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Affordable housing boosts Shriram Properties’ sales

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Less takers for luxury houses costing over ₹1 cr, says CMD

City-based Shriram Properties Ltd. has clocked a growth of 20% in the last two years outpacing the sector’s growth of 5% to 6% in the same period, a top official said.

“We have outgrown the market. While the real estate sector grew by 5% to 6%, we grew by 20% over the last two years” said M. Murali, CMD, Shriram Properties Ltd. “This year too, we are on track, having registered a 20% sales growth in the affordable and mid-market housing segment in the last nine months,” he added.

According to him, there is much more supply in nine Indian cities than demand for affordable and mid-market houses (with ticket sizes ranging from ₹40 lakh to ₹80 lakh). However, there are less number of takers for luxury houses costing more than ₹1 crore.

Mr. Murali said the real estate sector had made good progress in the last three to four years, following demonetisation, introduction of Goods and Services Tax and the passage of the Real Estate (Regulation and Development) Act, 2016. He foresaw consolidation and said ultimately 50 to 60 big players would serve 90% of the demand.

On the ongoing affordable projects in the city, he said they were in the process of completing work on Tower-I of 883 units, located in Perungalathur, spread over 1.1 million sq.ft. six months ahead of schedule and the apartments would be delivered eight months ahead of target date. More than 80% of the dwellings had been sold. Construction work on Tower-II would commence by April 2020.

Asserting that the real estate sector expected a ‘great’ budget, he said the construction major would be entering the capital market after February 2020.

It will be a ₹750-800 crore issue with primary issue accounting for ₹250 crore and the balance secondary issue.

“As of now, we have a very low debt. We can leverage to draw more than ₹1,000 crore. But, we do not need debt money for the next two years,” he said.

Asked about the growth plans, he said the company planned to develop eight million sq.ft. in the affordable and mid-market segment in the next two years.

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Printable version | Jan 29, 2020 10:55:27 AM | https://www.thehindu.com/business/affordable-housing-boosts-shriram-properties-sales/article30516855.ece

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