Tata Realty & Infrastructure (TRIL), a wholly owned subsidiary of Tata Sons, aims to increase its commercial real estate portfolio under the brand "Intellion" to 70% of its total portfolio over the next three years from the current 50%. The company seeks to emerge as a major commercial developer across India in the next 3-4 years, leveraging the steady office space absorption expected in major cities. TRIL is diversifying from residential to focus on commercial realty which provides recurring rental income and better insulates from market fluctuations.
Tata Realty & Infrastructure (TRIL), a 100 per cent subsidiary of Tata Sons Pvt Ltd, aims to increase the share of its commercial properties, branded as "Intellion", to 70% of its total portfolio from the current 50%, over the next three years. The company's goal is to emerge as a major commercial real estate developer across India within the next 3-4 years.
Office space absorption in the top 7 cities is expected to sustain at 35 million square feet annually for the next decade. This will allow TRIL to generate recurring income every year through rentals. Sanjay Dutt, MD&CEO of TRIL, said this shift towards commercial real estate is a long-term strategic move as it is a better fit. Dutt said with change in IT SEZ Act, the sector is witnessing accelerated leasing across the cities and rents are going up across SEZs.
Under the Intellion brand, TRIL has designed four primary landmark addresses based on scale and type of commercial projects. Intellion Edge for commercial projects, Intellion Park for Large Scale IT SEZ, Intellion Square for Small Scale IT SEZ and Intellion Prime for flagship projects in Central Business Districts.
Dutt informed that TRIL acquired 90% of its land outright and will retain this model. It currently has 10 million square feet of built commercial space and is adding another 20 million square feet. All projects will be Platinum rated for sustainability. Some developments are undertaken with partners like CPPIB, Actis and General Atlantic.
TRIL is building IT parks in Gurugram and Chennai with CPPIB, totaling over 1.3 million square feet. With Actis, it is developing 3.5 million square feet in Gurugram and India's largest mixed-use project of 12 million square feet in Navi Mumbai. The second asset is fully built (IT SEZ) in Chennai with 4.7 million square feet and has 112 Key "Taj Wellington Mews" hotel.
Experts say TRIL is diversifying away from the cyclical residential sector by focusing on commercial real estate. Sangram Baviskar of TruBoard said this move will help mitigate risks from market fluctuations. REITs have also prompted more institutional investment in India's real estate, he added.
TRIL has consistently delivered annual revenue growth of 20-24% and expects to maintain this rate in FY25. However, Dutt clarified that residential real estate will continue as an important business given its existing portfolio of 10 million square feet worth over INR 16,000 crore under development.
TRIL has already hiked residential prices by 7-10% and may raise them further by 5% in the current fiscal. TRIL has also increased sizes in residential projects under the Tata Housing brand by 7-10% as customers' space needs have changed to suit a better and healthy lifestyle.
Going forward TRIL is exploring co-working spaces in its upcoming commercial properties to give flexibility to its clients in space management. The company is also setting up world class sports and recreational amenities to engage with office communities besides wellness initiatives.
Dutt says that ownership and management control facilitates effective management of projects, especially office, retail and hotel portfolio as it allows them to repurpose, continuously upgrade and invest in the project to better serve the clients.
With more than 53 projects and 2.97 million square metres (32 million square feet) already delivered, TRIL has made a significant impact in the residential, commercial and retail space in the country and continues to do so.
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