DLF sales up, other realtors show a drop

Leading real estate player DLF registered a 46 per cent increase in its sales bookings for the first nine months of the financial year 2014 (April-December 2013), at a time when other developers, including Unitech, HDIL, Oberoi Realty and Godrej Properties, are not finding enough buyers, making them post a declining number for properties sold.

DLF had sales booking of Rs 3,760 crore for the first nine months of FY13-14, according to the company's presentation to the analysts. It sold an area of 3.32 million sq ft during the first nine months, with launches in Gurgaon and other micro markets. According to experts, DLF has been cautious in launching new projects.

Moreover, they are going for premium projects, which offer high margins.

KimEng analyst Anubhav Gupta says, "DLF is definitely bucking the trend. But the coming quarters would be slow for DLF and it would be difficult to maintain these sales numbers as the sales are largely coming from one or two luxury projects in Gurgaon. Earlier, for the first half of the current financial year, DLF had posted a 139 per cent increase in sales.

In a conference call with analysts on Saturday, Ashok Tyagi, CFO, DLF, said the recovery on the sales side would take a couple of quarters, although the rental business was growing well. Overall, the real estate market has been hit by low sales and high inventory. Even the number of launches by developers has come down drastically.

Experts say companies are waiting for an economic stability in the market. Another realty firm Unitech has shown a decline of 51.6 per cent in sales bookings at Rs 1,071 crore, while Godrej Properties showed a drop of 36 per cent at Rs 1,372 crore for the first nine months of FY 2013-14. Oberoi Realty's sales were down by 23.57 per cent at Rs 564.83 crore and HDIL was down by 30.9 per cent at Rs 579.28 crore for the same period. Vikas Oberoi, CMD, Oberoi Realty, said, "Domestic and global economic headwinds continue to be challenging. While business sentiments are likely to improve only after the results of the general elections, there will also be opportunities now, for companies that have shown financial prudence and discipline."

Pirojsha Godrej, managing director & CEO of Godrej Properties said: "We expect 2014 to be our best-ever year for new launches with major launches planned in all the top real estate markets in India, including a handful of high impact launches in Mumbai. We remain very confident of the reception these launches would receive even in the current market environment."

However, the recent Supreme Court judgement which set aside the earlier Bombay High Court verdict on 'private forest land' for large tracts of land in Mumbai, is expected to help the Godrej group and Oberoi Realty to launch new projects in the city. Earlier, the high court declared some of the land parcels where these companies were building projects as 'forest areas', where construction was not allowed.