Gurugram-based listed real estate firm Signature Global is planning to launch a 130-acre project in Sohna targeting the middle-income segment within this year with a revenue potential of more than ₹5000 crore, even as it plans to expand to Delhi, Noida and Greater Noida over the coming years.
The company intends to launch a mix of three products in Sohna – low-rise floors, retail and plots for industrial or multiple business use.
“During the coming quarters, we intend to launch a fairly large project in Sohna which is targeting the mid-income strata of the society… On a yearly basis, we do anticipate this per square foot realization to settle anywhere between ₹13,000, ₹14,000 a foot. But it is going to be upwards of ₹13,000 is what we anticipate,” Signature Global Chief Executive Officer (CEO) Rajat Kathuria told investors.
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“Geographically, it’s a very good location because from the main Sohna road sort of SBD area of Gurgaon, it’s like literally a 5 or 10 minute drive away. So that’s the place where we intend to launch a large project of about 130 acres within this year. And that’s where we will kind of try to create continued supply over the coming years,” he said.
“So, we are coming up with a significant inventory of these mid-income sort of low-rise floors, which we’ll be launching in Sohna. In addition to that, there’ll be a retail component, which will be typical convenience retail and we’ll do a build to sell over there. Also, we have certain, plotting plots, whether these be called industrial or multiple business use sort of plots, which will be there in this market,” he said.
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The company is yet to take a decision on whether it will launch the low-rise floors at one go or phase it across two or three quarters. “We are yet to decide on it, but we are sitting at a good stage of approvals on that project. There are few more anticipated, but we are confident of that launch. And that’s a big launch for the entire market because low-rise floors sometime back were stalled in Gurgaon and Faridabad,” he said.
Is the company planning to enter Delhi or Noida?
According to a transcript of discussion with analysts, the CEO noted that Signature Global is “cautiously expanding the horizon” and “is also open to entering new markets within the NCR market, whether it be the main Delhi region, capital region or the Noida market.”
“You may not see a launch happening, within this financial year but, over the next financial year, you will probably, see us kind of coming up with a project which is outside of Gurgaon but, so that’s the strategy, we are kind of, cautiously expanding the horizon and even here, see, the principle will remain that any market we enter, we would want to create a relevant scale, not to seed the market by just saying for the heck of it, you’ve launched one project,” he said.
He said that for the company to enter these markets, it would want to do its “sort of prep work properly and once we are entering any other market like Gurgaon, we have like a relevant sort of, share today, we would want to create that sort of positioning in any new market as well once as and when we enter it.”
On existing projects in Gurugram
In Gurugram, the CEO said, the company has a huge land bank in Sector 71, on the Southern Peripheral Road, Sector 37D at Dwarka Expressway, and south of Gurugram, Sohna region.
Kathuria said the company would keep replenishing land at these locations.
The CEO also expressed confidence that the company would meet the target of achieving sales bookings of ₹10,000 crore for this fiscal.
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The company launched a premium project in the first quarter and is yet to come up with mid-income projects, which will be priced between ₹1.5 crores, ₹2 crores. “These would be like premium luxury floors, more affordable in ticket size. And that gives us greater confidence of achieving our overall annual guidance of ₹10,000 crores for the year,” he said.
Overall, the company has ‘good levels; of yet to be launched projects, which is almost like 30-odd million square feet of land inventory that exists with it. The company intends to do land acquisition going forward “on a replenishment basis.”
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The company does not need to do any large expenditure or significant expenditure on the business development side, he said.
“In line with that, since we collected Rs1200 crores, we created a surplus of about ₹530-odd crores. About 55% of that surplus went towards new land acquisition. About ₹290-odd crores went in an acquisition which we did in Sector 37D. We added about 2.6 million square feet of developable area for the company. The balance went towards debt servicing and primarily for net debt reduction. That’s why we saw that the net debt came down from about ₹1150-odd crores to about ₹980 crores. It’s a healthy sign. I don’t think the leverage level is very high for the company. But irrespective, it’s on a declining trend,” he said.
The company’s total portfolio stands at about 51-odd million square feet of which 16 million is at very advanced stages of completion. Around 5-odd million was recently launched by the company. It has close to 30 million square feet which is yet to be launched, he told investors.
The company is focusing on completing its projects and hopes to deliver them in the next seven to eight months, he said.
“And we are hopeful that over the coming 7 to 8 or at the most 9-odd quarters, we’ll complete these projects which will give a revenue recognition in excess of 110 billion to the company. And collections from these projects in itself will be closer to about 65-odd billion,” he added.
