Sattva Group to invest Rs 12-14 thousand crore in next 3 years; in talks with Blackstone to launch REIT

Realty firm Sattva Group will invest Rs 12,000-14,000 crore over the next three years to build housing, office and hotel projects and is in talks with PE major Blackstone to launch REIT for monetisation of commercial assets.

Bengaluru-based Sattva Group is one of the leading real estate developers in India. It has completed 140 projects comprising 80 million square feet area in the last 30 years. 

Around 23 million square feet of area is under construction and 65 million square feet is in the pipeline.

Addressing a press conference here, Sattva Group Managing Director Bijay Agarwal said, "We are very bullish on the real estate market. We will be investing Rs 12,000-14,000 crore over the next three years across residential, commercial and hospitality verticals." 

The investments will be funded through equity, debt and internal accruals, he said, adding that the company might raise equity funds at the project level if needed.

Agarwal noted that the demand for the residential segment has been very strong post-COVID pandemic, while the leasing activities in the office market are also back on track.

He said the company would enter Mumbai housing market this year and plans to launch a project in the second half of this fiscal.

Agarwal highlighted that the company's co-working and co-living joint ventures, Simpliwork Offices and Colive, have been performing well and are also expanding.

"We plan to list our coworking and coliving businesses on stock exchanges in the next 2-3 years by launching public issues," Agarwal said.

Sattva Group has more than 50 per cent stake in both Simpliwork and Colive.

When asked about its plan to launch Real Estate Investment Trust (REIT), he said, "We are in the early stage of discussion with Blackstone." Agarwal did not give any timeline for the launch of the public issue of REIT to monetise the commercial assets developed jointly by Sattva Group and global investment firm Blackstone.

Sattva Group and Blackstone have a joint portfolio of around 32 million square feet, of which 18 million square feet is already completed.

There are four listed REITs in India and of these, three are backed by rent-yielding office assets while one REIT has a huge portfolio of shopping malls.

Shivam Agarwal, VP (Strategic Development) of Sattva Group, said the company is looking for growth opportunities across geography and different verticals of real estate. Adrija Agarwal, VP (Business Development) of Sattva Group, said the company has two hotels in Kolkata with around 620 keys.

The group is developing Taj Luxury Resort in Bengaluru with 294 keys and 60 villas.

"We are looking to expand our hotel business. We are in talks for a few more deals," Adrija said.Asked about the group rental income, Sattva Group VP Pradeep Kumar Dhandhania said the annuity income stood at around Rs 2,000 crore last fiscal and the company is expecting 20 per cent growth this fiscal year.

Sattva Group has completed 80 million square feet area in three decades, out of this, the commercial segment is 45 million square feet and residential 35 million square feet.

In the commercial segment, Sattva Group has completed 20 million sq ft in Bengaluru and another 5 million sq ft is under construction.

In Hyderabad, Sattva Group has completed 25 million sq ft of commercial space and another 3 million sq ft is under construction in HITEC city.

The managing director said the group will soon commence work on 4.5 million sq ft of office space in Chennai.

In Pune, 1 million sq ft of commercial space is under construction.