Slower decision making by customers has increased sales cycle: Anita Arjundas

Q&A with Mahindra Lifespace Developers' MD

Mahindra Lifespace Developers, the realty development arm of Mahindra Group, posted a 71% jump in its net profit for the third quarter of FY 2014. In an interview with Raghavendra Kamath, the company's managing director, Anita Arjundas discusses the company's performance and real estate markets.

How has been the December quarter in terms of sales across your projects?

Compared to previous quarters, the last quarter has been good. We have seen an 81% growth in sales in the last quarter. Of course, we would like to see more numbers happening, but the sales cycle has lengthened due to slower decision making by customers.

HDFC said it is seeing strong growth coming from smaller cities. What has been your experience?

Our focus has been the major cities and not the smaller cities, as in Tier 2 and 3 towns. The only Tier 2 city we are in is Nagpur which has performed reasonably well, but is not a large market for accommodating multiple large projects. In the Tier 1 cities, Pune and Hyderabad performed well during the quarter.

How many projects are you launching this year?

In this calendar year, we are working on the launch of six projects, with a total area of approximately 3.3 million sq ft. Of course, we will launch each project in a phased manner. Of these, two will be in low cost housing, two in the mid to premium segment and two in the premium / super premium segment. We are launching low cost housing in Bhoisar in Mumbai and Avadi in Chennai. They are under various stages of approvals. We will launch all the projects as soon as we get approvals.

What is the progress of your JV with Standard Chartered arm?

We have a Rs 1,000 crore platform to invest in residential properties. We have already invested half of our respective commitments in two projects. We are looking for opportunities to invest more under this platform.

You were planning to buy distressed SEZ projects. What is the progress on that?

Land acquisition is increasingly getting difficult and more so with the new bill. So, the route to large land parcel aggregation and development of future World City projects would be through acquisition of distressed assets or through partnerships with state governments. We would take over the pre-aggregated land as against aggregating land ourselves.

What is your outlook for property sales?

Going forward, the next couple of quarters will be slow as people are still in a wait and watch mode on the political environment and the economic outlook.