Unitech books Rs 5,553 crore sales

Unitech Ltd, the second-largest real estate developer in the country, has been able to generate sales of Rs 5,553 crore in the first nine months of the current fiscal.

According to operational update released by developer for investors, the company delivered area of 5.62 million square feet by December and another 17.05 million sq ft would be delivered by March 2011.

The numbers underline a revival in demand in India’s property market as buyers for homes and offices return on the back of low mortgage rates and lower prices, after the global financial crisis in 2008 cut off funding and demand.                    

A source familiar with the development said, “Unitech is on course to exceed its annual target of Rs 6,000 crore sales.”

The company generated average realisation of Rs 4,225 per sq ft, from which residential accounted for Rs 3,733 sq ft and commercial sales of Rs 6,401 sq ft.

The New-Delhi-based developer booked over 3 million sq ft during the October-December quarter mostly in cities including Mumbai, Chennai, Bhopal, Mohali, Lucknow and Bangalore.
Unitech, which is expecting 50% of its sales to be from Mumbai over a period of time, launched 1.92 million sq ft of projects in Mumbai, out of which it already sold 1.61 million sq ft.

Mumbai contributed about 12% of total saleable area booked between March and December, Gurgaon contributed 47%, Chennai 13% and Noida and Greater Noida collectively contributed 19%.

The developer deployed about 20,000 workers at various construction sites over the past nine months and is looking to add 5,000 workers every quarter to ramp up delivery of projects.
Unitech reported residential volumes of 10.7 million sq ft in the current fiscal but sales slowed down with just 2.5 million sq ft in the third quarter compared with 8.2 million sq ft in the first half of the year.

An analyst covering the company said that the current Unitech workforce is sufficient to handle about 18-20 million sq ft of projects but company would need to add at least another 10,000 workers at the construction sites over the next 12 months to
be able to scale up its execution capability to 30 million sq ft.

The company is also looking to attract investor demand rather than end-user demand as commercial projects in Gurgaon and Bangalore are being offered with assured returns.

“Unitech has launched commercial properties in Gurgaon where it is offering minimum guaranteed investment returns. Unitech is offering 10% assured return for its Business Zone, Gurgaon,” Puneet Jain, analyst at Kotak said in a note to clients.

Another analyst with a domestic brokerage said the quarter has been better year on year. “The revenues will start flowing in from the next quarter when the construction begins. If the funding they were looking through the foreign currency convertible bonds route comes through, construction on projects in Visakhapatnam and other affordable ones can start soon,” the analyst
said.
(With input from Pooja Sarkar)