Hubtown’s ongoing and upcoming portfolio comprises over 30 million square feet. Which are the ongoing projects? What does the company’s launch pipeline look like?
Rushank Shah: We have multiple projects both ongoing and upcoming. Among our ongoing projects, we have 25 Downtown which is one of the largest land parcels in South Bombay right next to the Willingdon Golf Course. We have Hubtown Seasons which is one of the largest land parcels in Chembur. We have Rising City in Ghatkopar. Hubtown Premiere in Andheri West. We have four projects in Gujarat which have been the Bus Depot redevelopments. And we have a commercial project, 27 West in Pune.
Among the upcoming projects, we have a lovely second home scheme in Kelavli which is 25 Estates. We have 25 Vistas which will be an upcoming project coming up in Thane on Pokhran 2 as well as we have Phase 2 of a Rising City project in Ghatkopar and a small affordable housing project in Andheri East.
Tell us about your long-term target of growth for the company, maybe in the next three to four years?
Rushank Shah: Over the next three to four years, we are focusing on a couple of things. One of the first things we are focusing on is reducing our debt from our current levels to zero, as well as we will be using some of our existing land parcels including one of the largest land parcels we have which is 150 acres in Thane in Mulund and monetising that as well So, we will be monetising some of our existing land parcels as well as reducing our debt.
Let’s talk about the preferential issue because your company just raised Rs 1,250 crore via preference shares. Where are you looking to utilise those funds then?
Rushank Shah: Yes, first we would like to thank all the investors for having faith in the company and trusting us with their money. As we discussed when we had raised the money, we will be using most of the money. Around Rs 850 crore would be used towards loan repayments which we have already done and the rest of it will be used for working capital requirements.
What kind of value unlocking opportunities are expected as you also have a historical quality land bank comprising over 30 MSF project portfolios.
Rushank Shah: We have an extremely large land bank. One of the key advantages of our land bank is all of it is within city limits especially within MMR limits and a lot of it is in South Bombay which is where a lot of the demand has been coming from. Since it has been historical and our cost basis is much lower than our competitors, obviously that gives us a leg up as we move forward. We will be monetising all of this land parcel all within city limits over the next four-five years to bring down that debt and to grow the company’s bottom line.And since you mentioned debt levels, what are the current debt levels that you are looking at? What are the kind of plans that you then have to reduce that debt also?
Rushank Shah: We have currently been able to bring our debt levels to the range of Rs 600 crore. In fact over the last four years, we have reduced debt by 70% and over the next two years we plan to reduce this to zero.How is the luxury segment performing for the company and how is the demand reception coming for these projects?
Rushank Shah: The luxury segment in Bombay is doing extremely well. We have multiple projects and multiple flats that are crossing both Rs 100 crore and one lakh PSF. We have launched one of the largest projects in South Bombay, which is overlooking the Willingdon Golf Course, which is called 25 Downtown. Our first two towers pre-launch have done extremely well. We have in fact launched our Tower 3. So, 25 Downtown is doing really well. One of the projects we are managing – 25 South – is doing extremely well. We are now going to be launching a second home scheme in that luxury bracket called 25 Estates. So far, that segment has been really doing well for us.
Against that backdrop, what are the kind of competitive advantages that your company enjoys? Tell us a little more about that then.
Rushank Shah: I have mentioned it a little bit and I will kind of go a little bit in more depth, but a lot of the land parcels we have are right in the heart of the city. So, the Chembur land parcel is the largest land parcel in the Chembur micro market. The 25 Downtown was one of the largest land parcels in South Bombay. And because this land has been acquired and fully paid for since a few years, our cost basis is very competitive. So, regardless of how the market is doing, either it helps our bottom-line or helps us absorb pricing pressure if that was to come. That is a huge competitive advantage for us.