Prestige Estates Projects Limited (PRESTIGE) Q4 FY23 Earnings Concall Transcript

Prestige Estates Projects Limited (NSE: PRESTIGE) Q4 FY23 Earnings Concall dated May. 31, 2023

Corporate Participants:

Amit Mor — Chief Financial Officer

Irfan Razack — Chairman & Managing Director

Venkat K. Narayana — Chief Executive Officer

Analysts:

Samar Sarda — Axis Capital Limited — Analyst

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Manish Maheshwari — Manu Group — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Prestige Estates Projects Limited Q4 FY ’23 Earnings Conference call Hosted by Axis Capital. [Operator Instructions]

I now hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you and over to you.

Samar Sarda — Axis Capital Limited — Analyst

Fine. Thank you. And good afternoon, everybody. Thank you for taking the time out. We have the senior management of Prestige Estates with us, led by Mr. Irfan Razack, the Chairman and Managing Director; Mr. Venkat K Narayana, the Chief Executive Officer; and Mr. Amit Mor, the Chief Financial Officer.

Handing it over to them for the initial comments. Mr. Razack, over to you.

Irfan Razack — Chairman & Managing Director

Thank you. I think I will ask Venkat to give the opening remarks. Yes, there’s a lot has happened in there in the quarter, and I think it’s the financial year end also. So the numbers are all there for all of — everyone to see. And whatever we set out to do during the financial year, it’s given me satisfaction to say we’ve over-exceeded our target. And hopefully, we’ll keep doing that. We’ll keep exceeding everybody’s expectations. That’s our job as well as the whole team is on the ball, and they definitely want to keep performing, and that is what is keeping us going. With this, of course, all of you will be quite curious to know about yesterday’s news of the acquisition of the 50% stake in DB Realty in both the office assets. But that also, I believe, is a strategic move which will help us to do our job easily. And also, I think it’s a win-win for both parties. I think more about it Venkat will tell you, and I will just ask Venkat to give his opening remarks.

Venkat K. Narayana — Chief Executive Officer

Thank you, sir. Thank you, everyone, for taking out time to be on this call and very happy to take you through the operational and financial performance of the company for the FY ’23. It’s been once again a remarkable year for us. We did cross the milestone number of INR10,000 crores last year as you are aware. And some of you did ask questions saying that, okay, now that you’ve reached that magical number, how will you sustain and how will you grow on that number and what will be the strategy. And we did give out our strategy last year itself saying that the new geography will contribute to the growth. And rightly so. Mumbai registered a little over INR2,700 crores of sales. That helped. Between Bangalore, Mumbai, and Hyderabad, majority of the sales this year have come. Also important thing is that I want you to take a note of is 60% of our sales have come from Bangalore and 40% all other branch offices have contributed. I think going forward there will be further increased contribution from regions of Mumbai with the new launches that are coming up. There are two new launches that are — three in fact: next phase of Prestige City, Mulund; Prestige Ocean Towers at Marine Lines; and Prestige [Indecipherable] at Worli, three new projects lined up. So Mumbai should give better numbers this year.

Hyderabad we have, again, Prestige City. As we told earlier in the call, Prestige City, as a brand, is something which we’re going to launch in all the cities that we are operational one after the other. This will be anchor development for that particular city and these are large in size and mix-use development. Prestige City at Hyderabad will get launched soon. Therefore, contribution from Hyderabad, Mumbai. And Chennai will have — this year we didn’t have a sizable launch in last couple of years. We’ll have a large project that is getting launched, Prestige Pallava Gardens, which is over 2.5 million square feet. So even Chennai will start contributing this year.

Overall, in spite of clocking 25% growth numbers and closing the year close to INR13,000 crores for retail, next year is even more exciting with the kind of launch pipeline that we have. And other important aspect is collections. Some of you earlier used to ask questions, one is, that sales and you’ve seen some of the developers, you compare and ask, is there any bulk bookings, etc., and all that. So to put everything to rest, you see the collections there almost commensurate with the sales that we are doing, so that means our collections teams are prompt. They’re collecting all outstanding. They’re not much, and they are close to INR10,000 crores, INR9,085 crores, 10,000 crores of collections from residential projects, up by 31% year on year. This quarter we have seen highest ever corrections made in any quarter.

