Listed real estate players are expecting a good Q3FY22 or the quarter-ending December 2022 while Omicron and a spurt in Covid cases could push back big ticket launches towards the later-half of Q4FY22 (Jan – Mar).

With return of work from home and restrictions on mobility imposed by State Governments, postponing the launch makes sense, analysts told BusinessLine. Some of the big ticket projects due in Q4FY22 include Oberoi Thane project, some of Prestige Estates Mumbai launches and Mahindra Lifespaces Bengaluru.

For instance, in Delhi, temporary closure of the revenue office could impact some urgent transactions or time-bound ones that were likely to be closed by January. On-site queries have dropped because of Omicron and accompanying mobility restrictions.

 “While January 2022 second half was expected to be launch heavy, we believe that Omicron driven Covid-19 wave 3 will push back the launches towards end of Q4FY22. Oberoi Thane launch, Prestige Estate Mumbai launches and Mahindra Lifespaces Bengaluru project launch were some of the key projects expected to hit market during January 22. We await more clarity on same from these companies,” brokerage firm, HDFC Securities said in a report.

Prestige Estates said One Mumbai project was launched in 2021, while “there are other upcoming projects for this year too.”

High sales

Revenue/EBITDA/PAT across major listed players are expected to see a sequential growth of 2-5 per cent; with impact of rising commodity prices likely to smoothen over the project completion period (as companies will take the hit once projects complete).

HDFC Securities said, despite an inauspicious period, holiday season toward December 21 second half and emergence of Omicron, Q3FY22 presales “remained healthy”. The likes of DLF, Sobha, Prestige and Oberoi have reported good pre-sales numbers.

Prestige Estates, one of the BSE-Realty index stocks, reported “highest ever quarterly sales” for Q3FY22, of ₹4,268 crore, up 111 per cent y-o-y; with collections up 70 per cent y-o-y to ₹2,432 crore. In 9MFY22, sales were up 97 per cent and collections up 51 per cent, y-o-y, respectively. “The new sales were backed by the great response to newly launched projects -- Prestige Avalon, Aspen & Eden Park, Part of The Prestige City, Bengaluru, Prestige Beverly Hills, Hyderabad and the existing inventories across geographies,” the company’s chairman, Irfan Razack said.

Delhi-based DLF, the country’s largest listed realty player, announced sales worth ₹1,500 crore for its luxury residential project ONE Midtown -- apartments are priced upwards of ₹3 crore.

Mumbai-headquartered Oberoi Realty clocked sales bookings of 1.04 million sq feet, up 136 per cent q-o-q, worth ₹1,965 crore, up 137 per cent q-o-q. The sales volume/value is largely driven by launched Elysian Tower B in Goregaon in the last week of October 2021 and had already sold inventory worth ₹787 crore within a week of the launch.

Bengaluru-based Sobha Developers in its operational update said for 9MFY22 (April–Dec) period, sales were higher than full year FY21. Sales value in Q3FY22 stood at ₹908 crore, with average price realisation going up by 4 per cent sequentially.

“The presales momentum may continue into Q4FY22, with incremental delta likely to accrue on account of new launches. We expect Prestige, Oberoi, Mahindra Life, DLF and GPL to make new records during Q4FY22, if launches remain on track,” HDFC Securities added in the report.

Demand Momentum

Tier-I or listed developers are expected to gain market share further over unlisted ones.

Consultancy firm ANAROCK in a recent report said, the housing inventory overhang across the top 7 cities plunged to 32 months by 2021-end, against at 55 months by 2020-end. (Inventory measured in months indicates the number of months it will take for the current unsold housing stock on the market to sell at the current absorption rate.)

For offices, Omicron has delayed return by 3 months, though underlying demand remains strong. “On the leasing front, new commercial leasing activity is likely to recover with economic re-opening, albeit Omicron led uncertainty in Q4 may postpone full recovery ahead. However, Q4 outlook is clouded by restriction owing to Omicron,” ICICI Direct Research said in a report.

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