TVS Emerald bets on micro-market strategy to grow in residential space.

TVS Emerald plans to double the number of residential projects across Chennai and Bengaluru by the end of this fiscal as the real estate arm of the TVS Group bets on its micro-market strategy along with the trust quotient to stay successful in the residential property space.

The company is optimistic about the demand for residential units in the two cities amid signals of a recovery in the residential property market. It is developing five projects now and will scale up to at least 10 by the end of this year.

Dearth of builders

“Chennai has a dearth of tier 1 builders. There are only a few in Chennai, compared with cities such as Bengaluru. Buyers in Chennai are the ones who live in Chennai or the ones who have come from other parts of Tamil Nadu. For migrants, it has been a difficult city for buying a house unlike in Bengaluru, though it is getting better now,” said V Ganesh, Executive Vice-President, Emerald Haven Realty Ltd.

“There are micro-markets in Chennai where there is a need for good projects. What is lacking today is the trust which we have built by delivering on time with quality,” he added.

TVS Emerald has already delivered about 1.4 million sq ft of residential units ahead of schedule. Also, it has garnered good response to its ongoing projects such as LightHouse and GreenEnclave.

New projects

It is preparing to launch five residential projects during this fiscal. Of this, three will come up at various parts of Chennai, involving an outlay of more than Rs. 200 crore (excluding land cost) and two will come up in Bengaluru.

The company is planning to build a villa project at Karapakkam on the IT corridor and an apartment project at Manappakkam, behind DLF IT park. Another project in the southern suburb is also being finalised.

“The primary driver for residential projects is job creation. The addition of office space in select markets provides the lead for us to plan residential projects. Also, we have taken the first mover advantage in some markets where we could fetch buyers,” said A Rajaraman, Executive Vice-President, Emerald Haven Realty Ltd.

Fund position

The company’s fund position is satisfactory as of now though it is open for PE investments for future projects.

It has signed an agreement with ASK Capital to pump Rs. 200 crore each as equity in residential projects. There is no assured return, no buy-back, no committed ARR and no preferred return. Whatever money the projects make, both will share it. These funds are being deployed across projects.

HBL