Realizations also have gone up and. And among the other things, we had I think after the end of the next year, we had a new boutique resort hotel that has opened up, the state Mulberry Shades at Nandi Hills, closer to JW Marriott. You all know that JW Marriott at Golfshire has become a landmark project. It’s address maker. And most of now events that are happening in Bangalore are outside people coming and having their destination wedding, their destination event. We’re very happy with the response that hotel has received. And in addition to that hotel property, we relaunched Forum Mall at Prestige Falcon City, which met with great success. And in fact, weekends we are seeing a phenomenal amount of crowd, people visiting mall, in spite of cinemas not yet being operational. We also had soft launch. We have handed over the property Forum at Kochi for fit out, which is again a large mall. So these two will be operational. Last year we also opened Forum REX, which is a boutique high-end mall, which had cinemas which are exclusive in the form of Director’s Cut. So malls are back, hotels are doing well, office space leasing has been good. We’re happy to tell you that whatever the buildings that we have been constructing at Pune has been completely leased out, close to a 1 million square feet at Kharadi and various other places. In Bangalore, the leasing is ongoing and it’s been good. So we have, in Hyderabad, a project getting completed and a few others in Bangalore. We are very confident that we will be preferred office space supplier for most of the MNC companies given our relationships, given the quality of the building, and given the specifications. And the residential is what we have spoken about.

And most important, as Chairman mentioned in the opening remarks, is a strategic acquisition that we have done. And before I get into financial performance of the company, maybe I’ll spend a couple of minutes explaining to you what it is and what have we done. Initially, when we got into these transactions, project at BKC and project at Worli, both commercial projects, there was issues on ground. There were other shareholders in the SPV, so let me talk about BKC. There was a IIRF as a shareholder, there was a treaty [Phonetic] German fund as a shareholder, and this was in a way in NCLT. There were tenants on the ground who need to be vacated. Of course, there was no planning. There was no approvals. Now from then to now, it’s a completely cleaned up site. Most of you must be visiting BKC areas, signages are done, work has started, design approvals [Phonetic] and approvals have come. The other shareholders have been exited, completely cleaned up, and the work started, approvals are in place.

Now we thought to give a boost to our annuity portfolio, since our JV partner wanted to be [Indecipherable], and he had other challenges to address and deal with in terms of his obligation to it, etc. The opportunity came by to acquire their stake and become 100% owner in both their series. We thought it is — given the fact that the project work has started and it’s only construction that we need to do which we have been executing and delivering, you all know last 5.5 years we have delivered the 90 million square feet, that square feet, given the teams that we have, so therefore, we decided it’s a strategic acquisition. It will help us grow annuity portfolio faster and these are marquee assets. So we did a valuation and acquired the stake in both the SPVs by paying out INR980 crores odd here and INR198 crores in Turf Estate LLP.

And with the kind of buildings that we’re making there, and we definitely see that the rentals will be definitely higher than what we have presumed for valuation currently, and also the cap rate compressions will happen. Right now we’ve looked at them at 9.5% of cap rate at the time of valuation. So I think by the time building is ready, the cap rates can be 8%, maybe less than that. That itself will give substantial valuation upside. We’ve looked at rentals around INR275 and INR300 psf levels. We firmly believe that rentals could be between 325 INR to INR350 psf, so rental upside, cap rate compression, both put together — both the projects put together will we’ll have the valuation upside of almost INR3,500 crores. So therefore, we felt it’s a good acquisition, and we went ahead and completed the transaction. I’m sure you will also appreciate the reasons and merits behind doing this transaction.

Of course, in the Q&A if you have any issues, any further information that you want, we will definitely discuss. Going ahead, we had remarkable amount of launches this year. I don’t think any other developer would have launched in a year 27 million square feet. So that’s what we launched last year. 17 million square feet comes from residential and almost 10 million square feet comes from capex. It’s up 57% compared to last year. Even completions were very good. We completed 16 million square feet of area last year, majority being residential. And an average, including holidays, Sundays, weekends, and all that, we had a good run last year, sold close to 26 units a day, aggregating to 9,644 units overall. The segment that has sold well and contributed significantly is the segment of INR80 lakhs to INR1.5 crores bracket. That’s the new affordable/mid-income segment.

