PROPERTY DEVELOPERS HAVE stepped up land-related capital expenditure due to strong sales and a decline in inventories in metros, analysts have said. Land-related capex surged to 27% in Q3FY23 against 18% in Q2, largely led by significant investments by Godrej Properties (GPL), according to a recent report by Nuvama Research.
GPL continued to lead in this field with 49% of collections in the first nine months ended Q3FY23, Nuvama said. "Free cash flow generation was the highest for DLF, followed by Lodha; GPL continued to have the largest cash flow deficit, largely due to its greater land capex," Nuvama said.
Sobha, on the other hand, had land-related inflows during this period, it said. Apart from GPL, Puravankara and Shriram Properties had cash flow deficit.
Developers agree that they are scouting for good opportunities in the market.
"Joint developments and joint ventures have reduced now. Today we have to buy land through NCLT and banks, for that we need to pay cash upfront," said Venkat K Narayana, chief executive officer of Prestige Estate Projects.
Prestige is setting up a residential platform with Kotak Realty Fund, wherein it will develop projects and Kotak will invest. "Such platforms help us in scaling up the business," Narayana said.
Prestige has set a sales booking target of ₹25,000 crore for FY26 and is looking to cross a target of ₹12000 crore for FY23.
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