sun estates: Goa-based Sun Estates in talks to raise $50 million

Goan luxury real estate developer Sun Estates is in talks to raise $50 million as demand for second homes in holiday destination has gone up considerably and developers are not left with much inventory to sell.

Sun Estates, which is currently executing multiple projects across north Goa, plans to start two more big ticket projects and will use the fund for expansion.

“Foreign funds are not hesitant anymore to invest in holiday destinations and even the developers of metro cities want to come to this part of the country. We are getting a lot of offer for joint development and at the same time we are looking to raise funds to fast track the development,” said Suraj Morajkar, managing director, Sun Estates.

According to consultancy firm 360 Realtors, the prices across Goa has gone up due to commissioning of new airport, which is due in a month.

The positive impact of the mega airport project in Mopa will also cascade to other nearby regions such as Morjim, Assagao and Siolim where the real estate demand will receive a major thrust.

“People come to Goa for view and whether we develop projects, we focus on the view. The HNIs are ready to pay premium for that,” said Morajkar.

According to 360 Realtors, property prices near the airport, where presently the average price is Rs 6,700/ sq. ft, can appreciate by 27.8% in the next 12 months. In the past 4 years, average property prices have risen at a CAGR of 3.9%.

“While airport will certainly have a positive impact, developers in North Goa will benefit a lot. We are also looking for land near the airport,” said Morajkar.

Suraj Morajkar established one of the Hilton Group’s first resorts in Goa and has also developed villas for celebrities such as Neha Dhupia, Chunkey Pandey, Yuvraj Singh, designer Ritu Kumar, MD and CEO of Eicher Motors Vikram Lal, Ronit Roy and Jackie Shroff.

Apart from tourism, the Rs 2,600 crore airport project, directly and indirectly, will fuel real estate demand in the Mopa region, wider North Goa, and the nearby Konkan region.

Already 232 acres have been earmarked near the airport to be developed into a commercial, logistics, and residential market. The planned project will consist of 5-star hotels, offices, retail shops, malls among others.

Many new projects are expected to come in the vicinity comprising cottages, retirement and second homes, gated villas, farmhouse and gated communities.

Even in the past, owning a villa or luxury bungalow in Goa was a matter of pride. With the region getting cohesively connected with the globe, the Retirement & Second Housing (RSH) housing demand will grow multi-fold.

“We have acquired land across north Goa and gradually started monetising them. Most of the villas are sold as soon as we start the construction. The demand has surpassed the supply,” said Morajkar.

Sun Estates has projects in North Goa in places like Candolim, Saipem, Nerul, Pilerne, Assagao, Morjim, and Batim.

In the adjacent Sindhudurg region, which is also a sought-after second home and nature resort destination, average property prices might increase by 29.2% annually. Presently, the average price is Rs 4,921/ sq ft. Over the past 4 years, average property prices in Sindhudurg have grown at a CAGR of 6.8%.

Many professionals and entrepreneurs take villas, cottages for long leases. Before the pandemic, the average occupancy was close to 40-50%. Besides long leases, the rise in demand for extended weekends is also fuelling the rental market.

In the north Goa region, annual rental yields are close to 4.1- 7.2%.

Large real estate developers are also entering into the holiday home market as the pandemic has prompted well-to-do people to hunt for a second home in the hills or beach destinations.

While DLF, the country’s largest real estate developer, is planning residential developments in Goa and Kochi for 2022, several other developers are eyeing sites in Himachal Pradesh and Uttarakhand.

As per a latest survey, Goa leads the domestic demand for second homes, with one-fifth of respondents interested in buying a second home in the popular beach destination.

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