Prestige anticipates 12 billion in pre-sales when the acquisition of land parcels through NCLTs and ARCs becomes easier

Real estate enterprises are finding it simpler to purchase property and expand because to the land parcels made accessible through institutional channels like Asset Reconstruction Companies (ARCs) and National Company Law Tribunals (NCLTs).

According to Venkat K. Narayana, chief executive officer of Prestige Group, at least four land lots have recently been bought through these institutional channels, and a couple more are in the works.

In Mulund, a suburb of Mumbai Metropolitan Region (MMR), the business has already begun an eight million square foot project that was selected through the NCLT procedure. Another upcoming project in Worli is a redevelopment project that has been stuck for ten years; the company is looking to launch a residential project there. The company is currently in the process of launching a project in affluent south Mumbai at Marine Lines, which was also selected from Edelweiss ARC.

Another tense transaction by Prestige was the purchase of land in Noida. It is awaiting the project’s last round of clearances there. Under Pune and Gurugram, there are also two similar purchases in progress.

Although the procedure has been simplified and made simpler, these acquisitions still have their own set of issues that need to be resolved, according to Narayana. The majority of land transactions now take place through banks, ARCs, and the NCLT procedure, making purchase simpler. However, because we are dealing with institutions, these purchases are not clean, and as a result, they do have issues that need to be handled.

Narayana claims that by being aware of the amount it would have to pay for every land piece, Prestige is able to reduce the risk. “We always price our items using scientific methods. We are aware of the price we would like to sell it for, the cost of the building, and the land cost alone. Therefore, if it is inside the range, we execute the transaction; otherwise, we do not.

Pre-sales for Prestige are expected to total more than Rs 12,000 crore by the conclusion of the fiscal year 2022–2023. In FY22, the business had pre-sales of around Rs 10,000 crore. Over the following six months.. In the next six months, it intends to introduce 15-20 million square feet of residential projects in the mid-range and luxury categories with two, three, and four BHK layouts, according to Narayana.

For the quarter ended September 30, 2022, Prestige Estates recorded a consolidated net profit up 55% year over year to Rs 149 crore. The company’s operating revenue reached around Rs 1,475 crore, an increase of almost 10% year over year.

Earnings before interest, taxes, depreciation, and amortisation, or Ebitda, were Rs 415.6 crore for the quarter, unchanged year over year. Net profit margins for the company were 10.12% and 28.18%, respectively. Ebitda margins decreased 226 basis points on a y-o-y basis for the September quarter.

For the first half of the year H1 FY23, the firm reported sales of Rs 6,523 crore, up 129% year over year, and collections of Rs 4,749 crore, up 85% year over year. With an average realisation of Rs 7,976 per square foot, the sales during this time period may be ascribed to a volume of 8.18 million square feet. In all, 5,774 units were sold by the firm in the first half of the year.

Past complicated property acquisitions caused by ambiguous titles, drawn-out approval processes, and other factors resulted in numerous of them building up significant debt loads and experiencing extreme financial difficulty. The majority of well-known, large players have held off on entering new regions. But now, things appear to be shifting.