Textiles giant Raymond Group on Wednesday has decided to venture into real estate. They will launch a 3.3 million square feet residential project in Thane at a time when the sector is going through a liquidity crisis. The project, which would be developed by its real estate arm Raymond Realty, will house 3,000 residential units across 10 towers in Phase 1 on a 20-acre land parcel that Raymond owns in Thane. This is part of the group’s plan to monetise its non-core assets to pare debt.
The chairman and managing director of Raymond, said efforts to enhance value for stakeholders, Raymond has forayed into real estate development in order to monetise the land in Thane. He added since the land parcel was in the heart of Thane, it offered huge potential for turning to real estate and that going forward Raymond intended to build a large integrated township at that location.
The CEO Raymond (real estate) said the maximum amount that Raymond would invest in this project was around Rs 250 crore and a sizable amount has already been done. This is excluding the amount paid for settlement with the labour union.
The project would not require significant debt funding, he added. In the first phase, Raymond Realty is expected to achieve a top line of over Rs 3,500 crore with a profit margin of over 25 per cent during the period of five years. The cost of construction is around Rs 5,000 per square feet for the saleable area. This roughly works out to be around Rs 1,650 crore for 3.3 million sq ft development.
He added that the ‘Aspirational District’ project, which will be spread over 14 acres, would house 2.7-2.8 million sq feet of residential units, while the premium project (over 6 acres) would have around 0.5 million sq ft housing. It would consist of 42-storey towers. Raymond’s net debt was Rs 2,185 crore debt in its books as on Q3FY19
