Puravankara Plans Aggressive Growth in Residential and Commercial Segments

Puravankara Ltd., the Indian realestate major, is mapping out an energetic agenda for aggressive expansion in both its residential and commercial realestate businesses. In an exclusive interview with a top company executive, Puravankara disclosed its ambitious agenda to expand operations in both these segments over the next five years.

 

The firm has aimed to develop and lease 3 million square feet of commercial office space and target Rs 300 crore in rental income per annum by FY 2027. To fund this aggressive growth, Puravankara is negotiating with international funds to establish a structured platform for driving its commercial realestate expansion. The firm is aggressively negotiating new land purchases and considering opportunities in high-growth urban markets.

 

Puravankara is already leading two significant commercial developments in Bengaluru Purva Aerocity and Purva Zentech covering a combined 3.1 million square feet. The Grade A green buildings are developed to host top-class office space, and upon commencement of operations by FY 2025-26, will yield a staggering Rs 180 crore of annual rental revenue. The company's emphasis on green initiatives is apparent in the sustainable designs of the projects.

 

Apart from Bengaluru, Puravankara is aggressively considering land plots in Mumbai and Pune with the objective of strengthening its foothold in India's leading commercial realestate markets. The company is also in mature discussions to set up a commercial business venture worth Rs 6,000 crore, jointly with institutional investors. While the process has been hit by some delays due to issues related to valuations, the company expects to seal this deal in the first half of FY 2026-27.

 

As commercial property is fast becoming an increasingly important focus, residential development is the bedrock of Puravankara's operations. Residential properties continue to comprise a major 85% of its total business. Puravankara has three separate brands functioning through it: Purva, dealing in luxury and high-end housing; Provident Housing for the mid-income buyer; and Purva Land, dealing in residential plotted development.

 

Puravankara's interest lies in the nation's top five cities Bengaluru, Mumbai, Pune, Chennai, and Hyderabad where it has already acquired sizeable land parcels. During the first nine months of FY25, the firm invested Rs 1,236 crore in purchasing 7 million square feet of saleable area, with a potential gross development value (GDV) of more than Rs 12,000 crore. These acquisitions are expected to play a pivotal role in fueling the company’s ambitious growth plans in the coming years.

 

"Our strategy is clear toughen the residential business, expand commercial property, and develop value through organised institutional platforms. The next half a decade shall be a path-breaking period for Puravankara, and we are poised to deliver strong growth", the spokesperson of Puravankara said. Owing to strong project pipeline as well as deliberate land purchases, the company looks forward to intensified growth in the residential as well as commercial arenas.

 

In FY25, Puravankara has invested in major land acquisition, such as acquiring 5.14 million square feet of developable land in Mumbai, which has an aggregate potential GDV of Rs 9,208 crore. The company also acquired land in Bengaluru with a developable land of 2.56 million square feet and an aggregate potential GDV of Rs 2,822 crore. Besides, in Goa, it has secured 0.26 million square feet of developable area, with a potential GDV of Rs 213 crore.

 

Nevertheless, even with superior operating performance, Puravankara's bottomline has been short-term affected by recent shifts in accounting principles, which entitle revenue recognition only at project completion. The change in accounting principles has caused a short-term fall in reported earnings, but the company is convinced that as its projects reach completion, revenue recognition will fall in line with the current robust sales momentum.

 

Puravankara has shown sound financial performance with consistent cash flows and operating surplus. In the last three years, the company has seen a compound annual growth rate (CAGR) of 21% in operating surplus, which increased to Rs 1,298 crore from FY22 to FY24 from Rs 884 crore. The fact that the company has been able to invest more than Rs 1,200 crore in land purchases emphasizes its growth prospects in the coming years.

 

The net debt of the company was Rs 2,824 crore, with a net debt-to-equity ratio of 1.58. The weighted average cost of debt as of December 31, 2024, was 11.73%, which indicates adherence to prudent financial management in spite of the adversities faced by market conditions.

 

During Q3 FY2025, Puravankara posted strong sales performance with 1.43 million square feet sold, which translated into a sales value of Rs 1,265 crore. The average realization of the company was Rs 8,847 per square foot. The total sales during the nine-month period were 4.24 million square feet with a sales value of Rs 3,724 crore and an average realization of Rs 8,783 per square foot. The company has a land bank of about 29 million square feet currently and has ongoing projects of 34 million square feet.

 

With sound foundations, diversified portfolio, and expansion plans backed by strategy, Puravankara is poised to achieve consistent growth and change in residential and commercial realestate business in the next five years.