Cyclical Sales Pattern in Focus

The discussion began when Gaurav Khandelwal from JPMorgan sought clarity on quarterly sales trends. He noted stronger sustenance sales from relatively older projects like Eternia and Enigma, while newer launches such as Jardin and Forestville saw a sequential decline.

Khandelwal asked whether this reflected an expected trend tied to the product life cycle—robust initial uptake followed by a slowdown, then a pickup as completion nears.

Leveraging Launch Curiosity and Construction Milestones

Vikas Oberoi confirmed the cyclical nature of project sales. “There’s huge curiosity around launch,” he said. “People pay a very small down payment, and they know that they will be making the rest of the payment gradually.”

However, once construction reaches 40-50% completion, buyers must make upfront payments matching progress—a shift that naturally cools demand. Oberoi Realty uses this phase transition strategically.

Strategic Sales Throttling Under RERA

Oberoi revealed that the company often slows or halts sales once sufficient units are booked to fully fund construction through RERA-escrowed customer advances.

“We have sold enough, and we have money lying in the project held by RERA,” he stated. “As a strategy, we actually end up slowing down sales… to ensure that I am not selling cheap, and I am not even getting the money in my hand.”

Since early sales lock cash in project-specific accounts without immediate deployability, the firm avoids diluting pricing during mid-construction lulls.

Price Hikes as Possession Nears

As projects near structural completion—typically with all slabs cast and possession 18 months away—Oberoi Realty implements price increases. “We increase the price… that also kind of starts pickling our price in the minds of people that this is what they will have to pay going forward,” Oberoi explained.

Even if volume slows at higher rates, the strategy cements elevated pricing while aligning sales momentum with end-user urgency.

Elysian Tower A: A Case Study in Inventory Holding

Oberoi highlighted Tower A of the Elysian project in Goregaon, where buildings are nearing completion. “We are sitting with money in the bank, there’s no point in selling,” he said. “Ready apartments within Goregaon are selling at a higher price than what we are booking at. So, I see literally a 20% return on my investment if I don’t sell.”

By retaining inventory, Oberoi Realty captures appreciation without triggering RERA cash inflows that cannot be redeployed.

Mastering RERA’s Constraints

Oberoi described the regulatory framework as creating a structural disincentive for early monetization. “This part of how RERA plays out is a disadvantage for us to sell early,” he noted, adding that leveraging project cyclicality remains “probably the best bet.”

Also Read: Oberoi Realty Ltd signs 18 acre Thane land deal

The post Vikas Oberoi Reveals Oberoi Realty’s Profit Playbook appeared first on Square Feat India.

By Varun Singh

In an extraordinary year marred by the pandemic and lockdowns, the real estate sector showed great resilience in 2021.

In their latest report, Knight Frank India notes that the Residential Sector had an unprecedented year of growth with sales rising by 51% year on year (YoY) to be recorded at 232,903 units across the top eight cities of the country.

New home launches also saw a significant rise of 58% YoY with the addition of 232,382 units in 2021.

For the Commercial office segment, the year was a mixed bag. Leasing volumes, recorded at 38.1 million square feet (MSF) though remaining at similar levels as 2020, clearly indicated towards the potential the market has in terms of leasing.

Noteworthy is that an overwhelming 68% of the total leasing in 2021 took place in the second half of the year. Bengaluru led the pack with 12 MSF of total leasing during the year. New completions in 2021 for office space was recorded at 39 mn sq ft, higher by 9% over the preceding year.

The report presents a comprehensive analysis of the residential and office market performance across eight major cities for the July-December 2021 (H2 2021) period.

H2 2021 cited that 133,487 housing units were sold in second half of the year 2021 cumulatively for the top eight cities.

This also showcased a substantial 41% increase Year-on-Year (YoY). Around 69,477 housing sales were reported in Q4 2021. Residential prices stayed steady or recorded marginal growth in seven of eight cities during the year. Homes priced over Rs 50 lakhs constituted around 58% of the overall sales in H2 2021.

Mumbai (34,382), National Capital Region (23,599) and Bengaluru (23,218) were the leading residential sales performers in H2 2021. Hyderabad and Bengaluru witnessed the highest home sales (in terms of percentage growth) during H2 2021 at 135% and 104% YoY respectively. In the calendar year 2021, Mumbai (62,989), Bengaluru (38,030) and Pune (37,218) led in terms of sales.

On the office market performance, Knight Frank India cited that the top eight cities recorded transactions of 25.9 mn sq ft in July – December 2021, whereas the office completions were recorded at 23.7 mn sq ft in the same period. Six of the eight markets saw transaction volumes grow in YoY terms during H2 2021. With the increasing need for flexibility and a hybrid working environment, co-working/ managed office sector’s transactions share increased to 18% in H2 2021 from 10% in H2 2020. With 8.7 mn sq ft transactions in H2 2021, Bengaluru recorded its highest ever office leasing activity in a half yearly period.

From the perspective of half-yearly sales, H2 2021 posted the highest sales volume since H1 2016. Low interest rates, improving affordability, and a resurging interest in home ownership due to the space constraints imposed by the pandemic, have been the primary drivers of this revival in demand. Developers strategically responded to this seismic shift in sentiment and launched almost 0.13 mn units in H2 2021, 50% higher than H2 2020. The incidence of direct discounts had reduced substantially during H2 2021.

Mumbai, National Capital Region and Bengaluru dominated the home sales activity in the country.
Despite the stamp duty cut window closure in March 2021, Mumbai and Pune accounted for 41% of the home sales during H2 2021. Homebuyers in the Information Technology sector dominated markets were relatively less impacted by pandemic induced disruptions and were well poised to take the plunge in H2 2021. This has primary been the reason for positioning Hyderabad and Bengaluru as the leading sales growth markets (in percentage terms) in the country in H2 2021.

In terms of 12-month residential price change, Chennai, Hyderabad and Bengaluru registered increment of 7%, 5% and 4% respectively. Mumbai witnessed a marginal increment of 1%. The prices were recorded to be stable in Pune, Kolkata and Ahmedabad. National Capital Region marked a marginal decline of 1%. However, price levels in seven of the eight markets under review were observed to remain at the same level or record marginal growth in the 6-month period.

The share of sales of INR 10 mn category has grown from 21% to 23% in the same reference period.

Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “Despite the disruptions caused by the pandemic, residential sales momentum increased across the key eight markets of the country due to a plethora of demand stimulants such as lowest home loan rates, government sops and change in attitude. Sentiments remain strong and should continue to aid market volumes in the near term. While buyer preferences were skewed towards ready inventory, established developers with a robust execution record are increasingly finding a market for their under-construction inventory.”

Also Read: Bhushan Kumar Of T-Series Paid Rs 167 Crore For Juhu Bungalow

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