Prestige Estates has reported yet another strong operational quarter with total pre-sales up 21 percent YoY at 2.2 msf, aided by new launches of 2.8 msf in H1FY15. Total sales value has been up 21 percent at Rs 1290 crore, while total collections rose 31 percent at Rs 810 crore on a year-on-year basis.
With this, Prestige Estates has achieved 50 percent of its FY15 sales, collection and launch targets. The company has an extensive launch pipeline in Hyderabad, Cochin and Bengaluru and delivery schedule of 10 msf in the fourth quarter.
In an interview to CNBC-TV18, Irfan Razack, CMD, Prestige Estates, said the average realization stands at Rs 5,800 per sq ft against Rs 6,200 /sq ft on a quarter-on-quarter basis. The company had launched Leela Residences in the second quarter.
Though he did not revise the numbers, Razack is confident of surpassing Rs 5,000-crore sales guidance for FY15. The real estate firm is coming up with two launches in Bangalore and one in Kochi, which it expects to add to the topline soon.
Below is verbatim transcript of the interview:
Q: We don’t have details of what the average realisations have been this time around. Last quarter you did about Rs 6,200 per sq ft, what about this quarter?
A: This quarter the average realisation has been approximately Rs 5,800 per sq ft as against Rs 6,000 per sq ft in the previous quarter.
Q: Would you want to scale up your guidance at this juncture?
A: Whatever guidance we have given for this financial year, we stick to that but we are definitely going to surpass that.
Q: What is the view on the market, what can you tell us about the demand for real estate in your market as well as the chances of any price hikes or increased realisations?
A: The demand is still available. People need housing and this housing has to be targeted to an audience where it is required, where the need is.
Now with the change in the mood and change in the entire geopolitical system and change in the economy itself, this is sitting on a growth curve.
We have three launches that are going to get ready not in Bangalore but two in Hyderabad and one in Kochi, these are also going to give us quite a lot of revenue, topline.
With regards to pricing and realisation, looking at the entire scenario - the land prices have gone up very high and construction cost is also quite steep today. So the chance of price correcting itself once it is sensibly priced, there is no way that it will correct itself.
If I priced it wrong, if I padded up the price too much with a lot of speculative requirements from our side that will correct itself but if it is priced sensibly, there is no hope on whether the price will go down and whatever average realisations we are getting, we will still keep those and that will be the order of the day.
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