Prestige Estates Projects Limited (PRESTIGE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome all of you, and thank you for your presence here at the Analyst Meet at the Prestige City Mulund here in Mumbai. We will start the event with prayers, request Molana sab to please come and offer prayers.

[Foreign Language]

Thank you, Molana sab. Now may I request Mr. Venkat, our group CEO, to take the event forward.

Good morning to all of you, and hearty welcome. It's good to see so many of you this morning here. It's been a long time since we've last met, some of you have changed the organization, some of them are continuing. Last Analyst Meet, we had in Bombay, I think, 5 years ago. While we keep talking to you post results on the investor call without -- we should take some time off, invite all of you to the place like this Prestige City, Bombay, which was a year ago, abandoned project. And if you see now the kind of action that is happening here. Warm welcome. And we have with us today our Chairman and Managing Director, Mr. Irfan Razack; and our next-generation Promoter family, Mr. Zayd Noaman, Executive Director; Mr. Faiz Rezwan, Executive Director; Mr. Juggy Marwaha, our CEO for Office Ventures, Juggy, maybe if you say hello to them so that they know; and Tariq, Head of Western Region, some of you must have interacted with him. We have Mr. Amit Mor, our CFO; Nayak, our Head of Accounts; Shamik Rudra, who takes care of Corporate Development; and Mr. Milan who is Construction Head. I don't see Milan here, Construction Head for Bombay and various other team members, Nadeem and Mohit who handles investor relationship. So it's important for us to meet all of you, therefore, the entire team, senior management and next generation, everybody is present here. The object of this meeting is to explain to you what we've been doing the last 3 to 4 years, transformatory in nature, a remarkable journey, thanks to our entire ecosystem, landowners, market outlook. We clocked some basic numbers. The idea is to explain to you what's our game plan next 3 to 5 years from now and expansion plans, business segment-wise, cash flows, outlook and give you the insights of what's happening within Prestige. I'll begin the presentation with a small video, which captures most of our developments, completed once more of them and some of them perspective which are under construction. And then I'll take you through the presentation. After we'll have question and answers and post which maybe walk to the site, which Milan and team will take care and we'll end with lunch. That's the sequence of the events today. Can we have video, please? [Presentation]

