Textile Companies Enter Real Estate Sector, Bringing $1.5 Billion in Fresh Land Supply

The real estate sector in India is experiencing a resurgence, with textile companies capitalizing on their vast land banks to venture into property development. Companies like Bombay Dyeing, Century Textiles, and Golden Tobacco are exploring the option of developing their land assets, bringing a significant amount of fresh supply to the market. According to estimates, if these plans materialize, land worth $1.5 billion will be made available.

Key Takeaways:

• Bombay Dyeing, a textile major, has a land bank of 64 acres in Mumbai, which it plans to develop in a phased manner without involving a developer.
• Century Textiles, another textile major, has a land bank of around 20 acres in Worli and is considering real estate development, with potential concrete developments in the next couple of months.
• Golden Tobacco, a manufacturer of cigarette brands, has a land bank in various parts of India and is mulling the option of having a separate real estate arm to optimize its real estate resources.
• These companies' foray into real estate is expected to bring in good corporate governance practices and improve the domestic framework, leading to a more stable and regulated market.
• The BT Realty Exposé by Nusli Wadia, chairman of Bombay Dyeing, suggests a significant focus on real estate development, with a revenue of over Rs 250 crore for FY 09 from their property business.

Statistics:

• Bombay Dyeing has a land bank of 64 acres in Mumbai, which they plan to develop in a phased manner.
• Century Textiles has a land bank of around 20 acres in Worli.
• Golden Tobacco has a land bank in various parts of India.
• The total land supply expected from these companies is estimated to be $1.5 billion.

Sources:

• [By Saurabh Singh, Mumbai, Jun 15 2009: Development Week]
• [By Deepak Joshi, ET Bureau, Jun 15 2009]
• [By Saurabh Singh, ET Bureau, Jun 15 2009]