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Aditya Birla Real Estate makes big moves

Aditya Birla Real Estate makes big moves

After discontinuing the textiles business, the rechristened company is seeing a sharp increase in its real estate revenue; a presence in commercial and residential and the opportunities in both are being viewed favourably.

Krishna Gopalan
  • Updated Oct 16, 2024 10:28 AM IST
Aditya Birla Real Estate makes big movesAditya Birla Real Estate sees high levels of interest among corporates/ Representative image

A new name also brings in renews focus on an industry, now seeing higher levels of interest among corporates. Century Textiles and Industries, a company that was established in 1897, is now called Aditya Birla Real Estate to denote a greater thrust on a business it entered in 2016. It has a play in both residential and commercial segments.

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The company has been in the news for a while and last month, bought over a 10-acre parcel from from Nusli Wadia, Chairman, Wadia Group, for Rs 1,100 core. It signalled the end of a legal dispute between the two families over the plot. In 2009, Wadia had moved the courts over the issue of the use of the mill land that was leased by his great-grandfather to Century for 999 years. Once the mill shut shop in 2007, Wadia challenged Century’s plans for the land. The issue ended once the deal to acquire the land was struck.

All eyes are now on the real estate plans of Aditya Birla Real Estate, with industry trackers speaking of a presence across cities being a key strategic advantage. A credit rating report put out by CareEdge this August, says the company has acquired land parcels in Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Pune and Bengaluru, with a gross development value of Rs 53,000 crore – that includes ongoing/launched projects and those that are to be launched.  

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From a business perspective, Aditya Birla Real Estate has two segments – pulp and paper, real estate, with the textile business discontinued last fiscal and according to the annual report, it was on the back of operational challenges at the plant in Gujarat. “The board took decisive action in the early second quarter of 2023-24 and approved the initiation of a restructuring process for our textile business operations. This involved discontinuing the in-house spinning and weaving departments, with subsequent approval for the disposal of plant and machinery, relevant spares, tools, and equipment associated with these departments.”

The real estate sector is going through a transformation with high levels of interest form large corporate groups, most notably Adani, preceded by Godrej and Tata. Speaking for Aditya Birla Real Estate, though pulp and paper bring in the larger chunk of revenue (for FY24, it was 64 per cent, followed by real estate at 21 per cent and the now discontinued textile manufacturing business at 15 per cent), that is already changing. CareEdge’s report highlights the fact that the company has started handover of Birla Vanya (Kalyan), Birla Navya Phase I (NCR), and Birla Alokya (Bengaluru) in the first quarter of FY24. “Thus, revenue from real estate segment increased to Rs 832 crore in FY24 compared to Rs 138 crore in FY23. In Q1FY25, the company has further recognised revenue of Rs 338 crore,” it states.

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Its two commercial properties (Birla Aurora and Birla Centurion) in Worli, Mumbai, according to the report, generate stable lease rentals of around Rs 130 crore annually. “The development of residential projects is through a mix of owned land and joint development agreements (JDAs). The projects despite at a preliminary stage have received favourable response. Factors such as strong brand name of the Aditya Birla group and premium feature offerings have driven sales.”

Published on: Oct 16, 2024 10:27 AM IST
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