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DB Realty eyes return to Mumbai property mart

Raghavendra Kamath/Mumbai 08 Oct 12 | 12:47 AM
Related to : D B Realty Ltd
 D B Realty Ltd
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DB Realty Ltd is taking aggressive steps to come out of the shadows of the second generation (2G) telecom spectrum scam. The property developer is seeking to revive its fortunes in Mumbai real estate by launching new projects and rebranding existing ones.

The company’s stock has fallen 33 per cent since February 9, 2011, when its managing director, Shahid Balwa, was arrested by the Central Bureau of Investigation. Some of the company’s projects also received stop-work notices and became a matter of intense speculation.

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DB Realty is now looking to launch as many as 10 new real estate projects in Mumbai in the current financial year. The company has 36 prime land plots in the city, which it wants to leverage on, said Vipul Bansal, the newly appointed chief executive officer. The developer is looking at completing two of its projects this financial year, he added.

According to Bansal, in cities such as Mumbai where the bulk of investments/project cost is in land, if any developer has prime land and all approvals, he can easily sell the project before the construction starts. “You sell 20 per cent of the project and then your entire construction is taken care of."

The company had a debt-to-equity ratio of 0.07. According to the fourth-quarter earnings release, DB Realty had total debt of Rs 213 crore. In the June quarter, the company posted a net loss of Rs 2.1 crore due to lower sales.

DB Realty is also in the process of rebranding seven of its ‘Orchid’ projects in Mumbai to ‘DB’ for better recall, said Bansal, who joined the company from Indiabulls Real Estate. Advertising agency Percept H had suggested the company rename its projects.

“Wherever possible, we have attempted to shift to the DB brand, as it has better brand recall. We are not shying away from the DB brand," Bansal said. He denied the rebranding exercise had anything to do with company’s attempts to come out from the negative publicity the 2G scam had generated in the past.

“The clouds related to approvals have gone away and it is for the new management team to launch new projects and focus on execution," Bansal added. Along with Bansal, the company has five new executives in senior positions.

“They have very good locations. Rebranding helps them in selling projects well," said Sanjay Dutt, executive managing director, Cushman and Wakefield, a global property consultant.

He said speedy approvals by the Brihanmumbai Muncipal Corporation (BMC), ensuing festival season and clarity on development rules and environment clearances will help developers in execution and monetisation of projects. Last year, the company’s projects faced a series of actions by the state government and public bodies.

First, the Maharashtra government cancelled the additional floor space index granted to DB Realty’s Pune project. Later, the company’s hotel project in Marine Lines in Mumbai, touted as one of the tallest towers in the country, got a stop-work notice from the BMC.

In October 2011, the Expert Appraisal Committee directed the state environment department to issue a stop-work notice to the project for carrying out work without environment approval and violating the Environment Protection Act. The project got approval from the state environment impact assessment authority in March this year.

There were media reports that the company was looking for joint venture partners for its projects in Mumbai and sell off its hotel projects.

Bansal denied such reports. “Our attempt is to release current inventory in our projects in phases and take advantage of the prevailing market prices. Post-Navratra, a lot of things will change in terms of offtake. We are aggressively beefing up marketing and advertising budgets to take advantage of that."

Issues raised by the government regarding its hotel projects are being sorted out and work at the Marine Lines project would start in December, he added.

Regarding the company’s 1 million sq ft MIG Redevelopment Project in Bandra, Mumbai, Bansal said the company had an environment committee meeting recently and was looking to start work soon.

Experts say developers need to focus on the right pricing. “Recently, some launches in Mumbai have done well due to right pricing. Mumbai has a huge pent-up demand," said Jasmeet Chhabra, a Mumbai-based real estate consultant.

“The problem is when prices shoot through the roof and buyers have doubts about the delivery of the project," Chhabra added.

Comments

    14 Dec 12 at 05:05 PM
By: Sheetal

Mumbai is a one of the well developed city which is developed fast and The improvement in the infrastructures of Mumbai is another reason for the demand in residential properties in Mumbai. Real Estate In Navi Mumbai



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