We did a case study on DLF Capital Greens located at Shivaji Marg, 8 Kms from Connaught Place. Here is the excerpt of the study.
DLF bought this land in 2H07 at Rs16 bln. Late 2008, DLF launched a part (1,400 apts, 1.8 msf) of its Delhi (W) residential project. It appears to have received good customer response, and 85% is likely sold. This is one of the high profile projects in DLF’s land bank, we believe.
Overall project size is roughly 5msf, of which 1msf of commercial/retail space was sold last year; the balance is planned to be used for residential purposes.
Aggregate pricing was Rs6,000 psf (Rs5,000 excluding car parking), 25% discount to neighborhood, and appears to be at the lower end of our expectation. The company used innovative strategy to attract customers by showing low base selling price, and made up some ground by higher Car parks.
We estimate Rs4,300-4,400 psf cost of the project, implying 25-30% EBITDA margins, which according to some builders is on the lower side considering the quality of the land bank. Since the heydays are behind us, DLF is doing a good job leading the Realtors to significantly mark down the prices and unload them.
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