Things have started to look up real estate developers who for the last few months were reeling under the double whammy of poor buyer demand and low availability of funds.
In a month’s time, three major developers including DLF, Unitech and Indiabulls Real Estate have raised money through the financial market indicating the beginning of a revival of investor confidence. They are using the money to restructure business, cut debt and expand projects.
“Availability of credit, for both developers and buyers, and an improvement in demand are essential for a complete recovery,” Anshuman Magazine, managing director, South Asia, at real estate consulting firm CB Richard Ellis.
Indiabullls this week announced an institutional placement of shares to raise Rs. 2,656 crore.“Indiabulls is a debt-free company and we will use the funds to fund our real estate and power business,” Gagan Banga, director, Indiabulls told Hindustan Times.
Last month, Unitech raised Rs. 1,621 crore through a qualified institutional placement (QIP) which led to the promoters’ stake falling to 51 per cent. They now plan to inject Rs 1,000 crore through convertible warrants to take it to 61 per cent, informed sources said.
Last week, DLF’s promoters diluted 10 per cent stakes to aid promoter-controlled leasing affiliate DLF Assets Limited (DAL). “We are pleased to follow through our commitments with this game changing transaction " Rajiv Singh, vice chairman, DLF had said.