The Covid-19 crisis and lockdown are expected to hasten consolidation in the real estate sector and larger players are expected to gain. Godrej Properties, which is known for its joint ventures, will benefit out of the consolidation due to its strong balance sheet and sales capabilities, its managing director Mohit Malhotra tells Raghavendra Kamath in an interview.
The consolidation is already happening. Those with balance sheet strength and sales capabilities will partner with other developers. We are already sitting on cash of Rs 2,500 crore and have a strong brand name, so we will benefit from the consolidation.
Are you seeing a surge in joint ventures and joint development proposals?
We are getting proposals. But there is no dramatic increase. Once the lockdown opens up, we will get to know the (real) situation.
How did you manage to post healthy sales in Q4 despite the lockdown?
We had done good numbers before the lockdown. We would have done even better had the lockdown not been imposed. During lockdown, we used video-conferencing and zoom calls effectively. We actually reworked sales by leveraging technology. Actually we had digitised our sales process one-and-a-half years ago.
How does FY21 look like and what are you doing to bring back the customer?
It is too early to comment. We have to wait for the lockdown to end. We are not doing anything special. We are in touch with customers through technology. We are using new ways of selling. A lot of innovations are going on.
Will you defer launches scheduled for this quarter?
There are a lot of projects in the final stages of approval. Depending on stage of approval and lockdown, we will take a call.
Do you have any plans of cutting apartment prices to boost sales?
We do not have any plans of cutting prices. The industry has been reeling under a slowdown for the past eight years. There is a limited scope to cut prices.
Barring South Mumbai, very few places have significant completed stock.
Do you think this entire Covid-19 issue will delay the recovery in residential real estate?
It depends on how long the lockdown continues and what its impact will be on the economy. If the impact is low, recovery will be faster. Otherwise, it will push recovery by one more year. Whenever revival happens, there will be strong recovery in sales.