We classify affordable by size, not price; Plans to launch the affordable project in Bangalore in Q4FY21: Mohit Malhotra, Godrej Properties
Mohit Malhotra, Managing Director (MD) & Chief Executive Officer (CEO), Godrej Properties, talks about his growth expectation in 2021 amid the incentives being launched by state governments, expansion plans, pipeline projects and participation in affordable housing segment among others during an interview with Zee Business Executive Editor Swati Khandelwal
Mohit Malhotra, Managing Director (MD) & Chief Executive Officer (CEO), Godrej Properties, talks about his growth expectation in 2021 amid the incentives being launched by state governments, expansion plans, pipeline projects and participation in affordable housing segment among others during an interview with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Overall prospects are looking strong in 2021 and it seems that the year is likely to be a good one as compared to the last year. What are your plans in terms of expansion and also provide details of the new projects that are in pipeline? You have recently bought land parcels in Mumbai, Bengaluru and Faridabad. How do you plan to develop them?
A: We will be sticking to our strategy of being in the top four cities, i.e. NCR, Mumbai, Pune and Bangalore, will continue to be the main focus areas, where we would like to expand further. And, most of these cities we are in the leadership position but we feel, even in these cities, we can significantly increase market share. So, there is not much change, expansion plans will be in these cities only and as you have highlighted, we will continue to add projects in these cities.
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We have added a plotted development in Faridabad, it marked an entry into Faridabad market in NCR and it was a sell-out during the launch. During the launch, we sold almost 90% of the project. We have added group housing projects in Mumbai and Bangalore, these are mid-income projects and hopefully, in the next two-three quarters, we will be launching them also. The way the company is performing, the kind of sales we are doing and see the response from our customers. We are very optimistic and would like to add a lot more projects and gain into a lot more joint venture. And, even during the 2020 crisis, we continued to add new projects and, I think, in 2021 we would definitely like to add a lot more projects than before.
Q: What is the projection in terms of million squares, if you can give a sense, and the percentage in which additions can be seen? At the same time, the state governments are trying to push the real estate sector, for instance, stamp duty reduction in Maharashtra, has had an impact and are you getting any indications in form of incentives from other states?
A: The thing the Maharashtra government did both, the stamp duty reduction and now saving in approval in premiums, this has been a very positive step. If you have a look at Maharashtra, especially in Mumbai, it has the highest level of registration in Q3 in December. So, it brought back the demand in the sector.
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When real estate generates demand then it has a positive impact on all other industries and is the biggest employment generation sector for the economy. It also, helped the government to get a lot of revenues, which has helped them to fight COVID and do the development work. I think, it was a win-win strategy that Maharashtra government did and has seen positive results. I feel many other state governments will hopefully see the success of Maharashtra and try to replicate it. Overall, very-very positive step by the government. All of these things will definitely bring back the consumers in the market and I think that the buyers' sentiment in the real estate is in a positive zone now.
Q: Godrej has said, earlier, that it is also exploring in the affordable housing segment. What is your view there because Godrej is mainly seen as a premium housing company?
A: We are doing projects in affordable housing. We have classified affordable by size and not by price because, after a certain price, the business is not viable. But if you see our projects in Thane, we are developing a project which we are targeting affordable segment. In Mamurdi, Pune, we have launched a project, which is in the affordable segment. Even in Hinjewadi, we have launched projects in the affordable segment.
Hopefully, in Q4, we will launch a project in Bangalore, which will also be in the affordable segment. But as I said, this is affordable by sizes and the ticket size for the customer is very attractive, i.e. 2 bedrooms would be something like Rs 30-35 lakh or maybe Rs 40 lakhs and three bedrooms would be in Rs 60-70 lakh kind of segment. So, I think, we are quite bullish in that segment and will continue to focus there.
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