'Trifecta of consolidation' at play in real estate mkt, says Mactotech Developers MD Abhishek Lodha

New Delhi, May 21 (PTI) Indian property market is witnessing a "trifecta of consolidation" with consumers, lenders and landowners preferring to work with a handful of reputed real estate companies, according to Macrotech Developers MD and CEO Abhishek Lodha.

He believes that this consolidation will continue for a long period of time.

Macrotech Developers, which sells properties under the 'Lodha brand', is one of the largest real estate companies in the country.

Responding to a query to an analyst regarding slowdown in demand for Grade A developers, Lodha noted that most of the Grade A developers have had very strong and high-quality pre-sales during the last fiscal year.

"We think there is a trifecta of consolidation at play. It's consolidation on the consumer side, it's consolidation on the lender side and it's consolidation on the landowner side. All three are very clear that they only want to work with a handful of developers as purchasers or as partners or sellers or lenders or whatever it may be," he said.

According to a transcript of the company's discussion with analysts, Lodha said "it is very clear that consolidation has a long, long way to go, and it will continue to play out for a long, long period of time." The sector, he said, is nowhere close to the end of the consolidation cycle.

Post-COVID, Indian real estate has been witnessing a shift in demand towards reputed builders with a good track record of delivering homes to consumers, according to property consultants.

A large number of homebuyers have burnt their fingers with many developers, especially in Delhi-NCR market, defaulting in delivering their projects.

On concerns over possible slowdown in demand, Lodha said, "the other part is that even assuming for a moment that there is some demand slowdown in certain segments, I think it will be a segmental demand slowdown, if at all, not across the board. Because in the last three years, for example, even though there was broad growth, mid-income was not doing well. So, I think that kind of cyclicality will inevitably happen," Lodha said.

In the past three years, the luxury housing segment has performed exceedingly well, while the affordable and mid-income housing segments have struggled because of lack of adequate supply in view of high cost of inputs, including land, according to market experts.

As part of its growth strategy, Lodha said the company operates across all the segments rather than being concentrated on any one segment.

"But even within that slowdown, you will see that the Tier 1 developers will be least affected or not affected because the slowdown inevitably affects the weaker hands. And on a balance, actually, it benefits the bigger developers because you see more beneficial terms in the land market also," Lodha said.

He said there is a lot of opportunity for big, branded and reputed developers to continue to deliver sustained growth.

During the last fiscal year, Macrotech Developers Ltd sales bookings increased 21 per cent to a record Rs 17,630 crore, from Rs 14,520 crore in the 2023-24 fiscal year.

The company aims to sell properties worth Rs 21,000 crore in the current fiscal, a 19 per cent increase annually.

Macrotech Developers has delivered around 100 million square feet of real estate and is currently developing more than 110 million square feet under its on-going and planned portfolio. PTI MJH DRR