Developers plan bigger launches this year

DLF Ltd, Godrej Properties Ltd, Macrotech Developers Ltd and M3M Group, among others, have planned a significant number of launches in the March quarter and beyond.

Launches have picked up in the last six months and are expected to surpass pre-pandemic levels in 2022, raising some concerns over rising unsold inventory levels.

The top eight property markets, including Ahmedabad and Kolkata, saw launches of 241,907 units in 2021, up 75% from 138,577 units in 2020, according to Liases Foras Real Estate Research and Rating Pvt. Ltd data.

“In pre-pandemic years, an average of 360,000 homes would be launched annually. This year, we expect to cross 400,000 units. While demand will keep growing, we expect 2022 to be a volume-driven market, where supply will grow significantly,” said Pankaj Kapoor, founder and managing director, Liases Foras.

DLF identified 35 million sq. ft of development potential in the medium term, including residential and office space, with a sales potential of ₹47,000 crore. Of this, about 4.6 million sq. ft of residential projects were launched between April and December 2021. The company has 3.5 million sq. ft of project launches in the March quarter and 6.3 million sq. ft of launches planned for the residential sector in 2022-23.

“The demand momentum will continue not only in NCR but also in places such as Chennai and Panchkula. We are expecting ₹2,500 crore of sales this year,” the DLF management said in an analyst call last week.

M3M is also planning to launch 2,000 homes every quarter at different price points, ranging from ₹6,000-11,000 per sq. ft. The company will launch 1,700 units on land it had bought from Sahara Group some years ago. “We want to launch the first phase of 700 units and sell it in 30 days. The sales momentum has increased, people want bigger homes, and demand is high. I feel 2022 will be the best year for the real estate sector in a long time,” said Pankaj Bansal, director, M3M.

According to Anarock Property Consultants, 2021 was essentially driven by end-users. In 2022, the trend is likely to be similar, with demand dominated by end-users. However, investors with a long-term horizon have already started to make a comeback. About 80-85% of demand is likely to come from end-users and the remaining by long-term investors, the property advisory said.

Hyderabad-based Aparna Constructions and Estates Pvt. Ltd, which saw a 25-30% growth in sales in 2021 compared to 2020, is eyeing 10-12 million sq. ft of new launches every year for the next years, director Rakesh Reddy said.

Similarly, Chennai-based developer Casagrand is riding high on demand sales in Bengaluru and its home market in 2021 and has 14 launches planned this year, including Coimbatore.

After booking volumes and sales value remained muted in the December quarter, partly due to delayed approvals impacting launch plans. With Godrej Properties having a launch pipeline of about 8 million sq. ft for the March quarter and expects a record quarter of pre-sales, Motilal Oswal said in a note.

If launch delays don’t happen, Godrej Properties may be able to achieve ₹2,500 crore of sales bookings in the fourth quarter, analyst reports said.