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Real Estate

Godrej Properties defies real-estate slowdown, but the high growth may be hampering returns

Riding high on the consolidation wave and cashing in on the distressed opportunities and a legacy brand name, Godrej Properties has created a new business model that has helped it to scale aggressively across markets. But this too has its own set of challenges.
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priyanka
18 Nov 2019 7 Mins Read 2 comments
A Godrej Properties building in Mumbai; courtesy of Godrej Properties.
A Godrej Properties building in Mumbai; courtesy of Godrej Properties.
In the Mumbai suburbs of Chembur lies a non-descript glass building, housing the office of city-focused, mid-to-affordable segment real-estate consultant— Sai Estate Consultants. The office has green boards that lists either the prices of available inventory around the city or sales targets. The business is good. For the buyer, who is worried about a stalled project or a defaulting developer,
shifting of strategy from joint development to land acquisition and the recent fundraise are likely to weaken the RoE further. If sales performance numbers don’t translate into strong revenue and returns in a couple of years, Godrej Properties may find that the road less travelled is becoming too lonely without investors. ( Graphics by Abdul Shafiq and Mohammad Arshad)
In the Mumbai suburbs of Chembur lies a non-descript glass building, housing the office of city-focused, mid-to-affordable segment real-estate consultant— Sai Estate Consultants. The office has green boards that lists either the prices of available inventory around the city or sales targets. The business is good. For the buyer, who is worried about a stalled project or a defaulting developer, shifting of strategy from joint development to land acquisition and the recent fundraise are likely to weaken the RoE further. If sales performance numbers don’t translate into strong revenue and returns in a couple of years, Godrej Properties may find that the road less travelled is becoming too lonely without investors. ( Graphics by Abdul Shafiq and Mohammad Arshad)

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