HDIL not to increase property prices as commodity cost falls
November 13, 2009
Housing Development and Infrastructure Ltd (HDIL) has said that it will not increase property prices following the decline in commodity prices such as steel and cement and would pass on this benefit to its customers.
"Cement and steel prices have come down substantially over the past few weeks and we will definitely pass on the benefit to the buyers and as of now, we are not going to increase the prices of properties. But if commodity prices increase again, then we may need to re-look at our strategy," said Sarang Wadhawan, managing director, HDIL.
HDIL has a total developable area of about 196 million square feet (msf), out of which 70 msf is in the Mumbai Metropolitan Region (MMR), including the Mumbai International Airport Ltd (MIAL) project. HDIL’s ongoing projects account for around 64 msf while planned projects account for about 106 msf.
"The response to new residential launches in Mumbai has been very strong, particularly in case of all the three projects launched by HDIL. As about 87% of HDIL’s land reserves are located in MMR, it is well-placed to benefit from the strong revival in the Mumbai property market," said Motilal Oswal Securities Ltd, in a report.
During the quarter to end-September, HDIL made sales of about 1.5 msf from its ongoing residential projects in Kurla and Andheri and around 0.5 msf of its ongoing commercial project in Virar. The developer is trying to maintain the same percentage of sales in the third quarter (Q3 FY10) as it has reported in the first and second quarter.
Emkay Global Financial Services Ltd, in a report said, "We are revising our NAV estimate for HDIL from Rs333 to Rs375 by increasing the transferable development rights (TDR) price assumption from Rs1600 per sq ft to Rs2100 per sq ft. We believe HDIL has strong cash flow visibility due to revival in the TDR market and new launches lined up in the residential space." -Yogesh Sapkale with Pallabika Ganguly[email protected]