Bombay Dyeing, a textiles-to-real estate powerhouse, is set to develop 800,000 square feet of prime property on its surplus land located in Mumbai. This initiative will include the construction of a high-rise building designated for both commercial and residential purposes.
Chairman Nusli Wadia informed shareholders during the company’s Annual General Meeting, "We will commence construction of a high-rise tower in two months. The entire project will be sold off in the next 24 months."
While it is challenging to estimate the exact value of the forthcoming project, sources within the real estate market speculate that the firm could potentially generate several thousand crores. However, the actual worth is heavily contingent on the prevailing state of the real estate market, which has exhibited signs of decline in recent times.
A real estate analyst, preferring to remain unnamed, commented, "It’s anyone’s guess where the market is headed for in the next two years." He referenced how Bombay Dyeing commenced the sales of its Spring Mills project at Dadar in 2006 at an initial price of Rs 10,200 per square foot, which surged to Rs 25,000 per square foot by January 2008.
Furthermore, the company is engaged in redeveloping its Spring Mills property in Central Mumbai into a residential tower, with an impressive 84% of the units now sold. Progress is ongoing at Dadar and Worli, with expectations that two commercial and IT/ITeS towers will reach completion by 2009-10. Mr. Wadia noted, "This is 45% ready." He also revealed a shift in strategy, stating, "Instead of our earlier plans to lease out part of the property, we are now looking at selling."
Despite these developments, Bombay Dyeing recently reported a loss of Rs 48 crores for the quarter ending June 2008 and anticipates another loss in the second quarter. Mr. Wadia explained, "We expect a further loss due to production of polyester stable fibre, which started in October 2008. The second quarter is also expected to mirror this loss. We see positive results in the third quarter."
On the stock market front, the company’s shares closed at Rs 564.6, marking a 4.91% increase in a robust BSE. Additionally, the company has recently made inroads into Dubai and is looking to invest in other international textiles retail markets.