BK Birla group's realty arm to launch one housing project every quarter

Birla Estates aims to become one of the country's largest property developers; is starting the next phases of some of its existing projects

Birla Estates, part of the BK Birla Group's Century Textiles & Industries, is looking to launch one residential project every quarter from next year in its bid to become one of the largest property developers in the country.

"We will launch three projects next year and (have) four to five launches year after that. We will launch six to seven projects a year after that," said K T Jithendran, chief executive at Birla Estates.

The company is planning to launch the next phases of its projects in Gurgaon in NCR, Kalyan near Mumbai, and Magadi in Bengaluru next year.

"We will focus on the premium segment first. Once we become a established brand, we will get into different segments such as mid-income housing. After building a strong pipeline and generating good cash flows, we will get into different segments," Jithendran said.

Right now, 90 per cent of the company's properties are residential and remaining are commercial.

Jithendran said in the next five years, it will be 75:25 and in ten years it will be equal.

 

He said the company is selling one apartment a day in the National Capital Region where apartments are priced between Rs 1.3 crore and Rs 2.5 crore.

The company has sold half of its 200-odd properties in Bengaluru, where it is offering one flat per floor. 

He said land owners in Pune and Mumbai are amenable to negotiations because of inventory build up.

"In Parel area of Mumbai, prices have dropped by 10 per cent. But we did not drop prices in Bengaluru, NCR and Kalyan," Jithendran said.

After a washout in Q1FY21 due to the Covid-19-induced lockdown, Q2FY21 has seen residential industry volumes revive to 65 per cent of pre-Covid levels due to a mix of pent-up demand, price discounts and low mortgage rates, said Adhidev Chattopadhyay, analyst at ICICI Securities.

"At the same time, Q2FY21 sales bookings for our listed coverage universe stood at 70-100 per cent of Q2FY20 sales, which points to continued consolidation and market share gains. For H2FY21-FY22E, all listed developers have a number of planned launches and continue to focus on monetisation of ready inventory," Chattopadhyay said.

While the overall industry volumes may remain lower in H2FY21 on YoY basis, we expect listed developers to be continued beneficiaries of industry consolidation and expect their sales volumes to get back to pre-Covid levels in this period assuming further waning of Covid-19 impact," he added.