Thank you. And for us to see the kind of work that we're doing in each of the city, the management team is really, really geared up. One -- a good thing is a lot of analysts must have changed the company, some of them moved from sector to sector. It's the same team that you've been seeing for the last 20 years. So our ability to keep people -- senior management people with the organization because they're all emotionally connected with the organization, growth, the story of Prestige. And they are the ones who are doing this much of work which is incredible. Quickly, let me take you through presentation now as to -- this is what we'll be covering in the presentation: Who we are, what have we done in the last 4, 5 years, the growth story. Each of the business segments that we are presenting, what's the outlook, and how are they doing. Mumbai Presence, most of you have been asking questions as to what are the projects that we are doing, what's the value of the projects, with whom are we developing those projects and what's the product type. So therefore, we have a separate few slides on Mumbai Presence, outlook opportunities and strategy. Where do we go from here? What's the market outlook for each of the segments, and what opportunity that we are foreseeing and what is our strategy to capture those opportunities? And 3 to 5 years from now, where do we head? Prestige story, all of you are aware, 36 years into real estate, 12-plus cities. We'll add a few more cities in this year. And CRISIL DA1 rated developer, which stands for on-time deliveries, with the quality and ability to pass on the tier titles, financially rated A plus. 165 million square foot developed so far, ongoing and upcoming projects. Right now, what you see in this investor presentation is 168 million square foot in a way to put it across in a different way. What we have done in 36 years, which is 165 million. Right now, we are embarking to do in the next 5 to 6 years. So that's the volume of work that we're doing. I mean when we want to expand from one city to other city, there's always been a skepticism as to whether we'll be able to really succeed. Because in the past, there are many people who ventured into different cities and real estate is not an easy subject because of the approvals, the land related and customer dynamics. It's not easy to succeed. But what takes us from one place to other place easily is this won't change for the organization. We've been building trust, not buildings alone for the last 36 years. We build the organization on these 5 pillars: credibility, it's important for us. What we say is what we mean. And we have not in the past -- at least I've been with the organization for 20 years, maybe except for 1 or 2 occasions, we have not revisited any agreement signed with any partners. Credibility, when we give word, when we say something, that's what it means. So credibility is what we build inclusiveness, it's not just all about us. It's about an ecosystem. It's about how do we take people along. That includes landowners, that intrude contractors, that include suppliers, our customers, bankers, investors. How do we make everybody part of a growth story, the inclusiveness. So it's -- we feel otherwise lonely at top. In fact, Mr. Razack is here, there are many occasions where L1 is not the way who get the contract. It's not about numbers an alone, it's about the relationship, it's somebody is able to deliver. I'm very happy to share that it's not about only our growth story. Along with us, there are so many suppliers. There are so many contractors who have grown to the next line of their business. It's about taking people along. Customer centricity. We exist because of our customer. They mean a lot to us. We were told we are the only developers. When we complete the project, we call all the customers, and we acknowledge the presence of our supplier contracts and everybody, make an event to celebrate and hand over their keys because for us, it may be a product, for them, it is a palace. So we approach things with that mindset. Paramount for us is the customer centricity. Transparency is what you'll see with us. There's nothing that is hidden. We don't say something that means something else. We're transparent in all operations, everything that we do. The trust, that's the most important thing. The reason why we are able to expand to other geographies, collaborate, not just -- not compete, everybody says there's a lot of competition. When there's collaboration, there's so much more that can be done. Why do people approach us giving so many lands, so many opportunities, so many projects is because the trust that we have built over a period of time. You ask -- you keep asking how much of money we deploy in business development and projects. Honestly, much more than the money what we deploy in reality is trust. Trust has become our capital today because of our execution track record. And these don't change irrespective of city that we get in. Some processes, some method of doing business will not change wherever we go. And we've been bringing those practices into those cities, and people are happy to adapt to whatever the processes that we are seeing because they believe that we deliver the projects on time. Incredible journey last 5 years. Thanks to everybody who's part of ecosystem, support and inputs. So some of you who are sitting in -- here in the mid, my bankers present, they helped quite a bit, the investors and everybody. Sales growth. If you look at last 5 years, 2019 to 2023, INR 4,500 crores of resales. We moved to INR 5,400. And then last year, we clocked INR 10,000-plus crores of sales. And this year, we estimate to cost INR 12,000 crores of sales. As we speak today as of end of January, we told an Analyst Meet as well that we have crossed last year's number. So now subject to launching 1 or 2 more projects, we should be able to cross INR 12,000 crore milestone as well this year. The collections are pretty in-sync with the sales that we are doing. We have registered a 17% CAGR in collections. This year, total collections will be INR 9,750 crores. As of 9 months, if you see in the investor presentation, we crossed entire year's -- last year's collections already. So the sales are duly supported by collections. Some of you ask us, say, that are we doing any bulk sales? Answer is no. We've been doing sales to most of the time end users, not to any investors. 80% of our buyers want to stay in the properties. They go, take home loans. And that's the reason why sales are supported by the collections. Otherwise, sales would happen, collections won't come. This has been in terms of unit sales from 4,221 units to 8,883 units last year. That's roughly 24, 25 units sold every day last year. And this year is even better. As of 9 months, we have done 7,200 units sold, an average ticket price of 1.5 -- INR 1.3 crores to INR 1.5 crores. The average realizations for '19 to now, if you see, have grown from INR 5,891 a square foot to INR 8,155 a square foot. In fact, residential alone, if you look at, is little over INR 9,000. Because of plotted development as a mix, the average realization is at INR 8,155. The launches, if you look at from '19 to now, we've launched a 75 million square foot plus launches. And I mean there are people who asked us the pipeline do we have enough to launch? I must tell you the kind of opportunities that we get every day, we capitalize -- maybe we take up only 10% to 15% of what comes to us. So our ability to do business development is directly proportional to the kind of deliveries that we've been doing. So therefore, that's not a concern at all. 75 million square foot. In that, 51% of the projects are residential, 49% of the projects are commercial, retail and hospitality. Our next 3 years' pipeline is just by going by our ongoing and upcoming projects what we have in the list, the details are also there in investor presentation. This presentation also will get uploaded. 32 million square foot of launches in the next -- this year and next year and FY '25, the balance of the portfolio and new business opportunities that we are evaluating. As we speak now, in addition to the ongoing, upcoming and land bank, we have 20 to 30 deals that have been under evaluation in various geographies. It's been quite transformatory for real estate. I mean the supply consolidation is something which we are foreseeing. Some of the growth that we've seen is linked to the demand growth. And major part of it is supply consolidation related growth. I mean beginning with the remonetization, RERA implementation, which require developers to get a lot more streamlined, well [ gun ], wanting them to deliver projects within time lines. GST, which required ecosystem also to have better practices. So therefore, they also need to go to the next level. COVID and lockdown related. FY '20 and '21, predominantly the fear of COVID lockdowns, workers not coming at the site existed. And of course, all of you know, NBFC and liquidity-related issues, with many banks have not taken the names, the banks and NBFCs having their own internal issues and trouble. In spite of all this, our completions in last 6 years have been 80 million square foot, the deliveries that we had from FY '18 to FY '23, if you see. From 84 million square foot of completions to 165 million square foot of completions is where we moved. So that should give a lot of trust to our customers. That's the reason why we are able to club that kind of numbers that in these difficult times we deliver, normal circumstances we'll be able to deliver ahead of time. Case in point, some of the projects if I had to tell you Prestige Jindal City 3,500-plus apartments. Prestige Finsbury Park, again, 3,500-plus apartments. They got launched in the later part of 2019 or so. Jindal city has been handed over. Finsbury Park is ready to hand over. In these 3, 3.5 years, 2 years went in COVID, but our construction did not stop. In fact, we're the first guys to get, even during that time, charter our labors from Orissa, Bihar, West Bengal and ensure that construction continues because of the commitment, that's why go back to the value system of credibility we have given a customer. We can find excuses not to deliver. At the same time, we can go ahead in spite of the progress and deliver what we are committed to the customers. In terms of number of units, FY '19, '20, '21, '22, '23, we have few more projects getting completed. 26,000-plus units got handed over in the last 4 years and this year put together. This is all growth in terms of -- you know that accounting is primarily dependent on the completion method of contracts. It could be lumpy because in some years, we have more completions, some years, we have less completions. This growth in terms of revenues, EBITDA and PAT has been. And network grew in the last 5 years from INR 4,962 crores to INR 9,547 crores. And debt equity moved -- came down from 1.75 in FY '19 to 0.42. When the debt was going up, a lot of you had concerns saying that the gearing is very high, however, we're going to bring down? We had told you saying that whatever money that we are taking, we are not using it for a futuristic land bank, which will become -- which will materialize after 10 years, 20 years. Every rupee was spent to create and build something, which is office, retail and hospitality and all of that. It just required management to take one decision to unlock value and bring down the entire debt. Even today, I would tell you the amount of debt that we have is municipal compared to the kind of work that we are doing. It's just about taking a decision of one project not being ours and selling it out that will become 0. INR 18,000 crores of market capitalization. So business segments. Moving on to each of them, residential, commercial, retail and hospitality. This is what I mentioned in the headlines. Ongoing is 75 million square foot and -- which will get over in the next 3 to 4 years. And upcoming projects, another 93 million square foot, adds up to 168 million, and the breakup of that is what you can see. So let me move on to residential. What is the outlook that we have. How do you see residential market. If you look at last 3 years -- calendar years, data from Propequity. Launches have been 245,000 units, 324,000 369,000 units. Absorption calendar year FY '22 has been far higher than that of what got launched. That's why we also don't have much of stock now. The stock that we hold maybe equivalent to 2 quarters, the key thing is going to be the launches, which we are working on. New launches at 14%, absorption is at 29%. Same is the case with office. We are back to where it used to be pre-COVID levels, 61 million square foot overall got absorbed in last year calendar year. So therefore, we are confident of leasing. We have good market share in commercial leasing market, and we go there, we'll get in a little more details. But this is overall what happened in the industry, which is residential and commercial in last 3 years. So residential alone, 21,000 units right now we are constructing. Ongoing 35 projects, 44 million. And this is a summary of -- in terms of numbers, where does it take us considering ongoing and upcoming projects. We should be able to generate from both these put together, free cash flows from ongoing projects, INR 8,319. This year, if you see investor -- this quarter investor presentation, if you see, we have given developmental business the positive surplus cash flows that they have generated. And we have also guided you considering the fact that the projects that -- whatever a pipeline translating them into numbers, FY '23, '24, '25, '26, '27, what kind of free cash flow that we can generate? INR 26,860, which is some of ongoing and upcoming projects. We have not considered INR 10,000 crores of potential land bank that we have. After taking off overheads and tax, net free cash flows that we have would be INR 20,000 crores, which will come over a period of next 5 years. Out of those cash flows, we intend to use 40% of cash flows to deploy our share of equity into commercial, residential and hospitality projects. So out of free cash flow, 40% goes for -- sorry, for contribution into CapEx projects, 60% will make those up our business development and other contingency related. This is how these are going to be used, and this is summary of cash flows. So this is a little more breakdown as to how did we arrive at the cash flows, which we also have in investor presentations, estimated value, total sales debt, balance to collect, the stock of INR 9,648 crores and refundable deposits that we have given to landowner, which are in case of joint developments, all that constitutes our inflow, which is INR 20,525 crores. And we have INR 12,000 crores of balance to spend money and then we get free cash flows. Same is the case with upcoming projects. And from there, we have reduced overheads and tax and arrived at net free cash flows giving you the ballpark potential of what these ongoing and upcoming projects hold. Again, just to give you the breakdown as to where these projects ongoing, upcoming situated. Bangalore is 55%. Bangalore used to be 90% for us -- for you to. Now I wanted to take a note that Bangalore has moved from 90% to now 55%. Scale has not come down, just that other cities started contributing a lot more. Mumbai, Hyderabad, Chennai, Noida, they make up a major share, top markets for residential and few others. So this is the breakdown of entire residential geographically. Moving on, commercial. Ongoing are 26 million, upcoming are 15 million. Next level of office spaces that we are building, which are future ready building in the architects from various -- different countries, all are ESG compliant and green buildings and with a completely different kind of experience. So with ongoing and upcoming projects, no new lands need to be tied up. And rather, the new lands that we're going to tie up are not part of this. It's as is right now. Our annuity can grow from INR 243 crores to almost INR 2,500 crores in next 5 years' time. This is the growth plan that we have. And this requires us to lease around 5 million to 6 million square foot across the cities. And this is what we have as a balance to spend our share of construction. This chart summarizes for you what is our potential annuity growth and what's the money that we need to spend to get there. Total cost of construction of INR 15,459 crores. Our share of construction in that is INR 14,000 crores. Of that, balance to spend is INR 12,800 crores that will take us to INR 2,500 crores of sales. And the spend pattern also we have given you. This entire spend, as I told you, 40% of it comes from free cash flows of residential. The 60% will be bank debt. Again, so geographically, Bangalore is 24 million. Mumbai is 10 million, Hyderabad, Pune, Delhi and Kochi, that adds up to 40 million. Well diversified portfolio, not concentrating in any city, 60% of it is in Bangalore and 40% is the rest of Bangalore. Retail. Ongoing 2 projects, 2 million square foot. Upcoming 4 projects, 5 million square foot. Relaunching of Forum Brand. We opened on 1st of December, the Falcon City Mall at the Falcon City. And I'm happy to share that it was with a great response in spite of all the shops not being open. And theaters are -- yet to start the operations. We had a little over 1 million square foot -- 1 million people or 10 lakh people visiting in the month of December alone. So that's become now talk of Bangalore. I'm sure it's going to do well. The next set of malls that are going to come are also large in size. They are going to be experiential shopping malls compared to what we have done in the past. If you see, the size of each mall is a little over 1 million square foot. So we see the rental growth retail segment from existing number to INR 535 crores in the near future. If you look at the amount that needs to be spent, the total construction cost, PG share, it will be INR 1,840 crores that we need to spend. And of that, some of it has been spent. The balance to spend is INR 1,613 crores. The annuity of PG Share is INR 536 crores. If you look at both the CapEx office and retail, our yield on costs are in the range of 15%, 16% to 20%. Retail will be on a higher side. Office is slightly lower. 