Sobha to invest Rs 1000 crore in Delhi, Gurugram to develop 2.76 million sq ft
Bengaluru-based realty major Sobha Ltd said it will invest close to Rs 1000 crore in Delhi and Gurgaon to develop 2.76 million sq ft, in a bid to expand its presence in Delhi-NCR.
The company recently entered into a joint development agreement with a Delhi based builder to develop one million square feet in Delhi’s Badarpur, and simultaneously, talks are on with a different developer to build 1.73 million sq ft in Gurgaon.
The company refused to divulge the names of developers. The company aims to keep the construction cost around Rs 4,000 per sq ft to balance profitability and demand.
“The ongoing pandemic and resultant crisis has opened up certain avenues on the operational front for businesses like ours. We are making efforts to further improve our existing practices and expand the base of the advanced technologies operationally to reach out to our customers,” said JC Sharma, Vice Chairman and Managing Director, SOBHA Limited.
Sharma said they are mostly looking at joint development in NCR, where it doesn’t have to pay for land acquisition. Sobha Ltd’s Q2 results show that the company achieved a total sales volume of 8,91,700 square feet valued at Rs 6.90 billion, with an average price realization of Rs 7,737 per square foot.
“Our other operating cities like Gurugram, Kochi, Thrissur, and Chennai, have shown encouraging sales performance during the quarter. The number of inquiries is almost at the pre-Covid levels, which will help us perform better in the second half of the FY 20-21,” Sharma said.
The company currently has ongoing real estate projects aggregating to 38.52 million square feet of developable and 26.81 million square feet of saleable area, and ongoing contractual projects aggregating to 9.48 million square feet under various stages of construction.
As per the Q2 presentation, Sobha has completed 1.56 million sq ft in Gurgaon and is in the process of construction another 11.12 million sq ft.
“Sobha has recently entered into a joint development agreement to develop another 1.73 million sq ft in Gurgaon, which is not part of the existing township it is already developing. This, along with the Delhi project, will have an investment pipeline of Rs 1,000 crore, excluding the land cost,” said an industry expert.
As per the analyst call, the price realisation of Rs.7737 per square feet achieved during Q2 FY2021 is the highest price realisation that the company has achieved in the past five quarters. “As a company, we are committed to launching 14.22 million square feet of new housing projects in Bengaluru, Gurgaon, Delhi, Chennai, Hosur, Thrissur, Gift City, and Hyderabad, and 0.36 million of commercial projects in Bengaluru in the coming quarters, which are at various stages of approval,” Sharma said during the analyst call.