Real estate developer TARC Ltd is focused on getting its residential projects off the ground now but is also keeping an eye on the office space for opportunistic development prospects.
“For the office portfolio our eyes are open,” Amar Sarin, Chief Executive Officer and Managing Director of TARC told businessline in an interaction. The company was in talks with a few prospective tenants or office occupiers. “Rather than speculative building, if we get build-to-suit kind of tenant or buyer then we will definitely look at developing those assets.”
Sarin said, however, that any plans for an office asset would be undertaken only a year from now. It has about 60 lakh sq ft of area zoned for commercial purposes and they were all in prime locations in the National Capital Region where monthly rentals are in the region of ₹200 per sq ft.
Right now the focus of the company is on its residential projects some of which have been launched and some in the process of launching. It has a considerable land bank of over 500 acres, of which 300 acres are in New Delhi.
Last May, it received funding of ₹1,330 crore from private equity investor Bain Capital. This funding has helped the company invest in growth and rely less on bank or other funding. “Ït has given us money to expand, it has given us freedom of thought,” Sarin said.
In October, it launched TARC Tripundra, a premium project in South Delhi, and has notched up sales of ₹350 crore so far. “The idea is to get to ₹1,000 crore this year,” Sarin said.
The company will launch two more projects, one in Gurugram and the other in Delhi, with a total sales potential of over ₹4,500 crore.
For 2023-24, the company has targeted pre-sales of ₹1,500 crore and to achieve double of that in the following year.
While most of the apartments sold by the company are in the range of ₹5-7 crore, some of them are priced as high as ₹20 crore.
Sarin said there were no signs of any slowing down of demand in premium category housing, despite rising mortgage rates and the rise in home prices. In Delhi and the National Capital Region prices have doubled in the last 2-3 years. This is because of less supply as the number of developers in the area have dwindled due to lack of finances and those with operations are able to command a premium pricing.
“Developers who were doing 20 apartments at one time are doing 2 or 3,” he added.
Sarin said after the recent price surge, he expected appreciation at a steady 10-15 per cent annually going forward and he expected the sales velocity to sustain even with this increase.
Pent-up demand had been created in the northern market after about eight years when the real estate developers went through tough times and homebuyers did not get delivery of the homes promised to them.