16% also is office, and retail is close to 19% to 20%. Those are the yield on costs. And these are to begin with. Every 3 years, we have escalations. And retail, we also will have additional incomes wherever we have the revenue sharing model, MG plus revenue sharing whenever we have. The locations, Bangalore, 2 malls; Kochi 2 malls. One of it, we just opened for the retailers. The public we have not opened, will open soon. Hyderabad is part of Prestige City. Chennai, 1 mall. Total 6 malls. Then moving on to the last segment, hospitality. We have 9 operating projects. 1,368 keys. Ongoing are 5 projects, 1,217. And upcoming 2 projects, 350 keys. All of you should have noticed in our investor presentation, the ARRs have gone up in hospitality. Their contribution to the overall portfolio is very positive. In fact, you only see in terms of growth, this sector should do very well because of domestic travels and staycations, destination weddings, because the hotel that we have in Bangalore, which is large in size JW Marriott, our Prestige Golfshire has been now most preferred for destination weddings now. Overall revenue of INR 1,852 crores once we complete. Total INR 14,000 -- sorry, one zero is missing here, balance to spend is INR 1,295 crores. Again, in terms of projects, if you look at Bangalore 2 hotels, ongoing and upcoming; Delhi, Mumbai, Chennai and Kochi. Delhi 2, though it is only one project at the end, some of you have noticed. It's 2 brands coming, St. Regis and Marriott Marquis, that's -- it has been totaled as 2. In addition, property management, which has got great potential. All the projects that we complete, we maintain and manage. That can give us the cash flows from INR 482 crore to INR 1,100 crores with the margins of cost plus, which is 20%. We do have a contracting arm, which does INR 300 crores of top line, which has got an order book of INR 1,300 crores. So in case any contractor whom we have joint was to fail to deliver, our construction arm can take over and complete the projects. We manufacture backward integration. We manufacture doors. We do interiors. We have furniture. We also do blazing work. New business opportunities, which we're looking at warehousing and logistics, low-yield game. So that's why we're a little cautious. Data centers, yes, either to tie up, operate on our own is something we are deciding, but having said that we have done a large deal with one of the data center operators recently and assisted living. With this, the most important slide that all of you want to know a lot more about is our Mumbai presence. We've got 7 projects right now in Bombay. The Prestige City at Mulund where we are right now. Prestige Daffodils at Pali Hill, Jijamata Nagar at Worli, which is right now under acquisition and cleanup. Prestige Jasdan Classic, Prestige Ocean Tower at Marine Line, Prestige Nautilus at Worli and 2 office projects, which is a BKC and Mahalaxmi. So this slide summarizes all the required information that you need for each of the projects. I have 7 slides like this. Prestige City at Mulund, all of you are aware, it's been a stock project for almost 15 years. We picked it up in NCLT, total almost 33 acres of area, 4 million square foot of carpet. We've launched, so far, 2.1 million square foot, gross development value of this project is INR 9,700 crores. Launch date, Siesta, we launched in December 22; Bellanza, we launched in May 22. I'm happy to share that recently, somebody forwarded report. I think this has been the top-performing project in Eastern suburbs. Current status 36 level completed of 54 in Siesta. And Bellanza, tower-wise, we have given you the breakdown. Prestige Trade Center, which is the building that we need to hand over to COC as per our understanding. It's commission completed. This is the summary of the Prestige City. Prestige Jasdan Classic, 2.1 acres of land. Launched in Jan '22. Estimated completion date is FY '26. Carpet area of 0.33. Gross development value of INR 1,500 crores. Right now, we are in level of 45 floor tower. The West Tower is -- we are in level 19 of 45 floors. EWS Tower almost 90% completed. We're happy to organize with it. So all of these projects at your convenience. I'll request [ Rajit ] and team, any of you can reach out our Mumbai office. They'll organize for you to see. And that's a perspective. This is where we are actual construction progress because common question that we keep getting for our analysts and investors is will you be able to do the construction at the same pace as that you're doing in Bangalore and South India. In fact, this is a little ahead of schedule. Prestige Daffodils, 1 acre of land. Launched date July '22. Estimated completion date, because of site difficulties, is FY '27. Shore piling work in progress. 0.12 billion square foot. Gross development value of INR 1,200 crores. Prestige Ocean Towers will be next quarter launch FY '24 Q1. 4 years to complete, estimated completion. And 2.3 acres of land. Carpet area of 0.45 million square foot. GDV of 3,400 crores. Approvals are under progress, and we'll start the work soon. Nautilus, we just signed a development agreement. We'll launch in FY '24. Estimated completion is FY '28. For you to know where the site is, this is opposite over Oberoi Three Sixty. This again was a stack project for a long time, which is a redevelopment project, which we have picked up -- taking or paying all the banks, which are involved and signing the DA with the society. 3.6 acres of land, almost 1 million square foot of carpet area. GDV of INR 5,900 crores. And this is about BKC. 2 projects -- 2 buildings rather. Earlier we used to call x and y. Now we are calling it BKC 101. 8.9 acres of the land. 4.45 million square foot developable area. What we've done is for you to equate and compile everything and give it one place, we have assumed the rentals of INR 325 a square foot. We are paying right now so much of rentals. We have not considered the escalation to be more realistic and operate a cap rate of 8.5% to arrive at GDV of INR 20,500 crores. This is Liberty Towers. 5.5 acres of land, will be launched soon. 4 years to complete. We have commencement certificate, approvals in place. So we started work already. Again, we looked at INR 325 rent an 8.5% cap rate that gives us GDV of INR 12,600 crores. Now just to give you a snapshot. Our entry into Mumbai happened 2.5 years ago. You've been asking in every call separately, when you speak to us or when you write to us, what exactly is happening in Mumbai. One slide snapshot. This is what is happening in Mumbai. This is exactly what we are doing. And for you to take note of. Prestige City Mulund, NCLT, Jasdan Classic pickup from HDFC & NCCCL, Jasdan is brand. Jasdan was a land owner. That's why it's called Prestige Jasdan Classic. Initially, it was supposed to be joint development. Subsequently, we bought out the joint development partner, but we kept the name as Prestige Jasdan Classic itself. Prestige Daffodils, INR 1,200 crores. Ocean Towers INR 3,400 crores, which we picked up from Edelweiss ARC. Prestige Nautilus, as I said, redevelopment, and we picked up from banks and the society. Prestige BKC 101, we picked up the stake from IL&FS and Trinity to stakeholders then existed and the project was an NCLT. We approached NCLT and gave a resolution plan and bought out the stakes from both these people, IL&FS and Trinity, which -- who had 50% stake. Subsequently, we also increased the stake we're buying something from DB share. Today, we are little over 75% of share in BKC 101 is by Prestige and the Liberty Towers again -- these 2 are the projects -- and again, because you keep asking who is our partner here, now what we're doing work, how many projects are with DB. These 2 are with JV partner, DB and the remaining are all some things we have picked up in NCLT and with banks we're doing our own. So all these and Jijamata Nagar, which will take another 9 months to 12 months to make it ready in terms of plans, in terms of cleanings, et cetera, which holds a potential of INR 20,000 crores, which is 3 million plus per foot of carpet area for sale. For you to understand better in the next slide, I have -- also -- we have also given a breakup of how we arrived at the numbers 0.33, sale value on carpet 45,000. Prestige City Mulund, 24,000. Daffodils, the price at which we are selling. Ocean Towers average pricing over a period of life cycle of a project. Nautilus, Liberty Towers applying the derived number, the way I said the rent and cap rate and Jijamata Nagar. This is the breakdown. So how are we looking ahead in terms of industry, in terms of internally our balance sheet, what is the CapEx. How are we going to do CapEx funding. What's the P&L outlook. This is where we will be heading in 3 to 5 years from now, entire organization is geared up in terms of pursuing opportunities, execution capability, management bandwidth to take the organization to the next level. In terms of pan-India presence. We are present in Bombay, we are not present in Pune. We'll be looking at -- we are evaluating a lot of opportunities in Pune. Soon we'll enter that market. As you all know, NCR, have entered. We have signed a deal, but for lack of approvals, we have not been able to launch. But we'll strengthen our presence in that market, we'll take it to the next level. Now please look at it, our CapEx commitment to what you saw in earlier slides. For office, retail, hospitality, Prestige share is INR 17,007 crores. And this is how we are going to spend that money year-wise, next 5 years. 40% of residential free cash flows, as we said, we'll deploy into the CapEx. This now the deployment is going to happen. We also will get lease deposits from the tenants which will help us fund last mile of construction are to repay to the [indiscernible] that we have borrowed also. The shortfall, INR 7,486 crores that you talk about is the one which we are going to be borrowed from the bank to complete these projects. So therefore, our peak debt will move in the following fashion. INR 4,730 crores that includes existing debt and then incremental shortfall whatever is that if we keep adding. We -- our debt will move when we achieve INR 3,000 crores of annuity income and the hospitality incomes put together, our debt will move to INR 11,000 crores. Along with that, our network also will move from where we are to INR 24,000 crores because of increase in developmental business in the profit that we book. Eventually, our next 5 years are projected ratio, maybe in the middle -- in a particular rate, it may be at 0.63, 0.64, it'll come to where we are just now. This is a cycle that we will go through. And in our network, we are not counted anywhere, all these numbers if you see. We've not counted the transaction that we are going to do from now to next 3, 4 years and what cash flow those can bring in. You're not added that. But having said that, we have kept aside 60% of the cash flows of residential business for business development. That's not part of it. That's what I've explained to you. 40% will come into CapEx, 60% are kept aside for business development. So this is now 5 years from now P&L should look like. The incremental step-up in terms of revenue recognition has to happen with the growth that we are seeing. Office, retail, hospitality, property management should contribute in the following fashion. The total top line of 30,000 crores, with EBITDA of 32% and tax, PAT of INR 4,746 crores. This is the direction in which we are heading. Now achieving INR 25,000 crores of sales before I get there. Now this is the market comparison as to where are we and what PE multiples [ will be paid ] at INR 17,367 crores of market cap. 12 months trading multiples in terms of PE is 12x. Price to book is 1.82. Our return on equity, you see in the presentation, is a 12.64%. So operationally, if you look at sales, we clocked the highest sales any developer has done last year and this year so far as well. And comparative numbers of all other developers in terms of multiples of PE, price to book and return on equity is here for you to see. And we're happy to share that in terms of return on equity, in spite of the product mix that we have, the highest ROE is by us. And the lowest price to book is also by us. In terms of even trading multiples, PE multiple, that's the value that we hold in terms of stock. And with the expansion that we are going to have into NCR and Pune to other good markets for residential, we will be one of the representative stock for Indian real estate as a whole from the investor's point of view. Some of the developers are Mumbai specific, some of them are NCR specific, some of them may be Bangalore specific. But if you look at the Prestige Estates, the way we are driving the organization is to make it as representative real estate stock. So if you want to pick one stock and cover all the markets, it should be us. So INR 25,000 crores of presales, INR 3,500 crores is what we had to deploy in the land because some of them are JDs, some of them are outright buys, INR 11,500 crores we'll spend for construction. INR 25,000 crores will be the presales number that we are looking at. How do we get there? INR 10,000 crores from Bangalore, INR 5,000 crores from Bombay, Hyderabad 1,000 crores, NCR 3,000 crores, Pune 1,500 crores, Chennai 1,500 crores. All other cities, which is Kochi, Kolkata, Goa, Bangalore and [ Motivair ], we have projects around INR 500 crores -- INR 1,500 crores. The number that you see in green right now is what is the contribution in this year. This year, we are doing INR 8,000 crores in Bangalore, INR 2,500 crores would be from Mumbai. Hyderabad would be INR 1,000 crores. What you see in black is what we are looking at in 3 years' time each city to contribute. So very realistic. 20%, 25% growth from Bangalore market. Mumbai is the kind of offering that we have to move from INR 2,500 crores to INR 5,000 crores. Hyderabad holds great potential when we launched Prestige City, which is a large project, we'll be easily able to clock INR 2,500 crores number. NCR, we don't have presence right now. We have 2.2 million square foot of project, which is Prestige Bougainvillea, that is coming up a launch. And with 2 more projects, we should be able to -- given the potential that market has we should be able to reach the number of INR 3,000 crores. Again, Pune, we don't have projects right now, but we are evaluating. Hopefully, by March, we should have to 2, 3 projects in pipeline. Chennai used to do for us INR 1,500 crores to INR 2,000 crores in the past, somehow in terms of acquisitions and change of guard senior management, not captured enough of China market. But I think now with the kind of projects in pipeline, we'll get there. So this is how the mix of the number that we are looking at by FY '26. Our journey, our efforts and the drive is going to achieve these numbers. Key takeaways for you, no compromising in terms of values. These values is what drives all our expansion. INR 22,000 crores of residential free cash flows that we have in addition to INR 10,000 crores of land bank potential, [ LET ] business will grow from where we are to INR 3,000 crores. Gross development value of projects that we're doing in Mumbai is close to INR 75,000 crores. And I want to add to that, that 4 more new projects in MMR region are under evaluation consideration in Andheri, in Navi Mumbai, in Versova and various other locations, we'll be able to close those deals by Q1. The portfolio will only become bigger and better and widespread with offerings across the price points and various ticket sizes. Expansion into NCR and Pune, already groundwork has been done. It's about now choosing on what is available in terms of deals. INR 25,000 crores of annual sales potential. This is where we're heading to by FY '26. And the Prestige City format will take into new geographies. Each Prestige City is a top line of over INR 5,000 to INR 7,500 crores, big in size. And we want to take Prestige City to all the geographies that we are presenting. With this, we come to the end of presentation. Thank you very much, quite exhaustive. I want you to understand in detail as to what we are doing, where the cash flow is coming from, where do we go from here, sales mix, how does the balance sheet look like and P&L look like. Thank you very much. I hope this has been informational and helpful to you in understanding organization better in terms of strategy, in terms of the way we're doing business. Thank you very much for your patient hearing. Thank you. And I request Mr. Irfan Razack, our Chairman, to come on to stage and share his vision and explain to you as to what drives him and how is he driving the organization next couple, and post which we'll have a question-and-answer session with sir and the management.

