Textile major RaymondNSE 1.51 % is venturing into real estate development business and has started a new division Raymond Realty to drive its growth plans in this segment. The company owns nearly 125 acre contiguous land parcel at Thane’s Cadbury Junction and is looking to monetize it through its new business venture.
For its maiden real estate development project, the branded apparel major has carved out a 20-acre land parcel of the total land holding and will be developing a nearly 3 million sq ft residential project on it.
“Given the historical land bank we have, we have decided to enter into real estate development on our own. This is the best option available with us to enhance the shareholders’ value. We are also open to other options that would help in value creation and maximize the returns for all stakeholders,” K Mukund Raj, president & CEO – Real Estate business at Raymond, told ET.
In October 2010, Raymond reached an out-of-court settlement with its labour union representing nearly 2,000 employees at the Thane unit.
The labour union received total compensation worth Rs 313 crore in lieu of giving its consent for real estate development on the land that used to house Raymond’s textile unit until then. The settlement provided clearances from the government bodies to Raymond for a real estate project on the land that housed its flagship textile factory since 1925.
As part of its first project to be spread over 20 acres, Raymond Realty will be developing total 3,000 residential units across 10 towers. Each of these 42-storey towers will house 2 bedroom apartments with carpet area configuration of 510 sq ft and 630 sq ft in aspirational category. The project will also offer around 5 acres of central landscape green area along with hundreds of trees, Mukund Raj explained.
It has already received around 450 applications for these apartments through soft launch of the project for its employees and their families.
According to property consultants, current property prices in the vicinity range between Rs 10,000 and Rs 14,000 per sq ft.
The company has already received all the requisite permissions for the project that is expected to be completed over the next 5-7 years in phases. It is planning to launch premium segment apartments with larger configurations after 6-9 months.
In 2012, Raymond had initiated talks with a local real estate developer in Thane to sell a 9.4-acre plot. This was the first plot out of the large land parcel to go on the block, but the deal fell through as the buyer was not able to raise funds for the transaction.
Given the high land prices and saturation in Mumbai, several city developers have stepped into the neighbouring Thane city in the past few years. Many large developers, including Hiranandani Constructions, Lodha Developers, Wadhwa Group, Runwal Group, Rustomjee and Tata Housing, are already executing realty projects here and the city continues to attract more of them.
Last year, realty developer Kalpataru emerged as the highest bidder for 8-acre land parcel of Mondelez India, or former Cadbury India, on Thane’s Pokharan Road 1 with its bid price of Rs 282 crore.