 "Workers walk past a billboard of DLF Ltd. at Gurgaon on the outskirts of New Delhi")
On the back of a reworked business strategy and demand uptick for ready-to-move-in properties, the country’s largest real estate firm, DLF Limited, registered sales of over Rs 2,400 crore for residential inventory properties in 2018, according to sources in the industry.
Sources said the firm has seen a rise in demand of residential properties over the past one year after it decided to sell only ready-to-move-in properties.
Last year, DLF said that it would sell apartments only when it gets occupancy certificate after completing the project as part of its new business model to remove any uncertainty regarding costs and delivery timelines.
The company has Rs 15,000 crore worth of residential inventory, which it plans to sell off over the next few years. Some of the reasons behind the recent rise in demand for DLF properties are the fact that the company is giving the flats at a discounted price and offering upgrades to those who had earlier bought smaller units.
“When a developer is selling under construction property, giving discounts is difficult as the prices are based on a construction-linked plan. But when a company sells ready-to-move-in properties, those costs have already been taken care of and a discount can be given on the final price,” said an industry observer.
Rajeev Talwar, CEO of DLF, said that the requests from customers for upgrading their units are up. “Customers who had purchased smaller units during the launch of Camellias are now opting for larger areas within the project. Today, we are in a position where a customer can visit any of our sites and select an apartment. We will be able to hand over the keys to the home within six to eight weeks,” he said.
The company witnessed a nearly 30-fold jump in net profit to Rs 373.21 crore at the September quarter from a year earlier. Its profits came on a 31.60 per cent rise in revenue to Rs 2,304.90 crore during the period.
DLF, in an investor presentation after the September quarter, said it sees good opportunity for itself from the current liquidity crisis in the NBFC sector, which it expects would lead to lower supply. “DLF is well positioned to grab this opportunity as it has completed units for offer in the market,” the company said in its investor presentation.
According to recent research reports by Anarock, there is a growing trend for completed inventory or close-to-completion properties. The report cited that despite the NBFC hiccup in 2018, housing sales were up by 18 per cent and new launches up 33 per cent across seven cities.
NCR added approximately 26,010 units in 2018, an increase of 17 per cent over the previous year. Of this, 47 per cent of the new supply catered to the affordable segment.
The issues of stalled projects and liquidity crisis were key deterrents. NCR-based developers are facing consumers’ ire over undelivered projects of 3C, Parsavnath, Jaypee, Unitech and Amrapali. Customers of these companies have also initiated insolvency proceedings in the NCLT with the hope of recovering their investment.