Good afternoon to everybody here. It's great to see so many that have come, taken out their time. Thank you very much for that. I think it's been an exhaustive presentation given by Venkat, and the entire team has worked on this and put this together. And whatever has been presented is not something that is just stacking in the air. I would say it's pretty realistic and extremely doable. So we have some of our team members listening on apart from all of you, and they know that all this is possible. When we entered Mumbai, there were so many questions. But now I think the only way to answer that question is action because you can keep talking. And the only way to convince the talk is to walk the talk to do what we are doing. And I think the team is well equipped to do what we do. And this question of planning, focusing, making sure that whatever we commit, we get there. Yes, Mumbai also, probably we would have probably like to grow a little more slower, but then these commitments already there. And I think every commitment that we've taken almost all of them, we are pouring Concrete. Except for Jijamata Nagar, rest of them, the concrete is there, all the approvals are in place including the 2 big office developments. And very soon, we'll have some good news on that also in terms of either occupancy, leasing, all of it. I don't want to say much more because these are 2 very, very prime sites. The residential business in Mumbai has done well and will continue to do well. Prestige City in Bangalore got sold out in a matter of 1 year, that 7,000-plus units of apartments plus 800 plots that we did. The plotting business is good, and we're getting ready and gearing up for Prestige City in Hyderabad, the approvals, the last stage is happening. Hopefully, we'll get March, then the 12,000 figure will go up. But if it doesn't get in March, hopefully, April. Of course, there's always the next quarter and the next quarter, we have to leave it for that time. But the thing is the numbers. Numbers will happen. Sometimes we have more numbers, sometimes it is less. It's about our vision. It's about what we are planning to do. It's about growing an organization. Like Venkat said, that many of us who are in the company for many, many years, that's nothing else because it's their commitment, it's their passion is passion to create. Now Mumbai, we've has created a completely new team. They're all passionate, they're all dedicated. Similarly, across the country, across every center, we say we need to have proper organic growth and that's we have done, and we'll continue to do that. And yes, macroeconomics do play a big role in whatever we are doing, especially real estate and every single region has its own local nuances. We need to understand those nuances. And we don't -- and we recognize those nuances. We need to how to battle the entire environment that goes along with it. I think we've been fortunate enough. We are blessed by the All Mighty that we have done it insofar because without the blessing of the All Mighty, nothing happens, nothing moves. So it's a committed team who believes in that. It's a committed team that is working on it. Yes, organizationally, it's a professional setup, and it will continue to be there. On the promoter level, we have the next-gen totally ready and completely committed and involved. And I see that this company will grow much more. And the only way to do it is to keep doing it. When we listed in 2010, it was a different story. Now in 2023, I probably couldn't even imagine that we'd come to this level. Now I don't want to keep talking. I think the best thing is we want to hear from you, your thoughts, your questions. You'll have many, many questions. We're ready to answer them. With this, once again, thank you for having come here. Thank you for having -- to have that patient to listen to us. And we do hope we were able to present a clear picture. Yes, while we are doing all this, the only thing is we have to keep working hard and praying hard that we reached the end. I've told this not only in our company, but whenever I go to any of our developers meeting. As early as yesterday, we had a credit convention for South India as for Karnataka. I said -- the youngsters wanted some advice. I said, if you start a project, be focused on it, reach the end. Because if you complete even if you're not sold, you'll sell it at the end because there's some buyer at the end. And of course, we'll get better prices. But the thing is you need to tighten your belt, not overcommit, reach the end. Now when we took this Prestige City Mulund, it looked too huge, too big, too humungous. But I think after what we have done so far, it's given us so much confidence, and we believe that even the next phase by the end of the year, we can launch that. Thank you again for being here. I'm more than happy to take whatever questions. I'll invite Venkat again to the stage, and we'll start with the Q&A. Thank you.

