Tata Housing Plans to Foray into International Markets

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Tata Housing Development Company (THDC) has announced plans to foray into international markets to develop premium apartments and luxury villas for the world’s multimillionaires as well as mixed-use projects in Sri Lanka and the Maldives. To pursue these initiatives the company has set up a team headed by Sandeep Ahuja, VP – business development. “We are in the final stages of due diligence for two mixed-use development projects of two million sq ft each in Colombo. With peace returning to the island nation, real estate will be a big growth story there,” said Brotin Banerjee, MD and CEO, Tata Housing.

THDC on Tuesday announced that it has entered into a 65:35 JV in the Maldives to develop luxury holiday villas and premium apartments under the brand ‘La Grande’. Named Apex Realty, the JV has as minority partner Chennai-based SG18 Realty that has executed some projects in the island country. The total investment will be around Rs 850-900 crore over a period of two and a half to three years.

“We are trying to minimise the extent of loans by trying to sell apartments in advance. Since the project is in a prominent area in the capital Male, which is facing acute housing shortage, we don’t expect to have a problem,” said Banerjee.

Tata-owned Indian Hotels Company runs the Taj Exotica Resort & Spa in South Male Atoll in the Maldives and the Vivanta by Taj — Coral Reef at the Hembadhu Island in North Male Atoll. “In addition, other Tata group companies too have operations there making it a popular brand in the Maldives,” said Banerjee.

The government of Maldives has allocated four plots on a long-term lease of 50 years to Apex Realty to develop residential apartments and retail space in Malé. Eighty per cent of the apartments will be handed over to the government at cost, while the balance may be sold at open market rates. Apex also gets commercial space measuring 1.5 lakh sq ft to be developed as office and retail space, said a top THDC official.

The JV also gets a 50 year lease to develop an exclusive island (Lhossalafushi) on Faadipolhu Atoll to construct premium luxury villas that THDC hopes to sell to wealthy Europeans and Russians. A total of 50 villas, each costing well in excess of Rs 10 crore, are to be developed in two phases (35+15).

THDC hopes to tie up with a resort operator to give prospective villa owners the option to let out their villas for resort companies’ guests when the owners are not using them. This is similar to what has been attempted by Six Senses in the Maldives.
It is also looking at SAARC countries for expansion. In 2011-12 the firm plans to invest Rs 800-1,000 crore for acquisition of land and project development.
“Now, we are developing 43 million sq ft. We will add land parcels that could add another 20-22 million sq ft. The funding will be done through 70 per cent debt and 30 per cent internal accruals,” said Banerjee.