And moving on to the financial performance of the company. We had overall revenue of INR8,772 crores, up 33% compared to last year and EBITDA of INR2,543 crores and PAT at close to INR1,000 crores, PAT 11%. This is for the year. And for the quarter, we had higher PAT on an exceptional item being coming to the accounting. So we also have given out segment results for you to see and what is our return on equity and return on capital employed that we’re making between office, retail, hospitality, services, and residential. Retail, just because mall — one of our large mall got completed just closer to the end of fiscal and it has not run a full year, so you see the returns being lower. We’ll annualize that and probably report it. We annualize [Indecipherable] are high. Office gives us ROE of close to 60%, retail at 40%, hospitality at 10%, services, of course, there’s no investment, so higher, residential at 35%. And overall the capital employed has been earning well for us.

With this brief, we’d like to open the forum for the question and answers.

Questions and Answers:

 

Operator

[Operator Instructions] The first question comes from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Hi. Congratulations, Irfanji and Venkat for this deal.

Irfan Razack — Chairman & Managing Director

Thank you.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

My first question is on your total payout is INR1,176 crores for both the deals. So can you break it up like — because we have already given some advances on behalf of the partner in terms of getting approvals and all. So what will be the actual cash outflow out of this INR1,176 crores?

Venkat K. Narayana — Chief Executive Officer

All that has been taken into consideration and net payout is what we have indicated.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

So INR1,176 crores is the cash payout, and what would be the overall commitments we would have done in terms of earlier on behalf of partner?

Venkat K. Narayana — Chief Executive Officer

So there are two ways of looking at it. If you consider them as 50% partners, now we’ll have to have spend in addition to the payouts that we have made to them, 50% of the construction costs and premiums.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

So the understanding of the construction costs will be incurred by us anyways, and only the approval costs and clearing up costs…

Venkat K. Narayana — Chief Executive Officer

Now let me take you through that mechanism. So let’s look at BKC.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Yeah.

Venkat K. Narayana — Chief Executive Officer

So construction cost and the money that we have spent to buy out the earlier shareholders, both put together, earlier 50% had come to us at the INR2,250 crores kind of valuation earlier, entire construction cost of INR2,000 crores being borne by us, and the money that we have invested to buy out. So that was earlier 50%. Now if you look at the entire premium money will be borne by us, and also there is a cash out that we need to give. All put together, and the earlier premiums that we have paid, all put together this obligation, including the cash payout, is going to be at around INR2,200 crores.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Basically you are buying them out effectively at INR2,200 crores for 50% stake.

Venkat K. Narayana — Chief Executive Officer

Yeah.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Okay.

Venkat K. Narayana — Chief Executive Officer

[Indecipherable] and all that. So as I said, there’s no much difference between earlier and now.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Okay. And what about the Mahalakshmi one? Because as I looked at the valuation, so BKC only comes at INR1,956 crores and the Mahalakshmi at INR400 crores, if I just look at 50% buyout. That was the reason I was delving into like what could potentially…

Venkat K. Narayana — Chief Executive Officer

Costs being higher because it’s a taller building. And rentals we have factored in at least INR25 difference in terms of both — almost areas are same. Taller building construction cost is a little higher and the rentals we have taken INR25 lesser. So therefore, the valuations are different. There, again, if you look at the numbers we have paid INR198 crores, and the premiums of INR1,200 crores, and the LUC [Phonetic] of INR200 crores, and rehab cost of INR150 crores. This is what we’ll assume freshly, and that will come to us at around — in INR1,800 crores to INR2,000 crores that number.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Okay, so similar a number there also. So almost INR2,200 crores…

Venkat K. Narayana — Chief Executive Officer

[Indecipherable] paid to buy 50% was also entire construction cost was ours and half of rehab cost. That makes it around INR2,350 crores to INR2,400 crores. So what we had got earlier versus now are almost same, primarily because, as you mentioned, whatever the outflow was there with respect to earlier premium payment also, as you are aware, we only have paid. So therefore, not much change to the numbers then and now.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Okay. Sir, my second question is on these two assets we have most significant, almost 100% stake. So any plans of monetization of this stake going ahead because these two are very significant assets and give rents of upwards of INR200 crores [Phonetic] annually. So, any thoughts there, how do you — I understand that you were earlier looking at financing this at 50:50 debt-equity. So how do you — with this change happening and now it being a Prestige project, so how the outlook will change towards the financial closure of these assets, execution of this asset, leasing, and even monetization? So any thoughts there?

