Oberoi Realty, the second-largest property developer in India by market value, on Thursday announced a tie-up with US-based Ritz Carlton Hotel for its hotel in Mumbai’s Worli area. Vikas Oberoi, chairman and managing director, discusses the hotel project with Raghavendra Kamath. Excerpts:
What kind of revenues are you expecting from the tie-up with Ritz Carlton?
We have not set any revenue target. The hotel is complementary for the residential property we are developing in the project. Because of the hotel, we will be able to get 25-30 per cent premium for our residential project.
You said you’ll invest Rs 750 crore (Rs 7.5 billion) for the hotel. How will you fund it? By when will you recover the money on that?
We will fund the project mostly from internal accruals and recover the money as soon as we complete the residential project.
When will the Borivali project be launched, for which you bought land from Tata Steel (for Rs 1,155 crore or Rs 11.55 billion). How much area will you develop?
We expect to start the project sometime in January. By then, we will get the approvals. I can’t give you a revenue number. We will develop 4.5 million sq ft on the plot.
Are you still debt-free?
I can’t talk about the past quarter. (The company’s results are on May 10.) There were a couple of things in the quarter. But before that we were debt-free.
Was there any investor pressure on you to buy the Tata Steel land because you had cash but didn’t buy land in the recent past?
There was no pressure. Investors were happy with our business strategy.
Are you looking to buy any land parcels now?
We are open to buying new land parcels at right price.
The recent Supreme Court order was beneficial for the launch of Mulund project. What is the progress on that project?
We have already reworked the project and We are awaiting some minor approvals. We are looking to launch in the second quarter of current financial year.
Do you think that residential sales and commercial leasing will improve post elections?
Residential sales will improve if the entire economy improves
Has land valuations come down in cities such as Mumbai?
Today, sellers have become realistic and transactions are happening. Today people are willing to sell land parcels at right prices.
