Macrotech Developers Limited (“Company”) has announced its entry into the Bengaluru housing market after completing a detailed evaluation which was ongoing for last 9 months.
The key drivers of the decision are:
- Fragmented market with top 5 players having market share of around 30%
- Steady volumes of end use demand
- Importance of the tech industry to the Indian economy and Bengaluru’s position as the core hub for technology in India.
The company will focus on gradual growth in the Bengaluru market with following core principles:
- Capital light joint development model
- Focus on profitable growth
- Creating local capability with a dedicated team based in Bengaluru
To take forward this journey, the company has recruited Mr. Rajendra Joshi as CEO for the Bengaluru market. Mr. Joshi last served as head of residential business for Brigade group and prior to that, has worked with various developers including Mahindra Lifespaces.
The company’s first project in Bengaluru has been signed through the JDA route by acquiring 100% equity shares of a company namely G Corp Homes Private Limited and is located adjacent to Manyata Tech Park. The project has GDV potential of ~Rs. 1200 crore and saleable area of ~1.3 million sq. ft. Project launch is expected in next 6-12 months.
The entry into Bengaluru does not change the debt reduction guidance for FY23.
Bengaluru will be the third housing market where Lodha residential developments will be available for the consumers thereby covering nearly 2/3″ (by value) of the housing market of top-7 Indian cities. This follows the company’s successful expansion in Pune where it now has two operating projects and several more to be launched in FY23. On the back of strong underlying housing demand as well as consolidation in the industry, the company expects to grow its pre-sales by over 20% CAGR in the medium term. Entry into Bengaluru market will be one of the drivers of sustainable, low-risk growth.