Hubtown’s ongoing and future portfolio consists of more than 30 million square feet. What projects are you working on? What does your company’s launch pipeline look like?
Rushank Shah: We have several ongoing and upcoming projects. Among the ongoing projects is 25 Downtown, one of the largest parcels of land in South Bombay, right next to Willingdon Golf Course. We have Hubtown Seasons, one of the largest land parcels in Chembur. Ghatkopar is home to the Rising City. Hubtown Premier in Andheri West. We are working on four bus stand redevelopment projects in Gujarat. And we have a commercial project called 27 West in Pune.
Among the upcoming projects is a stunning second home scheme called 25 Estates in Kelavli. We have 25 Vistas which will be our upcoming projects in Thane in Pokhran 2, Rising City Project Phase 2 in Ghatkopar and a small affordable housing project in Andheri East.
Tell us about your company’s long-term growth goals (over the next 3-4 years).
Rushank Shah: Over the next three to four years we will be focusing on a few things. One of the first things we are focused on is reducing our debt from its current level to zero. It will also make use of some of the existing land parcels, including one of the largest land parcels of 150 acres in Thane, Mulund. This will generate revenue. So we will monetize some of our existing land and reduce our debt.
Let’s talk about the priority issue since your company has raised Rs 1,250 crore through preference shares. So what do you plan to use the funds for?
Rushank Shah: Yes, first of all, I would like to thank all the investors who trusted the company and entrusted their money to us. As we discussed when raising funds, we will use most of the funds. Approximately Rs 850 crore will be used for repayment of loans we have already taken and the remaining will be used for working capital requirements.
Now that you also have a historic quality land bank of over 30 MSF project portfolios, what kind of value creation opportunities do you foresee?
Rushank Shah: We have a very large land bank. One of the key advantages of our land bank is that all are located within city limits, especially MMR limits and in South Bombay where there has been a lot of demand. It’s historic, and our cost basis is much lower than our competitors, so that clearly gives us an edge as we move forward. We will monetize all these land parcels within the city limits over the next four to five years to reduce debt and increase the company’s revenue.And you mentioned debt levels, what debt levels are you currently looking at? So what plan should you have to reduce that debt?
Rushank Shah: We have now been able to increase our debt levels to the range of Rs 600 crore. In fact, over the last four years we have reduced our debt by 70% and plan to reduce it to 0% over the next two years.How is the company performing in the luxury segment and what is the demand for these projects?
Rushank Shah: The luxury sector in Bombay is doing very well. We have several projects and several apartments worth both Rs 100 crore and 1 lakh PSF. We have launched one of our largest projects in South Bombay, overlooking the Willingdon Golf Course, called 25 Downtown. Our first two tower pre-launches were very successful. We actually launched Tower 3. So 25 Downtown is doing really well. One of the projects we are managing, 25 South, is progressing very well. We are now launching plans for a second home in a luxury home called 25 Estates. So far, that segment has performed really well for us.
Against that backdrop, what competitive advantages does your company enjoy? So tell us a little more about that.
Rushank Shah: I’ve touched on it a bit and will go into more depth. But many of the land parcels we have are right in the heart of the city. Therefore, Chembur land parcel is the largest land parcel in Chembur micro market. 25 Downtown was one of the largest land parcels in South Bombay. And because this land was purchased and fully paid for several years ago, our cost basis is very competitive. So regardless of market conditions, this either helps our bottom line or helps us absorb future pricing pressure. This is a huge competitive advantage for us.
