Lodha to invest Rs 4300 crore in construction to boost deliveries

New Delhi: Realty major Lodha Developers will invest about Rs 4,300 crore this fiscal on construction to boost deliveries of housing units and also plans to launch 8-9 new projects in Mumbai, Pune and London.

The Mumbai-based Lodha Developers invested Rs 3,700 crore in the last fiscal on construction and has increased outlay for the 2017-18 fiscal to boost deliveries, its Managing Director Abhishek Lodha said.

"We will launch 8-9 projects this financial year, of which 6-7 will be in Mumbai Metropolitan Region and one each in Pune and London market," he said in an interview.

Asked about the investment, Lodha said the company will increase its total construction spend this fiscal to Rs 4,100 -4,300 crore on existing and new projects from Rs 3,700 crore in the 2016-17 fiscal.

The investment will be funded largely through internal accruals as the company expects to receive Rs 8,000-9,000 crore from customers during this fiscal. The collections from customers stood at Rs 7,000 crore during 2016-17.

"During last fiscal, we delivered 7,200 homes which is a big record for the country in itself. The company is targeting to increase delivery of homes in excess of 8,000 units," Lodha said.

Lodha group will focus on affordable housing sector which is expected to gain momentum after the government accorded infrastructure status to this segment in the Budget this year.

"We sold 4,000 homes in affordable category in 2016-17 and we are targeting sale of 6,000 low-cost homes this fiscal," Lodha said.

The infrastructure status to affordable housing will boost availability of cheaper finance for such projects.

Besides infra status, the government has offered interest subsidy for prospective home buyers and relaxed various norms including built-up area for developers of low-cost homes.

Lodha group's sales bookings rose by 30 per cent last fiscal to about Rs 8,500 crore on the back of better sales in the domestic market and foray into London.

"Our new sales bookings grew by 30 per cent last fiscal at around Rs 8,300-8,500 crore. Out of this, about Rs 7,000 crore sales were from Indian market and rest from London where we launched our first project," Lodha group's MD said.

The group's sales bookings stood at about Rs 6,400 crore during the 2015-16 fiscal, all from Indian market, he added.

Lodha said sales were affected during November 2016 to January 2017 because of poor demand post notes ban.

"Sales have bounced back in February and March. We will have to see the sales number of April-May to get to know whether this demand is sustainable," Lodha said.

On the London market, he said the group launched its first project 'Lincoln Square' in London last year and the sales have been good despite Brexit.

The construction work has started and completion is expected in the next year.

Asked about the company's debt, Lodha said it is currently around Rs 14,000 crore. The overall debt level and interest cost of debt is expected to reduce.

Lodha group is currently developing around 45 million sq ft area and has over 30 ongoing projects across London, Mumbai Metropolitan Region, Pune and Hyderabad. It has a land bank of 350 million sq ft for future development.