Prestige Estates set for tightrope walk
₹21,040 crore. The management’s confidence stems from a robust launch pipeline of 59.2 million square feet for FY25 with a potential gross development value of ₹59,100 crore. Notably, FY24 saw a high number of new launches and deliveries, which contributed 75% to pre-sales.
Collections in FY24 were the highest ever with realizations continuing to rise. The company could exceed its FY25 pre-sales guidance if project approvals come on time, the management said. However, the first quarter of FY25 is expected to be soft in terms of pre-sales due to delays in approval amid the general election.
Prestige continues to diversify from its core markets of Bengaluru and Hyderabad to newer localities such as the Mumbai Metropolitan Region and National Capital Region (NCR) which offer better margins. It will launch its first project in NCR, Prestige Bougainvillea Gardens, in first half of FY25. It has also acquired land parcels in Ghaziabad and Pune.
While the company has proven its execution ability, there could be challenges, mainly elevated competition from incumbents/established realty brands in newer markets. The capital expenditure (capex) related to land acquisition in FY24 was around ₹4,800 crore. It is expected to be around ₹3,500–4,000 crore in FY25.
To meet its growth aspirations, investments in land banks are crucial. Not only residential, Prestige is also going full-throttle in expanding its annuity assets (offices and retail) and hospitality portfolio. It aims to achieve an exit rental from office assets of ₹3,930 crore by FY28, a substantial increase from FY24 exit rental of ₹740 crore.
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