New Delhi, Dec 5: The structure of Indian real estate is improving in a meaningful way with disciplined supply and consumers demand gravitating towards branded developers having better execution track record, Macrotech Developers MD & CEO Abhishek Lodha said.
Macrotech Developers, erstwhile Lodha Developers, is one of the leading developers in the country. It got listed in April this year with initial public offer (IPO) of Rs 2,500 crore.
In an interview with PTI, Macrotech Developers Managing Director (MD) and Chief Executive Officer (CEO) Abhishek Lodha talked about the change in structure in Indian real estate over the last five years.
He said consumers preferred buying bigger homes and better homes from branded developers.
He said property prices, which have remained stable during the last few years, would appreciate, leading to huge wealth creation for the people especially the middle class.
“In India and globally, there is a lot of positivity about the Indian real estate sector. The reason is that the structure of the industry is changing in a very meaningful way,” Lodha said.
“The demand is all going to the very top brands who in the difficult period before the COVID pandemic, when there was slowdown in demand and projects were getting stalled, behaved well with customers and did not delay their projects,” Lodha said.
By completing projects on time, those brands have built a lot of trust, he added.
“People want to buy from only those brands especially under-construction homes.”
Asked about housing demand, Lodha said sales have been very strong after the second wave, with robust demand across all price points.
He said the supply has become disciplined and would remain moderate going forward.
“Customers are now understanding that they should purchase bigger homes, better homes from a brand. Three ‘Bs–bigger, better and branded’, Lodha said.
Stating that industry’s structure has fundamentally improved, he said: “You have a industry structure where the supply comes in a disciplined manner and consumers are keen to buy bigger and better homes.”
Lodha said there would be price appreciation, which will lead to wealth creation for middle class.
According to market reports, the overall housing sales have declined compared with 2019 level because of the COVID pandemic, but the performance of big and branded players have been encouraging and they are gaining market shares.
To capitalise this rising demand for branded players and limited supply, Macrotech Developers has recently raised Rs 4,000 crore through sale of shares to institutional investors (Qualified Institutional Placement).
The company will utilise Rs 3,000 crore for further growth of its business while the remaining Rs 1,000 crore will be used for debt reduction.
Macrotech Developers is aggressively entering into Joint Development Agreements (JDAs) with landowners to develop more projects.
The company, which currently focuses on Mumbai Metropolitan Region (MMR) and Pune, is looking to enter Bengaluru market as well.
“We are aiming to have Rs 14,000 crore of sales by FY’24 (2023-24 financial year) and Rs 20,000 crore by FY’26 (2025-26), which is almost three times of our number before COVID,” Lodha said.
Macrotech Developers had clocked a sales bookings of Rs 5,970 crore during the last fiscal year and is targeting to achieve Rs 9,000 crore in the current 2021-22 fiscal.
“Growth is enormous. It is going to be more focused on middle income and affordable housing. The geographical focus is going to be around MMR and Pune where we are going to deploy funds in a capital light manner. We will not buy large parcels of land,” Lodha said.
He highlighted that the company’s debt equity ratio is among the lowest.
“We are growing in a capital light model where because of the company’s brand and execution strength, land owners are partnering with us. We are doing joint development,” Lodha said.
Macrotech Developers has delivered more than 81 million square feet of real estate and is currently developing around 93 million square feet under its ongoing and planned portfolio.
The group has more than 4,400 acres of land beyond its ongoing and planned portfolio which will be utilised in developing further residential, commercial and industrial & logistics spaces.
Besides India, Macrotech is also developing two projects in London, where it made a foray in 2013. (PTI)
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