Annual Report 2010-2011 - Gammon India

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front. The importance of the Real Estate sector, as an engine of the nation’s growth, can be gauged from the fact
that it is the second largest employer next only to agriculture.
Gammon Realty Limited which principally functions as the Real Estate arm of Gammon India Limited has forayed
in to varied Real Estate developments in the past few years with strategic decisions being taken to increase land
bank thereby positioning itself to become a major Real Estate player in the coming years.
Opportunities:
The demand for housing is expected to grow at around 14 per cent per annum. There is scope for 400 new
township projects over the next five years, spread across 30 to 35 cities, each with a population of 0.5 million.
The demand for office space (excluding government and public sector) doubled from 50 msf in 2002 to 100
msf in 2005 and is expected to rise to 500 million sq. ft in the next ten years. The organised retail industry is
expected to grow at around 27 per cent annually, growing from ` 6 billion in 2005 to ` 23 billion in 2010.
Threats:
• Lack of uniformity in Local Laws and their implementation.
• Non-availability of Bank Financing.
• High Interest rates.
• Absence of centralized title registry.
• Lack of clarity in Redevelopment rules and regulations.
• Lack of Urban Planning.
• Procedural complexities.
• Limited market history.
• No title insurance.
Outlook:
Your Company is well placed to continue to lead the Real Estate industry in India and has multiple opportunities
for growth and diversification across all lines of business.
Key priorities going forward include focusing on execution of current and planned projects, building a pan-
Indian presence, expanding into new consumer segments, pursuing new business opportunities and achieving
the highest standards of professionalism, ethics and customer service. Investment in property is believed to be
the smartest move as chances of loss is negligible. The growth graph of the Real Estate Sector is observed to be
escalating day by day.
There has been a substantial increase in your Company’s Land Bank with a development potential of more than
3 million square feet, of which a major portion is in the Metro and Super Metro regions. This transformation has
been made possible through a series of bold and far-sighted decisions aimed at enhancing our internal corporate
efficiency and upgrading our capabilities for project implementation and delivery in tune with global standards.
Your Company has over the years through its subsidiaries acquired substantial presence in the Real Estate Sector
across India. The following subsidiaries of Gammon are active in this segment:
1. Metropolitan Infra-housing Private Limited: Acquired 180 Acres of Land in auction within the limits of
Municipal Corporation of Kalyan and Dombivali. The land was acquired at total cost of ` 726 crores.
The land belonged to the erstwhile Pal Peugeot Limited, and is proposed to be developed as a Township
Project.
2. Deepmala Infrastructure Private Limited: A subsidiary of your Company was incorporated as a Special
Purpose Vehicle for execution of Central Business District at Bhopal. The project involves Procurement,
Finance, Construction, and Development of 15 Acres of prime area in South TT Nagar Bhopal. It is a PPP
project with lease period of 30 years extendable thereafter for another 30 years at no additional costs.
3. Preeti Townships Private Limited: Another subsidiary is holding 15 Acres of Land within the limits of
Municipal Corporation of Kalyan and Dombivali.
A NNUAL R EPORT I 2010/11