Unitech in Rs1,880 crore spend plan

Unitech Ltd, the second-largest real estate developer in the country, is looking to aggressively ramp up its lagging construction activities in the next two fiscals to keep pace with the sales growth.

In the past, the developer booked a project cost (total construction cost) of Rs1,340 crore in the fiscal 2008 and a total project cost of Rs3,030 crore in fiscals 2007-09. However, the developer has just booked project cost of Rs170 crore in the first half of 2009 even as it has sold projects valued at over Rs4,000 crore.

To match cost to sales, Unitech will develop 10.5 million square feet in the fiscal 2011 and 19.2 million sq ft in fiscal 2012 by investing Rs1,880 crore and Rs3,520 crore, respectively as costs for the construction activities.

The developer said it has been able to post sales of 10.11 million sq ft during March-September from over 30 new launches in cities including Mumbai, Gurgaon, Noida, Chennai, Kolkata, Bhopal, Lucknow, Mohali and Bangalore.

But from the launched projects of 21 million sq ft this fiscal, the preconstruction activities or activities relating to “breaking ground” on several projects has not even started after mopping up over Rs4,000 crore sales.

Sources told DNA Money that most of the Unitech's project constructions would commence from the fourth quarter as it gets the necessary approvals from the government. 

An analyst said that slum rehabilitation projects in Mumbai are in the initial stage and could take longer than expected considering the long gestation period involved.

Unitech has rehabilitated 7% or 2,200 slum dwellers of the families out of the total 30,714 families and has obtained consent from 85% families. To attract investors in its Mumbai Worli project, Unitech has pre-launched its new residential project, at a massive 36% discount to the prevailing market price.