PremiumBENGALURU : The covid-19 pandemic in 2020 had caught India’s real estate sector in the worst stage of an ongoing slowdown. The recovery, surprisingly, was quick and the residential sector had started witnessing green shoots of revival until the second covid wave set in. Tata Realty and Infrastructure Ltd (TRIL) has postponed some of its project launches, suspended physical sales of homes and is confident about the long-term outlook on the sector. In an interview, TRIL managing director and chief executive officer Sanjay Dutt spoke about the demand for larger homes, bounceback in demand and the harsh impact of the second wave.
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Premium Premium How has TRIL tackled the onset of the second wave of covid-19?
About 20 of our projects (17 residential, 3 commercial office) across 15 cities are still going on, with 3,000 workers. We learnt a lesson last year and had (onsite) camps in place for them. Online sales are on, but physical sales have been closed in our sales experience centres, because movement of customers to visit sites or these centres has drastically come down. We are monitoring the situation closely across all cities because safety is paramount.
What’s been the impact on business so far?
I expect a shortfall in the June quarter in terms of sales, but it will still be higher than the June quarter of 2020. Though we are mainly looking at online sales for now, fortunately, we had about 2,000 high quality (sales) leads from customers in our existing projects, for which negotiations are going on. A digital campaign has also been launched for the June quarter. In our commercial office projects, no tenant vacated this year. We expect leasing activity to be slow this year. Also, some companies, after a year of lockdown, may not want to grow as much.
What kind of recovery did you see before the second wave hit?
Despite the disruption in the first few months last year, we embraced digitization at a rapid pace, which helped us a lot. By December, we had made up for the losses in the first two quarters and exceeded our targets. Our revenue for residential projects grew by over Rs200 crore in 2020-21, up 15% from the preceding year. We achieved our highest-ever sales last year and January-March was our best-performing quarter. Thirteen projects exceeded 100% of their sales targets. New sales were good and mostly in the ready inventory category. Collections were also very good, and we were able to reduce our debt and to bring down our cost of debt. We gave possession of 1,200 units to buyers last year.
What does TRIL’s launch pipeline in 2021-22 look like? Are you going ahead as per schedule?
We have 4-5 fresh project launches planned across regions in commercial and residential. We have been working from last year on bringing new projects to market as soon as possible, securing necessary approvals, but considering the renewed covid spike and its anticipated impact through the first half of FY22, we have shifted some launches to later in the year.
We have a 191-acre project (plots, villas) in partnership, next to the Bengaluru airport, that we are aiming to launch by Dussehra. There’s another 12-acre office project at Yeshwantpur in Bengaluru, in partnership with a Tata subsidiary company, which we will launch, subject to approvals. Early next year we will launch the second phase of Eureka Park, Noida, where we sold 800 units out of 1,000 in the first phase. There are two projects planned in Andheri (west) and Mulund (east) in Mumbai. Earlier we were looking at extended suburbs such as Boisar, but now we now looking for project developments within Mumbai city limits. There is also a 47-acre office project on Thane-Belapur Road with a private equity partner.
Given that our construction is on time, we will finish some of our ongoing projects and have good ready inventory for buyers. Our commercial office inventory is around 7.3 million sq. ft now and will reach 8 million by year-end.
What kind of homes have been selling well?
Among the real estate trends that are emerging is the need for a ‘wellness’ factor in residential projects. TRIL has been doing that for a while, but we will add a wellness quotient more actively to our projects and it is in line with what the Tatas have always thought of. Senior living friendly homes will also generate interest going forward, and we would add basic features to our projects on this front. We are also surprised that everybody wants bigger homes now, with additional study and workspaces. Thankfully, we didn't make very small homes other than in the affordable category. This is sort of reverse trend after everyone had started making compact homes. Very compact homes will have a limited market now.
In terms of Tata Housing’s projects, some of the best performing projects were luxury residences such as Primanti in Gurugram, Ariana Bhubaneshwar, Avenida Kolkata, Serein, Thane and Promont Bengaluru, as well as second-home projects such as Myst in Kasual and Prive in Lonavala.
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