The Rs 1,000-crore textiles-to-real estate major, Bombay Dyeing, will develop eight lakh square feet of property on its surplus land in Mumbai. The company will construct a high-rise building for commercial and residential use.

”We will commence construction of a high-rise tower in two months. The entire project will be sold off in the next 24 months,” chairman Nusli Wadia told shareholders at the company’s AGM.

Although it would be difficult to fix a value for the upcoming project, real estate market sources said that the company could earn a few thousand crores. However, the value will depend on the state of the real estate market, which has shown signs of weakness of late.

“It’s anyone’s guess where the market is headed for in the next two years,” said a real estate analyst on condition of anonymity. Bombay Dyeing had started selling its Spring Mills project at Dadar in 2006 at an introductory price of Rs 10,200 per square feet, which zoomed to Rs 25,000 per square feet in January 2008.

The company is redeveloping its Spring Mills property in Central Mumbai into a residential tower, 84% of which has been sold. The work at Dadar and Worli is also under way, with two commercial and IT/ITeS towers expected to be ready by 2009-10. “This is 45% ready,” Mr Wadia said. “Instead of our earlier plans to lease out part of the property, we are now looking selling,” he added.

Bombay Dyeing, which suffered a Rs 48-crore loss for the quarter ended June 2008, is likely to take a hit in the second quarter too. “We expect a further loss due to production of polyester stable fibre, which started in October 2008. The second quarter is also expected to be the same (loss-incurring). We see positive results in the third quarter,” Mr Wadia said.

The company’s stock closed at Rs 564.6, up 4.91% in a buoyant BSE. The company, which recently entered Dubai, plans to invest in other overseas textiles retail market.