After Ayodhya, The House of Abhinandan Lodha plans to launch projects in Shimla, Amritsar and Vrindavan this year

“Excluding Ayodhya, we would have invested close to ₹1800 crore across all projects – three in Konkan, three in Goa, one in Alibaug and one in Neral. The company’s total investment in Ayodhya, that includes the 75-acre township, is close to ₹1200 crore and the topline should be close to ₹2000 crore,” he said.

While the company has acquired land in nine locations, it is yet to finalize parcels in six.

Also Read: Are gods smiling for real estate investors in Varanasi, Ayodhya, other temple towns?

The company intends to invest close to ₹1250 crore on the six new locations by the end of this fiscal and the rest over the next few years ( ₹2750 crore). HOABL has identified 48 locations so far in cultural and tourism destinations connected by new infrastructure.

Why did the company go in for the luxury plotted development format?

During COVID-19, online real estate transactions gained traction. Investors realized that there was value in land and not in the building that you construct on top of it. It was during this time that “we took up that challenge and launched a 100-acre project in Dapoli, a town in Maharashtra. Our contention was that if we can show what the development will look like 18 months from now, we would see greater participation from buyers,” he said.

The company had anticipated that it would be able to sell the project in a year but “we sold the project within three weeks of the launch and that too during COVID. The consumer proposition was extremely strong. Then we moved quickly from one city to multiple cities in India.”

The company’s strategy to launch branded plots was timed with the new infrastructure coming up across the country, not to mention the economic growth in cultural and tourist destinations, explained Abhinandan Lodha.

“We identified 48 locations between 2020 to 2021. We saw infrastructure coming together and economic activity beat the national average. We initially identified 12 land parcels around towns that were getting connected with new highways, where we were confident that massive economic growth would happen,” he said.

“Infrastructure is the core of what we do. Our identification of land parcels is based on the coming together of the local and central infrastructure and economic growth. These include both cultural centres such as Ayodhya, Vrindavan and Amritsar and tourism centres such as Shimla, Goa, Dapoli, Neral and Khopoli,” he said.

Acquiring land a challenge – requires time and patience

Abhinandan Lodha agrees that acquiring land is a big challenge. “Land banking is a local subject, you cannot keep a team in Mumbai and buy land in Shimla or Vrindavan.”

“In the first 12 locations, we hired local teams and lawyers. Acquiring land was a tedious and time consuming process. Our first lesson was that one had to go local and have a lot of patience. , what is important is that one has to go local and have a lot of patience in acquiring large tracts of land.

How it all started? The company acquired only 12 acres in Ayodhya in the first 12 months

In the first 12 months, the company managed to get less than 12 acres of land in Ayodhya, he said

The land in Ayodhya was acquired from more than 1400 farmers, and “buying almost half a biswa, one biswa to aggregate land is not easy at all and continues to be a technically difficult subject even today. It is possible to do but you have to build large local teams and work with local farmers. Eventually, since farmers are the owners of the land, they have to be comfortable with you. You may be at a location for three to six months but not get a single inch of land. It’s only when they eventually find comfort in the exercise do they start believing in you,” he said.

Future plans for Ayodhya

The company has so far launched 75 acres in Ayodhya. “It is difficult for us to get more land there. I think 75 acres is potentially what we may end up at. We have a great hospitality partner there like the Leela as part of our development. The Ayodhya project has by far been our best asset so far. That’s where we have witnessed the movement of a town to a city. Prices too have moved from ₹9900 per sq ft in January 2024 to ₹12500 per sq ft at present,” he said.

“We should have invested close to ₹1200 crore in the entire development by the time it is over in March 2028, including the hotel and our topline number should be close to ₹1800 crore,” he said.

The company is expected to come up with a fist 5-star vegetarian hotel in association with The Leela in Ayodhya.

Besides the hotel in Ayodhya, the company intends to launch four more properties in the hospitality segment. “We will announce the remaining four hotel properties as we finalize our alliances. Hospitality will definitely be part of the core of what we do. Senior living is a great opportunity but not in the short term,” he said.

