Raymond Eyes JDA Route For Mumbai Realty With Rs 10,000 Crore Projects

Raymond Ltd. is tapping the capital-efficient joint development project model in Mumbai to boost growth and is already working on projects worth Rs 10,000 crore, Harmohan Sahni, chief executive officer of the real estate business, said.

"So far, we have five JDAs (Joint Development Agreement) in Mumbai worth Rs 10,000 crore in Mahim, Bandra and Sion areas of Mumbai," Sahni told NDTV Profit. "JDA is a more capital efficient process to follow. In the last five years, joint development projects are back in focus."

He explained that given the capital-starved nature of the Indian real estate industry, companies resort to raising funds every few years from the market, which investors tend to dislike as it exposes them to risk.

"How do you de-risk the business and make it capital efficient has been the perennial question. One of the easy answers is JDAs, especially in high land value areas like Mumbai. The interests are aligned between the landowner, developer and markets," he said.

Sahni also noted the lack of regulatory clarity around JDAs in Mumbai and Maharashtra that stalled interest earlier. This changed after the introduction of the Mumbai Development Plan (DCPR) 2034, Real Estate Regulatory Authority (RERA Act) and goods and services tax, that have made norms easier and certain.