Real estate demand to remain buoyant in India, says Abhinandan Lodha

Lodha firm targets Rs 2,400 cr revenue in FY25

Demand for real estate, especially plotted land in India, will see a sharp rise as government investment in new roads, highways, and airports is encouraging developers and customers to invest in remote cities, said Abhinandan Lodha, Chairman of The House of Abhinandan Lodha.

As demand rises, the company, which is sitting on 700 acres of land for plotted development, is expected to end the current financial year (FY25) with a growth of 40 per cent on a year-on-year (Y-o-Y) basis with revenues of Rs 2,400 crore and earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs 1,300 crore.  Since 2021, the company has already delivered 150 acres of plotted land to its customers.

The group, which is currently building a luxury real estate brand in plotted land, is separate from Macrotech Developers - set up by billionaire Mangal Prabhat Lodha, currently the Minister of Tourism and Skill Development in the Maharashtra government. "Post Covid, we have witnessed a sharp increase in demand for plotted land that has encouraged us to invest in several projects across India including in Ayodhya, Goa, Shimla, Alibag, and Dapoli near Mumbai," said Lodha in an interview at his Mumbai office.

The company has identified 48 locations across India for development which are closer to world-class infrastructure development in progress. Of these potential sites, it already owns land in nine locations. “In UP, we saw the infrastructure development on the ground and the phenomenal amount of transformation that has taken place in the area which gave us the confidence to invest in the area,” Lodha said.

“As infrastructure improves and general wealth creation happens and housing is under-penetrated, we would see land prices appreciating faster in the country," said Lodha. Lodha's 70-acre project in Ayodhya was sold out within days of the launch and the company is now planning to launch the next phase.

"We have seen inherent value creation for those who are holding on to land. The value which has been created is phenomenal and creates value over 10 to 30 years," Lodha, 42, said.

The entire sale process has been digitised with none of the new age customers either visiting the site as all documents are in demat format. “New customers are looking for technology-based solutions and if their concerns over land title, approvals, security and resale are addressed, then it can become a very scalable business,” Lodha said.

Post-Covid, plotted land is fast gaining ground among customers as an investment destination while vertical constructions are becoming more popular for consumption. In February this year, Tata Realty sold residential plots worth Rs 650 crore within a week of opening its sales in Bengaluru.

“Real estate prices are a cyclical business. We are in a good cycle right now and like any cycle, there will be an end to the good cycle. Fundamentally, India is a very underhoused country and the cycles will keep coming and going but real estate from a long-term perspective will add to the GDP and generate huge employment and it will continue to remain buoyant in the near future,” Lodha said.

“Land will continue to remain a big avenue for wealth creation and a good tool for investment as transparency in the transactions would attract new buyers,” he said.