Bengaluru-based real estate firm Sobha has reported sales of 0.8 million sq ft during the July-September quarter, keeping up its improved performance of the preceding quarter.
Sales rose by 14% over the last year during the period, primarily driven by its first mid-range project, Dream Acres. In the past two years, Sobha has failed to meet its 4 million sq ft of sales guidance. This time, the management has cautiously refrained from setting a specific target. But after selling 0.8 million sq ft in each of the two quarters this year, sector analysts are optimistic that 4 million sq ft might not be a elusive target for the full fiscal.
The consensus is that Sobha’s annual sales might be between 3.2 million sq ft and 3.6 million sq ft. However, in value terms, the company, which reported fresh sales of Rs 590 crore during the quarter, is anticipated to cross Rs 2,000 crore for the full year, making it Sobha’s best performance in four years, analysts said.
In addition to Dream Acres, Sobha’s Kochi luxury project saw material sales improvement. Gurgaon market sales too remained robust, only partially impacted by seasonally weak demand during the quarter. The company didn’t launch any projects during the past three months, focusing on liquidating its existing inventory of 6.8 million sq ft.
This is in tandem with sector trends in the Bengaluru market. Sobha has definitely bucked the trend as channel checks suggest sales did not improve meaningfully in Bengaluru during months of July and August as the industry transitioned and implemented the RERA. “Whether in Maharashtra or Karnataka, industry leaders have been able to ride the RERA challenge better than others and Sobha has been able to take advantage of its market share, adapt and rise to the occasion more quickly,” said an analyst from a foreign brokerage.
Its luxury project in Kochi balanced its maiden mid-range one, Dream Acres. Over the past two years, Sobha’s average realisations improved 18% at a time when prices in Bengaluru have fluctuated only to the extent of 1%, according to Knight Frank.
Dream Acres, launched two years back, was a real game changer for Sobha. Prior to the launch, Sobha was unable to compete with its peers with its premium Rs 3-crore-and-above offerings. After introducing the first phase of Dream Acres, it was able to tap the more affordable segment.
The Knight Frank report said 84% launches in Bengaluru during the first half of this year were priced below Rs 75 lakh, attractive for IT professionals, one of the most prominent demographics to tap into. But the timing has been right for Sobha as it simultaneously launched in the HNI-driven market of Kochi and the more investor-led Gurugram. As a result, its average realisation for the quarter stands at Rs 6,883 per sq ft, up 13% on an annual basis.