Realty major Emaar India will invest Rs 2,000 crore over the next two years to complete all its ongoing 50 projects across the country, a top company official said. Dubai-based Emaar Properties entered the Indian real estate market in 2005 in partnership with India’s MGF Development and invested Rs 8,500 crore through the joint venture firm Emaar MGF Land. In April 2016, Emaar Properties announced its decision to end the 11-year-old JV through demerger. Since then, its Indian venture Emaar India is focusing on execution of ongoing projects. “Our focus in on delivery. We are putting in place all components required to complete our ongoing projects. We have increased the number of labourers on sites to over 10,000 from 1,000 a year ago,” Emaar India CEO Sanjay Malhotra told PTI.
The company has about 50 ongoing projects in Gurgaon, Jaipur, Lucknow, Mohali and Chennai comprising about 10,000 housing units. “We have got completion certificates for 2,000 apartments since July last year and these units are being handed over to customers. We are targeting to hand over all 10,000 units in the next two years,” Malhotra said. Asked about investment, he said the company will infuse Rs 1,000 crore each in the current and next financial year on construction.
Emaar India’s CEO said the company has raised Rs 2,500 crore debt in last one year, of which about Rs 1,500 crore was used to replace costlier debt and rest on construction. The company currently has a debt of about Rs 5,000 crore. It would be raising more debts for construction purpose but there would be no equity infusion from parent Emaar Properties. Emaar India has brought in a new project management team to expedite projects. The uncertainty over the JV delayed execution of projects. On unsold stocks, Malhotra said the company does not have much unsold inventories.
“We will be having unsold stocks of about Rs 600-700 crore, mostly on Dwarka Expressway in Gurgaon,” he said. In line with market trend, the company has cut price by 10-15 per cent in projects on Dwarka Expressway to clear unsold stocks. Asked about new launches, Malhotra said the company could launch one or two projects later this year depending on the market condition. Considering the current slow market condition, he said the company “will make what we can sell”.
The demand currently is for apartments of lower ticket size, he said. Real estate market, especially housing sector, is facing a multi-year demand slowdown that has led to significant delays in delivery of projects and forced consumers to protest and even file legal cases. On the demerger, Malhotra said he expects the process to be completed by the end of this year.
Emaar Properties had in April last year said it has “agreed to take steps for the reorganisation of Emaar MGF Land by way of scheme of arrangement (demerger)”. The reorganisation was being done for greater focus on its Indian operations and for the purpose of developing the potential for further growth and expansion of the business, it had said then. The projects and land bank have been divided between the two partners. Emaar India has a land bank of 6,000 acres for future developments.