2024-11-18 16:45:44 :
India’s largest developers are looking to venture outside the comfort of their home market again but are treading cautiously as they prepare to expand into new markets.
Gurgaon-based DLF Ltd is eyeing to launch a slew of new value-for-money products $Speaking to Mint, Aakash Ohri, joint managing director and chief commercial officer of DLF Homes, said that $1 trillion will be invested in the next five years, but there is no intention to rush into projects unless the profits are attractive.
While Delhi-NCR will remain the focus center for DLF, the company is gearing up to launch a project in Mumbai between January and March, with apartments priced at $Oli said Rs 6-8 crore. DLF is also preparing to launch a villa project in Goa and a residential project in Panchkula, Haryana, with apartments priced at $3-5 Crores.
“DLF does not manufacture and launch products just for the sake of launching them. We want to ensure that we provide profitable products and products that further keep customer benefits intact and alive,” Ohri said.
“NCR will always be our main focus. Our center will continue to be there and NCR is growing at an incredible rate,” he added. “We’re trying to focus on retail sales. We don’t want bulk sales.” “We will carefully select buyers regardless of demand. That’s the change in strategy.”
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The Delhi-based developer also planned to enter the luxury residential development segment in Chennai last year, Ohri revealed during the company’s 2023-24 quarter earnings call with analysts. But in March this year, DLF sold a 4.67-acre land in Chennai for $735 crore investment in Cholamandalam Investment and Finance Co. Ltd, according to a regulatory filing.
“DLF went national as early as June 2005. They were buying land in places like Chennai, Mumbai, etc. but few projects were successful. They were under pressure to sell some of their core assets,” said real estate ratings and research firm Laises said Pankaj Kapoor, Founder and Managing Director, Foras. “It is therefore prudent that such strategies are consistent with their own past experience.”
Not without challenges
DLF’s booking momentum weakened in the September quarter. Nonetheless, the company has retained its pre-sales guidance for the full financial year, with new launches reviving bookings, including the ultra-luxury The Dahlias project in DLF Phase 5, Gurgaon.
Meanwhile, other top developers are expanding rapidly across the country.
Mumbai-based Lodha Group entered Bengaluru in 2022, while Bengaluru-based Puravankara Ltd re-entered Mumbai in 2021 after 30 years, Mint reported. Mumbai-based Godrej Properties Ltd entered Hyderabad last year with two land acquisitions. According to the Hindustan Times, Emaar India plans to enter the Mumbai real estate market after launching projects in northern India.
Additionally, DLF may find it challenging to tailor its projects to the unique tastes, lifestyle preferences and economic dynamics of local markets, said Shalin Raina, managing director of residential services at real estate services firm Cushman & Wakefield.
Unlike Gurgaon where DLF has established a foothold in prime locations, acquiring prime land in high-demand areas in other cities may pose a challenge, he added.
At a group level, DLF has a development potential of 220 million square feet. its development and leasing operations. DLF Ltd alone has 131 million square feet of development potential in India (excluding new launches), according to the company’s second-quarter report to analysts. Of this, approximately 125 million square feet. Delhi-National Capital Region has considerable value of developable area (including new developments).
get out of debt
DLF collapses in near meltdown $As per the company’s analyst report, the company’s debt load stood at Rs 27,000 crore as of the second quarter of 2017-18 (July-September 2017).
The company got some breathing space when the promoters moved $16,561 crore in the accounts of DLF Cyber City Developers Ltd in February 2018, Mint reported earlier. DLF’s consolidated net debt decreased to $In December 2017, revenue after strategic stake sales and asset monetization was Rs 5,513 crore.
Last year, DLF’s debt fell to “net zero.”
Additionally, DLF’s net cash position has improved significantly to $Recent second quarter revenue was Rs 2,831 crore $142 crore in the same period last year.
“DLF has historic land banks. We monetize these first,” Ohri said. “Today we can say that the debt burden does not exist.”
top revival
A key factor supporting DLF is the resurgent demand for such residences across India, given its focus on ultra-luxury, luxury and high-end projects.
Quality homes sell for more than $10 million ( $The market has become the largest market segments.
The segment accounted for nearly 41% of sales during the period, he wrote.
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Cushman & Wakefield’s Raina added: “Markets such as Mumbai and Delhi-NCR are leading the trend, while Gurgaon stands out as a hotspot for luxury car launches, strong sales and significant capital appreciation.” Bengaluru and Hyde Labah is a traditionally mid-market market that has seen a recent rise in demand for high-end and luxury properties, signaling a change in the residential landscape of these cities. “
Raina said factors such as changing lifestyle aspirations, the rise in the number of ultra-rich people in India and continued interest in prime real estate as a solid investment are likely to sustain the demand.
While he expects the high-end and luxury residential market to continue growing in the coming years, Raina added, “Sales of large luxury homes (4BHK) are likely to slow down as higher interest rates and prices make these properties less attractive to investors power is reduced and investors constitute a large part of the market.”
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