It's a struggle to balance cost vs selling price: Prestige Estates MD

Prestige Estates Projects saw its sales bookings jump twofold to a record Rs 4,267.6 crore in the third quarter of financial year 2021-22 (Q3FY22). It also clocked the highest-ever collections of Rs 2,431.6 crore in Q3, up 70 per cent year-on-year. Irfan Razack, chairman and managing director of the company, in an interview with Raghavendra Kamath, talks of how the

third wave of the Covid-19 pandemic will impact sales. Edited excerpts:

What reasons do you attribute for the good sales bookings in Q3?

This huge uptick is because of the new launches – The Prestige City, Bengaluru; Prestige Beverley Hills, Hyderabad; and Prestige Jasdan Classic, Mumbai – and the festive season, when we had the annual KEYS event (residential property expo). It is also because of the general mood of home buyers and low interest rates.

Do you think the third wave will affect your Q4 numbers?

Third wave will definitely affect numbers because of the weekend curfew. We have to wait and watch if we have any more lockdowns. However, we are trying to remain positive by planning two to three new launches during Q4 — Prestige Marigold, Prestige Green Gables, Prestige Tech Hub in Bengaluru, Prestige Bougainvillea Gardens in Noida (subject to approval) and Prestige Eden Garden in Kochi.

How have your recent launches fared?

All new launches in the recent past have met with resounding response, led by The Prestige City, Bengaluru, where the plotted development, Prestige Great Acres and Prestige Avalon Park apartments, are sold out. We are planning to launch new components of The Prestige City – Prestige Meridian Park and Prestige Eden Park – which should also receive good response.

When do you plan to launch the Mulund and Bandra project in Mumbai?

We are looking to launch The Prestige City, Mulund, Prestige Daffodils, Bandra, and Prestige Ocean Towers, Marine Lines, latest in the first quarter of the next financial year, and earlier if possible.

Are you tweaking unit sizes, ticket price, and so on to suit the new environment?

Getting the product right is always an ongoing process and we have to keep researching what the market will accept, including the unit sizes and ticket price, and we have to ensure that the affordability barrier doesn’t get breached.

Are you looking to increase prices in the near future?

Yes, all raw material prices, including labour, have gone up in the last one year and this will certainly affect the decision on pricing. It’s an ongoing struggle to balance the cost versus the selling price and at the same time ensure that there is customer acceptability and affordability.

What is the status of your new commercial projects?

We have new commercial projects coming up in Bengaluru, Chennai, Kochi, Pune, Hyderabad, and Mumbai. Each one of them will be a landmark and will be a new generation offering with upgraded specification and in line with Covid norms. I believe that demand for A Grade offices in good locations will always remain and will give us rentals.

What is your expectation from the Budget for the real estate sector?

I personally believe that tweaking taxation or frequent changes should be avoided and done only once in five years so that it brings stability to taxpayers. If you ask me for one single change for the real estate industry, it would be the reinstatement of the GST input tax credit (ITC) for housing.