Real estate sector not looking for subsidy but some govt support needed: Prestige Group

We have kept internal targets but right now, we do not want to commit ourselves in the public, says Irfan Razack, CMD.

Despite the lockdown you have managed to reach and some cases go beyond the guidance which you had given for FY20. Are you giving any guidance for FY21 now or will you be playing it by the ear and see how things pan out?
For FY21, we have stopped giving any guidance because these are very uncertain times and it is very difficult to predict what is going to happen in the next week or maybe even next day. So, we are trying to play it by ear but at the same time, we are not stopping any of our activities because again demand has picked up quite well and commitments are coming from customers, which is a fantastic sign.

It is helping us to even do some new launches. Today itself we have a new launch called the Prestige Primrose Hills in Kanakapura Road. That will probably help us to take things forward further and get our targets. We have kept internal targets but right now, we do not want to commit ourselves in the public and more so because of the uncertain times.

How are tenants coping with pandemic in terms of leasing, releasing and renegotiations, especially with your longer tenure tenants?
There are various asset classes. Let me start with the office segment. It had near 100% occupation and that helped because we do not have to chase and look for new occupiers at the moment. The focus will be different even from the occupiers and the business perspective because even those spaces that have been leased out, today nobody is working from these offices. They are just keeping their servers and running minimal electricity in terms of AC and keeping the premises in sanitised conditions. Some have started working but most have not.

But from the office side, there are no notices for quitting spaces and even if there, it is very minimal. Moreover, the rentals are being paid by the tenants because they are occupying our premise and all the infrastructure is in place and we are helping them with their business continuity. However, going forward, I believe new business will only come once things settle down. It may happen a quarter later.

What is the launch pipeline going forward, especially with labour worries emerging for rental business and what exit rental trends are you targeting?
My exit rentals in the year that has gone by is around Rs 950-1,000 crore. I do not want to make any prediction for March 2021. We will take it as we go along but right now this is the exit rental that we have and of course once the more and more space comes in, we are going to boost it up.

Two malls are under production and it will take another-a year and a half to complete and there are a lot of other office spaces which are under construction. There will be a delay from the original to now by about three to six months. As far as residential is concerned, we are on track to deliver to our customers almost on time because we had a buffer which we had kept for any delays that could happen. Our customers can rest assured that our contractors have told us that they somehow or other would get the required labour and make sure that they deliver on time. So on that aspect, we are pretty happy and confident that we will satisfy our customers and deliver to them on whatever timelines that have been committed, give or take two or three months.

Minister Piyush Goyal has called for a sharp reduction in prices. Is that a viable option or is that likely to happen? So you think developers will be forced to cut rates anyway?
I heard that statement of Goyal ji many, many times. I do not know in what context it was said but what he really meant was that if there is a ready inventory of real estate, you may as well sell and liquidate and pay off the banks and that the government is not there to support or subsidise for it.

In fact, the real estate industry does not look at the government for any subsidy whatsoever. Having said that, since we are an industry that supports almost 250 ancillary industries and we also are the largest provider in terms of employment for the unorganised sector and since we churn the GDP, we need some government support.

Now what is the type of support we are looking for? This is a time when all of us have to go hand in hand if the government is serious about churning the GDP because real estate, apart from building houses because in the Indian context, housing definitely depends on which sector, which segment of the population one is catering to.

Today small, medium and big developers are all catering to all segments of the population and everybody needs a house -- whether it is somebody who is buying a new home for the first time or is someone who is upgrading from two bedroom to a three bedroom or a three bedroom to a four bedroom or villa, everybody needs their living spaces. All this activity helps create employment, churn the GDP and the economy.