[ Yash Gupta ], this side, sir. So sir, first question is on our Mumbai market. We have again seen the increase in the unsold inventory in the MMR market by almost 29% to or 3.63 lakhs. Do you think the next 2- to 3-year absorption to increase significantly or the unsold inventory to come down?

Talking about Mumbai market?

Yes, Mumbai market. MMR.

See, now we've had a good run. Like even in this project, whatever we've launched, I think we have sold more than 60% plus apart from some legacy customers that we have. And I believe by the end of this year with this inventory, whatever we have, we probably will run out of it. And then that's the reason why I said by the end of this year, we'll probably in a position to launch the next phase.

So all in all, you are saying that we will keep doing better than the market. The inventory keeps increasing and then to -- will be able to do better than the market.

I can't hear you.

So do we think that we keep doing better than the market in MMR region and if this kind of inventory keeps on increasing, that may in future after next 1 or 2 years keep -- add some pressure to you also.

There is no pressure as such. This entire transaction also is skewed in a certain way that we have certain commitments to COC, and the certain cash flows from this will go towards that way. There will be no cash flow from there. But ultimately, the complete cash flow will come in the last phase of this project. Similarly, now whichever project that we are doing in Mumbai, it's all properly handled, properly tackled. So in the residential's share. Basically, what will happen is it will be sort of self-sustaining and we'll have enough cash flow coming in to see construction happens, and there's no stress on the cash flows. Yes. On the 2 CapEx projects, which is about 6 million-odd square feet, which is the Liberty Tower, which is now we rechristened it as the Prestige and the BKC. Unless we decide to sell certain portion of the area, the rest of it, there will be a lot of CapEx cost where the cash flow, like Venkat said, that a certain portion will come from residential surpluses and the rest will come in the form of debt.

And sorry, just to add, in spite of the inventory that you're mentioning about, if you have a right offering, good ticket price in terms of unit pricing and pricing is reasonable, I think there is enough market for it. I mean even this we're launching. There's enough offerings around. It's not that there's no development that is happening and we came and we launched a project. But it's about the design, the pricing and the credibility of the developer. I think there's room for us to enter each of those segments, the MMR region market that we spoke about and make our presence.

Second one the Bangalore market. Why do you don't think that Bangalore market peak is behind us? For all the positives has been played out in last 2 years like lockdown savings or what young generation is having. Back to work has been done by almost all the IT-ITES companies, exceptional hikes is behind us. And increasing the net headcount from the IT companies is also behind us. Now we are listening that the net headcount has started going down again. So do you think that peak of Bangalore is behind us in terms of IT-ITES especially.

Peak is behind. So if you look at what has been driving the sales of Bangalore market is not necessary the lockdown savings and all of that. Ever since the RERA came into play or a demand came into play, a huge amount of supply consolidation has been happening. If you look at -- I don't want to take names. But the number of large developers is able to be 15 then. Now it's boiling down to 5, 6. Our large developers have come and given us lands for the developing their properties who earlier used to go under bid for the land along with us, used to give their offers and take the plant. And they are coming and saying, okay, we'll align with you. We'll bring more and more lands to you. And the supply consolidation theme, I think in the next 3 to 4 years, it will play out because our land providers now have become the financial institutions or the developers. Last 35 projects that we have signed in 2.5 years or so, almost 25, 70% of them have come either from the bank's financial institutions or other developers. Look at Mumbai. All of them from other developers in the financial institutions. Land acquisition will become easier. And supply consolidation is playing. I'm reiterating. Supply consolidation is playing, and that will drive the growth for the next 3 to 5 years. I'm very confident. Let me give 1 more anecdote. If Bangalore micro market has got 40, 45, I'm talking about small micro markets. Our presence is around 15, 16 micro markets. That's all. The rest of the areas is where other developers are flocking. Very seldom, there is a competition of 2 developers launching next to each other. So if we can only increase our presence to the remaining micro markets within Bangalore. So we don't have offerings in some locations. Our projects have become extremely successful. We don't have follow-on offering to those locations. But we'll be able to get those numbers.

This is Kunal from CLSA. Venkat, in your cash flow projections, you've not factored in any strata sales, which we have spoken about in the past.

No.

So has the plan changed over there? Or still look at doing strata sales?

We have assumed that whatever we are building in terms of office will hold. We have not factored in the strata. If it happens, it will only help the cash flows further. Assume for a moment, we are able to sell 1 block of BKC, example I'm saying. It will give you half of whatever the GDP value you projected ease of cash flows not more -- you are talking about optimistic scenario, I've given you realistic.

Just to add, you see there's no cast in stone sort of strategy as far as office is concerned. There could be actual users who want to buy office. It could be investors, a strata, but it's a mix and match. It depends on each project, we'll evaluate it, and then it also depends on the requirement of cash flow. But the key bottom line is we definitely, definitely don't want debt levels to go up. We would like to definitely see the ease of cash flow is there. But of course, see a retail mall, I can't sell, I mean in strata. Hotel and rooms and strata. So basically, hospitality and the retail malls are definitely can't be sold strata. Maybe after the project is fully ready and operational, it's an option. But then we've created -- sold on portfolio you want to create once again fully and operate it properly. And then the rest of it, how to monetize its left to us later on to decide, which is a 6-, 7-year later story.

My second question was on -- we are doing 40 million square feet of development in our office portfolio over the next 5 years. So how do you perceive the...

Sorry, I think the mic or the speakers are facing -- a little louder. I can't hear what you are saying.

Sorry, I've got a bad throat. So in terms of the office portfolio that we are building is 40 million square feet. And going by like the leasing that we have to do in the next 5 years, that seems like a tall task, right, considering like going by the current run rate of less than 40 million square feet of net absorption, that's like almost capturing 20% of market in leasing. How do you plan to achieve that?

I think I have the man for the office sitting here smiling. Why don't you come and answer that question?

