Showing posts with label LODHA GROUP. Show all posts
Showing posts with label LODHA GROUP. Show all posts

Tuesday 12 April 2016

Realty firms miss residential sales guidance for 2015-16

A few developers revise sales target for March quarter; weak demand, delay in approvals seen as reasons for slump



Bengaluru: Real estate developers struggled to meet their residential sales guidance for the year 2015-16 due to tepid consumer sentiment and delays in securing project approvals.
Unable to launch projects and sell in line with expectations, a few realty firms even revised or downsized their sales targets in the March quarter.
While real estate developers in Mumbai and Bengaluru selectively launched projects in the last fiscal year, most in India’s largest property market—the National Capital Region centred on Delhi—refrained from bringing more new supply into the market—causing sales to shrink.
Bengaluru-based Prestige Estates Projects Ltd, which generated about Rs.5,030 crore of sales in 2014-15, includingRs.1,000 crore of rental income, is expected to have clocked a little above Rs.3,000 crore in 2015-16.
Prestige Estates, which had set an annual sales target ofRs.5,500- 5,800 crore for 2015-16, revised it in the course of the year.
PrestigeGroup’s chairman and manaing director Irfan Razack said the approval delays and the inability to launch projects in Chennai and Hyderabad affect- ed the sales momentum.
“We are happy with the numbers in the current environment, and we would be the highest to generate such sales in the current environment,” Razack said.
In the April-December period, Prestige launched just 3.8 million sq.ft of the full year’s target of 12 million sq.ft and met just 33% of the Rs.5,800 crore sales target. However, with three residential launches in the March quarter and one commercial project seeing good response, the company is targeting more than Rs.1,000 crore of sales bookings in the last quarter and Rs.3,000 crore for FY16, according to an Elara Securities India (Pvt.) Ltd report.
Prestige did not give out exact numbers due to the impending results.
Another Bengaluru developer, Sobha Ltd, last week said it has registered new sales of 3.38 million sq.ft, valued atRs.2,012 crore, 3.2% higher than its 2014-15 performance, in a scenario where demand remained muted in almost all property markets in the country.
Sobha’s affordable housing brand Dream Acres emerged as its fastest selling product.
An Elara Securities report said that “FY16 is the third consecutive year where Sobha Ltd has missed its annual sales guidance with 3.4 million sq.ft of sales worth Rs.2,010 crore versus guidance for 4 million sq.ft of sales worthRs.2,600 crore. This was largely owing to continued delay in approvals for new launches (Kochi, Chennai and Gurgaon), slowdown in the Rs.1 crore-plus segment and sustained weakness in the Gurgaon market.”
“Most developers missed their sales guidance last year, but 2016-17 is expected to be much better. Developers in Bengaluru such as Sobha and Prestige have a strong pipeline of launches, and that will naturally boost sales numbers. We expect NCR to remain slow and Mumbai will be mixed bag where some developers will sell well,” said Adhidev Chattopadhyay, real estate analyst at Elara Capital.
On a pan-India basis, Mumbai-based Lodha Group again seems to have hit the highest sales numbers, crossingRs.8,000 crore in gross sales—far ahead of Prestige Estates and Godrej Properties Ltd (GPL). GPL generated sales of about 4,422 crore in the first three quarters of FY16. The company didn’t disclose full year numbers. Lodha Group, which beat India’s largest developer DLF Ltd and Prestige in 2014-15 to clock the highest new residential sales of Rs.7,800 crore, had set an ambitious target of Rs.9,000 crore for 2015-16.
Lodha Group’s 40-acre residential project Amara in suburban Thane was the largest contributor towards sales last year. In the past month or so, it has clocked 1,500 apartment bookings that would amount to Rs.1,300 crore. In total, in 2015-16, Amara contributed nearly Rs.3,000 crore, followed by Palava, a township near Mumbai which generated another Rs.1,200 crore.
“The product, brand and price are the three things that played important roles in generating this kind of sales. We have also been able to significantly improve the net to gross ratio without sustained consumer-centric approach,” said Prashant Bindal, chief sales officer, Lodha Group.
While the gross sales typically indicate customers who have paid the booking or the signing amount, net sales would mean when a customer actually makes the initial 20% payment.
Pune-based Kolte-Patil Developers Ltd, which had set a target of selling 3-3.5 million sq.ft of residential space, revised it to 2-2.5 million sq.ft in the last quarter, Elara Capital’s Chattopadhyay said.
In 2015-16, DLF is expected to match the level of 2014-15, when it clocked sales of about Rs.3,850 crore, said analysts.
DLF’s chief executive Rajeev Talwar said that there was a visible rise in customer enquiries. “Customers are gradually coming back. In the last 5-6 years, developers only launched residential projects leading to a lot of supply in the market and this will take time to be absorbed. But... the new financial year will definitely be better in terms of buyer sentiment,” Talwar said.

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