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Bombay Realty may be the next cash cow for Wadia group’s flagship Bombay Dyeing as it will generate nearly ₹24,000 crore free cash flow over the next few years from its two projects spread over 53 acres in the heart of Mumbai.
“I think Bombay Dyeing is an asset unlocking story. The company has a legacy of over 135 years and after textile mills were shut down, they have been sitting on land to develop at an appropriate time. And it is happening now. (Bombay) Realty is going to be the cash cow,” Bombay Realty Chief Executive Officer Ramesh Ranganathan told Business Line .
Bombay Realty is the real estate arm of Bombay Dyeing and is developing two mixed-use projects in Worli and Vadala. “When I put together the FSI between the two, we are talking of 8 million sq ft of FSI and if I multiply it with the value, we are talking of about ₹24,000 crore of free cash flow coming out of these, depending on take-off,” he added.
No land cost
The prime land in these two locations was historically bought by the group, one of the oldest textile mill owners in Mumbai. The lands had been lying vacant after mills in Mumbai were shut down. “In Mumbai, about 60-70 per cent of cost is land and that is zero for Bombay Realty. We are effectively spending on construction, which gets more than mitigated for through sale advances,” Ranganathan said.
In Vadala, one million sq ft is nearing completion and the company will begin handing over to customers in the next 2-3 months. In Worli, Bombay Realty will develop 5.2 million sq ft for mixed use. “Since we have prime lands, the idea is to do mixed-use integrated development, where people can live, work and play within the complex. In Worli, we will begin with development of a million sq ft for office with 6-7 per cent retail and F&B blend. It is in advance pre-concept design stage and we should be off the ground in the next 6-8 months,” he said.
700 acres in Mumbai
The group owns around 700 acres of land in Mumbai, but most of it is under various charitable trusts or other group companies and not immediately available for use by Bombay Realty.
“These two lands are housed under Bombay Dyeing. So we could begin work on them. At some point of time, we may start looking at other land parcels but right now, it is about looking at what is within our fold, setting up a platform and then look at various models,” Ranganathan added.
The company has also undertaken a re-development project in Prabha Devi, where it will monetise the free sale FSI. “We are open to joint development projects too, but the idea is to first unlock the value here,” he added.
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