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Prestige Estates Eyes New Launches After Two Dead Quarters

Prestige Estates to launch new projects in third and fourth quarters.



Pigeons fly as commercial buildings stand in the distance in the Nariman Point area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
Pigeons fly as commercial buildings stand in the distance in the Nariman Point area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Prestige Estate Projects Ltd. is betting on a revival in sales during the ongoing festive season as the property developer plans new launches after two-quarters lull, largely due to the new housing regulation.

Though the Real Estate Regulation Act process was seamless, there tends to be some lag in getting registration certification for new projects, leading to delays in launches, said Irfan Razack, chairman and managing director of the Bengaluru-based company in an interview with BloombergQuint.

RERA seeks to improve transparency and accountability in India's cash-driven real estate sector. The law makes it mandatory for developers to register projects and get approvals before starting sales. It also prevents builders from diverting funds from one project to another.

Expecting a revival, Prestige Estates targets Rs 3,000 crore worth of sales in the rest of the year to March. The third quarter is likely to see new product launches in Bangalore, Chennai and Hyderabad, followed by nearly four big launches in the fourth quarter, said Razack.

The company, largely focused on developing projects in southern cities like Bengaluru, Chennai, Hyderabad, Kochi and Mangalore, has a commercial portfolio the provides rental revenue. Rentals have “hardened” and the market is bullish for now, with Bangalore leading the space, Razack said. The emergence of co-working spaces and ballooning online retail sector have contributed to growing rentals across cities, he said.

Our current income from rentals is around Rs 700 crore and we hope to clock Rs 1,200 crore in FY18.
Irfan Razack, Chairman, and Managing Director, Prestige Estate

Amid speculation over a possible investment by Canadian pension fund CDPQ, Razack said there have been no such talks. Offers for stake sale and investments keep pouring in, but there have been no concrete developments, he said.

The company, which reported a revenue of Rs 1,279 crore in three months to June, is looking at how to generate more capital and scale up its operations, Razack said. The next eight to 10 weeks are crucial for Prestige Estates as it inches towards the launch of two of its major hospitality projects, Conrad and Sheraton.

The company will also look at affordable housing “as the space has become increasingly potent”, he said.