Venkat K. Narayana — Chief Executive Officer

Prior to doing the Blackstone transaction, we did look at monetizing those assets by going to the REIT, combining retail as well as office, probably would have done first hybrid REIT in the country. Right now when we’re acquiring, we’re not thinking of divesting. First and the foremost step is to increase the pace of construction and to ensure that buildings come up faster and are visible, and post which we’ll see there is always a premium for completed building and higher premium for leased building. So we’ll play accordingly. Right now there’s I think strategic dilution talks that are happening.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Now that both these projects are financially closed now and the loan [Phonetic] has been tied up and the work has started at both the sites and…

Venkat K. Narayana — Chief Executive Officer

Work has started. It’s for anyone to see. Financial [Phonetic] closures are done. So therefore, that’s what I said, next 36 months we would want to [Indecipherable] complete BKC, and maybe 40, 42 months [Indecipherable].

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

And this is the last question on residential business in Bangalore. We had seen a decline YoY for the full year FY ’20 to ’23, while other markets have contributed to the growth, largely Mumbai. So how do you see the Bengaluru market now in FY ’24?

Irfan Razack — Chairman & Managing Director

See, it’s not a decline because there was no demand. It’s a decline because we didn’t have inventory because it was got delayed. And there’s a lot of inventory that’s going to come in from the Bangalore market. Recently, we did a launch called Prestige Lavender Fields. That’s again in Whitefield, 1,400 units. I think it’s about 4 million square feet, fully — 3 million or 4 million, just check that up properly. 3 million, but the entire thing is sold. So that’s the type of demand we have. Unfortunately, we didn’t have inventory. In fact, in Bangalore, even ready inventory because there are only two geographies where we have ready inventory is Bangalore and Hyderabad, and Hyderabad is also like NIM [Phonetic], Bangalore is also as good as NIM [Phonetic]. And the thing is, we are working really, really hard pressurizing to see that we get the approvals. File for RERA, get the RERA number, and launch. I think what Venkat said is we did a lot of launches, but those were in other cities like Mumbai and Hyderabad. Bangalore was soft on launches. Hopefully this year, this quarter, we did Prestige Lavender Fields. In the next two, three quarters, we’ll be getting a host of other launches because there’s a huge visibility of getting these approvals soon. It’s all a function of the inventory that’s available. In fact, I would say if we hadn’t — if we had really launched what we were planning to, we would have crossed in this fiscal itself, that is the ’23, crossed INR15,000 crores, but unfortunately, we couldn’t do that. And that differential would have come from Bangalore.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

What is the target this year? Like in FY ’23 you were looking to — what was the previous guidance?

Venkat K. Narayana — Chief Executive Officer

I believe we can easily safely look at a 25% increase.

Parikshit Kandpal — HDFC Securities Ltd. — Analyst

Okay, sir. Thank you and wish you all the best.

Venkat K. Narayana — Chief Executive Officer

Thanks.

Irfan Razack — Chairman & Managing Director

Thank you.

Operator

Thank you. Next question comes from the line of Pritesh Sheth from Motilal Oswal Financial Services Limited. And also please restrict yourself to two questions. Thank you. Please go ahead.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Thank you for the opportunity and congrats on a great year. Firstly, just a few clarifications on this DB Realty deal again — transaction again. So one is does it change our capex outplay from hereon which is INR15,000 crores? So as you said, we were earlier 50% partner with the capex. Rest 50% should we presume that we are paying it upfront with buying out this stake?

