DLF to hike rates in Gurgaon project despite low demand

New Delhi: Realty major DLF will increase the price of its apartments in a housing project at Gurgaon by 4 per cent despite sluggish sales and slowdown in the overall real estate market.

DLF has decided to increase the price of flats in its housing project ‘Regal Gardens’ by Rs 250 per sq ft to Rs 6,500 per sq ft effective from July 15.

The country’s largest real estate developer had launched this 10-acres project in March 2012 at Rs 4,750 per sq ft. It is developing 516 apartments in this project. The construction of this project is being done by Simplex Infrastructures.

A company official said that the prices are being revised upwards as construction work of the project has reached at an advanced stage and less than 10 per cent of inventories remains to be sold.

“About 90 per cent of Regal Gardens is already sold out and there are only a few units left. The project is getting traction because structural work has already been completed and services and finishing works are going on,” said Vikram O Datta, Vice President?Marketing, DLF Home Developers Ltd.

Real estate sector, particularly residential segment, is facing a huge slowdown in demand since last 2-3 years and that has resulted in liquidity crunch to developers and significant delays of up to 7-8 years in project completions.

DLF’s sales bookings fell by over 5 per cent during the 2014-15 financial year.

The company achieved gross sales bookings for 2.25 million sq ft worth Rs 3,850 crore in 2014-15, as against 3.74 million sq ft amounting to Rs 4,070 crore in the previous fiscal.

On outlook for this fiscal, DLF said it would “take at least 12 months for the sales momentum to begin improving; the key factor would be in general, reduced interest rates and GDP growth and in specific, demand/supply conditions in micro markets. Sales volume in most geographies shall continue at a diminished pace similar to FY14 and FY15”.

At the end of the last fiscal, the company’s net debt stood at Rs 20,965 crore, of which about Rs 14,000 crore pertained to rental business and the rest towards its development segment.