Adani in realty push, lines up projects

The Adani group is on a fast track.

It announced a Rs 4,400-crore (Rs 44-billion) acquisition of the Dhamra port the day election results gave Prime Minister Narendra Modi a superlative win.

Just over a week later, the Rs 50,000-crore (Rs 500-billion) group’s real estate arm, Adani Realty, announced the launch of a luxury residential project in Mumbai’s posh Four Bungalows area, a western suburb.

The project promises ‘the privilege of being up and away’ and is coming up on two acres of land the group bought in early 2012 from Mumbai developer HDIL for Rs 900 crore (Rs 9 billion).

There will be three towers of 29 storeys each.

. . .

The Mumbai launch came after a long hiatus for the realty firm.

While the group’s corporate communications team did not respond to emails, consultants said the saleable value of Adani’s real estate projects could be at least Rs 10,000 crore (Rs 100 billion).

The group has a little over 1,000 acres of land across the country.

Adani Realty, the youngest firm in the group, claims it is developing 50 million sq ft of real estate in Ahmedabad, Mumbai and Gurgaon.

DLF, the country’s biggest real estate company, had 52 million sq ft under development, consultants said.

. . .

The Mumbai launch was only one of Adani’s many upcoming projects, sources said. Adani and joint venture partner Marathon is plan to launch another luxury project in the Byculla area of Mumbai.

The ‘by invitation only’ project is called Monte South.

According to sources in the know, Adani will focus on the western suburbs in Mumbai and Navi Mumbai, beside Baroda and Gandhinagar.

Besides, the group is developing a 700-apartment project in Gurgaon, Oyster Grande, launched one-and-a-half years ago.

It has two projects in Ahmedabad, a 600-acre township, Shantigram, and an affordable housing project, Pratham.

. . .

In 2006, the Adanis bought a Rs 2,250-crore (Rs 22.5-billion) land parcel in Mumbai’s Bandra Kurla Complex from HDIL.

They also bid for Hindustan Unilever’s property in Worli, ultimately sold to the Ajay Piramal Group.

The Adanis have joint ventures with Marathon to develop the Khatau Mills property in Byculla and the M2K group in Gurgaon to develop a property there.

Earlier, the Adani real estate business was part of Adani Enterprises, the group’s listed flagship company.

In 2012, Adani Enterprises said it was exiting the real estate business to focus on ports, logistics and resources.

. . .

Adani Infrastructure Development, a subsidiary of Adani Enterprises, has reportedly invested about Rs 2,000 crore (Rs 20 billion) in projects to develop 40 million sq ft of office and residential properties.

According to the 2012-13 balance sheet of Adani Infrastructure and Developers, which then represented Adani’s real estate business, it had a net loss of Rs 11 lakh (Rs 1.1 million) as against a profit of Rs 6.4 crore (Rs 64 million) in 2011-12.

The company reported revenue of Rs 53 crore (Rs 530 million) in 2012-13 against Rs 20 crore (Rs 200 million) in 2011-12.

“The Adanis have diversified into different businesses from time to time, as infrastructure is a long-gestation business.

“They want to grow the business through real estate as this is a high growth area,” said a chief executive officer of a realty consultancy, who did not want to be named.

. . .

Though some experts believe real estate is a secondary business for the group, the chief executive officer quoted earlier said the group had invested in real estate for 10 years and was still investing, ‘proof of their seriousness about the business’.

“But they need to set up a full-fledged realty company with professional management,” said the CEO.

According to property consultants, Adani’s land buys were prudent.

The group has bought properties from developers who need money to repay debts or for some other purpose.

It has also got into joint ventures for real estate development.

. . .

Real estate run

Adani Realty’s launches or ongoing projects:

• A mega-luxury residential project in Mumbai’s posh Four Bungalows area, a western suburb; three towers of 29 storeys each
• 'By invitation only' Monte South luxury project in the Byculla area of Mumbai, with joint venture partner Marathon Group, to be launched
• The 700-apartment Oyster Grande project in Gurgaon, launched one and half years ago; a 600-acre Shantigram township project and Pratham cheap housing project in Ahmedabad
• Developing 50 million sq ft in Ahmedabad, Mumbai and Gurgaon
• Consultants say saleable value of Adani’s ongoing real estate projects Rs 10,000 crore (Rs 100 billion)