Godrej Properties, the real estate development arm of the Godrej Group, has inducted six new projects with a total saleable area of 6.34 million sq. ft. and total estimated booking value of Rs 6,025 crore and is likely to surpass its own bar of projects with total revenue potential of over Rs 15,000 crore in the current financial year, the company‘s executive chairman Pirojsha Godrej told ET.
“We are witnessing a lot of momentum in business development and hope to deliver Godrej Properties’ best-ever year in terms of new project additions through strong momentum in the second half of the year,” Mr. Godrej said.
With bookings valued in excess of Rs 4,930 crore, the Godrej Properties has achieved its highest-ever sales for the first half of any financial year. Of this, the second quarter witnessed total booking worth Rs 2,409 crore with total booking volume of 2.71 million sq. ft.
“The current quarter is also looking good… we have not seen any major impact of the hikes in interest rates on our bookings. Even now, the home loan rates are relatively lower than the earlier highs. We are on track to achieve and even top bookings worth Rs 10,000 crore in the current financial year,” Pirojsha Godrej said.
The Reserve Bank of India has been increasing the repo rate since May in a bid to tame inflation and provide support to the currency. The cumulative hike in repo rate since then now stands at 190 basis points and housing loan rates have already moved upward of 8%.
“We do not see home loan interest rates turning out to be a major dampener until it reaches the double-digit number,” Godrej told ET. The company has been able to achieve price increases in the range of 5-10% across its projects in the last 6-9 months and the homebuyers have responded well to that as indicated by the bookings.
Industry experts believe the ongoing market consolidation in favour of large and established developers will gain momentum owing to their better execution ability and access to liquidity in the current market environment than that for smaller developers.
The Godrej Group company is looking to leverage its brand and financial position to tap consolidation opportunities through distress situations arising in the real estate sector.
These new additions will be made through its existing model of forming alliances and even direct land acquisitions supported by its robust balance sheet.
The company has also been raising funds to drive consolidation with the use of additional capital and to significantly strengthen its development portfolio. Currently, it has a war chest of $1 billion to support its growth plans.
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