Joshi said the firm is “very cautious” about partnering financially-stressed real estate developers as there is very high partner risk. Last month, property consultant JLL said $66 billion worth of stalled projects are there in the country. “We may be evaluating 10-15 such projects now but the conversion ratio would be 1:25,” he said.
Realty signed a joint venture with Mumbai-based property developer Nirmal to develop a plot in Mulund in 2017. Though the firm is open to joint ventures, it would not do development management contracts due to the risks in the model, he said.
He said the company is growing its business cautiously despite a couple of good residential launches. It recently sold 490 apartments out of 510 it launched in the Seawoods area of Navi Mumbai two months ago.
The company is seeing good customer interest in the yet-to-be-launched project at Mulund in Mumbai, said Joshi. He added that the sizes of apartments are also becoming smaller and prices becoming appropriate. “Earlier a two bedroom apartment used to cost Rs 2.25 crore. Today, we are launching it at Rs 1.5 crore (in Mulund),” he said. He added, “Today, we ensure a clubhouse is ready with the first customer handover.”
Highlighting that margins have come down sharply, he said they are in high single digits. “If we get 12-13 per cent, it is a big margin,” he said.
During the real estate boom, developers used to make 40-60 per cent margins in premium housing projects. The firm is also building office projects in Hyderbad and Bengaluru. It is looking for ways to monetise them. It sold a mall in the Seawoods area of Navi Mumbai to Blackstone and is looking to sell four malls in Hyderabad, he said.