 "Abhinandan Lodha, founder and chairperson of HoABL")
Real estate development company House of Abhinandan Lodha (HoABL) uses technology and transparency to make investing in land consumer friendly. It aims to have an annual sales revenue of ₹10,000 crore by FY30, Abhinandan Lodha, founder and chairperson of HoABL, told Prachi Pisal in an interview in Mumbai. “My business is to sell intergenerational wealth,” said Lodha. Edited excerpts:
As land is traditionally seen as an investment vehicle, how is your strategy different?
Making land investments transparent, liquid, retail, and convenient to buy requires addressing these fears. While land has existed as an investment asset for a long time, we managed to bring it to complete transparency and make land investments non-physical.
India is changing very fast. The government is making announcements on infrastructure projects transparently. Based on these announcements, our research team identifies locations for our projects. We are giving the comfort of our brand.
Everything about us is transparently disclosed to every customer. Building a very high-quality framework for corporate governance is the prime need for the real estate sector.
What pricing premium does your brand achieve over unorganised land sellers?
It's not comparable like that, because our product offering is substantially superior, and we are utilising technology. Our consumers are willing to pay a premium for a superior product.
In some of our markets, we are the first movers. We create markets more than anything else. We also reserve huge open areas ranging from 30-50 per cent in our projects.
In India, people are willing to pay a premium … a notional premium for headache-free delivery of a superior and differentiated product. My business is selling intergenerational wealth.
As an asset class, how would you compare land with residential and commercial real estate in terms of returns and risk?
No other real estate asset classes can give the return that land gives if one buys it in the right location and from the right developer.
Every real estate asset class has a different utility. Residential real estate is more for immediate consumption, while commercial real estate is a mix of consumption and investment. Land is investment and consumption.
How have investments in land performed?
Our buyers in the past four years would have made an excess of 25-30 per cent compounding return. But again, we don't think that’s any indicator for the future. We strongly believe that land should be bought with 10-year money for an expected compound annual growth rate (CAGR) return of around 20 per cent.
How were your sales in FY25?
In FY25, our net sales were ₹1,500 crore. Roughly 92-93 per cent of our launched projects were sold.
This year, we think we will grow by an excess of 25 per cent. We just want to make sure that our ability to complete our promises to the consumer is constantly being met. So, we'll temper our growth to be 25 per cent per annum.
What top-line targets shape your project planning?
At a minimum, we try to keep it at ₹500 crore or more but there could be exceptions. For larger assets, the top line will be closer to ₹2,000 crore. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin is usually around 40 per cent.
We discussed buyers’ returns. What about your returns?
It has been a wonderful time. We started with a very limited amount of capital, and we’ve been able to grow very fast.
A large amount of what we owe is to the policy of central and state governments, as well as the Indian retail consumer. Indian retail consumers are the best in the world. The way they support a business story that they like and the way they are willing to take risks, along with the developer, I don't think any other consumer in the world can do it.
Which markets are you looking forward to?
We are already present in markets across Uttar Pradesh, Maharashtra, Punjab, Himachal Pradesh, and Goa. We see ourselves adding some more markets in North India and South India to our play over the next two or three years.
We have identified the 48 locations. If we’re able to get to all of these 48 locations by even 2030, we'll consider ourselves to have done quite a good job.
We have sold 12 million square feet [of land] and have another 30 msf under active development. We plan to grow at a CAGR of 25 per cent. Our annual revenue target is Rs 10,000 crore by FY30.
What are your plans to raise capital or have an initial public offering (IPO)?
Capital raising is an ongoing exercise. We keep having multiple alliances as and when needed, and we’ll probably keep exploring that in the future as well. We are a young company, and we have some path to cover. Someday, we may even look at an IPO.
You forayed into hospitality and then vertical real estate. What’s the strategy?
It’s the outcome of huge belief in the Indian retail consumer, technology, and understanding and utilisation of land and disruption.
In land, we brought disruption to the asset class. What we are doing in vertical real estate is going to bring a substantial disruption to that asset class. What we are doing on the hospitality side again is very differentiated and niche.
We believe that our offerings will be a cut above the market. Our buyers will be people who have the desire and the ability to pay a slight premium for that kind of differentiated product. Technology and governance will be at the fulcrum of whatever we do.
What's the average size of plots that you have sold?
The average ticket size this year will be close to ₹80 lakh. It was probably closer to ₹12 lakh the year we started, which was our Dapoli project. Area-wise, it is around 1,500 square feet.
Who are your buyers?
Our product ranges from ₹25 lakh to ₹5 crore, depending on size and location. The majority of our customers are salaried professionals (45 per cent, largely CEOs and CXOs), entrepreneurs, celebrities and independent professionals.
Less than 10 per cent of our buyers take a loan. People have long-term money, which is why they are not taking loans.
The last four or five years have seen a 25-30 per cent compounding return every year. But that's not the way we ever advise people to buy land. The compounding return in India so far has been 18-20 per cent over a block of 10 years.
Our average ticket size now is in excess of ₹80 lakh.
Do you see momentum in buying land, given the recent moderation in residential sales velocity?
There is no slowdown for a good product. We have launched three new assets in different states in the last five months, and 80-90 per cent of them were sold out within a month.
When we started working on land as an asset class, it was less than 3 per cent of the overall real estate market, but people who were putting money in real estate for investment were probably more than 30-35 per cent.
There is a huge demand for land as an asset class. As the acceptance of the way we do business sets in, as the brand recognition increases, and more and more of our projects get delivered, the confidence in buying our branded plotted land will only increase.
How do you make your market-entry strategy?
We did a lot of research between 2021 and 2023 and identified 48 locations across India. In these 48 locations, both the state and the central government have publicly announced massive infrastructure projects, and the economic growth of these locations is ahead of the national average.
Of these 48 locations, we are present in about 13 of them today. We'll probably keep expanding this list as we go forward.
The idea is always to be at places where infrastructure development is substantially going to change the trajectory of the location. We are following the infra boom in India.
