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With the realty sector struggling with inventory overhang and thin demand, Sobha Developers recorded a 14 per cent fall in sales in the fourth quarter of FY16.
Speaking to Bloomberg TV India, Sobha Developers MD and Vice-Chairman JC Sharma said the demand looks better in this financial year.
The FY16 sales numbers are much better than FY15. Take us through the outlook for FY17.
If you look at the macro environment right now, with declining interest rates, declining inventory levels of developers and the Indian economy showing clear signs of improvement, the real estate demand in the current financial year is expected to be better than what it was in FY16. This industry is primarily cyclical in nature and at the macro level it has seen a continuous decline in the last three years. In my view, except the Bengaluru market, most of the regions must have shown lower volume growth in FY16.
In that backdrop, when we look at FY17, we believe that there may be some transition challenge with the Real Estate Act (REA) a reality now. But the declining interest rate and improved economic fundamentals should be giving far better results in this financial year than what we have witnessed in the preceding financial years.
There are two distinct moves that you have made — one in Mysuru and another in Gurgaon. How much are your operations Bengaluru-centric and how much will other markets contribute?
Bengaluru continues to bring in two-thirds of our sales volume and value. Our desired target is that Bengaluru should be 50-55 per cent and other regions should be bringing in the rest of the volumes. However, we have not been able to achieve this so far. Going forward, with the number of new launches planned in Delhi-NCR as well as in the other regions, especially in Kerala, this year we believe that the volumes will keep growing in other markets and they should contribute more and the share of the Bengaluru market may come down.
Approvals for your NCR projects are in place. When can we anticipate the official launch?
We hopefully should be doing it either by this month-end or first week of May. The apartment is almost ready and we are planning a good date for launching it .
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