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Homebuyers willing to pay 15-20% premium for health and wellness amenities: Dhaval Ajmera

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  • Services such as fitness facilities, clubhouses, swimming pools and tennis courts have become an important factor for people looking to buy real estate.
  • Ask about housing has increased after the pandemic, with real estate becoming an important investment for people, says Dhaval Ameradirector of ajmera Real Estate and Infrastructure India.
  • According to Edelweiss, the real estate developer plans to reduce gross debt by ₹350-400 crore by FY24.

The Covid-19 pandemic has made people more aware of their health. And that is reflected in their housing choices. Health and wellness facilities such as gyms, yoga rooms, training centers, spas and the like are becoming a top priority for homebuyers, said Dhaval Ajmera, director of Ajmera Realty and Infra India.

Amenities and community life are what people are most concerned about when choosing a home and are willing to pay a premium for it, Ajmera said. Ajmera Realty is known for its mid-luxury to luxury housing projects in Mumbai, Pune and Bengaluru.

“Even if it is a single building or even a complex, people would really want to live in projects with lots of amenities for them or their family to enjoy. And these provisions have a premium of 15-20%,” Ajmera told https://londonbusinessblog.com/ India in an interview.

The love of amenities, clubhouses, swimming pools and tennis courts within a residential complex has become all the more important after the pandemic, when people were confined to their homes.

Ask to keep growing


In general, the demand for houses has increased following the pandemic, with real estate becoming an important investment for people, even beating gold and stocks. Ajmera expects this trend to continue.

“After the pandemic, we are seeing demand for housing and there we have seen good numbers from many listed and unlisted developers,” added Ajmera.

Within his group, sales of luxury and mid-luxury real estate were good. Affordable real estate – defined as property worth ₹1 crore in Mumbai – has also clocked good sales this year, Ajmera added.

The real estate developer registered an 82% year-on-year revenue increase of ₹166 crore for the quarter ended September this year. It sold nearly 80,000 square feet of carpet space during that time.

‘Buyers respond to current prices’


Recently, Ajmera Realty clocked its best festive season in the past two years – as it also coincided with new launches. The developer has planned a few new launches in the next two years, mainly in Pune, Mumbai and Bangalore

The company currently has more than 1.3 million square feet (msf) of projects under development, including flagship projects such as Manhattan, Greenfinity and Sikova.

According to an Edelweiss wealth survey report, about 25% of the inventory worth ₹354 crore in the Manhattan flagship project has already been sold in less than six months after its launch.

The last time the company saw sales this good was during the 2020 pandemic year, when it had an inventory of move-in ready homes that were in high demand during the pandemic. The demand that the industry is seeing is also expected to continue, supported by new launches in various markets. Even rising interest rates won’t be a bummer, Ajmera hopes.

“We have seen an increase in interest rates, but demand has not fallen because people realize that this is temporary inflation. I feel that this demand will continue until the (interest rate) does not exceed 9%,” Ajmera further explains.

Despite demand, Ajmera does not see property prices rise significantly next year. The exception, however, are a few micropockets such as in Wadala, where the real estate company has both land holdings and projects.

“It is not wise for developers to raise property prices now because the market has been pretty good, people are reacting to current prices. However, in the ready-to-move segment, there may be a small increase because the demand for ready-to-move homes is greater than for homes under construction,” said Ajmera.

According to a report by CREDAI – Colliers – Liases Foras, property prices rose 6% yoy in the September quarter in eight cities – Delhi-NCR, MMR, Kolkata, Pune, Hyderabad, Chennai, Bengaluru and Ahmedabad. And Delhi NCR saw the highest increase in house prices in the period at 14%.

Pay off debt in two years


The real estate developer has a land bank of 11.8 msf for future development and projects and 1.3 msf of land under development.

According to the Edelweiss report, the company plans to reduce its gross debt by ₹350-400 crore by FY24 by generating high operating cash flows and monetizing assets.

“We are seeing good sales traction, which also helps with our payback plan. We want to generate maximum revenue, allowing the project to run and requiring less debt compared to a project that has no revenue and has more debt. Projects are also being built at a faster pace which will also allow us to earn money faster and pay the debt faster which will help us reduce our debt,” Ajmera told https://londonbusinessblog.com/ India.

However, project-related debt will still persist, he added. “Project requires some kind of working capital financing, which is related to the project itself,” he added.

As of 30 September 2022, the company had a gross debt of ₹800 crore on their books, of which ₹250 crore was for projects and the rest for general corporate purposes.

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