DRA aims to deliver almost one million sq ft in execution this year.
Ranjeeth Rathod,
How is the market performance this year? What are the key trends to look for in 2024-25?
The real estate sector is expected to perform exceptionally well in FY 24-25. The commercial space absorption is at its peak, driven by demand from IT, global capability centres, BFSI, and domestic start-ups. Given India’s position as the world’s back-office capital, this demand is anticipated to remain robust, creating more employment opportunities. This will, in turn, drive housing demand further. We expect a cut in housing interest rates by the RBI, which should make EMIs more affordable, thereby boosting demand. Lastly, the positive sentiment towards real estate is not only prevalent in India but also among the NRI community, which should further push housing demand in India.
How is the company performing in terms of project execution and sales? Which are the key projects?
DRA has set a target of Rs 600 crore in annual sales and aims to deliver almost one million sq ft in execution this year. Additionally, it has an inventory of 3.5 million sq ft in the initial stages of approval. Key projects include a commercial development in Egmore (Heart of Chennai city) featuring a Grade A green building of one lakh sq ft, luxurious apartments at Valasaravakkam (Arcot Road), a sea view apartments project of 7 lakh sq ft at Siruseri, OMR, and 135 luxurious upscale villas at Navalur.
What difference do you experience this year in buying trends in residential and commercial segments?
We expect the experience to be mostly similar to last year, with a few differences anticipated this year:
· Customers may prefer larger apartments like 3BHKs and 4BHKs.
· Customers may seek more amenities to enhance their lifestyle.
· Commercial clients will likely prefer green and environmentally friendly buildings.
· Customers and tenants may prefer locations close to a metro station.
What are the key challenges faced in the project execution on various fronts?
The primary challenges faced in project execution are as follows:
· Rising input costs for both materials and labour, impacting profitability and potentially increasing prices.
· Non-availability of good land parcels for development.
· High taxation in India (GST, approval fees, stamp duty, etc.
· Approval delays.
· Shortage of skilled labour.
How do you look at the future market opportunities?
We are exploring new markets such as Pune and Bangalore for diversification and higher sales. We are considering opportunities to acquire some real estate companies and their projects through NCLT. We are aggressively seeking plotting opportunities. We aim to build a corpus AIF for owning rent-yielding assets. Lastly, as pioneers of the build, sell, lease, and operate business model in co-living in Chennai, we plan to test this model in other cities like Pune, Hyderabad, and Bangalore.