So thank you. No, I was laughing and boss saw me laughing. Typically, if you look at the office markets, our peak in 2019 was about 52 million square feet of gross leasable -- gross leasing happening came the pandemic, 3 years, we came down to as low as 32 million. Last year, we were back to 50 million. So from a perspective of where we see the market. In the next 5 years, India office leasing market will be closer to the 75 million to 80 million square feet, and that's the market that we're talking about. And when you look at the 41 million that we're talking about, of which 26 million other construction and 15 million is on the planning stage where we are going to build another 15 million. I think we are talking about -- to give you a small example, in Bangalore market, Bangalore has been leasing consistently between 15 million and 17 million square feet year-on-year. Last year, calendar year Jan to December, without getting a single new building OC in our own portfolio, that asset under management that we do all of that, we did 3 million square feet. So we are typically at about 10% to 12% of the market in a year where we don't have new supply. When we have new supply, that number can easily be about 20% of the market share. And that's what we're hitting in the market like Bangalore, which constitutes or 35% of the overall gross leasable scenario in India. So nothing to worry in terms of -- you built a great product and Venkat's presentation was very clear. We are redefining our product. We're redefining the alignment to fertilizing our office spaces using the best global consultants to build future-proof products. And like Mr. Razack also said that we are trying to hold as many assets and buildings to go forward to create a net operating income of INR 3,000 crores. So we are well in SKU for that. I hope I answered your question.

Just to add to what Jagdeep Marwaha said. See, when a new asset gets redeemed, a new building gets ready, whichever market, it is, whether it's Mumbai, Bangalore, Hyderabad, Chennai, wherever, the -- you see there is always a sort of movement that happens. One is the new business that happens, expansion in terms of new takeups. There also the existing occupiers in different buildings, they'll be scattered in several buildings. They'll be having an old development. They'll probably want to upgrade themselves and also sort of expand some marginally. So there always happens a consolidation into 1 single building. So once they see a newer development, better development, and they believe that is the address they would like to have. So that's what he meant by hotelization. What we now are endeavoring to do is create certain special and better development so that people will sort of come to us, and that's the only way because excellence is the only way ahead and the location. There are 2 things. One is the type of building and second is the location. These 2 things count, whichever market you're in. And we are pretty confident. Believe you me, I mean cut to some 1999 in Bangalore. When we leased out 50,000 square feet, we thought we did something fabulous. And when it came to 100,000 square feet, it became amazing. And then on day Intel came and they asked us to build a greenfield development of 200,000 square feet. We thought within the best deal of the decade. Now you came into 2000, 2001. Today, we're talking about millions of square feet where the absorption is happening. That's the type of business that is happening today in the IT-ITES space. And I believe that the cities, especially Bangalore, Hyderabad, Chennai, Mumbai, are growing. And India itself as a country, the amount of work that is going to come into this country is not yet conceivable the entire world is looking at us, and that is where the growth will come from. Yes, we have to have optimism. At the same time, we have to be cautious. So these numbers, what you say, if you ask me if I'm going to pick up another 3 million square feet in Mumbai to develop office. The answer is a clear no. We are doing a certain amount of work in Mumbai, a certain amount of work in Hyderabad. Today, Hyderabad is overpopulated. There's a lot of supply. So just completing some 2.3 million square feet. And I believe that one will get occupied quite easily and without difficulty, but there are some actual users who are approaching us in terms of buy some people want to lease. Yes, there will be some stress levels going -- it's not going to be easy ride everywhere, every market. But each market is different. Like in Chennai, we completed a few buildings. Even before we completed, they were fully leased. So it's a mix and match. We cannot get worried and not build. We have to build, but we have to build the best in the best locations. That's how the answer is.

This is an important question, Kunal. Just to add up in Bangalore market the number of people who are providing Grade A office building also are very limited, very limited. It boils on to 4, 5. So 20% to 25% of the capturing share of that market is not difficult. When we presented the slides about residential, office, retail, hospitality, the one that I want all of you to know is, it's not that we are doing just higher sales in the residential. We are market leaders in Office market. We do as much more of any developer who does only office, not do any residential. Our presence in the retail segment. If we had to look at pre-Blackstone deal and including, we would have been probably the largest number of malls, if you look at malls in the country. Even the hospitality, if you look at it, it's not a mere presence to look at the number of the rooms. So we are leaders in each of the segments. So a market leader in the segment to capture 20%, 25% of the market share with the new offerings coming and different locations is not a difficult thing.

Sure. And one last question from my side on the resi. So in FY '22, we had Prestige City Bangalore. In '23, we had Mulund contributing significantly. So the sales were largely concentrated because of a couple of projects driving the sales for that particular year. How should we look at FY '24 and beyond going? Like do we have such large-scale projects which can -- or which can like drive the sales or which -- or the sales will be largely broad-based going ahead?

No, no, we do have Bangalore itself. We've got a lot of development coming up in good prime locations. I think the latest approvals that are coming in, which we have launched. Again, it's a question of today. I can't launch anything without the complete approval and the RERA. So I've got Prestige Lavender Fields, which is about 1,500 apartments and Prestige Serenity Shores, which are approved in the BDA. the development plan is there. But I need to get the BBMP plan and the RERA number. We are trying hard to see, we bring it for this quarter. If that comes, it will boost up my numbers in Bangalore. And I've got Prestige Park grow. Even there, the development plan is approved, but the building plan still has to get done. Bureaucracy and government doesn't work at the speed at which we want them to do. But these are all plans which are -- we've been working over the last 3 years. Land is already in place. Concept is in place. The entire plan is done. And we've come into that last leg of approval. So '24 in Bangalore, we've got many projects coming up. Similarly, Hyderabad, we've got the Prestige City, which is almost 5,000 apartments with about 200 with us. And that's, again, going to be a number mover. And even Chennai, we've got Pallava Gardens. Chennai moves extremely slow. I think there, again, we are hoping to get it this quarter. It's not going to come. Probably, it will come the quarter -- next quarter or the quarter after that. And so also in Noida. We've done the CEC. We've done the show. It's all ready. But the approval is taking time, there are some issues. We are trying to resolve it. Hopefully, it should come in a quarter or so. So there's a big pipeline in all the cities that we are working on. Yes, we don't want to have a situation, we've got too much inventory or we don't want to have a situation where we have no inventory. Like today, in Bangalore, just in completed stock, I think we've got the lowest inventory, which is about INR 173 crores, which is nothing compared to the scale of operation, which we are doing. And just launched project is about INR 350 crores, INR 400 crores. There's hardly any inventory in Bangalore. If I don't get the new projects, we wouldn't be able to achieve those numbers, but we are going to get them. INR 12,000 crores, yes, we are very confident of clocking that. We've already clocked INR 10,000 crores and March 31, we should do INR 12,000 crores, but we could surprise you with a little more if the approvals do come and the launches do happen, as planned.

So just to add, Kunal, if FY '22 was Prestige City Bangalore, FY '23 is Prestige City Mumbai. FY '24 is going to be Prestige City Hyderabad. FY 2025, maybe Prestige City Goa. Prestige City will come to all the cities, and that will be anchor for the tier, and we have enough Prestige Cities. That's why we mentioned key takeaways, Prestige City as a concept to all cities.

Saurabh from Motilal Oswal. So you have laid out a very aggressive plan on residential segment also that we are planning to double up sale from INR 12,000 crores to INR 25,000 crores. So what is sort of giving me the confidence that the momentum can sustained? Like you had a very large product, which contributed in the last 2 years, but then we also have a pipeline which you get out. But from a demand perspective, how confident are you? And in addition to that, like how do you maintain that the underwriting of new projects from IRR perspective, it's the threshold is met. And if not diluted in pursuit -- by pursuing the growth.

Not diluted by?

I mean, from IRR perspective, given the aggression that we are pursuing, how do you make sure that the internal threshold is met?

