Housing sales as well as enquiries from prospective homebuyers, which were badly hit during April-June due to the COVID-19 pandemic, have started to revive gradually and end-user demand is likely to strengthen in coming months, a top official of Mahindra Lifespace said on Thursday.
In an interview with PTI, Mahindra Lifespace Developers MD & CEO Arvind Subramanian said the company did not witness much cancellation of apartments booked by customers as widely feared after the outbreak of COVID-19 and subsequent lockdown.
"Just like the economy, businesses were severely challenged in the first quarter of this fiscal year. There was almost a standstill in housing sales and construction activities," he said.
However, Subramanian said, "The good news is that our existing customers are committed to their bookings. We are not seeing a large cancellation which could have been one of the outcomes."
He said the sales bookings and enquiries from customers in July increased as compared to the past three months, and this could be because of pent-up demand or new buyers looking for security of home ownership amid the pandemic.
Subramanian expects demand to strengthen gradually in the coming months and ruled out any V-shaped recovery because of a lot of uncertainty.
He said interest from non-resident Indians (NRIs) has increased, driven by favourable exchange rate and the need for safe environment in a gated housing society for their elderly parent.
Mahindra Lifespace Developers, which is a real estate arm of business conglomerate Mahindra group, plans to launch one housing project in the Mumbai Metropolitan Region (MMR) in September, he said.
Subramanian added that the company was in advance negotiation with landowners for either outright purchase of land or formation of joint venture to develop housing projects.
The expectations of land owners have softened after the outbreak of COVID-19, he said.
Subramanian said the company was also looking to set up an investment platform for the development of mid-income housing projects. It already has one platform with HDFC Capital for affordable housing projects.
The construction work has started in all projects but the number of workers available at its sites is just around 20 per cent compared to the pre-COVID-19 level.
Subramanian said the company has a strong balance sheet with low debt and healthy cash position. "This is the time for stronger players to be patient and conserve resources."
Asked about the industrial parks vertical, he said the growth prospects look encouraging with India being considered as manufacturing base amid geo-political tensions between the US and China.
Subramanian said the enquiries for the industrial space have also increased and hoped to convert them in the next 6-12 months.
To encash this opportunity, he said the company would explore setting up more industrial and warehousing parks.
Mahindra Lifespace Developers on Wednesday reported a consolidated net loss of Rs 20.5 crore for the quarter ended June on lower revenue amid the coronavirus pandemic.
Its net profit stood at Rs 13.11 crore in the year-ago period.
Total income fell drastically to Rs 22.09 crore in the first quarter of 2020-21, compared with Rs 120.30 crore in the corresponding period of the previous year, according to a regulatory filing.
The company achieved sales of Rs 39 crore (0.08 million sq ft) in residential business and attained collections of Rs 72 crore.
It delivered 28 units to customers across various projects.
Mahindra Lifespaces leased 2.5 acres for Rs 8 crore in the integrated cities and industrial clusters business.
Subramanian did not give any guidance regarding sales bookings, collections and deliveries for the current financial year.