There's no slowdown in luxury residential market, says DLF

DLF, India’s largest real estate developer, said there is no slowdown in the luxury residential market, and that the removal of indexation benefits in the budget won’t have a major impact on sales.Senior executives said during the company’s June quarter earnings call on Friday that launches in the super-luxury segment this fiscal will further boost cash flows and profitability.

“In about 15 months, we have done about ₹22,000 crore of sales. The demand is further consolidating towards a better and a good product. The latent demand that a DLF product still has, and our delivery schedule, based on all of that, our price points stay where they are. I don’t see any slowdown at this point in time,” said Aakash Ohri, joint managing director and chief business officer, DLF.

Finance minister Nirmala Sitharaman scrapped indexation benefits on property while lowering long-term capital gains tax on it to 12.5% from 20% in the budget, clarifying subsequently that this will not apply to assets acquired before April 1, 2001.

DLF recorded a 23% year-on-year rise in consolidated net profit in the fiscal first quarter at ₹646 crore as it gained from sustained robust demand for residential properties. Consolidated revenue in the three months ended June rose by 14% to ₹1,730 crore. Sales bookings surged more than three-fold to ₹6,404 crore from ₹2,040 crore a year earlier.

The company currently generates about a quarter of sales from non-resident Indians.

“Whenever we launch a product, it is a global launch and not restricted to one geography. My customers today are coming from all over,” Ohri said during the call.

DLF’s investor presentation shows this financial year, the company has planned launches totalling 5.4 million sq ft in the super luxury segment with a sales potential of ₹27,500 crore. It has lined up launches of 6.8 million sq ft in the luxury segment with a sales potential of ₹13,500 crore.

DLF plans to launch super luxury villas in Goa this quarter. It will also launch a new super luxury project in Gurugram with apartments priced at ₹60 crore and above in the December quarter.

For its Mumbai projects, the company is currently seeking government approvals, and it is expected to be launched by December or January.

In addition, the company is planning small project launches in Chandigarh, and a few commercial launches, besides a new project in the ₹7-8 crore category in Gurugram.

Ohri said DLF is trying to ensure by implementing various processes that the customer is the end user and not investors looking for short term gains.

“Our intent has been to look at retail customers. Even if somebody is asking for two units, mostly we say no,” Ohri said.