Margins are maintained. Okay. I see 2 things. So today, because of so much of regulatory including RERA, apart from the market itself expanding, there's also a consolidation that's happening. Now why does the Prestige sell more than anybody else? It's only because of the past track record and the delivery that we have done and the confidence of the customer happens. So if Prestige does launch a project, they are just about a handful of developers who can command that same respect. So what happens is we get the advantage. We get the business, and there is enough buyers for our product. So reaching INR 25,000 crores, I believe it's not at all difficult. It's very easy. We have to strategize this. We have to have the product. See without inventory, I can't sell. Like in Bangalore, without the inventory we're stillborn. So we need to have the inventory in the right location product, the right offering on the price. Now the very good point that you brought up is in quest of top line, are you sacrificing the bottom line. That debate keeps happening internally also. The question is while we look at the top line, the most important part is the bottom line also should be completely protected. And internally, all our guys debate this properly. We work out our costing properly land cost, construction, escalation, interest overhead, whatever that comes in. And we make sure that the pricing is a -- priced in such a way that it's not completely unaffordable to the buyers. But at the same time, we make sure that our cost is controlled in such a way without wastages that the bottom line is always protected. Yes, we've had some -- EBITDA margins have always been historically between 25% to 30%, a little more than 30%. But the PAT margins have always been single digit. Now I can't promise that it will be better than that because if I'm looking at PAT margins of 30%, the sales won't come. If this product like Prestige City Mulund, if I price it at INR 40,000 crores, there are not going to be any takers. I also have to look at what's happening in the market, what others are selling. My product probably will sell for 10%, 15% more than what others are selling in the same market. But at the same time, we have to give a good product, timely delivery and make sure the pricing that we price at is sensible. Yes, customers do buy from us. After the project is completed, 2 years later, 3 years later, the price is 3x more than what we have sold, but that's very good luck. And that's how business keeps coming back to us, and that's the confidence, I mean that's part of business.

In terms of growth, too, we also looked at the data and arrived at where it can be head in next 3 to 4 years. With the expansion that we have done being Bangalore-centric, and captured and done good numbers in Hyderabad, Chennai and most recently, Mumbai. Our ability to expand and make our presence will then have sales. I think that is -- I hope you're all now confident as confident as we are that we'll be able to expand to other cities and given our approach and given our value system. Overall, the number of units that gets -- got sold in the last calendar year, if you look at a little over 450,000 units on all the significant markets. We are talking about doing 3% of that in those cities. Maybe if we get to 4% across that number. That's all very realistic numbers we have kept. All that we need to do is add to our offering some more micro markets in existing cities and enter 2 new cities, which have got potential for the real estate sales. So we're looking at that much only. In fact, there's a lot more that can be done.

Another thing that we do is we look at some new concepts all the time. We mentioned Goa, I don't think Goa anywhere. It's not there because it's in camouflage in the land bank. We've tied up some great land in Goa. We've got the support. We are doing a concept. We're doing some assisted living. We're doing our golf course again there and some recreational villas, holiday homes and plotted in development. I think plotted development should give us instant cash flow even there. That's another market that suddenly -- project development has come off edge. There are many, many -- there's a huge opportunity for project development. And we used to do that in the '90s, early '90s and I said there's no value addition. We stopped it. And then now in the suburbs in every city, whether it's Chennai, Bangalore, except in Mumbai. You don't have land at all in Mumbai to do plotted development. But everywhere else, there's a huge opportunity. Hyderabad, we did plotted development. It's met with huge response. And it just gets sold off within -- not even weeks and days. So that's an opportunity we've learned, and I think we are mastering that also, doing a good job. So see, to do business, there's potential. And while we are doing it, like you rightly said, it's not only the top line. We have to make sure even the bottom line is protected. And most importantly, while we are doing on it, we are definitely, definitely not going to depend on too much debt all this, we'll try and work in such a way that, especially in the residential business, I've kept repeating it everywhere. We have no business to have debt in residential business.

Yes. This is Mohit from IIFL. Thanks for an exhaustive presentation. My question is on your commercial projects in BKC and Mahalaxmi. Can you tell us what is the share or what is the comment of the SRA partner? And where is he right now in terms of fulfilling a share of commitment?

Share of commitment in what?

I mean what is this response as in clearing the site, creating -- so I'm trying to understand where is he in terms of doing all that.

Okay. Very, very good question. And I think I'd like to clear the air on this completely. Now let's take it step by step. Now first, let's take BKC. When we did a shake hand on BKC, I asked Venkat what are we doing, honestly. But then he said, these are all my CPs. Now what were the CPs? That entire site had some 900 or 1,200 tenements over there. You couldn't step into that plot. Then there was those 2 financial IL&FS and Trinity was sitting there. Today, there's no ILFS (sic) [ IL&FS ] , there's no Trinity and then the site is absolutely flat. It's clear, clean ground. And the fourth point responsibility was is to get the entire approval. The cost of the approval was our partner's responsibility. So what did he do, he cleared all these 4 things. And all these 4 things were at his responsibility, what was at his cost. Our cost started with -- only with construction. And we had to give an x amount of money that is INR 300 crores on either of [ X and Y ] INR 300 crores plus INR 325 crores as an entry cost that was our nonrefundable deposit. As we went along, we saw that if he didn't support, this project will be stillborn, it will not move. So what did we do? We took a calculated risk, we kept funding him because he didn't have the funds. That was all at his cost. Initially, we said if we're going to charge you, then finally, we said this is not going to be secured. So we have now taken space against the money that we have given. And now our job starts now in terms of construction. So whatever money that was paid apart from that INR 300 crores whatever commitment that we did as part of our deal and it was a 50-50 on development, 50% of buildup area was our partner, and 50% was ours. And now it happens that since we have are funded for A, B, C, D, which was our partner's responsibility. We've got more space and that's how Venkat says, our share in that project is some 75% or 80% or whatever that is. Similarly, you've gone to Liberty Towers or the Prestige. Even there, land was leasehold. To convert from leasehold to freehold, payment had to be made. So that was his responsibility. Secondly, it was a project which was launched as a residential project, he had customers. He had to clear the existing customers. Thirdly, again, premiums. And what's that, your approvals, the entire responsibility of his. Now both these projects, the approvals are in place. Premiums have been paid, everything has been done project, both sides started broken ground. And then, of course, in the Prestige and Mahalaxmi, we also had to build a rehab tower, which was Tower D. Now it was greenfield. Today, we've come to some 10th level or 12th level. And from I think this year-end, we'll complete that building even that cost 50% was our partner's cost and 50% was our cost, and work is going on at full speed. Even there, we had to do the adjustment on the space because the liquidity. So basically, what we did was we provided liquidity. Fortunately, we did have the liquidity without getting into debt. And now we have to max -- the sort of mix up of our debt-to-equity ratio as we go along. And I think we're pretty confident of doing that. And if we do sell some space in either BKC or in Liberty Towers, which we have not, many people are knocking on our door, asking us to sell, we are holding on. And if something good really comes up, some transaction happens, then it's all free cash flows. That's the total sum and substance of the entire transaction as far as office is concerned with our partners. So there's nothing else that we are doing with them.

In terms of equation, just to summarize what Chairman said right now. We had a lot of CPs when we entered into a transaction for both BKC as well as Liberty Towers. Now net debt, as we stand today, what is outstanding, deliverables from him is, one, at BKC, a rehab cover need to be built at his cost, which will be roughly around INR 200 crores to INR 250 crores. A rehab tower the need to be built at Liberty Towers, jointly by both of us, which is a 10th floor right now. These are the leftover deliverables that need to be done from where we started to where we have come. So there's nothing else that's outstanding.

Okay. So that's very clear. So my second question is you mentioned about your investments in warehousing and data centers. But I guess you haven't taken it anywhere in your estimates in terms of estimate -- in terms of CapEx or even in terms of revenue. So what kind of plans do you have and how big this could be, let's say, in the next 5 years? What kind of opportunities you see that -- in that segment?

We have not taken in the cash flows, for sure. But if you look at the allocation of free cash flows, 40% has gone for commercial CapEx, 40% has gone for business development residential, 20% if you look at, has been kept for other opportunities and contingencies. If we were to pursue, those cash flows will go there. As we mentioned, the logistics and warehousing is a low margin game. It's more about keeping land for the future development, which will yield also and to more it can become a good residential development. So I mean, given the opportunities that we have, deploying in high-growth markets versus low-yielding warehousing. We've not been able to find a strategy. Having said that, we have 1 warehousing project right now operational. Data centers, we are still evaluating as of now.

