Tag Archives: Boom in Indian real estate

Godrej Properties saw sales bookings of Rs 22,500 crore in FY24, an 84% increase from the previous year

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Due to rising housing demand, Mumbai-based real estate company Godrej Properties reported an 84% year-over-year increase in sales bookings to a record of Rs 22,500 crore. 

Due to rising housing demand, Mumbai-based real estate company Godrej Properties reported an 84% year-over-year increase in sales bookings to a record Rs 22,500 crore on April 9, according to a regulatory filing from the business. 

The booking value increased by 135% to over Rs 9,500 crore in the fourth quarter of FY24, and by 84% to over Rs 22,500 crore in the full year. 

GPL surpassed its booking value guidance by 161% for FY24 thanks to an improved project mix, volume growth of 31% to 20 million square feet, and year-over-year improvements. The company sales volume increased by 56% to 8.17 million square feet in Q4FY24.  

Godrej Properties said in a regulatory filing that the company’s sales for the fourth quarter of the previous fiscal year and the entire year 2023-24 were the highest they have ever been.  

“This marks the greatest annual sales any publicly traded Indian real estate developer  has ever disclosed.” The company claims was achieved by selling 14,310 homes totaling 20 million square feet. 

Superlative customer demand propelled sales in a few significant new project launches. According to the statement, Godrej Reserve in MMR and Godrej Zenith in NCR had booking values of over Rs 3,000 crore and Rs 2,690 crore, respectively. 

Four projects in FY24 achieved over Rs 2,000 crore in booking value, including Godrej Tropical Isle in Q2 and Godrej Aristocrat in Q3. In FY 24, GPL’s booking in the NCR increased by 18% to exceed Rs 10,000 crore, while in the MMR, they increased by 114% to exceed Rs 6,500 crore. 

“The scale-up we have accomplished over the last years fills us with great satisfaction. Our annual bookings in FY22 are not as high as the sales bookings of over Rs 9,500 crore in Q4FY24. In FY24, we saw an 84% increase in bookings, totaling more than Rs 22,500 crore. Godrej Properties MD and CEO, Gaurav Pandey, expressed his satisfaction that the company’s sales growth was driven by a strong 31% increase in volume and an improving project mix.  

Along with its recent entry into the Hyderabad market, the company will have an even stronger launch pipeline for the current year. 

In FY24, land deals will total 3,000 acres as developers purchase real estate

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Aiming to maintain the launch momentum, real estate developers in India expect land deals to reach 3,000 acres in FY24, up 59% from the previous year. 

Anarock, a property consultant, provided data indicating that homes sold for 2,258 acres in the first nine months of FY24. Anecdotal evidence and exchange filings from listed developers that Businessline tracks suggest that the momentum in land acquisition has continued, with the possibility of another 600-700 acres added this quarter. 

For example, Godrej Properties went on a purchasing binge in the March quarter, spending over Rs 400 crore on over 15 acres in Hyderabad and Rs 506 crore on a 6.5-acre plot of land in Noida. In a joint venture, it will develop a 62-acre township in Bengaluru. Mahindra Lifespace recently purchased a 9.4-acre plot of land in Bengaluru.

The managing director and co-head of Motilal Oswal Alternates, Saurabh Rathi, claims that both listed and unlisted players have been very busy. The availability of land parcels from corporations, the government, and other landowners, in addition to developers, has increased transactions, he said, particularly in the Delhi-National Capital Region and the Mumbai Metropolitan Area. In Gurgaon alone, land deals totaling more than Rs 3,000 crore have concluded in the past two years.  

According to Anarock’s data, the two main metropolitan areas saw the most transactions, with Bengaluru and Hyderabad, two of the real estate hotspots, trailing closely behind. 

From light to heavy assets 

Since the middle of 2022, there has been a shift toward land acquisitions, according to Rathi. As they pursued an asset-light model, developers joined joint development projects in 2019-2021 and the first few months of 2022. While smaller developers faced project delays because of inadequate funding, landowners sought to make money from their real estate holdings. 

