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Core sector firms into realty ventures


Core sector firms into realty ventures

Last updated: August 27 2007
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  • Core sector firms into realty ventures

    With the real estate sector getting more corporatised, and profit margins increasing, more infrastructure companies are making an entry into India’s realty market to increase their toplines.

    Many real estate companies made a foray into infrastructure sector. Companies such as Soma Enterprise, Simplex Infrastructure and GMR Infrastructure have drawn up strategies to enhance revenue from real estate business. The group, Soma Enterprise, was extremely bullish on widening their operations into real estate. Projects in the real estate sector require project management and execution skills as well as resources and strategic alliances to achieve success.

    These companies expect revenue from the real estate construction to grow up to 10 to 15% of the total revenue by the following two years. Similarly, the Simplex Infrastructure has entered into the realty sector with the construction of multi-storied residential towers and mass housing projects. GMR Infrastructure, which is currently modernising the Delhi airport, is banking on 250 acres of land for commercial development. In Hyderabad, they have 750 acres for commercial use. Real estates is an important driver for their overall growth.

    Gopal Sharma, MD, infrastructure advisory division of Feedback Ventures said that the ability on project construction and management and understanding of the regulatory process help infrastructure companies to jump into the realty sector. Infrastructure companies have the skills required for realty development. Hence, real estate development is a natural extension for most of them. Also, given that a lot of infrastructure projects are land intensive, and they have built skills in land acquisition management, the sector becomes even more attractive.

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