Arihant Superstructures, is looking to double its portfolio to 20 million sq ft over the next 12-18 months led by alliances and new land acquisitions.
The developer is currently in the process of acquiring new land parcels for affordable housing projects on an outright basis as well as joint ventures for middle income and higher income group projects.
The company has identified land parcels in the Mumbai Metropolitan Region (MMR) that are expected to provide the requisite growth push and will be utilising internal accruals and raising new funds to support this growth.
“We are embarking on a growth plan by almost doubling our portfolio in the next 12-18 months given the rising number of opportunities in the property market. We have clear visibility on revenue potential of Rs 6,500 crore and operating cash surplus of Rs 2,100 crore from existing projects portfolio,” Ashok Chhajer, CMD, Arihant Superstructures, told ET.
The real estate sector, especially the housing segment, is expected to be in the limelight going ahead, as it benefits from the central and state governments’ favourable policies pertaining to affordable housing.
Rising income levels and affordability levels are expected to drive sales for quality organised developers. Further, established players are expected to benefit from ample inorganic opportunities, which is driving the ongoing consolidation in the sector.
Arihant Superstructures currently has a portfolio of under-construction projects spread over a total 11 million sq ft and in Mumbai region and Jodhpur. Around 65% of these projects are in the affordable housing segment, Chhajer added.
Property sector is expected to benefit from low interest rates that provides a dual benefit in driving demand and reduced funding cost for realty developers.
The company’s key identified markets for the proposed expansion include Mumbai’ Metropolitan Region’s micro-pockets of Navi Mumbai, Panvel, Kalyan, Dombivali, Badlapur and other locations offering similar propositions.
According to analysts, the developer has a long-standing presence in Mumbai region’s property markets with focus on affordable housing. The company holds a 51% share of supply in Rs 30 lakhs to Rs 1 crore segment and 58% share of supply in below Rs 5,000 per sq ft in extended MMR. The company held 13% market share in Navi Mumbai in the first half of 2021-22.
The company reported a 180% on-year jump in consolidated net profit at Rs 11.63 crore for the quarter ended September. Total income for the quarter also rose 37% from a year ago to Rs 88.15 crore. The robust performance was driven by strong rise in revenues, sales bookings and collections. The listed company had clocked sales bookings of 831 apartments in the first half of the current financial year.
The Maharashtra government’s recent decision to waive property tax on houses with an area of up to 500 sq ft in Mumbai and Navi Mumbai is expected to push both demand and supply of affordable houses in the country’s most expensive property market.
Both central and state governments have been supporting the affordable housing segment for the last few years.
Several schemes for affordable housing have been introduced by the government in recent years, including interest subsidies for low and economically disadvantaged sections, affordable housing being granted infrastructure status to ease fund availability, and additional tax benefits for both developers and homebuyers.
The need for affordable housing is growing across the urban sprawls of India and has caught the attention of many developers and financial institutions, who are looking to tap this growing demand.
More than half of all Indian residential launches in the top eight cities in the last five years have been in the sub-Rs 50 lakh segment.