Real estate developer Rustomjee's managing director Boman Irani in an interaction with Moneycontrol said that despite continuous warnings in the market about an ongoing slowdown in real estate sales, the data and feedback that he has received does not match up. Irani, also the president of the developers' lobby group CREDAI, added that in case of any slowdown, the company will instead go into an "overdrive" to consolidate its position.
He noted that if a slowdown in real estate sales manifests, non-capitalised developers may be in trouble, as some people may defer purchase decisions, while adding that the inventory level in markets such as the Mumbai Metropolitan Region, India's largest housing market, remains comfortable.
"We are looking at the current situation as an opportunity, and we don't see any slowdown in the market. Developers are continuously engaging with customers through various schemes and pricing discounts. And in case there is a slowdown, we will go into an overdrive in the market. Data reports that show a slowdown in sales are painting with a broad brush, as it does not capture data from various micro-markets. Before entering a market, we always undertake a dipstick survey, as we have done for our upcoming launch in Dombivali," Irani said during the interaction.
He said that the current inventory overhang—the time needed to sell existing inventory at current run rates assuming no new inventory is added—in Mumbai is at around 19 months, lower than the industry's "healthy" overhang levels of 24 months.
Irani added that narratives of a slowdown in the housing market tend to benefit speculators, as they can buy at lower prices. As for the company's projects across price points, Irani said that Rustomjee's premium project in Thane, with apartments listed at Rs 3.50 crore each, as well as a super-luxury project in Bandra (West), priced at more than Rs 15 crore per apartment, have both seen good sales volumes, with around 80 percent of the inventory sold out. In Mumbai, Irani said that the company has identified its ticket size "sweet spot" of around Rs 5.5 crore.
Rustomjee, which is listed on the stock exchanges as Keystone Realtors, is known for its dominance in the redevelopment market in Mumbai, both in the island city and now increasingly in the suburbs. Besides a greenfield project in Dombivali, the company plans to launch a redevelopment project in Bandra (East) during the ongoing quarter. Irani added that the focus in the ongoing quarter will be project completions, to drive more collections and revenue recognition.
For the quarter ended December 31, 2024, Rustomjee launched two redevelopment projects, one in Goregaon and the other in neighbouring Malad, which carry a total top line potential of around Rs 1,000 crore. At its plotted development project in Kasara, on the outskirts of Mumbai, the company has sold around 21 percent of the launched inventory, Irani said.
Besides Rustomjee, a number of developers, both Mumbai-based and otherwise, have now latched on to redevelopment as part of their growth plans in the city. The names include Raymond Realty, Macrotech (Lodha), Puravankara, Prestige Estates and Mahindra Lifespace Developers, among others. Irani, though, dismissed suggestions that its position in Mumbai's redevelopment market was being challenged, saying that the company has the edge of expertise in the redevelopment segment over others.
"It is always good to have a lot of developers in a market, as we have seen that property prices seem to appreciate as a result. As for redevelopment projects, we have the entire process set up to carry out a project, and we have taken less time to take a project from proposal to development agreement to launch than others. We can see in advance if there may be hitches in any project, because we have the depth of study in redevelopment," Irani said.
Unlike most other large Mumbai-based developers, the company has planned to largely stay in the Mumbai market for its business development activity, with some forays into the Pune market. Irani did not comment when asked if the company had identified a micro market in Pune, but said that it plans to be in the "aspirational" category there, with homes priced at Rs 2-4 crore each.
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