Prestige Estates Plans Debt Reduction and Aggressive Expansion with QIP Funds

Bangalore:

Prestige Estates Projects, a prominent real estate developer, revealed its plan to utilize the ₹5,000 crore raised through a Qualified Institutional Placement (QIP) earlier this month. The company has earmarked ₹1,500 crore for debt reduction and ₹1,750 crore for acquiring land to fuel nationwide portfolio expansion. This financial move is aimed at enhancing Prestige’s financial position while securing strategic assets across major cities.

Investment Plans and Long-Term Growth Strategy

According to Irfan Razack, Chairman and Managing Director of Prestige Group, the remaining portion of the funds will be directed towards capital expenditure projects and other general corporate purposes. In line with its ambitious growth strategy, the company has outlined a ₹16,000 crore investment plan, focusing on development and growth. Additionally, Prestige aims to sell ₹50,000 crore worth of residential assets over the next five years, while targeting a significant increase in exit rental income from its office and retail segments by FY28.

Expansion Across Major Cities

The company has laid out plans to maintain a pipeline of at least 50 million square feet of projects annually for the next three to five years. These projects will span key markets including Mumbai, Bangalore, Pune, Chennai, Delhi-NCR, and Hyderabad. In the past six quarters alone, Prestige has secured land worth ₹6,000 crore across these regions, showcasing its commitment to rapid expansion.

Projected Sales Growth and Hospitality Business Developments

Prestige reported top-line sales of ₹21,000 crore for FY24, with projections of 15-20% growth for the current fiscal year. The firm is confident in its ability to meet these targets as it continues to scale its operations. Meanwhile, the company’s board of directors has approved a plan to monetize its hospitality business, with a subcommittee established to oversee the process. The possibility of an IPO for the hospitality business is also under consideration, along with a potential REIT listing for its office and hospitality segments.

Hospitality and Rental Business Growth

With an eye on doubling its hospitality portfolio over the next three to four years, Prestige plans to invest ₹1,700 crore into this segment. Currently, the company manages 1,489 keys across brands such as Hilton and Marriott. Prestige forecasts revenue growth in its hospitality segment to reach ₹2,000 crore, a significant increase from its current ₹982 crore. Additionally, the company aims to reduce gross debt by ₹900 crore, easing cash flow pressures associated with its capital expenditure plans.