Bengaluru: Realty firm Sobha, known for its luxury apartments, is venturing into the Hyderabad and Delhi residential property market.
The firm has entered into a joint development agreement with local landlords to build high-end apartment totalling 1.5mn sq ft in both cities.
“We have seen good demand for the Rs 50 lakh to Rs 2 crore segment. The JD (OR JV) has been signed and we are working on specifications,” said JC Sharma, vice chairman and managing director of Sobha.
While the Hyderabad (Somajiguda) project will have 270 units of above 1850 sq ft, the Delhi (Badarpur) project will have 406 units of over 2150 sq ft each.
The firm also plans to launch over 10 m (SQ?) ft of residential projects including its affordable segment — dream series — to boost growth. The total investments will be about Rs 4500 crore including debt and equity over the next five years.
“Despite tough environment, we are seeing good sales,” said Sharma.
Separately, Sobha has also increased its focus on the mid-income homes apart from launching more commercial and retail projects. The Bengaluru-based firm expects its housing business in the Rs 50 lakh to grow significantly faster due to rising demand in the market.
Currently, Sobha generates around 65% of its revenue from residential projects priced above Rs 1 crore “We have also achieved pre-sales volume of 1.06 million square feet valued at Rs 778 crore during the first quarter of the financial year,” said Sharma.
The key southern real estate markets of the country — Bengaluru, Hyderabad and Chennai – are seeing gradual revival in residential property sales across top seven property markets of India since the first half of 2018 through the first half of 2019. The southern property market is now stabilising, with properties priced between Rs 40 and 70 lakh categories picking up steam since early last year.
During the first half of 2019, Hyderabad recorded the highest growth in sales at 65%; the Silicon hub of India displayed steady and mature growth in residential markets as sales grew at a stable 12% over H1 2018. The Chennai market also witnessed a robust sales volume of more than 7,500 units in H1 2019 and grew by 24% over the second half of 2018. However, the sales are yet to match the level high volume of H1 2018 — a decline of 7% over the same period last year.
The company currently has ongoing real estate projects aggregating to 42.15 million square feet of developable area and 29.16 million square feet of saleable area under various stages of construction. Sobha has a land bank of 2430 acres across different cities.
The firms plans to reduce its debt equity ratio to 1:1 from 1:8 last quarter. The firm has a net debt of Rs 2751 crore.