Lodha Developers eyes ₹1,500 crore rental income in FY31, says MD

Lodha Developers is targeting a six-fold jump in the annual rental income by 2030-31 to ₹1,500 crore, which will cover almost the entire interest and salary cost of the company, its MD Abhishek Lodha said.

After capturing a decent market share in the housing segment, Mumbai-based Lodha Developers intends to scale up its commercial real estate business.

It is building office complexes, retail projects and industrial and warehousing parks, besides entering into facilities management.

The company's annuity income, which includes rents from leased commercial assets, stood at ₹250 crore in the last fiscal year.

In a letter to shareholders, Lodha Developers MD and CEO Abhishek Lodha said the company now aims to have a reasonable annuity income portfolio over time.

He said the "aim is to have ₹15 billion (Rs 1,500 crore) annuity income by 2030 (FY31)".

Abhishek noted that the targeted annuity income for 2030-31 would be enough to cover almost the entire interest and salary costs of the company.

During the 2024-25 fiscal year, the company acquired land in Chennai and Delhi-NCR for warehousing parks.

"Leasing at various parks is progressing well, and we are continually enhancing our high street retail portfolio alongside our residential projects. We look to meaningfully grow in annuity income in the next few years," Abhishek said.

At present, Lodha Developers has a commercial portfolio of 8.4 million square feet, of which 2.1 million square feet is retail, 1 million square feet of office space and 5.3 million sq ft of industrial and warehousing parks, according to an investor's presentation.

Out of this 8.4 million square feet area, 3 million square feet were leased till March this year.

From the current portfolio, the company expects a total annuity income of Rs 1,150 crore in FY31. About Rs 550 crore will be from office and retail space, while nearly Rs 300 crore will come from warehousing parks and Rs 300 crore from facilities management.

It will increase the size of its commercial portfolio in the coming years to reach the targeted annuity income of Rs 1,500 crore in FY31.

In the letter to shareholders, Abhishek outlined the vision of the company for the short, medium and long term.

He also talked about the importance of having predictable growth with consistency to reduce business risk.

In housing, Abhishek said the company is strategically positioned to continue to grow pre-sales at about 20 per cent CAGR (compounded annual growth rate) over a long period.

In 2024-25, the company's pre-sales or sales bookings stood at a record Rs 17,630 crore, up 21 per cent annually.

Addressing shareholders in the annual report for the last fiscal, he said the company is focusing on mid-income, premium and luxury homes across the Mumbai Metropolitan Region (MMR), Pune and Bengaluru markets.

Going ahead, Abhishek said, the company would focus on scaling its presence in these three markets and would enter a new city in the pilot phase.

He said the company remains committed to keeping its leverage at a very conservative level, where net debt to equity will be below 0.5 times.

"As we expand, we remain resolute in integrating sustainability at the core of our developments, ensuring they are future-ready and resilient," said Abhishek.

Lodha Developers has built more than 100 million square feet and is developing more than 110 million square feet under its ongoing and planned portfolio.

Its net profit increased to Rs 2,764.3 crore in 2024-25 from Rs 1,549.1 crore in the preceding year.

The total income grew to Rs 14,169.8 crore last fiscal from Rs 10,469.5 crore in the 2023-24.