Bengaluru-based real estate developer Shriram Properties Ltd (SPL) has announced plans to invest over Rs 400 crore in the current fiscal year as part of its ambitious growth strategy. Group CEO Gopalakrishnan J stated that the company aims to increase its profit to Rs 250 crore by FY27, up from Rs 75 crore in FY24. Additionally, SPL plans to triple its revenue to Rs 3,000 crore by FY27. This aggressive expansion comes with a focus on expanding sales and shifting attention from affordable housing to mid-segment projects.
SPL’s Growth Strategy and Sales Targets
SPL is targeting a 20% compound annual growth rate (CAGR) over the next few years, with sales projections of 20 million square feet (msf) across major cities like Bengaluru, Chennai, Pune, and Kolkata. Among these, Bengaluru is expected to contribute 7-8 msf, Chennai 5-6 msf, with the rest coming from Pune and Kolkata.
The company currently has a robust project pipeline, consisting of 42 projects with a total development potential of 42 msf. Out of this, 24 msf is currently under construction, and the remaining 18 msf is in future development projects. SPL aims to double its future project inventory within the next 18-24 months.
Focus on Plotted Development
According to Gopalakrishnan, plotted development has seen a significant surge in demand in cities like Bengaluru and Chennai. For instance, in areas like Doddaballapur, located on the outskirts of Bengaluru, prices for plotted land have risen from Rs 2,500 per sq ft to Rs 4,000 per sq ft in recent years. The surge in demand can be attributed to the Real Estate Regulatory Authority (RERA), which has provided greater transparency and clarity in land titles, boosting investor confidence in this segment.
Kolkata Remains an Affordable Market
While SPL is gradually moving away from affordable housing in other cities, Kolkata remains one of the most affordable real estate markets in India. The city offers residential prices as low as Rs 4,000 per sq ft, with a typical ticket size of Rs 45-50 lakh. SPL has 30 msf approved for development in Kolkata, of which 10 msf will be developed independently without joint ventures. The company plans to sell out these developments within the next 3-4 years.
Shifting Focus from Affordable Housing
Despite the booming demand for affordable housing in India, SPL is shifting its focus away from the affordable segment. For deliveries in FY25, only 1 million sq ft out of the planned 3.5 million sq ft will be in the affordable segment. SPL Chairman and Managing Director Murali Malayappan cited the lack of government incentives and policies as significant challenges for developers in the affordable housing sector.
Instead, SPL is focusing more on mid-segment housing, aiming for leadership in this segment over the next decade. The company sees greater long-term potential in mid-range housing, which offers more flexibility and profitability than the affordable housing market.
