Expect to sell over 1.7m Sq ft TDR in Q3: HDIL

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS HDIL inclusion in MSCI Index to increase FII holding ALSO READ See latest News about HDIL See previous management interviews See what other Experts & Brokerages are saying about HDIL HDIL BSE | NSE 10/02/12 Are Mutual Funds betting on HDIL?

HDIL has sold 0.3 million square feet TDRs. In an exclusive interview with CNBC-TV18, Sarang Wadhawan of HDIL spoke on the latest development in the company.

Below is a verbatim transcript of the exclusive interview with Sarang Wadhawan on CNBC-TV18. Also watch the accompanying video.

Q: What exactly is your offer? At this point in time which piece of your transfer of development rights (TDR) are you selling in the city of Mumbai and what kind of prices are you expecting?

A: We are constantly generating TDR out of the airport scheme. This TDR is being generated out of the Kurla land where we are rehabilitating almost 25,000 families. This is one tranche of the TDR which is coming out, which is 300,000 square feet.

Q: What's the proximity to getting the deal done? By when do you expect the money coming in?

A: Last quarter, we sold almost 1.7 million odd square feet at Rs 2,500 square foot. This quarter also we expect TDR to sell approximately at the same levels or a little higher as we know that TDR prices have moved up substantially. From Rs 950 in March they are currently anywhere between Rs 2,500-2,600. So this is one part of that TDR sale.

Q: TDR is unique to Mumbai. What is your estimation on what TDR rate would be? We are talking about the Kurla area here it is Rs 2,500-2,750. Could it go to Rs 3,500-4,000? What do you see as we go into next quarter? Is there enough demand or the demand basically at this moment is that it will keep stable at Rs 2,500-2,750?

A: TDR market is dependent on the entire residential and commercial segment and the way the other segments move out. Residential segment has seen a huge upswing from March even the stamp duty data says that registrations have increased substantially almost by 90%. We have seen TDR prices from Rs 950 to Rs 2,500 and even in 2007 we had TDR at Rs 3,500. So you cannot speculate on that but I am sure that TDR prices will continuously move up from here.

Q: But precisely when they went to Rs 3,000, it appeared to kill the golden goose and demand for affordable housing fell sharply. Do you think if you go on to Rs 2,600, you are still sure realtors will buy and affordable housing will remain affordable?

A: Definitely. The way the intrinsic demand in the Mumbai system is there even for Maharashtra Housing and Area Development Authority (Mhada) when they opened 7,000 flats, they got 700,000 applications, that itself shows that the demand potential exist and the realtors are now buying more further TDR just to complete their ongoing projects and cash flows and so TDR definitely will keep on improving.