Just to add on the data center. I mean, that's why, again, Jag is getting a little nervy because we've just now closed the transaction in our Prestige Tech Cloud project, we had some land which was -- which we had set as Phase 2. And now we've signed a data center. It's a signed deal. It will come into the numbers probably this quarter. Where we are not building and leasing, we are building and selling. So it will give us only positive cash flows, and it's a good transaction that happen. It has a two-pronged effect. One is that Prestige Tech Cloud per se as a project, there's some occupier and people are already in there. And we have to complete this project in a calendar year, I think in 12 months' time. And we need to see that the power because the biggest thing in a data center is not the building itself. It's getting the MEP like the power connection because there's the huge gazillions of power as far as data centers are concerned, and we are evaluating 2 other sites where we've got some people who are interested for us to build for them. So it's a big game. Like Venkat rightly said, warehousing, it's a INR 22, INR 23 square foot margin, I mean rent. So it has to be a low-cost land and a low-cost development, still we need to get up 15%, 18% yield on cost. So we are working on that. We've got a couple of sites already tied up, and those will come to fruition soon.

It's like development business for us, build-to-suit facility. We're not operating data centers.

Any more questions or shall we wind up? One more. Okay.

This is Parikshit from HDFC Securities. Yes. So my question is on commercial office. So we have about 11 million square feet to be leased in Mumbai in the next 5, 6 years, including the partner share. So we have about 20 million-odd in Bengaluru. So how far are we signing the first lease deal in Mumbai. So if you can give some color on that?

See, it's not 11million. We've got 6 million square feet in Mumbai, BKC and Liberty Towers, 4.4 million in BKC, 2.2 million in Liberty Towers. That is Mahalaxmi. That's the rentable area. I mean, the developable area will be much, much more, which includes the car park basement, but leasable area is only 6.6 million. And the rest is Bangalore, Hyderabad, all of those are there. Now the good news is even in Mumbai, we are getting a lot of inquiries. Even at this stage, you've seen the picture is just we are still in excavation stage. It's a 4-year window, a maximum 5-year window and all this will fortify and really be shown to the Mumbai market. People are interested where people are looking at actual occupiers they want to buy, and they want to occupy it. And typically, leases will not happen at this stage. If somebody wants to buy and have their own office, yes, then they make their changes also and they've sort of become the tailor-made for them. But the leasing probably will happen when my structure is sort of up the ground and it's visible and that's the time the action happens. But having said that, there is a huge interest in Mumbai. Bangalore is an ongoing thing. It keeps happening all the time, and I don't see any problem. I already talked to you about what's happening in Hyderabad. And the most difficult market for me today is Hyderabad. Let me be very honest. Fortunately, we don't have too much space there. It's 2.2 million square feet. And -- but even there, I'm pretty confident from the time we complete to the time we lease it, it will be probably a year.

Okay. So my second question is, this year, Mulund has been our star product. So in terms of business development pipeline in MMR in Pune. So beyond the traditional Central Mumbai and the South Mumbai. So how are we evaluating other markets within this micro market? So if you can give some sense on that, even in Pune, how do you think could be the opportunity for us?

Actually, that's why you heard Venkat say we are looking at suburbs in Mumbai, like the Andheri, Thane, Navi, all other around. Because I recognize the fact that to sell 80,000 square foot unit or 1 lakh square foot unit every day, it's not possible. Because again, affordability, when I say 80,000, 100,000, it means also INR 25 crores, INR 30 crores. It's -- what's the affordability? How many people can afford that. But a INR 2 crore unit in Mumbai, INR 2.5 crores is the sweet spot. Maybe if I can bring it down a little less than INR 2 crores, the velocity will be huge. So that we are evaluating, that we are looking at definitely. And we've got a fair share of the premium projects, and I don't think we're going to touch another premium project till we launch what we have in our kitty and till we start building it until we sell those we've got Pali-Hills, we've got Worli, we've got Marine Lines and also Jijamata up, that's also in Worli itself. So this will consume the high-end market. We get -- every day, we get many offers, whether it's in Bandra or wherever else for redevelopment, which we are now staying away from. Now if at all, we tie up anything in Mumbai for residential, it will be always in the suburbs, that's the only way to do it because we don't want to be skewed. Definitely not top heavy or the very expensive project. And then we -- when the market changes a bit. That's the first one that gets affected. We recognize that whichever city we are in, whether it's a Bengaluru or Hyderabad or the very expensive ones sell, but they sell slowly. They don't -- in my own experience. We did Prestige Golfshire in Bangalore. 2008, we launched it. Now we are in 2023. Number of units 2 not 6. COVID helped us a lot. Price went up, of course. But happy to say Golfshire has fully sold out. We don't even have 1 single unit. And now across the street, we had some 22 acres of land. We launched something called Prestige Sanctuary, 85 units, more than half is sold. Now, it's a mindset. It's a people's acceptance of a location, people's acceptance of a price. But high-priced. Yes, it is uphill, but the regular stuff between, say, if I mean in a Hyderabad, INR 1 crores, INR 1.5 crores, Bangalore, INR 1 crore to INR 2 crores, it's an easy seller.

And just the last question on the AIF. So any update on that? Have you got any commitments there? How big could that be for us?

So we were in discussions to raise AIF, one of the partner that we looked at was ADIA. We had discussions with them. As you know, ADIA is -- doesn't have own in the country and they operate either through HDFC or through Kotak. So their thing was that we have signed a platform with HDFC, and we have deployed only 10% of it so far. And the balance has not been deployed. And similarly, with Kotak, we have an understanding and maybe we will announce like Q1. Again ADIA working you through Kotak. Next 3 to 4 projects, we would be doing in the platform with them where they will be capital providers, large transactions, 1 in Chennai and 1 in Bangalore and 2 in other different cities. We are in advanced talks. They also have looked at the land parcels. So once we exhaust this money, and then we'll look at doing something on our own independent. So right now, we're working either through Kotak platform or HDFC platform.

And how much of the capital is still pending to be deployed in these 2 entities, HDFC and Kotak?

INR 2,500 core platform that we signed with HDFC, we made use of them to the extent of INR 300 crores, the balance is available. Right now, we are talking about $500 million equivalent platform with Kotak. So we'll deploy that capital.

Thanks, everyone. Thanks for the incisive questions. Thanks for the interest. Thanks for having come over and spend this time. I do hope that you've got a better insight at what we are doing in the company. And we'll keep doing our job, I think, dedicatedly and of course, delivering to us to shareholders, delivering to our customers. That's been our focus. And you've been supporting us by writing about us. I hope the market understands what we are doing and also is able to appreciate that. Thank you. I think if all -- any of you are interested in looking at the site, our team is available, not only this site any other site in Mumbai. And I think with this, the lunch also will open. Thanks a lot.

Thank you, everyone. .

Please do join for lunch. Don't go away without having lunch.

Thank you, everyone. I just want to place it on because the primary -- the purpose of this meeting was because we've been getting a lot of questions, some of you have been interacting regularly, you've been writing to understand our presence in Mumbai and where we are heading from here on. To interact with you, explain to you and to showcase as to the kind of scale of operations, the value of work that we are doing. And how are we trading compared to any other developers and the valuation upside the stock holds. We didn't derive the numbers and give it to you because all of you are intelligent. You can drive, you can do DCF so you can do NPVs and do some of parts the segments and see where we stand compared to current market cap, probably 3x, 4x is where we should be at. I'll leave it to you to do your own other computations, but this is what we are doing. And most importantly, I had to place it in the card that we're not looking at raising any equity. So this analyst meet is not as a push for raising of equity. We're not looking at raising equity. It's more to help you understand what we are doing. Thank you very much. Kindly join us for lunch.

Thank you, Irfan sir, thank you, Venkat, sir. Everyone, thank you for your participation rather an active participation. The lunch is ready. We can proceed for the lunch. Our sales team has also organized the site tour. Abhinay Saxena is here. Abhinay, yes. Okay. So please feel free to approach Abhinay. We can do it in 2 parts. We have the site or organized even before lunch and after lunch. So please do this as per your convenience. Thank you so much.