With the foresee of weak sales for 2014, debt ridden real estate developers would find it difficult to lessen the debt considerably and the weak cash flows may in fact load up their debt on their account.
One of the analysts says that the increase in bookings and effective cash flows in 2014 the debt level could be controllable for many real estate companies, which concentrated in decreasing their debt by liquidating their assets and other stratagems.
A fall in economic growth to 4.5 per cent in the previous fiscal year is considered as the sluggish in a decade due to which high rates have hurt the consumer sentiments and sales of residential and other segments of real estate. For the second time in the pipeline, the economic growth is predicted to stay below 5 per cent.
The cumulative net debt of 11 registered real estate companies increased slightly by Rs.1,000 crore to Rs.42,000 crore in the quarter ended December on quarter-on-quarter basis and furthermore debt reduction is not anticipated in the near period. Because, the drive in sales is likely to be fragile in the first half of 2014-15 and most of the companies are in the stage of execution of projects that were launched in 2012-13.
One of the Gurgaon based top real estate developers in the country says that without effective cash flows selling of assets to lessen high debt is fine negative,which means debt is rising.The management also specified that the qualitative part of debt is fast improving, and once their under-construction shopping mall becomes effective, healthy rentals will start flow in.
While in Mumbai, the scenario is no different, many real estate developers say that there main focus is to reduce debt and look forward to complete their ongoing projects for robust rental returns.
One of the industry experts says that the revenue bookings for most real estate companies in the December quarter exhibited no progress except in Bangalore. He also added that sales prediction for both NCR and Mumbai metropolitan region (MMR) is low and hence no further reduction in debt will happen
On Contrary, the Bangalore developers continue to witness a robust effective performance with strong sales bookings and healthy projects in row across South India.
One of the analysts says that the increase in bookings and effective cash flows in 2014 the debt level could be controllable for many real estate companies, which concentrated in decreasing their debt by liquidating their assets and other stratagems.
A fall in economic growth to 4.5 per cent in the previous fiscal year is considered as the sluggish in a decade due to which high rates have hurt the consumer sentiments and sales of residential and other segments of real estate. For the second time in the pipeline, the economic growth is predicted to stay below 5 per cent.
The cumulative net debt of 11 registered real estate companies increased slightly by Rs.1,000 crore to Rs.42,000 crore in the quarter ended December on quarter-on-quarter basis and furthermore debt reduction is not anticipated in the near period. Because, the drive in sales is likely to be fragile in the first half of 2014-15 and most of the companies are in the stage of execution of projects that were launched in 2012-13.
One of the Gurgaon based top real estate developers in the country says that without effective cash flows selling of assets to lessen high debt is fine negative,which means debt is rising.The management also specified that the qualitative part of debt is fast improving, and once their under-construction shopping mall becomes effective, healthy rentals will start flow in.
While in Mumbai, the scenario is no different, many real estate developers say that there main focus is to reduce debt and look forward to complete their ongoing projects for robust rental returns.
One of the industry experts says that the revenue bookings for most real estate companies in the December quarter exhibited no progress except in Bangalore. He also added that sales prediction for both NCR and Mumbai metropolitan region (MMR) is low and hence no further reduction in debt will happen
On Contrary, the Bangalore developers continue to witness a robust effective performance with strong sales bookings and healthy projects in row across South India.
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