‘Residential recovery has been faster post second wave’
Premium- Housing is at the start of a multi-year bull run both in prices and volume, says Macrotech MD and CEO Abhishek Lodha
Macrotech Developers Ltd, which operates under the ‘Lodha’ brand, got listed on the stock exchange in April after raising ₹2,500-crore through an initial public offering, just before the second wave of the pandemic unfolded. The Mumbai-based developer, subject to no further covid-led disruptions is on track to meet its pre-sales guidance of ₹9000 crore this year, it said, and is betting big on the residential and industrial real estate space. In an interview, Macrotech MD and CEO Abhishek Lodha spoke about business recovery post second wave, luxury housing, debt reduction target and more. Edited excerpts:
Was the impact on business of the second wave different from 2020?
AL: The June quarter was an interesting period. The country suffered a very challenging time and the second wave wiped off most activities except for construction to some extent. I think this time around, the organized sector came back very strongly. For homebuyers from the organized or corporate sector, there was not much of a financial hit. Even in June, when everything hadn’t opened up, business was returning to normal. There is a start different from last year, when the three months (April-May) were wiped out and we didn’t know what hit us.
How has the housing sector responded to the disruption this year?
I think, fundamentally, the demand for housing remains strong. We saw strong sales in June and home loan rates continue to be attractive. We continued to spend money on construction even in April and May. In the January-March quarter this year, there was recovery after the first wave, and we did about ₹650-700 crore of monthly sales. If you see, we clocked about ₹650 crore of sales in June right after the second wave. So, the rebound has been faster in the residential sector this time. The supply and demand in the residential sector are more balanced now, and homebuyers realize that prices are starting to rise and it’s a good time to buy.
How do you compare the performance of the mid-market and premium housing segments?
We know that the affordable and mid-market segment have been the resilient part of the business for a while now, when the residential segment was going through a low. That momentum continues to be. About 50% of our sales is from this segment. The premium segment, however, has surprised us. Even in June, as we were recovering from the second wave, this segment contributed well.
MINT PREMIUM
See All
The premium homebuyer was circumspect in the last few years, thinking that rental yields are low and expecting prices would fall. The fact is good quality housing in premium locations are in short supply. Working professionals from the organized sectors have surplus savings and their other big expenses such as international travel and holidays has stopped. Home has become the focus in our lives. Across the globe, housing is at an all-time high.
India has just started and there is room for significant growth. Housing is at the start of a multi-year bull run both in prices and volume.
What’s the debt reduction status?
We continue to pare debt and reduced our net debt by ₹3641 crore in the June quarter. The current debt levels are at ₹12,435 crore (as against ₹16,076 crore as on 31 March 2021). We are on track to reduce it to below ₹10,000 crore by March 2022. The cost of debt too has gone down.
What does your project pipeline look like?
In the June quarter, we signed four joint development agreements in Mumbai Metropolitan Region (MMR) and Pune, expanding our residential reach in different micro-markets. The projects are across 3.3 million sq ft with an estimated sales value of around ₹3500 crore. A couple of these projects are expected to be launched in 2021-22.
We also see digital infrastructure (warehousing, data centres and industrial parks) as a big opportunity and a number of ongoing discussions around our industrial park at Palava strengthens our belief in this space. We have been approached by long term investors for a partnership to capture this opportunity.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!