Puravankara Limited is joining the ranks of developers placing significant emphasis on commercial real estate and says is actively engaged in building its commercial portfolio, aiming to make it a substantial contributor, accounting for 10 percent of its long-term revenues.
Speaking to businessline,Abhishek Kapoor, the CEO of the company, expressed confidence in the commercial sector’s potential, highlighting that once the portfolio is established, the financial benefits will be evident.
The size of the Indian commercial real estate market is estimated at $67.08 billion in 2023 and is expected to reach $223.25 billion by 2028, growing at a CAGR of 27.19 per cent during the forecast period (2023–2028), according to a report by Mordor Intelligence.
Currently, Puravankara has 3 million square feet of commercial property under construction spread across two commercial projects in Bengaluru. “Purva Business Park should give us about ₹130-140 crore of annual rental income, while another one, Zentech if leased, should generate a rental income of 40-45 crore annualised. So, between the two projects, we are looking at about 175 crore of rental income,” the CEO noted.
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In addition to Bengaluru, the other geographies of interest include Pune and Mumbai, and said that they are also evaluating opportunities in Chennai. “But for commercial, as of now, the strategy is to be more focused on Bengaluru, Mumbai, and Pune.”
Moreover, “over the course of five years, we are planning to generate 35 per cent of our business from Puravankara Residential, 35 per cent from Provident Residential, about 20 per cent from Purva Land, and 10 per cent from commercial,” Kapoor added.
For the ongoing year, the company has an extensive pipeline of approximately 16 million square feet in development, distributed among various cities. This includes 5 million square feet in Bengaluru, 5 million square feet in Chennai, 3 million square feet in Kochi, 2 million square feet in West India, and around 1 million square feet in Coimbatore, Kapoor said. In FY23, the company recorded an annual turnover of 1,236 crore, marking a 29 per cent growth.