New Delhi, Feb 18: Realty major DLF will focus on selling ready-to-move-in flats worth Rs15,000 crore over the next 3-4 years and launch new projects for sale only after reaching advanced stage of construction.
Out of Rs15,000 crore worth of housing units, around Rs9,000-10,000 crore inventories are in Gurgaon. The real estate sector, particularly housing, is facing multi-year demand slowdown, resulting in sluggish sales and unsold inventories.
In an investor presentation, the country’s largest realty firm said the company has modified its business model for residential segment. It will “sell completed product or products which are at an advanced stage of completion instead of selling off a plan”. The new business model will help the company in achieving higher realisation besides mitigating regulatory risks and delays beyond its control, DLF said.
“Empirically, it has been observed that the price of the finished/completed product is valued significantly higher than what it is priced at the time of the launch,” the presentation said.
In the revised model, DLF said the increase in working capital costs would be marginal as construction finance is available at attractive rates, currently at about 9.25%.
“The company will focus on selling the completed inventory valued at about Rs15,000 crore (net of pending construction payments) on its books over the next 3-4 years,” the presentation said.