(For other news from the Reuters India Investment Summit,
* Says implemented selective price increases
* Expects to sell 3 mln sq ft this fiscal
* Looking to expand outside its base of Bangalore
By Adveith Nair
BANGALORE, Sept 29 Indian real estate firm
Sobha Developers (SOBH.BO) will launch about 12 million square
feet of residential projects this fiscal year and has
implemented selective price increases, a top official said.
"Prices have been stable. This quarter on, there have been
selective price increases on some products," Managing Director
J.C. Sharma told the Reuters India Investment Summit on
For the April-June quarter, the company reported average
realisation of 4,000 rupees per square feet, down from peak
prices of 4,500 rupees in 2007.
Sharma said the company, which gets about 65 percent of its
residential revenue from the southern Indian city of Bangalore,
is looking to launch new projects in other cities, including in
"This year, we hope to launch projects in the National
Capital Region, Chennai and Mysore, besides launching new
projects in existing locations -- Bangalore, Pune, Coimbatore
and Thrissur," Sharma said.
In Northern India, Sobha will be up against established
players like DLF (DLF.BO) and Unitech (UNTE.BO).
Sharma expects Bangalore's contribution to the company's
overall revenue to fall below 50 percent in less than five
Of the targeted launches this fiscal, a majority will be
outside Bangalore, Sharma said.
Sobha, which went public in 2006, is seeing higher demand
from non-resident Indians (NRIs).
Demand from NRIs rose to 17 percent from less than 10
percent last year, on higher inquiries through the internet, he
Sobha is on track to meet its revenue growth target of 30
percent this year and achieve operating margins of 35 percent
on its residential business.
After a lull in real estate demand, which saw the company
sell just 2 million square feet last year, Sharma said the
company expects to sell about 3 million square feet in the year
to March 2011.
Sharma himself booked property in the premium Sobha Ruby
project in Bangalore recently.
Shares of the company were up 1 percent at 393.8 rupees
Wednesday afternoon on the Bombay Stock Exchange.
The stock is up 15 percent since it reported strong results
in July, outperforming a 7 percent rise in the sector index
(For more on the Reuters India Investment Summit, see
(Additional reporting by Archana Shankar and Mihir Dalal in
Bangalore; Editing by Prem Udayabhanu)