by THO
Listed real estate developer Keystone Realtors, also known as Rustomjee Group, is planning to foray into the data centers segment and launch plotted development projects, said Boman Irani, chairman and managing director, Rustomjee Group.
The company is currently active in the redevelopment space in the Mumbai Metropolitan Region (MMR) and gradually plans to expand into new verticals.
The company also plans to raise funds via qualified institutional placement (QIP) of equity shares.
“It will be worthy to note that we have added 15 new developments (projects) in the last two financial years, out of which 12 are redevelopments, which further solidify our position as leaders in the redevelopment space,” Irani said.
Plans for data centers and plotted development
According to Irani, the company will continue to explore potential in other real estate segments as well.
“We are exploring plotted developments, we are exploring data centers, just to name a few, to be able to kind of grow our positioning and serve across various segments in this micro market itself or in this large market itself,” Irani said.
Rustomjee Group plans to diversify into data centers probably because the company has land banks and the development capabilities to construct data centers, said real estate consultants.
A data center refers to the physical infrastructure that stores and shares applications and data. It comprises components that include switches, storage systems, servers, routers, and security. The capacity of data centers is measured in megawatts (MW) and gigawatts (GW).
Potential of data centers in India
According to a report by JLL India, The Data Centre (DC) industry in India is set to witness remarkable growth, with projections of adding 791 MW capacity by 2026. This expansion will drive a demand for 10 million sq. ft. of real estate space, attracting investments worth $5.7 billion. The surge is primarily fueled by the increasing adoption of Artificial Intelligence (AI). As usage of AI gains pace, the demand for Indian DCs is expected to be in the range of 650-800 MW during 2024-26.
“For data centers to be built, the two major components required are land and development. It takes time to buy the land and procure development approvals. Also, there are two types of companies that are getting into data centers – real estate developers who are getting into data center development (not operations) and large energy and infrastructure firms,” said Rachit Mohan, Head – Data Centre Advisory, India, JLL.
Mumbai have the highest capacity when it comes to data centers.
In 2023, the government had decided to provide infrastructure status to data centers in a move to help developers get better access to institutional credit at lower rates and attract foreign investments.
NCR-based listed real estate company, Anant Raj Ltd, is also developing a 300 MW power load data center at three locations in Haryana.
According to a report by CBRE, data centers (DC) continue to rank among the top three preferred alternative assets for investors in the APAC region, including India. The sector has witnessed significant investments from global operators, real estate developers, and private equity funds eager to tap into the country’s data center market. Between 2018 to 2023, India secured investment commitments of more than $40 billion from both global and domestic investors.
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According to market sources, Rustomjee Group is also planning to launch its first plotted development project in Kasara Ghat near hill station Igatpuri, about three to four hours from Mumbai.
The company also has plans to come up with a plotted development project in Manori in Mumbai having a potential of 0.33 million sq ft, according to an investors’ presentation.
MMR has ‘tremendous’ potential
Speaking about the company’s expansion plans, Irani said, that he is “happy to welcome other developers into the Mumbai market and every time I ask them why they come here, they say the market is deep, the market is wide.”
“That further increases my confidence in the market where I am. It is better to continue to grow out here because the growth potential out here is huge and personally as a company, we believe that there is tremendous potential in the MMR area and the MMR area per se will keep growing,” Irani said.
Pune might become Mumbai’s sister city
On launching real estate projects in other areas, Irani said that the company would earlier restrict itself to launching real estate projects in Virar and maybe, Thane.
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“Now we have moved towards Dombivli, we are exploring areas in Palghar, Boisar and who knows over time with the way the infrastructure development is taking place, Pune might become a sister city to Mumbai if not an extension of the city itself,” he said.
Q4FY24 performance
Real estate firm Keystone Realtors Ltd on May 16 had reported an almost 60% dip in consolidated net profit to ₹30.68 crore for the March quarter while its FY24 profit rose 36.92 per cent to ₹112.21 crore, according to the regulatory filing.
