housing Development Company (THDC), the fully owned arm of Tata Sons, has a land bank of just 150 acres.

And that is one reason why the company has been able to insulate itself from the current slowdown in the real estate sector, according to Brotin Banerjee, MD & CEO.

The trick has been to leverage many of its joint development and joint venture pacts, explained the top official of the Tata group company which is seeking to be a $3 billion giant by 2012.

“This has in a way shielded us from the impact of the slowdown,” said Banerjee explaining the strategy to DNA Money.

With a growth rate of 50-100% every year, THDC does not seem to be bogged down even by the weight of high interest rates afflicting the industry now. “We have tied-up with land owners and real-estate firms for our projects. The land costs are not paid outright. This has helped us move forward in the real estate market without any hassles,” he added.

At the same time Tata Housing is also talking to Tata Sons to leverage the huge land holdings of the parent company to build up properties over the next few years. Banerjee however refused to divulge the extent of these land holdings stating the talks were yet to be concluded.

Tata Housing is currently working on 12 projects, including two in Mumbai that will be completed in another six to 12 months.

“One of them is a mixed development project while the other is a commercial project” he said, talking to DNA Money.

The two projects total up to over two million sft of land.

Set to build over 200 lakh sft over the next four years across the country, the company has been able to sell some its projects even before kicking off their marketing.

For instance, Aquila Hieghts, a 360-unit residential project in Bangalore, had been sold out 50% even before its announcement on Wednesday.

Not just that, the flats which were selling at Rs 3,230 per sft some time back are now quoting at Rs 4,250 per sft. despite the current dip in property prices, says Banerjee.

“We have invested Rs 200 crore in the Aquila project and we are expecting a turnover of Rs 300 crore plus from it,” he added.

THDC will also launch 6-7 new township projects by next fiscal. A majority of these will come up in Kolkata, Chandigarh and Pune.