L&T Realty banks on large projects

L&T Realty, the property development arm of construction and engineering giant L&T, is betting on bigger projects, lower pricing and faster execution to boost its growth.

The company plans to launch three malls of 1.2 million sq ft in Hyderabad in the next six months. The total project size would be 18.5 million sq ft and it would be a part of a metro station development.

Last year, L&T Realty sold its 1 million sq ft mall in Seawoods station in Navi Mumbai to Blackstone for Rs  1,400 crore. The total project size was 2.6 million sq ft.

In 2015, it sold its 1.5 million sq ft commercial property project in Chandigarh to the Carnival group for Rs 1,785 crore.

“All of our projects are at least 1.5 million sq ft in size. We believe in doing fewer but bigger projects,” said Shrikant Joshi, chief executive at L& T Realty. Currently, it is developing 8.5 million sq ft. In comparison, DLF, the country’s largest developer, has 18.5 million sq ft under development. Joshi said L&T Realty is planning to launch the second phase of its 1 million sq ft residential project in Powai within two months and it will release 300-400 apartments for sale.

The company sold off many of its projects within a short span of time, Joshi said. For instance, the company sold 80 per cent, or about 400 apartments, in Bengaluru in three months when it launched a residential project in June 2016.

The company launched its joint venture project Crescent Bay in Parel in 2012 which was 3 million sq ft in size and out of an inventory of six towers, 90 per cent is sold.

In its project in Powai, called Emerald Isle, the company sold off 97 per cent of the inventory in eight towers. The 1.6 million sq ft project was launched in 2013. Besides the brand, Joshi said the fair pricing followed by the company is also a hit with buyers.

When resale prices were between Rs 30,000  and Rs  35,000 a sq ft in Powai, it launched apartments at Rs 15,000 a sq ft and in the Parel project also it launched apartments at Rs 16,000 a sq ft when the going rates in the area were Rs 40,000-45,000 a sq ft, Joshi said.

“If you are honest in pricing, people buy. If developers start giving discounts, customers will wait since they do not know what is the bottom,” Joshi said. He said the company will focus on mid to premium housing in the range of  Rs 15,000-20,000 a sq ft.

Joshi said the company is also focusing on timely delivery. For instance, in its Parel project, it is offering possession of three towers this year.  In comparison, projects launched in the same area in the same year have seen 60 per cent of total construction till date, he says.

In the Powai project, the company delivered 300 apartments in August 2016 and is geared up to deliver 400 apartments.