Developers are turning to carry out full buyouts or purchase their former development partners, according to Rathi. 

While the new supply was at 4.5 lakh units, an all-time high of 5.3 lakh were sold in 2023. Players in real estate are building up their land banks in anticipation of volumes. The difference in supply and demand has fueled an increase in prices. 

Land availability

More land is now available. To generate revenue, corporations are selling non-core land assets. For example, last year Bombay Dyeing, owned by Nusli Wadia, sold a 22-acre plot of land in the heart of Mumbai for Rs 5,200 crores to a division of Sumitomo Realty. Runwal Developers paid Rs 726 crore to Kansai Nerolac in December for a 4.13-acre plot in Lower Parcel. It had previously received Rs655 crore for the dale of a 24-acre Thane plot to the house of Hiranandani. 

Local state authorities, like the CIDCO in Maharashtra and the Haryana State Industrial and Infrastructure Development Corporation, regularly auction plots for residential and commercial use.  

The extraordinary demand for land, says Rathi, has driven up prices. The price per acre has increased by 50-60% in Pune and MMR over the past two years, while land prices in Hyderabad have doubled. 

Compared to two years ago, when the transaction’s value was projected to be between Rs 25,000 and 30,000 crore, he now places it between Rs 35,000 and 40,000 crore. 

Property prices in this category are among the highest in India.

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India moved up eighteen places to take 14th place in the third quarter of 2023 on Knight Frank’s global house price index. The nation’s home prices rose 5.9% annually, creating a notable upward momentum.

In September 2023, the average annual growth rate for home prices in the 56 markets that compose Knight Frank’s Global House Price Index was 3.5%. The previous quarter saw a 2.2% increase in worldwide home prices. 

According to Knight Frank, India’s steady economic growth is the reason behind the country’s rising residential market despite obstacles like increasing home loan rates and inflationary pressures. State and federal governments offered assistance during the pandemic, which sparked the market. 

As per Shishir Baijal, CMD of Knight Frank India, “strong internal economic fundamentals, rising aspirational qualities of residential real estate, and an elevated interest cost environment brought on by elevated levels of inflation are driving heightened demand among homebuyers in prominent residential markets within the country.”

Emerging residential hubs in India’s urban centers are made possible by the increased momentum infrastructure development is receiving from the country’s increasing urbanization, according to Bajijal.  

The Indian housing market has been strong despite price increases. Compared to 3.65 lakh units in 2022, as many as 3.49 lakh units were sold in the top 7 cities by the end of the third quarter of 2023. 

At the same time, the total sales value of the sold housing stock increased marginally to Rs 3.48 lakh crore. The value of all residential property sales in the first nine months of 2023 is already 7% more than the entire year of 2022. 

After a five-to-six-year period of stagnation, real estate value began to decline in 2013. It was a period of tepid demand. But after COVID, we saw a significant resurgence in demand that exceeded the previous peaks, according to Poulomi Estates MD Prashant Rao.

Pent-up demand, the need to upgrade, and a willingness to pay for newer features were key factors driving up property prices. Property prices also rose due to infrastructure development and improvements in the economic environment. Even though real estate prices increased dramatically across the nation, Hyderabad consistently outperformed other top cities year over year. It’s since the city has seen an increase in corporations moving their headquarters there. We anticipate this trend continuing. 

The first quarter of 202 saw Turkey at the top of the rankings. With an annual growth rate of 89.2%, this is another year of record growth. The top five rankings belong to countries in southeast Europe, including Greece (14%), Croatia (13.7%), and North Macedonia (11%). 

With 6.3% annual growth, Japan leads the Asia-Pacific region, followed by India with 5.9%.

Given the rising costs for mortgage borrowers, the resilience of global house prices is surprising; however, market supports include solid savings, pay settlements above inflation, and a shortage of stock available for purchase. The main problem facing the housing markets in 2024 will continue to be low market liquidity, with sales volumes falling by up to 25% from their recent peaks. “Only a move toward lower interest rates will boost sales activity,” stated Liam Bailey, Knight Frank’s global head of research.