Macrotech Developers Plans Rs 3,500-4,000 Crore Investment In Land Acquisitions

Realty firm Macrotech Developers Ltd will invest Rs 3,500-4,000 crore this fiscal to acquire new land parcels, outright and through joint development agreements with landlords, to build housing projects as part of its expansion plan to encash a surge in demand for residential properties.

Macrotech Developers, which markets its properties under Lodha brand, is one of the leading developers in the country. It has a major presence in Mumbai Metropolitan Region (MMR) and Pune, while the company has just entered the Bengaluru market.

According to a transcript of earning calls with analysts, Macrotech Developers Managing Director and Chief Executive Officer Abhishek Lodha said the company will invest Rs 3,500-4,000 crore on new business development, which means acquiring land parcels for future development.

The total spend on 'new business development' will be about 'Rs 35 to 40 billion', he said, adding that there would be some outflow for land acquired in previous years.

In the case of joint development agreements (JDAs) with landlords, real estate developers pay some advance amount to landowners. Builders share revenue or area with the landlords.

'Our target mix is 60 per cent owned land and 40 per cent from JDAs. You know that we own a very large amount of owned land. Therefore to maintain this 60:40 mix is likely that the incremental GDV (gross development value) addition will be perhaps 50 per cent from JDAs and 50 per cent from owned land,' Lodha said.

During the last fiscal year, Macrotech Developers added many new land parcels to build housing projects with a potential sales value of over Rs 20,000 crore.

'In terms of our business development, we added about Rs 20,000 crore of GDV through new projects, which was higher than our guidance of Rs 17,500 crore. Both on JDAs as well as on outright, we continue to see a steady and strong pipeline of new projects coming in,' Lodha said.

Mumbai-headquartered Macroteh Developers registered a 20% growth in its sale bookings (pre-sales) to a record Rs 14,520 crore last fiscal from Rs 12,060 crore in the 2022-23 financial year.

It has given guidance of achieving 21% annual growth in sale bookings this fiscal to Rs 17,500 crore.

Recently, Lodha told PTI that the company was not in a 'rat race' to become the top builder in terms of sale bookings and it would rather focus on achieving consistent and predictable growth with high profit margins.

To achieve the sale bookings target, Macrotech Developers will launch 17 housing projects this fiscal, comprising 10 million square feet of saleable area and a revenue potential of Rs 12,000 crore.

The company will launch 10 new projects and seven new phases in existing residential projects during the 2024-25 fiscal across the three cities. However, the company said the guidance for the launch pipeline of this fiscal might shoot up as it might acquire more land parcels and be able to launch housing projects on those sites in this financial year itself.

Even during FY24, Macrotech Developers cited that the company launched projects worth Rs 18,000 crore as against the guidance of Rs 13,000 crore.

Macrotech Developers is bullish on the overall demand scenario in the housing segment.

To encash this, the company will step up its investment this fiscal year in the construction of projects to over Rs 5,000 crore.

Lodha said the company is targeting to deliver more than 10,000 apartments during 2024-25 as against around 8,200 units in the last fiscal.

Recently, Macrotech Developers reported an 11% decline in its consolidated net profit to Rs 665.5 crore in the March quarter from Rs 744.4 crore in the year-ago period.

The company's total income grew to Rs 4,083.9 crore in the quarter under review from Rs 3,271.7 crore a year ago.

During the 2023-24 fiscal, Macrotech Developers registered a three-fold jump in profit to Rs 1,549.1 crore as against Rs 486.7 crore in the 2022-23 fiscal.

The company's total income rose to Rs 10,469.5 crore last fiscal over Rs 9,611.2 crore in the 2022-23 fiscal.

Macrotech Developers has delivered around 100 million square feet of real estate and is currently developing more than 110 million square feet under its ongoing and planned portfolio.