The Hindu Business Line : Mumbai developer pegs sales with ‘buyback’ offer

Mumbai, Nov. 15 Amid the gloom in the realty sector, the cloud appears to have lifted, at least for a Mumbai developer who has managed to sell 50 apartments in one week with a buyback offer incorporated in the sale agreement.

Under the scheme, the developer undertakes to buy back the apartment he sold to buyers at the current prices three years down the line if prices at that time are lower.

Sunil Mantri Realty has booked 50 units in four of its projects — three upcoming ones in Gwalior, Sholapur, and Bangalore and one nearing completion in Mumbai.

The offer opened on October 25 and ended on November 2. The company intends to offer 50 more units under the scheme. “I can only offer as much as I am comfortable with,” said Mr Sunil Mantri, Chairman of Sunil Mantri Realty, while adding that if all goes well, he would not have to buy what he built and sold.

Price range

Mr Manish Grover, Vice-President (Marketing), Sunil Mantri Realty, said the scheme was designed more to test the sentiments of buyers and the response had been overwhelming. Mantri Realty has about 1,000 units across the four projects with units in Sholapur priced at Rs 2,300 a sq ft at the lower end and Mantri Park in Mumbai at Rs 6,300 a sq ft. The apartment sizes vary between 728 sq ft and 970 sq ft.

Apart from the Mumbai project slated for completion in December, the delivery schedule for the other three projects is 18 months.

Mr Sunil Mantri said home loans rates have begun to taper down and banks were stepping forward to extending loans. “Two of my customers said a couple of banks they had contacted earlier called them up to inform them that they were willing to extend loans and also lower margin money from 25-30 per cent levels.”

Sunil Mantri Realty’s projects are in 15 cities such as Mumbai, Hyderabad, Bangalore, Pune, Nagpur, Solapur and Gwalior. The company has a land bank of 1,400 acres.

Price cut futile

Confederation of Real Estate Developers Associations of India’s chief, Mr Kumar Gera, said the average square foot price across the country was Rs 2,900 and there was little scope for prices to drop further.

Mr Gera said just as buyers were holding back, banks too were doing the same despite the prevailing high interest rates. The Government’s measures to inject liquidity were yet to attain the desired penetration levels, he felt.

Mr Anand J. Gupta, General Secretary, Builders Association of India, said the current scenario was so dismal and price cuts were of no consequence as buyers and even financial institutions were on a wait-and-watch mode.

With prices having corrected 20-30 per cent, there was little left with developers to sweeten deals as freebies such as parking, furnished accommodation and modular kitchens, besides EMI subventions, were already on the cards.

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