Godrej plans JV for developing factory lands

The Godrej group, which is one of the beneficiaries of the Urban Land Ceiling (Regulation) Act (Ulcra) being repealed, is looking at developing real estate at some of its factories in India.

The group has some 100 factories across India, and these include prime areas like Mohali and Ambattur (Chennai). With some parts of the manufacturing likely to be relocated to tax free zones like Himachal Pradesh, there is a possibility of a lot of factory land being freed up for development.

“Wherever there is a scope to develop real estate at factory land, Godrej Properties will enter into joint ventures with the respective group companies,” said Adi Godrej, chairman, Godrej group.

For instance, Godrej Lawkim had recently entered into a JV with Godrej Properties to develop a property in Thane. A similar JV could be forged with Godrej Agrovet where the company has around around 110 acres of land in the outskirts of Bangalore. However, these will require the requisite clearances from boards of the respective group companies.

The group would proceed with such moves only if “positive” changes are brought about in the regulatory framework by the state government, post Ulcra repealment.

Godrej, like others in the real estate sector, wants the government to modernise the regulatory framework. The group is waiting for changes to be made in the FSI (floor space index) regulations.

Once there is clarity on the policy front, it hopes to go ahead with its plans on developing real estate.

The Rs 7,500 cr group is planning to adopt an integrated development strategy on real estate.

The growth story in real estate is expected to continue for the next few years on the back of housing demand for the growing young urban population in India.

To capitalise on this opportunity, Godrej Properties has entered into development opportunity in Hyderabad, Bangalore, Goa, among others.