Developers may increase prices with rising input costs: Oberoi Realty CMD

Oberoi Realty posted a 63 per cent jump in net profit in Q3FY22. The company is gearing up to launch projects and planning to foray into new markets. Vikas Oberoi, chairman and managing director of the company, talks to Raghavendra Kamath on the company’s plans and prospects.

What do you think are the reasons for good growth in profits and sales in Q3? How does FY23 look like in terms of demand for apartments and sales?

Q3FY22 looked promising as volumes remained strong across all our projects and the new launch at Goregaon received an overwhelming response. Growth came despite the stamp duty waiver ending and we can see a supply-side consolidation along with a shift in consumer preference towards established players clearly playing out.

The market is growing towards thoughtfully designed homes and well-equipped communities that meet the lifestyles of modern living. With the pandemic easing, the retail business is reviving as more people feel safer to step out. In the commercial segment, leasing is gradually picking up as people return to their workplaces and a favourable global outlook continues to drive occupancy in India.

Do you think you will be able to sustain sales, given the third wave, and what are you doing to boost them?

It looks like there will be no further disruption due to the pandemic. Most of the countries have already begun to return to “normal” and adapt to life accordingly. We feel confident that all our projects will continue to perform well as the demand outlook looks strong and our product is well-placed to capitalise on this.

When do you expect the occupation certificate for your Three Sixty West project in Worli?

We believe 2022 will be the year for Three Sixty West. We have applied for the certificate and are hoping to receive it in 20 days. The building has been completed and will be one of its kind in India. There is a lot of interest in the project from the market and we see a healthy pipeline of transactions in the coming quarters.

When are you planning to launch the Thane project and what is the reason for delay?

Our focus is to get our plans aligned and prepare for the project launch. We have been responsive to market conditions and have modified the plans to suit the changing consumer behaviour after the pandemic. Our endeavour is to launch the project this quarter or in the next.

Consultants said raw material and project costs had gone up by 9-13 per cent in the last one year. What has been your experience? Are you looking to increase prices in the near future?

We believe buyers are enjoying the pricing benefit. Our inventories in micro-markets like Goregaon, Borivali, Mulund, and Worli will soon near completion and we want to continue to focus on driving volumes. Nevertheless, in the future, developers may look at increasing prices with rising input costs. I feel this is the best time to buy your dream home.

What is the status of your new commercial projects?

We are developing Commerz III, which is a landmark project and a large part of that is already pre-leased. We are strongly committed to this project and look forward to completing it next year. Construction on the Borivali mall is also expected to complete in this calendar year and we will get it operational next year.

Oberoi Realty was planning to venture into other cities for commercial projects. Why could it not launch anything so far?
 

We are always open to exploring new markets across India. Currently, we are assessing different micro-markets in these cities and will look for expansion opportunities once we have all the boxes ticked. Delhi-NCR is one market that looks promising because of the demand and supply dynamics.