According to sources of the Trump Tower developer in Mumbai, it reveals it is shifting focus to cheaper apartments and office space as the credit of the company seeks demand for other posh properties.
Lodha Developers, earlier known as Macrotech Developers are alleged to reduce the share of premium housing from 17% to 30% from its portfolio, as was declared by Abhishek Lodha, the Managing Director. Furthermore, the company is also seeking to boost the contributions from the so-called affordable housing to about 50% of revenue over the period of next three to four years from 40%.
The Indian real estate market has been criticized over the past three years owning to a series of policies declared by the government of Prime Minister Narendra Modi. It also led to collapse of lending by non-bank financial companies.
As premium homes foster across the country, builders are dependent on Modi’s home-for-all push in order to keep pace with demand for budget apartments.
The decline on cash comes months before Macrotech was to repay $325 million U.S. dollar- bond which was raised to develop two premium residential properties from London. Furthermore rating companies reduced the rank of company’s ratings twice this year as a result of weak sales and liquidity by narrowing its refinancing options.
After the London project is complete, the next one will be completed in the next six months and repayment of the bond will be realized through cash flows. Until then Lodha commented he did not expect to divest any more stakes in private equity firms after the sale of 28% of company’s holding.
“We are well on track to make the arrangements to make the payment in March 2020,” commented Lodha, declining to share details. “We are available as a secondary source if there is a shortfall. We don’t expect a shortfall, though.”
The small peers in India are on the other hand struggling to survive. In order to grapple with the downturn, Lodha began a new business line which offered apartments as low as Rs 25 lakh ($35,000).
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