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May 14, 2024

Macrotech Developers to Invest Rs 4,000 Crore in Land Acquisition to Fuel Expansion

Macrotech Developers Ltd, a leading real estate firm, has announced plans to invest between Rs 3,500 and Rs 4,000 crore this fiscal year to acquire new land parcels. This investment, aimed at expanding their housing project portfolio, will be executed both outright and through joint development agreements (JDAs) with landlords. The move comes in response to a significant surge in demand for residential properties.

Operating under the renowned Lodha brand, Macrotech Developers has a strong presence in the Mumbai Metropolitan Region (MMR) and Pune, and has recently ventured into the Bengaluru market. According to a transcript from an earnings call, Managing Director and Chief Executive Officer Abhishek Lodha revealed the company’s strategy to bolster its land bank, stating, “The total spend on new business development will be about Rs 35 to 40 billion.”

In JDAs, real estate developers typically pay an advance to landowners and share revenue or constructed area with them. Lodha outlined the company’s target mix for new land acquisitions, aiming for 60% owned land and 40% JDAs. “To maintain this 60:40 mix, it’s likely that the incremental gross development value (GDV) addition will be perhaps 50% from JDAs and 50% from owned land,” Lodha explained.

Last fiscal year, Macrotech Developers added several land parcels with a potential sales value exceeding Rs 20,000 crore, surpassing their guidance of Rs 17,500 crore. “Both in JDAs and outright purchases, we continue to see a steady and strong pipeline of new projects,” Lodha noted.

Macrotech Developers also reported a significant 20% growth in sale bookings, reaching a record Rs 14,520 crore last fiscal year, up from Rs 12,060 crore in the previous year. The company has set an ambitious target of achieving 21% annual growth in sale bookings this fiscal, aiming for Rs 17,500 crore.

In an interview with PTI, Lodha emphasized the company’s focus on sustainable and profitable growth rather than merely striving to become the top builder by sale bookings. To meet their targets, Macrotech Developers plans to launch 17 housing projects this fiscal, encompassing 10 million square feet of saleable area with a revenue potential of Rs 12,000 crore. This includes 10 new projects and seven new phases in existing residential developments across Mumbai, Pune, and Bengaluru.

Moreover, the company’s guidance for new project launches may increase if additional land parcels are acquired and developed within the current fiscal year. During FY24, Macrotech Developers launched projects worth Rs 18,000 crore, exceeding their guidance of Rs 13,000 crore.

Confident in the robust demand for residential properties, Macrotech Developers plans to significantly increase its construction investment to over Rs 5,000 crore this fiscal year. Lodha highlighted the company’s ambitious delivery targets, aiming to complete over 10,000 apartments in 2024-25, compared to approximately 8,200 units in the last fiscal year.

Despite reporting an 11% decline in consolidated net profit to Rs 665.5 crore in the March quarter, down from Rs 744.4 crore in the same period the previous year, Macrotech Developers saw its total income rise to Rs 4,083.9 crore from Rs 3,271.7 crore. For the entire 2023-24 fiscal year, the company achieved a three-fold increase in profit, reaching Rs 1,549.1 crore compared to Rs 486.7 crore in the 2022-23 fiscal year, with total income growing to Rs 10,469.5 crore from Rs 9,611.2 crore.

Macrotech Developers has successfully delivered around 100 million square feet of real estate and is currently managing the development of over 110 million square feet across its ongoing and planned projects. This significant investment in land acquisition and development underscores the company’s commitment to capitalizing on the strong demand in the housing market and driving future growth.

Jhumpa Lahiri

Jhumpa Lahiri

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