Noida-based real estate developer Max Estates is targeting residential booking value of ₹4,000 crore in April-March 2024-25.
Speaking to CNBC-TV18, Rishi Raj, Chief Operating Officer of Max Estates said the company has acquired an additional 18 acres of land in Gurgaon adjacent to an existing 12-acre plot.
This acquisition, made through a joint development route to maintain a relatively capital-light expansion, will add another four million square feet of development space with a potential gross development value exceeding ₹9,000 crore. The company plans to launch this project in 2026 and 2027.
This is the verbatim transcript of the interview.
Q: Can you give us a sense of the residential bookings in Q4 and FY24? You have a target of ₹4,000 crore in FY25.
A: We are in Delhi NCR in premium commercial and residential. In FY24, we successfully launched our first residential project in Delhi NCR in Noida, called Estate 128 and there we booked ₹1,800 crore in FY24, at an average price utilisation of ₹18,000 per square foot, which was unprecedented for market like Noida so that's a FY24.
We have built a residential portfolio and we have added in a residential portfolio to more projects in Gurgaon. One is a joint development that we did last year on 12 acres of land on Dwarka Expressway a very prime location well connected with Gurgaon and Delhi. Our approvals are on track and we will be launching it in July of this particular calendar year. For that our guidance to the market in terms of booking value is ₹4,000 crore. We have also added another 18 acres of land in Gurgaon contiguous to this 12 acres of land again on a joint development route to keep expansion in a relatively capital light way, that 18 acres gives us another 4 million square foot and the gross development value of that the potential of that is ₹9,000 crore plus, which we plan to launch in the subsequent two years in 26 and 27.
In summary, the total booking value potential for residential portfolio today as we stand is approximately ₹15,000 crore of which ₹1,800 crore for our Noida project is already booked, which is under construction now.
Q: Since this is a joint development what would be your share in this? Is the project Estate 360 factored into your guidance? When do you expect to launch it?
A: Estate 360 is a project that we are going to launch in July this year on 12 acres of land on Dwarka Expressway. The guidance of ₹4,000 crore includes the share of landowner, the revenue share is roughly one-third to the landowner and two-third will be for Max Estates.
The new acquisition that we announced over last couple of weeks, which is an addition of 18 acres over 12 acres in on Dwarka Expressway in Gurugram. That has an additional GDV potential of ₹9,000 crore plus.
Q: What about the fundraise. Will all of that fund be used in the residential projects that you have spoken about or some of it will go to commercial as well? Over how much time period will you be utilising those
A: The fundraising is from New York Life, a leading insurance player from US, which has been a strategic partner since we started our real estate business in 2016-17. They are 24% shareholder in the listed company and they are 49% joint venture partner in our commercial office platform.
The most recent announcement was related to they buying 49% stake in two of our rent-yielding Grade A plus operating assets, which is Max Towers and Max House with this, they are now a platform partner across all commercial office portfolios of 4.5 million, some delivered some under construction. The total investment from this is around ₹400 crore that you mentioned. And this will be one of the many sources that we will be using as a growth capital to fund our growth moving forward, both residential and also in future commercial. The ₹400 crore that we are talking about will be used in the residential growth opportunity that we are planning over and above what we have already announced, which is the 18 acres over and above that, we will be using this ₹400 crore in the coming months.
Q: What about the lease rentals and what is the kind of income revenue stream that you are seeing from that particular vertical. Total lease area of close to 0.91 million square feet with lease rentals of close to ₹66 crore. FY25 how will that number pan out? Number two, you have a partner on board as far as the commercial assets are concerned. Will you also in the future look at creating a platform and go via the real estate investment trust (REIT) route back to the market?
A: We are expecting lease rental from our operational assets to be to the tune of ₹120-125 crore in FY25, but when you look at 4 to 4.5 million square foot of portfolio that we have on the commercial office front, three delivered, two under construction, one in Gurgaon, one in Noida, the total annuity income potential at 100% occupancy is in the tune of ₹450 to 500 crores.
Q: That will be by when?
A: By FY29
Q: What is the split between your overall portfolio between residential and commercial?
A: So now we have 12 million square foot of total portfolio off which delivered and under construction commercial is 4 to 4.5 million rest, including the new acquisition of 4.4 million square foot of residential that we announced is 7.5 million square foot.
Coming back to the question on how are we thinking of partnerships on the residential front? We are very open to all three models outright purchase, joint development route and we are also open to bring in New York Life kind of a partner for co-investment in a residential portfolio moving forward.
Q: Any plans for a REIT?
A: Not yet. It will be one of the many exit strategies that will be available for us for a commercial portfolio.
