From Prestige to Sobha, listed realty firms post best-ever quarterly sales

Buoyed by strong pent-up demand and cuts in levies by governments, listed real estate companies saw record sales in the December quarter.

Bengaluru-based Prestige Estates, Brigade Enterprises, and Sobha posted best ever quarterly sales in October-December.

During the quarter, Prestige racked up sales of Rs 2,026 crore, up 80 per cent quarter-on-quarter and 55 per cent year-on-year (YoY).

An area of 2.98 million square feet (sq ft) was sold with a realisation of Rs 6,790 per sq ft. It, however, posted a 59 per cent YoY decline in its consolidated net profit at Rs 87.8 crore.

“On the back of our scale, efficiency, and unmatched service, we are witnessing strong traction across our business segments. For example, the record sales were backed by the strong response to our newly launched projects,” said Irfan Razack, chairman, Prestige.

With debt under control for Prestige, analysts say the worst is over for the company while it is planning to sell a substantial portion of annuity assets to Blackstone and make the balance sheet debt-free.

Brigade Enterprises reported its highest ever presales of 1.53 million square feet, valued at Rs 923 crore, during the third quarter. Its revenues went up 103 per cent on a sequential basis. The company reported a net consolidated loss of Rs 21.4 crore during the quarter.

“We witnessed resilience across all verticals of our business during the quarter, with the residential segment taking the lead. We expect the office business to gain momentum in the coming quarters as enquiries are building up and our office rental collection is stable. The retail business is back to 70 per cent of its pre-Covid levels and will scale up from here and all efforts are being made to improve the hospitality business,” said M R Jaishankar, chairman and managing director, Brigade Enterprises.

Experts say strong sales will continue in the coming months.

“Brigade’s residential sales have seen a scale-up since FY20, owing to right pricing and because new launches were city-centric with an average ticket size of Rs 1.2 crore. Given the rich launch pipeline and stable Bengaluru market (high affordability), we believe momentum in pre-sales will sustain,” according to Elara Securities.

J C Sharma, vice-chairman and managing director of Sobha, said going by the number of enquiries crossing the pre-Covid levels and a healthy number of them resulting in sales, the trend was sustainable.

Sobha posted its best ever quarterly sales volume of 1.13 million sq ft, valued at Rs 880 crore, with an average price realisation of Rs 7,830 per square feet, the highest in six quarters.

The volume and value of sales during the quarter were up by 6 per cent and 22 per cent, respectively, over the third quarter of FY20.

Its consolidated profit stood at Rs 21 crore, a 24 per cent rise against the second quarter, but a 72 per cent YoY decline.

In Mumbai, Oberoi Realty’s revenues went up 56 per cent at Rs 837.57 crore in the third quarter against Rs 536.53 crore in the corresponding quarter a year ago.

“The quarter saw a convergence of multiple positive factors, resulting in our nine-month FY21 booking values surpassing the FY20 numbers. Changing consumer behaviour like homes to live in them instead of perennially waiting for better deals, statutory benefits provided by the state government, the economic stimulus provided by the Central government, and low interest rates have all contributed towards our performance,” said Vikas Oberoi, chairman and managing director, Oberoi Realty.

Though Godrej Properties saw a 70 per cent decline in net profit in the third quarter and its income fell 38 per cent, the quarter witnessed booking value growth of 25 per cent to Rs 1,488 crore and booking volume growth of 51 per cent to 2.4 million square feet.

“Real estate has recovered from the initial impact of the pandemic. Government action to reduce stamp duties and premiums in Maharashtra, combined with a push towards home ownership as a result of the pandemic, has helped drive a turnaround in sentiment towards residential real estate,” said Pirojsha Godrej, executive chairman, Godrej Properties.