No new launches likely in current quarter: Prestige Estates

A: The launch guidance though we decided in the beginning of the year, with the advent of implementation of Real Estate Regulatory Authority (RERA) just around the corner, we felt it was better to be completely RERA compliant and launch any other new project. So, hence in that endeavour, the company took a decision that we are only going to sell the current inventory that is there with us and that is why the launches have not been that heavy. Having said that, even this current quarter there won’t be any new launch but last quarter should see a couple of launches, both in Bangalore and Chennai. However, then that will be where everything is compliant towards RERA and there won’t be any issues if the project is launched.

Having said that, I think company has done pretty well in terms of sales considering that they were only handling the current inventory that they had. If you look at the quarter-on-quarter (QoQ) sales, we have done Rs 757 crore worth of sale in this quarter, the quarter gone by and that is much higher than the previous quarter in the previous year. So, I believe that we are quite strong there and you rightly said the guidance is only 40 percent achieved and this quarter is not going to be that great considering the confusion that is there in the people’s minds.

Latha: Would you cut your guidance for new launches?

A: We will review because I believe the last quarter again will bounce back and if you see typically the last quarter of every financial year is where we have got the high jump and with the couple of launches that we have planned, those should take care of whatever shortfall that has happened in the current quarter and also because in this quarter, whatever we have not done, will get done in the following quarter because in the last couple of months, the customer has got total confusion in the mind and there is a lot of diversion and they have got much more important things to attend to.

They will come back -- definitely want to buy a home if they have the ability to and since the money has gone back into their bank accounts, they will come back with a bang and I look at the last quarter of the year to be fantastic. However, right now, the September quarter has done well. We will wait and watch how December quarter pans out.

Anuj: What about commercial real estate, how is that shaping up?

A: Commercial real estate has so far done extremely well. In fact we are in a situation where single digit vacancy is there, so that way I think we have done extremely well. We are trying hard to sort of complete the projects that are on-hand; we have got two retail projects, one in Mysore and other in Whitefield in Bangalore and the team is working hard to see how quickly they can complete it and start trading. We are also doing a couple of office buildings in CBD which we are now trying to complete and there is enough demand for leases for those buildings.

We are also working on several other tech parks which won’t happen in the next two quarters but will certainly happen in the next nine months. Having said that there is demand in the commercial segment; it goes unabated and that is a good sign because more demand means more jobs. We only are hoping that the demand will sustain and in the long-term pans out good for both, retail as well as residential.

Sonia: Your leasing volume target as well for the full year may not be achieved, you have only achieved a little over 20 percent in the first half and your total target is about 2 million square feet. Would you want to scale that down?

A: As I said, these four developments are -- we are just trying to get them ready because as far as we are concerned, leasing is not an issue, the only thing is we have to complete these projects and in case they don’t get ready before March, we will have to scale down the guidance. However, if it doesn’t happen in March, it obviously will happen in April.

So, it is question of a miss by about a month or two or a quarter maximum and that is what is going to happen. However, whatever we are now building is like pre-committed. It is already -- the leases are in place, the customers are in place but then the yield will start coming a little later because of the non-readiness of the development.

Latha: Is completion likely to get postponed because of problems with paying labour and labour not being available sometimes because they are as you say in queues?

A: Yes there is a problem with the smaller and medium contactors but fortunately working with the larger contractors, in fact I did call a few of my larger contractors when this thing happened and they told me we moved to systems like SAP and all of it and we opened accounts for all our labour and it was like a premonition as far as they were concerned.

I am happy to say that L&Ts and the JMCs of the world and NCCLs, these guys have already got bank accounts for the labours but there will be a lot of these daily wage earners and they have been affected and we have tried to see how the impact can be sort of minimalised. However, it is another month to go, I think after that things should settle down and I think it should be business as usual.