Also Read | Explained: Why unsold homes aren’t moving as fast in Hyderabad
Speaking to CNBC-TV18, Rishi Raj, Chief Operating Officer of Max Estates said the company has acquired an additional 18 acres of land in Gurgaon adjacent to an existing 12-acre plot.
This acquisition, made through a joint development route to maintain a relatively capital-light expansion, will add another four million square feet of development space with a potential gross development value exceeding ₹9,000 crore. The company plans to launch this project in 2026 and 2027.
This is the verbatim transcript of the interview.
Q: Can you give us a sense of the residential bookings in Q4 and FY24? You have a target of ₹4,000 crore in FY25.
A: We are in Delhi NCR in premium commercial and residential. In FY24, we successfully launched our first residential project in Delhi NCR in Noida, called Estate 128 and there we booked ₹1,800 crore in FY24, at an average price utilisation of ₹18,000 per square foot, which was unprecedented for market like Noida so that's a FY24.
We have built a residential portfolio and we have added in a residential portfolio to more projects in Gurgaon. One is a joint development that we did last year on 12 acres of land on Dwarka Expressway a very prime location well connected with Gurgaon and Delhi. Our approvals are on track and we will be launching it in July of this particular calendar year. For that our guidance to the market in terms of booking value is ₹4,000 crore. We have also added another 18 acres of land in Gurgaon contiguous to this 12 acres of land again on a joint development route to keep expansion in a relatively capital light way, that 18 acres gives us another 4 million square foot and the gross development value of that the potential of that is ₹9,000 crore plus, which we plan to launch in the subsequent two years in 26 and 27.
In summary, the total booking value potential for residential portfolio today as we stand is approximately ₹15,000 crore of which ₹1,800 crore for our Noida project is already booked, which is under construction now.
Q: Since this is a joint development what would be your share in this? Is the project Estate 360 factored into your guidance? When do you expect to launch it?
A: Estate 360 is a project that we are going to launch in July this year on 12 acres of land on Dwarka Expressway. The guidance of ₹4,000 crore includes the share of landowner, the revenue share is roughly one-third to the landowner and two-third will be for Max Estates.
The new acquisition that we announced over last couple of weeks, which is an addition of 18 acres over 12 acres in on Dwarka Expressway in Gurugram. That has an additional GDV potential of ₹9,000 crore plus.
Q: What about the fundraise. Will all of that fund be used in the residential projects that you have spoken about or some of it will go to commercial as well? Over how much time period will you be utilising those
₹400 crore?
A: The fundraising is from New York Life, a leading insurance player from US, which has been a strategic partner since we started our real estate business in 2016-17. They are 24% shareholder in the listed company and they are 49% joint venture partner in our commercial office platform.
The most recent announcement was related to they buying 49% stake in two of our rent-yielding Grade A plus operating assets, which is Max Towers and Max House with this, they are now a platform partner across all commercial office portfolios of 4.5 million, some delivered some under construction. The total investment from this is around ₹400 crore that you mentioned. And this will be one of the many sources that we will be using as a growth capital to fund our growth moving forward, both residential and also in future commercial. The ₹400 crore that we are talking about will be used in the residential growth opportunity that we are planning over and above what we have already announced, which is the 18 acres over and above that, we will be using this ₹400 crore in the coming months.
Q: What about the lease rentals and what is the kind of income revenue stream that you are seeing from that particular vertical. Total lease area of close to 0.91 million square feet with lease rentals of close to ₹66 crore. FY25 how will that number pan out? Number two, you have a partner on board as far as the commercial assets are concerned. Will you also in the future look at creating a platform and go via the real estate investment trust (REIT) route back to the market?
A: We are expecting lease rental from our operational assets to be to the tune of ₹120-125 crore in FY25, but when you look at 4 to 4.5 million square foot of portfolio that we have on the commercial office front, three delivered, two under construction, one in Gurgaon, one in Noida, the total annuity income potential at 100% occupancy is in the tune of ₹450 to 500 crores.
Q: That will be by when?
A: By FY29
Q: What is the split between your overall portfolio between residential and commercial?
A: So now we have 12 million square foot of total portfolio off which delivered and under construction commercial is 4 to 4.5 million rest, including the new acquisition of 4.4 million square foot of residential that we announced is 7.5 million square foot.
Coming back to the question on how are we thinking of partnerships on the residential front? We are very open to all three models outright purchase, joint development route and we are also open to bring in New York Life kind of a partner for co-investment in a residential portfolio moving forward.
Q: Any plans for a REIT?
A: Not yet. It will be one of the many exit strategies that will be available for us for a commercial portfolio.
Also Read | Explained: Why unsold homes aren’t moving as fast in Hyderabad
(Edited by : Shweta Mungre)
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