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BENGALURU : Top property developers have lined up a slew of housing projects for launch from July as they await a complete lifting of lockdown curbs imposed during the second wave of the pandemic.

Sales of new residential properties that rose steadily since the coronavirus outbreak last year stalled when the second wave struck in March, prompting builders to defer launches.

While this quarter would be a washout for both sales and launches, it is expected that the bulk of FY22 sales may come from fresh launches scheduled in the second half of this fiscal.

DLF Ltd had launched projects totalling 1.5 million sq. ft in 2020-21. Encouraged by improved sales, it is stepping up and targeting 8.3 million sq. ft of residential launches this fiscal. In the coming years, India’s largest property developer plans to launch around 35 million sq. ft of projects in the next few years.

The bulk of FY22 sales may come from new launches in the second half of the fiscal year.
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The bulk of FY22 sales may come from new launches in the second half of the fiscal year.

“We believe these launches will uplift the sales trajectory," Edelweiss Securities Ltd said in a report on DLF.

Similarly, Bengaluru-based Prestige Estates Projects Ltd has planned 12-15 million sq. ft of residential launches between July and December across south India, Noida and Mumbai.

The company had launched 4.7 million sq. ft of new projects in the March quarter, accounting for 30% of FY21’s gross sales value of 5,460 crore.

Prestige did not offer any sales guidance in its recent post-earnings call, but indicated that it expects strong revival in demand across segments from the September quarter if the impact of the second wave wanes in the coming months. The company’s focus will largely remain on mid-income projects, along with a few luxury projects based on the location.

“There is a huge pipeline of new supply expected to hit the market. The second wave has dented the market unfortunately following a good recovery curve. The pent-up demand has been consumed to a great extent and we have to see how the new launches are received by homebuyers. But builders can’t sit on land for too long and need to launch projects to monetize them," said Pankaj Kapoor, founder and managing director, Liases Foras Real Estate and Research Pvt. Ltd.

Kapoor estimated that after a lull in launches lasting nearly a year, around 70,000 homes were launched between January and March 2021. Before the covid outbreak last year, an estimated 90,000 launches happened every quarter.

Macrotech Developers Ltd, which operates under the ‘Lodha’ brand, plans to launch around 4.3 million sq. ft of new projects in the Mumbai Metropolitan Region (MMR) and Pune, according to its investor presentation. The developer is entering new micro-markets with the new launches and will also expand in Pune, outside its core Mumbai market.

Another Mumbai-based developer, Oberoi Realty Ltd, is planning new launches in the fiscal second half in Thane and ongoing projects once the lockdown curbs are eased, brokerage firm ICICI Securities Ltd said in a 17 May note.

While the timeline and the number of launches is awaited, ICICI Securities expects Oberoi Realty to clock sales of at least 2,500 crore and 3,500 crore in FY22 and FY23, respectively, due to the new launches and either completed or near-completion inventory in projects in Mumbai.

Meanwhile, some builders plan to raise prices despite the weak market. Akash Ohri, executive director, DLF Home Developers Ltd, said in a post-earnings analysts’ call last week that there has been a price increase of 1,500 per sq. ft in its Gurugram project that sells independent floors. DLF has also cut discounts at its luxury project Camellias. DLF’s management also said that sales in the June quarter were impacted by the second wave, but it expects to maintain a sales trajectory of more than 1,000 crore per quarter for the rest of this fiscal and in FY23. DLF is aiming at bookings of 4,000 crore in 2021-22 on the back of its strong launch pipeline.

Kapoor said a price rise may not go down well with customers in the current scenario. “Many factors contributed to the recovery in the housing sector, which included a 5-20% reduction in the cumulative cost of flats last year due to stamp duty reduction, among other factors. But margins have really shrunk for builders and most reported less revenues in 2020-21. So, they need to go out and launch projects and take a price hike, if necessary," he said.

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