Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Oberoi Realty Ltd (BOM:533273, Financial) recorded its highest ever quarterly and annual profits in the current fiscal year.
- The launch of Elysian Tower-C at Oberoi Garden City in Q4 garnered strong demand from customers.
- Received occupation certificate for Commerz 3, with Morgan Stanley as a large tenant and strong leasing interest from prospective tenants.
- Entered into a deal to redevelop seven buildings in Adarsh Nagar, Worli, with a potential free sale component of about 6.25 lakh square feet.
- The Borivali mall is near completion with significant leasing progress and expected to be one of the best malls in the country.
Negative Points
- Execution timelines for projects like the Borivali mall and Commerz 3 are challenging and can be moving targets.
- The Thane project has faced delays, although work has now commenced.
- The company faces competition in the luxury segment, particularly in markets like Delhi.
- CapEx requirements for upcoming projects in hospitality and office sectors are significant.
- The company is cautious about aggressive expansion and prefers prudent growth, which may limit rapid scaling.
Q & A Highlights
Highlights from Oberoi Realty Ltd (BOM:533273) Q4 FY24 Earnings Call
Q: Can you provide an update on the leasing for Commerz 3 and the Borivali mall, including timelines for rent commencement?
A: Commerz 3 is nearly 85% leased, with Morgan Stanley as the anchor tenant. The Borivali mall is near completion with a soft launch expected by October. Rent for Commerz 3 started on April 1, 2024, and Borivali mall rents should start by October.
Q: What is the timeline for launching the Adarsh Nagar and Gurugram projects?
A: Both projects are expected to launch within an 8 to 12-month window, likely in the next financial year.
Q: Can you provide an update on the Thane project, including launch timelines and current progress?
A: Work has commenced on both Kolshet and Pokhran Road projects. The launch is expected during the festive season starting in early October.
Q: What are the margins for Three Sixty West and Elysian projects?
A: Both projects have high margins. The margins are sustainable and expected to either sustain or improve as higher floors are sold.
Q: What is the CapEx outlook for the next two to three years, especially for hospitality and office assets?
A: The CapEx for these assets is relatively small given the company's size. The focus will be on buying more land and aggressive execution and sales.
Q: When do you expect to reach INR 1,000 crore in rental income?
A: We expect to surpass INR 1,000 crore in rental income within this financial year, driven by the mall and Commerz 3.
Q: What is the outlook for luxury residential demand, particularly for Three Sixty West?
A: Luxury demand has surged post-COVID, and Three Sixty West is well-positioned with no immediate competition. We expect strong sales and pricing.
Q: What is the total construction area for the Adarsh Nagar project?
A: The total construction area is approximately 11 lakh square feet, with a free sale component of about 6.5 lakh square feet.
Q: What is the company's strategy for business development and land acquisition?
A: The company is actively looking to acquire more land and expand its project portfolio, focusing on maintaining quality and brand reputation.
Q: What is the sales outlook for the next year?
A: While specific sales guidance was not provided, the company expects strong growth driven by multiple project launches and high-margin projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
