Most of the real-estate players are relying on new launches as well as the delayed ones expected in the second half to meet their guidance for the current financial year as sales have been on the muted side in the first half due to approval-related issues and low inventory levels.
There is very little unsold inventory with developers to maintain the pre-sales run rate achieved in the last fiscal or meet guidance for the current fiscal, HSBC Research said in a note on Thursday.
With the 2024 election season over, the managements of companies remain optimistic on the launch pipeline in the second half of the current fiscal and expect receding risk of project-approval issues, especially in areas like Mumbai.
Launches in the top seven markets — Mumbai Metropolitan Region, Gurugram, Noida, Bengaluru, Hyderabad, Pune, and Chennai — in the first seven months of the fiscal were down 5% to 322 million square feet, according to an Antique Stock Broking Ltd.'s report on real estate.
Hyderabad and Pune saw a drop of 50% and 29% respectively in new launches during the period, while Gurugram witnessed a 350% jump.
Prestige Estates Projects Ltd., which is expected to achieve 71% of its guidance in the second half, is optimistic in meeting its guidance. In the fourth quarter, the company will be launching projects from Northwest, KG Marg, Sector 150 and Rock Cliff, which will add up to the Rs 24,000–25,000-crore guidance.
The management said approvals had been slow because of the elections, but they should start moving normally again.
DLF Ltd. indicated that it has a strong launch pipeline for the second half and is confident of touching their pre-sales guidance of Rs 17,500 crore.
Brigade Enterprises Ltd. expects a higher proportion of pre-sales to come from new launches and if these launches get delayed, the second-half numbers will be impacted.
Sobha Ltd. launched only one project of 0.5 million sq. ft, but has a strong pipeline of 19.3 million sq. ft of residential projects across eight cities and 18 projects, which can be launched in four–six quarters.
In the second half, the company expects to launch an additional 5.5 million sq. ft, taking the yearly launches to about 9 million sq. ft across four projects in Bengaluru.
Recent Fundraises In Focus
Developers utilised about 34% of the collections towards land-related capital expenditure in the first half of the fiscal as compared with 32% during the same period in the last fiscal and 29% in fiscal 2023, Nuvama Research said in its Q2 FY25 report on the real estate sector.
"With significant financial firepower available with developers post the fundraise, we reckon business development shall remain robust over the next six–eight quarters," it added.
Some of these companies include Oberoi Realty Ltd., which is planning to raise Rs 6,000 crore of capital to buy new large land parcels and accelerate growth opportunities.
Godrej Properties Ltd. is also set to raise Rs 6,000 crore with the intention of capitalising on the current market opportunities and future growth prospects.