Ritika Dangemoneycontrol.com
Demand for commercial property in Mumbai is looking up, but demand for residential property continues to be weak, Mohit Malhotra, Executive Director, Godrej Properties, told moneycontrol.com in a telephonic interview.
Malhotra feels that for buyers to start looking for homes, interest rates need to fall to 9 percent.
Following is the transcript of the interview.
Q: What's your outlook on the Mumbai property market-residential and commercial. How soon do you see a demand recovery?
Our commercial business is doing very well. The sentiment has improved over the past few months. We have sees a good traction both from investors as well as from consumers. Residential business, however, is tough right now.
The trend that we are observing is that only quality developers are now able to sell apartments. Some smaller companies are partnering with bigger companies, forming joint ventures, to push sales. For others, there is a lot of wait-and-watch taking place. But the environment for residential homes is a very tough one.
Q: RBI and even banks say developers need to drop rates and clear inventory. What is your view on this? How many months of unsold inventory is your company carrying?
We at Godrej have no issues with inventory. In fact our Godrej Prime project logged the highest sales ever in Q1. Whatever the inventory we currently hold, we are very comfortable with it.
Furthermore, our inventory is also a matter of choice. It is by choice that we have the inventory that we do, because we try to gain price advantage by selling a few apartments after the project's launch date.
Q: What is the progress on your projects like Central, Platinum, City, Serenity, Palms?
Godrej Central and Serenity are in the advanced stages of construction. All towers in this project have already been constructed.
We are awaiting approvals from the government on Godrej City while Platinum is at its delivery stage.
We will also be launching a new project in Badlapur. This will be in the affordable segment of residential apartments.
Q: We understand the debt on your books is close to Rs 3000 crore. Are you comfortable with this level or do you intend to pare it. Do you have any plans to raise capital?
Yes, we do have plans to reduce our debt but it is all in the works currently.
Q: The RBI will be coming out with its policy action on Tuesday. What do you expect Governor Rajan to deliver?
I can't give a figure in terms of a rate but we direly need the RBI and the government to play a proactive role in reviving the realty sector. It is a sector that employs a huge number of labourers and hence has a huge impact on the economy.
The rate of interest too needs to come down as people are still in a wait and watch mode. If the home loan interest rates come down to 9 percent, that's when we will see demand come in meaningfully.
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