Real estate majors to miss FY12 sales targets

There might be a glimmer of recovery in auto sales as FY12 draws to a close, but not so for residential developers. Lackluster demand has tripped up the top real-estate companies and they have failed to meet the full year targets, reports CNBC-TV18's Priyanka Gosh.

Muddling their way through stagnant sales, high debt, high interest costs and rising input costs, developers have somehow avoided a crash and all those predictions about an imminent price reduction in 2011 have failed to come true. However, top notch companies have failed to grow their sales numbers in FY12, and are painting a dull picture for the upcoming results season. DLF is expected to report sales of 10 million square feet, just like in FY11. Oberoi Realty is expected to end the year with sales of almost 7 million square feet, against the previous year's 6.4 million square feet. Unitech's sales are seen at 7.5 million square feet, against 9 million square feet in FY11. JP Infratech's sales are expected to drop 22%. Experts say it might be time developers in Mumbai and Delhi took a leaf out of Bangalore's book. Bangalore has emerged the strongest performing market in FY12, backed by a strong demand and realistic price escalations of about 15%. Estimates peg Sobha Developers to have sold 3.2 million square feet and Prestige Estates to have sold over 3.6 million square feet. So FY13 promises to have new strategies. The market is rife with unconfirmed reports that several behind the door negotiations are going on, especially with bulk buyers. But beyond that, the industry has stopped penciling in an outright price reduction. Some say that with all this talk of lower interest rates and easing inflation, buyers may look at a six months window before another wave of price hikes hit the market. Also watch the accompanying video..