Venkat K. Narayana — Chief Executive Officer

Not really. So in fact, the clarification that I gave earlier also. As per the JV understanding, the construction costs were to be borne by us, all the premium, LUC and a portion of rehab-related costs were to be borne by the partner. Now, construction costs, whatever we were — anyway earlier was to incur is over the period of time linked to progress. Even the payments rehab and LUC are also staggered over a period of time. In fact, the transaction has come at a time which is going to help build our annuity portfolio. Even from partner point of view, if they had stayed invested, they had to bring a lot of money for the premium and rehab, for construction and LUC payments and all of that. As against bringing in money, they are actually taking out close to INR2,200 crores. It will help their cash flows. When we were the structuring the deal, because these lands were held by them for quite some time, they were little attached to the land. So we did mention saying that given the situation, it is mutually beneficial. Once the projects are ready and if you have money at that point in time, you can buy the area. So if you’re looking at selling — you’re evaluating selling to somebody else and you’ve been the partner before at that point in time prevailing, you can buy the area. That’s how we structured the deal. I think it’s got a great potential and value upside. And it’s a win-win proposition.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure, no doubt about it. But just trying to assess what would be the additional payouts apart from this INR1,176 crores from our side.

Irfan Razack — Chairman & Managing Director

There wouldn’t be any other payments, except for the premiums which they have to pay. Now the other thing is now, Venkat says, emotional, this that. But ultimately, I think knowing them and knowing their mind, they will take this money and come back to us and give us the place. So that we’ve already thought of this sale. Ultimately, let us [Technical Issues].

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sorry, I think line is not clear. Voice is cracking.

Irfan Razack — Chairman & Managing Director

Yeah, Venkat.

Venkat K. Narayana — Chief Executive Officer

Hello. Can you hear now?

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Yeah.

Venkat K. Narayana — Chief Executive Officer

No, I was mentioning when we were structuring the deal it was, of course, win-win because we want to consolidate and they have requirement of money to fulfill their debt obligations. So it helps. But during the transaction, the discussion came out they somehow want to have some area. So in the conversations, we did mention saying that, once the project is complete, you have the cash flows, at that point in time, what is the prevailing market price, you are free to buy the area, if you’re looking at divesting to anybody else, why not you? That’s how we had mentioned. That’s what Chairman was reiterating.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

And how much would be the additional premium payment now that would be required [Phonetic]?

Venkat K. Narayana — Chief Executive Officer

I just gave out the numbers, right? INR1,200 crores and, overall, including what we have already paid, overall premiums are INR1,500 crores and rehab and LUC charges of another INR350 crores. So the total in addition to what we have paid is going to be close to INR1,800 crores to INR1,900 crores.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Got it. And plus the INR1,176 crores addition that [Indecipherable].

Venkat K. Narayana — Chief Executive Officer

Of that, we have already incurred close to INR1,000 crores because we availed that 50% scheme and paid the premium.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Okay. So balance there is INR800 crores and then INR1,176 crores additional for buying out the stake.

Venkat K. Narayana — Chief Executive Officer

Absolutely. Whatever you said, that’s correct.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Okay, perfect. And just last on — I was trying to reconcile the net debt increase for the quarter, which increased by INR1,400 crores quarter on quarter. While the cash flows that you have given indicate that the net deficit was around INR400 crores since we generated OCF of INR1,500 crores and spent INR1,900 crores in investment. Some of it is obviously with regards to the interest outflow, but can you help me reconcile the balance part of it?

Amit Mor — Chief Financial Officer

You want me to run him through the cash flow?

Venkat K. Narayana — Chief Executive Officer

See, increase of net debt, primarily there’s a large payout towards this transaction.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

So we have already created and that’s reflected in net debt [Phonetic], is it?

Venkat K. Narayana — Chief Executive Officer

Right. So earlier premiums were also funded by us and some of these consideration has already been paid most of that actually. This money that we’re talking about has been paid. I’m just getting the cash flows. So if you look at the overall 12-month cash flow, INR11,000 crores of inflow. On that construction cost, we have spent INR4,252 crores. And landowner payments, sales, marketing, admin everything put together INR2,700 crores, totaling to INR7,000 crores, and we had a surplus of INR4,000 crores. Yes, that’s INR4,000 crores. Now what is the exact query?

