Demand for residential properties remains extremely strong across India’s major cities, yet the rampant euphoria witnessed over the last few years appears to be slightly tempering, as noted by Pirojsha Godrej, the executive chairperson of Godrej Properties. The real estate developer has established itself as one of the market leaders, recently becoming the largest listed realty firm based on sales bookings, with over Rs 28,000 crore of properties sold.
Godrej stated emphatically, "Am I seeing a slowdown in demand? The answer is 'No'. Because we have seen Rs 500 crore plus sales in our new housing project launches across five different cities during the December quarter. That to me is pretty indicative of a very strong housing market." He emphasized the strong performance of the housing market across the four major regions: North, South, West, and East India.
Although Godrej acknowledged the sustenance of high demand, he pointed out the current state of the market: “I would say some of the euphoria is perhaps mellowing down a little bit, particularly in Delhi-NCR... It has settledinto a more sort of standard strong market.” He indicated how the fervor seen 6 to 12 months ago seems to have cooled, yet overall demand is still solid.
The third quarter of the fiscal year highlighted impressive figures, with Godrej Properties achieving sales exceeding Rs 500 crore from new launches spanning Mumbai, Bengaluru, Gurugram, Pune, and Kolkata. Godrej expressed pride, saying, "This is perhaps for the first time any developer in the country has seen such a positive response from new launches across so many cities."
Nonetheless, trends from the broader market point to signs of slowing growth. Vipul Roongta, the MD and CEO of HDFC Capital Advisors, remarked on the stagnation of housing prices, noting, “Clearly the euphoria, which was there say maybe a year, year and a half back, related to increase in prices is no longer there... regardless of segment or brand.”
Data from real estate firm PropEquity indicated a 9% drop in housing sales last year across nine premier cities, and Anarock reported a notable 4% fall across seven major cities. Despite these setbacks, many listed developers, such as Godrej Properties, are witnessing healthy pre-sales figures, reflecting consumer preference shifting toward reputable brands.
Godrej Properties recently revealed its investor presentation, stating, "Highest ever booking value and area sold achieved by any listed real estate developer... booking value grew 69 percent to Rs 28,800 crore from the sale of 26.38 million square feet of area,” reflecting significant volume growth of approximately 54 percent. The Delhi-NCR market led the charge with maximum pre-sales last calendar year, tallying Rs 9,936 crore, followed closely by Mumbai Metropolitan Region at Rs 9,177 crore and Bengaluru at Rs 5,303 crore.
Pirojsha Godrej expressed confidence about meeting this fiscal year’s sales bookings target of Rs 27,000 crore, up from Rs 22,527 crore the year before. By the end of the first nine months of the fiscal year, pre-sales reached Rs 19,281 crore compared to Rs 13,008 crore during the same period the year prior.
To maintain this growth momentum, Godrej Properties has acquired 12 land parcels during the April-December period of this year, aiming to develop housing projects valued at Rs 23,450 crore. Pirojsha mentioned their intention to continue purchasing more land this quarter as the company seeks to bolster its portfolio amid sustained demand. He noted, “We raised Rs 6,000 crore through Qualified Institutional Placement (QIP) during the December quarter. This fundraising has solidified our balance sheet and enhanced our capability to invest and grow.”
The company maintains significant footholds in the group housing segment across regions like MMR, Pune, Delhi-NCR, and Bengaluru, and recently entered the Hyderabad market. Not stopping there, Godrej Properties has also ventured toward tier II cities, anticipating more opportunities for plotted developments.
Overall, with one eye on the current market status, Godrej Properties is strategically positioned to navigate both challenges and opportunities. While past highs may be giving way to steadier growth, confidence from leadership indicates readiness to tackle the future head-on, ensuring the company's commitment to driving real estate forward remains unwavering.