Goliaths of India real estate rise as sales soar

Mumbai

INDIAN home buyers are flocking to the nation's well-funded publicly traded developers as risks of stalled and delayed housing projects mount at smaller players in the industry.

While overall home sales remain weak, India's top nine listed real estate companies saw sales jump 159 per cent in the year ended March from 2017, when the slowdown began, Anarock Property Consultants said in a report this month.

These developers also reduced their debt by a total of 8 per cent during the period while competitors struggled to survive.

The revival is seen in the stock market, where the S&P BSE Realty Index has surged 21 per cent this year - three times as much as the broad BSE 500 Index - and is set for its biggest annual gain since 2017.

The property gauge is also the best performer among 19 sectoral sub-indexes compiled by BSE.

Compare this performance with India's broader real estate industry, where as many as 500 firms face bankruptcy and Citigroup Inc estimates as much as 800 billion rupees (S$15.1 billion) of debt is locked within incomplete projects. A credit crunch is feeding into - and worsened by - an economic slowdown that's hitting Indians' demand for goods and services.

Home buyers are going to listed companies to mitigate the risk of their apartment building being left unfinished, Anarock chairman Anuj Puri said. The government's 250 billion-rupee fund to salvage stalled residential projects is estimated to salvage some 6 per cent of constructions that are running behind schedule. BLOOMBERG