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sorry, I was just talking about the quarter. So for the quarter, I can see INR1,500 crores of opening cash flows, INR1,900 crores of spends, so INR400 crores of deficit. But net debt has increased by INR1,200 crores — sorry, INR1,400 crores quarter on quarter. So I was just trying to reconcile whether it’s because of any — there would be obviously payments outside of what we have given in cash flows, so what are those?

Amit Mor — Chief Financial Officer

Pritesh, we have made some partner payout, the minority interest in certain SPVs. We have made payments to them. That was around — to the tune of around INR300 crores, INR350 crores. Apart from that, the cash balance also has reduced. So what we have given in cash flows is only the operational and investment activities. The financing portion we have not given. In that the payments to partners and all that is captured. That has resulted in a increase in net debt.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Okay. Sure. Thank you.

Venkat K. Narayana — Chief Executive Officer

We’ll add that also and give it to you. It will be whole figure.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure. And if you can also add interest outflows to that cash flow, so that would be fairly easy for us to…

Venkat K. Narayana — Chief Executive Officer

Under financing activity, the amount we bring in that head, automatically everything will get added.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Yeah. Okay. Thank you. That’s it from my side. All the best.

Venkat K. Narayana — Chief Executive Officer

Just to primarily demonstrate that our developmental business is cash flow positive. That’s one objective. Now we’ll also anyway give you comprehensive one.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure. That would be helpful.

Operator

Thank you. Next question comes from the line of Murtuza Arsiwalla from Kotak Securities. Please go ahead.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Yeah. Hi, sir. Sorry, just want to delve a little more into the acquisition itself. So on a gross basis, the 5 million odd square feet would have INR2,000 crores of rentals. You said the premium was about INR1,500 crores, rehab cost is about INR350 crores. Can you give us specifically the construction cost for this? And out of all of the cost, how much have already been spent? And is there any debt on these two entities just yet?

Venkat K. Narayana — Chief Executive Officer

Construction cost on both the projects put together is around INR4,200 crores.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Yeah. Which takes our total cost to roughly about INR6,000 crores odd, premium, rehab, plus construction.

Venkat K. Narayana — Chief Executive Officer

Correct. And then you are adding up everything, then you should add up the rehab construction that we have to do, which is at the INR350 crores.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Yeah.

Venkat K. Narayana — Chief Executive Officer

And premiums I mentioned to you saying that around overall paid and balance to be paid all put together will be in the range of INR1,800 crores odd.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Okay.

Venkat K. Narayana — Chief Executive Officer

And there is LUC charges of INR300 crores odd.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Okay.

Venkat K. Narayana — Chief Executive Officer

We also considered some interest and overheads and everything.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Sure. And how much has been spent? So I’m getting an aggregation of roughly about INR7,000 crores. How much against this INR7,000 crores is already spent?

Amit Mor — Chief Financial Officer

Little over INR500 crores towards construction cost.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Okay. And is there any debt?

Amit Mor — Chief Financial Officer

No.

Murtuza Arsiwalla — Kotak Securities Ltd. — Analyst

Nothing. Alright, thank you so much.

Venkat K. Narayana — Chief Executive Officer

You’re talking about external debt, right? Not intercompany debt.

Operator

Thank you. The next question comes from the line of Biplab Debbarma from Antique Stock Broking Limited. Please go ahead.

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Good afternoon. Congratulations for the excellent FY ’23. My first question is related to these transactions only. Till date, sir, how much cash flow has gone out in all forms, advance, [Indecipherable] loans, or some payments for this BKC project and Turf Estate project?

Venkat K. Narayana — Chief Executive Officer

What has been drawn out, sorry?

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

How much cash flow has gone out from Prestige for these two projects, including…

Venkat K. Narayana — Chief Executive Officer

These two projects so far?

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Cash flow that has gone out from Prestige for these two projects, total cash flow for whatever maybe the use in all forms, how much cash flow has gone out for these two projects?

Amit Mor — Chief Financial Officer

A little over INR3,000 crores, INR3,025 crores, including the payment that we made just now to buy.

