Home buyers ready to pay 15-20% premium for health and wellness amenities: Dhaval Ajmera
Amenitieslike fitness facilities, clubhouses, swimming pools and tennis courts have become an important factor for people looking to buy properties. Demand for housing propertieshas been increasing post pandemic, with real estate becoming an important investment for people, says Dhaval Ajmera, director of AjmeraRealty and Infra India.
- According to Edelweiss, the realty developer is planning to reduce gross debt by ₹350-400 crore by FY24.
AdvertisementThe Covid-19 pandemic has made people more conscious about their health. And, that’s reflecting in their housing choices. Health and wellness amenities like gyms, Yoga rooms, workout centres, spas and the like – become a top priority for homebuyers, says Dhaval Ajmera, director of Ajmera Realty and Infra India.
Amenities and community living are what people are most concerned about while choosing a home and are ready to pay a premium for these, said Ajmera. Ajmera Realty is known for its mid-luxury to luxury housing projects across Mumbai, Pune and
“Even if it is a single building or even a complex, people would really want to live in projects that have got plenty of amenities where they or their families can enjoy. And, these amenities come at a 15-20% premium,” Ajmera told Business Insider India in an interview.
The love for facilities, clubhouses, swimming pools and tennis courts within a housing complex have become all the more important after the pandemic, when people were stuck in their homes.
Demand to keep growing
In general, the demand for
“Post pandemic, we are seeing demand for homes and that is where we have seen good numbers clocked in by many listed and unlisted developers,” Ajmera added.
Within his group, luxury and mid-luxury properties sales were good. Affordable property – defined as properties worth ₹1 crore in Mumbai – also clocked good sales this year, Ajmera added.
The realty developer recorded an 82% year-on-year jump in sales at ₹166 crore for the quarter ended September this year. It sold nearly 80,000 sq ft carpet area during the period.
‘Buyers are responding to ongoing prices’
Recently, Ajmera Realty clocked its best festive season in the last two years — as it also coincided with new launches. The developer has a few new launches coming up in the next two years, primarily in Pune, Mumbai and Bangalore
AdvertisementThe company currently has over 1.3 million square feet (msf) of projects under development, including flagship projects such as Manhattan, Greenfinity and Sikova.
According to an Edelweiss wealth research report, around 25% of the inventory worth ₹354 crore in the Manhattan flagship project has already been sold in less than six months of the launch.
The last time the company saw sales as good as this was during the pandemic year of 2020 when it had an inventory of ready-to-move-in homes that was in deep demand in the middle of the pandemic. The demand that the sector is seeing is also expected to continue, bolstered by new launches across markets. Even rising interest rates will not play spoilsport, hopes Ajmera.
“We have seen a rise in the interest rates but the demand hasn’t gone down because people realise that this is a temporary inflation. I feel that till the time it (interest rate) doesn’t cross 9%, this demand will stay,” Ajmera further explained.
In spite of the demand, Ajmera doesn’t see property rates rising significantly next year. The exception however being a few micro pockets like in Wadala, where the real estate company has both land holdings as well as projects.
Advertisement“It is not wise for developers to increase the property rates right now because the market has been pretty decent, people are responding to the ongoing prices. However, in the ready-to-move-in segment, a little bit of surge can happen because the demand for ready houses is better than for under-construction properties,” Ajmera said.
In the September quarter, the property rates saw a 6% y-o-y increase across eight cities — Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru, and Ahmedabad, according to a report by CREDAI – Colliers - Liases Foras. And Delhi NCR saw the highest increase in residential prices at 14% in the period.
Reduce debt in two years
The realty developer has a land bank of 11.8 msf for future development and projects and 1.3 msf land which is under development.
According to the Edelweiss report, the company is planning to reduce its gross debt by ₹350-400 crore by FY24 by generating high operating cash flows and monetising assets.
“We are seeing good sales traction happening, which is also helping in our repayment plan. We want to gather maximum sales, which will run the project and (have) less requirement of debt compared to a project that is having no sales and more debt. Projects are also being constructed at a faster pace, which is helping us also realise money faster and pay the debt faster and hence, this will help us reduce our debt,” Ajmera told Business Insider India.
However, project-related debts are still going to continue, he added. “Project requires a certain kind of working capital finance, which is related to the project itself,” he added.
As of September 30 2022, the company had a gross debt of ₹800 crore on their books, out of which ₹250 crore was for projects and the balance for general corporate purposes.
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