Macrotech Developers, which operates the Lodha brand, will be launching 7.3 million square feet of residential space worth Rs 10,000 crore in the Mumbai Metropolitan Region (MMR) and Pune by March 2023.
The company has already launched 4.4 million sq ft of residential space in the first six months of the current financial year from April-June 2022 worth nearly Rs 8,500 crore.
Sushil Kumar Modi, CFO, Macrotech Developers, told FE that the company is looking at a good amount of the pipeline coming in newer locations in MMR, which include eastern and western suburbs and Navi Mumbai. The company is also focused on the Pune market and intends to close the year with the numero uno status in the city.
Modi said the demand for residential real estate continues to remain strong and there are no signs of it slowing down beyond the festive season. “As the employment outlook is strong and intact in India, along with growing affordability and control over disproportionate rise in prices, the demand momentum will sustain,” he said.
Additionally, he said that to remove the dilemma from the minds of its buyers who are wary of rising interest rates, the company has said for the next 18 months with June 2024 as a cut-off, if there is a rise in EMIs on account of interest rates going north of 7%, the increased amount will be borne by Lodha.
Macrotech currently has ready-to-move-in inventory worth around Rs 7,000 crore, while those under construction is Rs 17,000-18,000 crore (6-36 months).
Modi said that the company is ensuring affordability by undertaking measured price increases. “With wage growth at 8-10%, our position is that the price should be not more than 6-7% in FY23. So long as the price increase is in this order, affordability will only improve. We have undertaken a 2-2.5% increase in the first six months and the balance 3-4% we would potentially take in the second half starting now,” he said.
On the rising costs, Modi said commodity inflation is moderating. “In the last 18 months on a weighted average, price increase of all the elements of cost has been around 14%, and the same number in September has come down to 10-11%. So, the inflation and cost effect is moderating,” he said.