Mahindra Lifespaces to raise number of launches, eyes sales of Rs 2,500 cr

Arvind Subramanian, MD & CEO, Mahindra Lifespaces
Mahindra Lifespaces, the real estate arm of Mahindra group, which was considered a slow mover compared to its peers, is shifting gears.

The company is looking to launch six projects in the next six months and planning to launch three to five projects every year.

It launched four residential projects in 2019 and one in 2020.

"We plan to launch about six residential projects within the next six months, across Mumbai, Pune, Bengaluru, NCR and Chennai," said Arvind Subramanian, managing director & CEO, Mahindra Lifespaces.

Going forward, the company plans to launch about three to five residential projects each year and is well-prepared for a significantly larger scale of operations, he said, adding that it is looking at sales of Rs 2500 crore in the next four years.

The company posted total income of Rs 37 crore in Q2FY21 as against Rs 22 crore in Q1FY21.

The consolidated loss stood at Rs 13 crore in Q2FY21 as against a loss of Rs 20 crore in Q1FY21.

"Deepening our presence in our existing markets will help improve brand salience and recall in these markets.  We might even launch multiple projects within a locality. We have a strong balance sheet with low debt and are well-positioned to deliver increasing value to our customers,” Subramanian said.

From a residential perspective, the company will focus on consolidating its existing presence in Mumbai, Pune and Bengaluru as its primary markets, with faster project completion cycles of about four to five years. "In the affordable segment, its units will continue to be priced in the Rs 10 lakh – Rs 60 lakh range (approximately), while the average ticket size for our mid-premium homes will vary between Rs 50 lakh and Rs 2.5 crore," he said.

The company's stock has risen 95 per cent since beginning of the FY21.

Home sales rebounded in top cities such as Mumbai, NCR, Bangalore, Pune since Q3CY2020 primarily due to pent up demand backed by lower interest rates, drop in levies such as stamp duty in states such as Maharashtra and so on after a washout in the second quarter of this calendar year.

Last year, the finance minister announced doubling the differential between circle rate and agreement value for residential apartments upto Rs 2 crore from 10 per cent to 20 per cent, resulting in a lower tax burden for buyers. Maharashtra government reduced the stamp duty on property transactions from 5 per cent to 2 per cent till December 2020 and 3 per cent till March 31, 2021. Karnataka also reduced stamp duty for property transactions.

Mahindra Lifespaces is also in the early stages of evaluating opportunities in the senior living and second homes segments and hopes to go to market within the next couple of years with the first offerings in these segments.  

"We’ve seen a revival in residential demand over the last couple of quarters - a trend we expect will continue into 2021, provided macroeconomic fundamentals and job security prospects hold steady.  This is a combination of pent-up demand from the first quarter of this fiscal and new demand arising from end users whose lockdown experiences have precipitated their home buying or upgrade decisions," he said.

The post-Covid, ‘zero touch’ launch of our affordable project Happinest Palghar was very well received, with more than 300 apartments sold completely online, with no site visits or face-to-face meetings, within only three weeks of launch, thus building the case for the future shift towards ‘phygital’ homebuying, he added.

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