Since independent floors and luxury housing has seen good demand, DLF is once again planning to increase prices selectively across its residential business. The firm has already raised prices thrice between November last year and March 2021 on independent floors in Gurgaon, besides doing away with some discounts on Camellias.
Although the real estate developer did not offer details on the products that may see a price hike, it has indicated that the increase is likely to be under 5% in the current fiscal. DLF is keen on revamping its premium and mid-income housing, which has been consistently gaining homebuyer’s interest in the last 8-12 months.
At its quarterly earnings call on Tuesday, DLF said it is “looking” at increasing prices “selectively” across the residential product portfolio depending upon market demand. On a weighted average basis, the price increase could translate into “sub 5%”, which the firm expects to hold on during FY22. In its Q1 FY22 results presentation also the company said, it is exploring a “judicious price increase in line with market acceptability”.
DLF launched independent floors in Phase-3 (Gurgaon) at Rs 11,000 per sq ft in November last year. Later in February 2021, prices were raised to Rs 12,500 per sq ft, translating into a growth of 14% on a like-to-like basis between November 2020 and March this year.
In March 2021, the company launched independent floors in Phase-1 at a price of around Rs 15,000 per sq ft. However, it emphasised that the rally was largely driven by the project’s strategic location. DLF has also slashed discounts on the ultra-luxury housing, Camellias, which is about 4-5% and translates to an improved recovery of Rs 1,500-2,000 per sq ft.
The company said it received an encouraging response on independent floors across DLF city and New Gurgaon vindicating product demand and acceptability. New products, which include plotted development in Gurgaon, recorded sales booking of Rs 542 crore for 0.5 million sq ft (MSF) in Q1 FY22. So far it has booked 1.3 MSF of space in the project spread over 1.5 MSF.
Camellias witnessed sustained demand. In April-June, it reported a sales booking of Rs 330 crore for 0.1 MSF. It has a total area of 3.6 MSF, of which so far 2.4 MSF has been booked. The housing project has posted consistent double-digit sales in the last 4 quarters.
DLF will open sales booking for its flagship premium luxury project, Midtown in central Delhi, in the second half of FY22. At present, the company is busy with RERA approvals for the high-rise condos. The project size is 8 MSF, of which 2.1 MSF will be delivered by H2 FY22 and the remaining 6 MSF after FY24. Midtown’s total sales potential is Rs 12,000-15,000 crore.