Bangalore-based realtor Puravankara expects 40 per cent of its business in value terms to come from Mumbai and Pune. Puravankara is well-positioned to capitalise and gain market share in a continuously consolidating real estate market, says Abhishek Kapoor, Group CEO, Puravankara in an interview with Sangeetha GPuravankara saw 56 per cent growth in sales bookings in the December quarter and 89 per cent in the nine months of FY24. What do you attribute this growth to?In this fiscal year, India remains the world’s fastest-growing major economy, with a GDP growth of 7.6 per cent in Q2FY24. This has led the Reserve Bank of India (RBI) to hike India’s GDP forecast further to 7 per cent for the year from the earlier forecast of 6.5 per cent. The Monetary Policy Committee maintained the repo rate unchanged at 6.5 per cent in its December 2023 meeting, opting for a status quo for the fifth consecutive time since February 2023, balancing inflation and thus promoting the economy’s growth and the real estate market.These favourable economic conditions have generated an unprecedented demand for quality residential real estate. We are witnessing buoyant demand for our new launches as well as sustenance sales across all segments. What is your outlook for FY24 regarding sales bookings, margins, and net revenues?We are optimistic about maintaining the current sales momentum. This confidence is rooted in a blend of strategic vision, customer-centric strategies, and an unwavering dedication to maintaining high-quality standards. You have a strong presence in the southern cities. Going forward, how do you see your geographical presence expanding? While we continuously evaluate opportunities to enter new markets, our current focus is to gain more market share in the five cities of Bengaluru, Chennai, Mumbai, Pune, and Hyderabad. We will continue to scale up our business in these markets. Over time, the Mumbai and Pune markets will account for 40% of our business in value terms simply because of the higher per-square-foot value in Mumbai. Recently, we secured redevelopment rights for two housing societies in Andheri, Mumbai with potential gross development value of Rs 1,500 crore. What about the North Indian market? What are the challenges you see in the market? While continuously evaluating opportunities in new markets in the North, we remain focused on increasing our market share in the five cities in the South and West. Considering the higher mortgage rates and increasing property prices, what is your outlook on residential demand?The Indian realty sector reflects the resilience demonstrated by the broader economy in the face of significant challenges currently confronting the global economy. This is indicated by declining inventory. The absorption is expected to remain buoyant in the upcoming quarters across segments, as end-users predominantly influence this demand. With increasing economic activity and a revised growth projection of 7% by the RBI (up from 6.5%), we firmly believe that Puravankara is well-positioned to capitalise and gain market share in a continuously consolidating real estate market. How have you been able to manage the price rises? Typically, one can anticipate a price surge between 50% and 70% from project launch to completion. This upward trajectory is expected to persist within the real estate sector. However, when considering the average price increase over four to five years, it is expected to hover around high single digits. Specific projects and micro markets may experience varying degrees of price appreciation. Fortunately, the industry, on the whole, has avoided excessive price hikes, prioritising volume over exorbitant pricing. This approach is beneficial and fosters a healthy dynamic for consumers and the development community. You have announced a plot development project in Chennai. How do you see the prospects of plot development and redevelopment? Post-pandemic, the demand for plotted developments has been on the rise across the country. This is driven by a preference for open spaces and a desire for homes with custom designs, offering personal outdoor areas and dedicated work/study spaces.For homebuyers, plots offer flexibility to build their home according to their preference and time frame. Additionally, plots by reputed developers also offer safety and create an appreciating asset for the customers. For developers, plotted developments offer the ability to sell volumes, realise cash flows and turn the project around faster. Interestingly, 80-85% of our demand is by end users.
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