Real estate developer Housing Development and Infrastructure Ltd says its focus will be on Mumbai and its periphery in the next few years. Besides speedy execution of projects, debt reduction through asset monetisation will be key to its strategy in the current financial year.

In an interview with BusinessLine, Sarang Wadhawan, Vice-Chairman and MD, outlines the company’s road map for growth. Edited excerpts:

Where is the real estate sector headed to?

There is recovery in the market and new launches are happening in Mumbai. The recovery is happening in the ₹10,000-15000 sq feet segment, which is the affordable category in Mumbai.

In the city, the average ticket size for affordable home is ₹1-1.5 core. We are going to see a demand pick-up somewhere in the middle of 2015.

Is the focus going to be on execution or new launches?

Buyers have been fence-sitting due to certain policies. This has led to a delay in execution. Our industry needs continuous approvals. But execution comes to a halt when approvals don’t happen. Mumbai at least suffered on those counts. The focus is on execution. A buyer goes to a project where he sees continuous execution.

Since our current focus will be on execution, new projects launches will be taking a lag for some time. We have our land bank in place. We are getting approvals for those as well.

What is your debt position and what is the strategy to pare it?

Our target is significant debt reduction in the current financial year. Our debt currently stands at ₹3,400 crore and we want to bring it down to ₹2,700 crore by the end of the current fiscal. We are looking to achieve this by largely selling non-core assets. We have put land banks outside Mumbai for sale. And, we hope to close some transactions in Mumbai soon.

Where is your sweet spot – luxury or affordable houses? What about commercial real estate as a category?

Till the time the economy is completely recovered, we will not be in the commercial space. Our focus will be on residential projects. Slum rehabilitation projects give us lot FSI optimisations. Margins are higher when we sanitise such project.

HDIL seems to be focussed on Mumbai…

We have land in Hyderabad and Kochi. We are looking at exiting some to reduce debt.

Our focus remains on Mumbai. We have 222 million sq feet of land bank for development in Mumbai and it periphery. We don’t have the bandwidth to complete these projects in the next 10 years. We are better off as a one-State player than a pan-India player.

On the residential front, execution will be in the ₹1-1.5 crore category.

We are also looking at launching projects in the ₹40 lakh category in Vasai-Virar area and are investing about ₹5000 crore. These will be largely through internal accruals.

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