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

INR200 crores including the payment.

Amit Mor — Chief Financial Officer

Including the payment of yesterday’s transaction, INR3,025 crores, around INR3,000 crores.

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Yeah. My second question is on that second project in BKC, Prestige 101 Y. That is not part of the transaction? What is the status of that project and the structure staying [Phonetic] in that project?

Amit Mor — Chief Financial Officer

So these are two different companies. The projects are next to each other, therefore, we call it by one single name, 101, but they’re differentiated by X and Y nomenclature-wise. The shareholding pattern is completely different. And in terms of sequencing also we would want to build this first and move on to that. Step at a time. We have done this, and we have some more work to be done on ground with respect to Y project. So as of now, X and Turf transaction that we have done.

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Okay. That project, that [Indecipherable] is not in your possession and…

Venkat K. Narayana — Chief Executive Officer

It is in possession. Plans have been submitted. The approvals are underway. But we don’t want to build entire 4.5 million square feet at one go. So this will happen first and the other one will start a little later, after this…

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

The site is clear, sir, that site?

Venkat K. Narayana — Chief Executive Officer

Sorry?

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

The site is clear, the Y?

Venkat K. Narayana — Chief Executive Officer

Yeah. You see, no? So we have fence and we’ve put hoardings there. Internally, strategic planning is that we’ll wait for X building to come above the ground and then we’ll start Y. Y building will also have a hotel.

Biplab Debbarma — Antique Stock Broking Ltd. — Analyst

Okay, sir. Thank you, sir. All the best.

Venkat K. Narayana — Chief Executive Officer

Thank you.

Operator

Thank you. Next question comes from the line of Manish Maheshwari [Phonetic] from Manu Group [Phonetic]. Please go ahead.

Manish Maheshwari — Manu Group — Analyst

Hello.

Venkat K. Narayana — Chief Executive Officer

Yes, please.

Manish Maheshwari — Manu Group — Analyst

Sir, congratulations on the great set of numbers. Sir, what is our rental income for FY ’23 that we have reported?

Venkat K. Narayana — Chief Executive Officer

In the books or exit rental income for the year?

Manish Maheshwari — Manu Group — Analyst

Exit.

Amit Mor — Chief Financial Officer

INR210 crores.

Venkat K. Narayana — Chief Executive Officer

INR210 crores from office and retail of INR186 crores.

Manish Maheshwari — Manu Group — Analyst

INR186 crores?

Venkat K. Narayana — Chief Executive Officer

Yeah, close to INR400 crores.

Manish Maheshwari — Manu Group — Analyst

Total, right?

Venkat K. Narayana — Chief Executive Officer

Yeah.

Manish Maheshwari — Manu Group — Analyst

And sir, how is the residential for FY ’24? Specifically for FY ’24, how is the residential pipeline looking like for a market like Bangalore and Mumbai?

Irfan Razack — Chairman & Managing Director

Quite bullish, quite strong, quite bullish. And there’s a long — quite a big pipeline also this financial year in Bangalore as well as in Hyderabad as also in Mumbai. I think there’s a lot of projects that will get launched here in all these three cities. And if NCR approval comes, even NCR will come in.

Manish Maheshwari — Manu Group — Analyst

Okay, sir. Thank you.

Irfan Razack — Chairman & Managing Director

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.

Irfan Razack — Chairman & Managing Director

Thank you so much for your participation. It was, as usual, interesting, and we quite enjoyed answering the questions. Of course, Amit and Venkat and the rest of the team are available for any clarifications you have any time. We’ll be more than happy to answer.

Venkat K. Narayana — Chief Executive Officer

Thank you, everyone. And interesting conversation, and I’m sure all of you will appreciate whatever we have done yesterday and reported will benefit the company immediately and also in the long run, given what we are doing and given the fact that there is no land available at these locations and residential is also looking very good. We look forward to your continued support, and we’ll continue to do transactions that are value accretive and which helps grow the company to the next level. All the more exciting next year is going to be because it will mark like the way last year marked our entry into Mumbai, next year will mark our entry into NCR. We look forward to your support. Thank you very much once again.

Operator

[Operator Closing Remarks]