Despite headwinds, luxury residential real estate is buoyant: DLF’s Aakash Ohri
Despite headwinds such as RBI rate hikes and rising commodity costs, the residential real estate market, particularly at the luxury and super-luxury ends, remains buoyant, says Aakash Ohri, Managing Director of the group and commercial director of DLF, the largest real estate in the country. real estate developer.
Confident in achieving his ₹8,000 crore revenue forecast for FY23, Ohri says there has been some postponement of property purchases due to an increase in home lending rates, but this does not didn’t have much of an effect on end-user purchases or DLF’s sales figures.
A bull cycle in real estate lately – in the past 18 months, 35 million square feet have been carved out by DLF – has seen real estate re-emerge as a stable investment relative to other related asset classes. at market or at high risk, which have been affected because of volatilities.
“Demand is buoyant and we remain cautious as some headwinds drive up the cost of credit for buyers. Premium and super premium homes have again emerged as a stable asset for investors, and it looks like this bull cycle is brewing. will continue for some time now,” he said. activity area in an interview.
In the first quarter of FY23, DLF Ltd. recorded consolidated revenue of ₹1,516,000,000, an increase of 22% year-on-year, and a margin of 53%. Net profit was ₹470 crore, up 39% year-on-year. New sales bookings reached ₹2,040 crore, a year-on-year growth of 101.
And nearly 75% of total sales came from new launches in the June quarter. For example, at The Camellias, DLF’s super luxury offerings generated a booking of ₹350 crore in the first quarter of FY23 and new offerings during the period generated sales of ₹1,532 crore.
According to Ohri, new DLF launches are up from the pre-Covid period, and there is also demand for larger homes. The average home size is around 1,800 to 2,000 square feet and goes up to 2,500 square feet; sizes are now 2,400 to 3,000 square feet.
“However, that doesn’t mean we don’t have the smaller 1,800 square foot offerings. But, the market value realizations for larger homes are higher,” he said, adding that: “While rising interest rates may pose some challenges, we expect the structural recovery in the residential segment to continue.
According to him, DLF’s recent launch, The Grove, another luxury low-rise offering in the freestanding floor segment, will see revenue contributions of over ₹1,700 crore (which will be reflected in the books from the T3FY23). The Grove will offer 292 luxury residences with 4 BHK, 4 BHK + entertainment lounge on plots ranging from 225 to 539 square meters.
Capex on new products is divided into two – one, which is on the books of DCCDL platform, where investments will be between ₹1,200-1,500 crore in the next 3-5 years (in DLF Downtown at Gurgaon and Chennai, Mall of India in Gurgaon and expansion of Vasant Kunj mall). Then there are office and retail projects on the DLF platform, which include IT Park in Noida, New DLF Goa Avenue, High Street Phase-V Malls in Gurgaon and Midtown, which will entail an investment of ₹400 –500 crore per year.
September 26, 2022