In talks with 10-12 realtors for assets in Chennai, Bengaluru

Shriram Properties has initiated talks with 10 to 12 property developers to buy their stressed assets, said a top executive.

“Right now, we are doing due diligence for 10-12 assets, of which we might take three to four assets,” said M. Murali, MD, Shriram Properties. “These properties, measuring 22 lakh sq.ft., are located in Chennai and Bengaluru.”

“Stressed assets may be of two kinds — plain land mortgaged with a bank and land with partly-built construction. We will look at the suitability of the stressed assets for our operation,” said S.S. Asokan, executive director, Shriram Properties.

“A lot of stressed assets are coming up for sale. In the last 12-15 months, land prices have not risen and will remain stable for the next two to three years. This is good for developers and real estate will do very well,” Mr. Asokan said.

Briefing reporters, Mr. Murali said the firm was currently developing properties in six cities — Chennai, Bengaluru, Coimbatore, Vizag, Hyderabad and Kolkata and they would continue to do so. However, 80% of property development in the country took place in nine cities — Chennai, Bengaluru, Hyderabad, Mumbai, Pune, Kolkata, Noida, Gurugram and New Delhi. It required specialisation for developing nine cities.

Mid-market and affordable housing constituted 80% of the market and the luxury segment accounted for the rest. “In the last 18 months, supply of inventory has gone down by 40% and in the next two years, it will come down further. We see a big opportunity and are hence ramping up our offerings in the mid-market and affordable housing sector,” he said.

Funding plans

Mr. Murali said the firm was hopeful of raising ₹1,000 crore ‘within a month’ to fuel the growth in mid-market and affordable housing. Besides, another ₹600 crore will be pumped in commercial sector for building office space, IT, Special Economic Zone.

He also said the firm would bring to market two properties having 4,000 residential units on the outskirts of Chennai. Besides, commercial space along with a shopping mall will come up in Perungalathur, he said. All these projects would take three years to complete, he added.