Acquires land in 15 locations

The company has so far identified 48 locations across the country. It has till date launched projects in nine locations.

“Out of the 48 locations, we have already launched nine in Ayodhya, Goa (three), Alibaug, Dapoli, Neral, Anjarle among others. We have acquired land in 15 locations. Acquisition in the remaining six areas is not yet complete,” he told HT.com, adding these include Shimla, Amritsar, Varanasi, Nagpur among others.

“Land in these areas has been identified but acquisition is not yet complete. We are confident that we may be able to launch them in the next six to nine months,” he said.

Buyers include 35% end-users and 65% investors

Abhinandan Lodha said that as many as 35% of buyers who purchase branded plots are end-users and the remaining are investors.

“As many as 35% are clearly those who would want to build on the land and in some way may be called end-users. They too may decide to sell after 10 years. Another 20-30% are investors who may want to sell 24 months after the project is delivered. Remaining investors may want to stay invested for five years and above, but they won’t build now,” he said.

The average age of these buyers is between 25 to 40 years. Majority of them are salaried people.

These investors also include non-resident Indians who may have bought now but may decide to build five years from now if they move back to the country. NRI’s contribute close to 27% of the company’s total portfolio. This segment has bought primarily in developments coming up in Ayodhya, Alibaug and Goa.

In developments such as Nerul, buyers are primarily from Karjat. “Overall, buyers are from South India, Kolkata, and North India. Majority of buyers for the Goa projects are from North India, Gujarat and Hyderabad. Buying land online has no boundaries. We have never met our buyers in person. Land is a great wealth creator. I may be sitting out of Mumbai and buying land in Amaravati. The buyer across the country and even overseas is willing to pay a premium for a clean titled land,” he said.

Amaravati is part of the company’s identified list of locations where it intends launching a project but it does not have land parcels there yet.

Most buyers today are looking at land as a wealth pool for the family. As many as 98% do not take a loan. “Land is a wealth asset and investors are buying from an identifiable objective. Most buy land when their children are small and intend to use the sale proceeds to pay for their higher education or marriages in future. Some may be buying land to plan for their old age,” he said, adding, investors usually invest in land for a period of 10 years wherein the expected return on value is anything between 20 to 30%, he said.

Entire process of buying land is online

The company’s fundamental goal is to democratize land. “We don’t do profiling of our buyers before they buy. The process of buying land is largely online. The process makes sure that people who have the confidence to buy land online are educated and have enough disposable income to purchase the asset. They are here for the long term and have a mind set with the focus on value creation.

The online process by default keeps punters at bay. “There are far more cheaper options available for them to punt. This is a relatively expensive proposition. There is a definitive premium attached to this investment,” he said, adding as part of the agreement, buyers are locked in till the time of possession. “Investors end up paying close to half the amount in the first six months.”

The company also has a platform that enables people to sell their properties. “There is a set of ready buyers who want to buy into the project after it is delivered and a set of people who want to sell after taking possession.”

“At least 17% of buyers are those who may have bought into multiple projects with the company,” he said.

Are celebrity purchases project endorsements?

Abhinandan Lodha is quick to point out that the repeat purchases by Amitabh Bachchan in Ayodhya and Alibaug are not endorsements. “We are clear that we do not want endorsements. Amitabh Bachchan’s deal was picked up from the registrar’s office. No quasi endorsements are happening on this front.”

Budget 2024 proposals

Budget 2024 has proposed a unique identification number for land or ‘Bhu-Aadhaar’ in rural areas and digitisation of all urban land records as part of several land-related reforms in the Budget.

“This is a wonderful move. For a company that is dependent on land records in multiple states, digitisation is a must. Once this is done, it will make participation in land so much more transparent for everyone involved. It will cut down a lot of effort on the part of developers who are not locals coming from outside,” he said.

Also Read: Budget 2024: Focus on digitisation of land records, Urban development gets a leg up

Budget 2024 has also proposed long-term gains on all financial and non-financial assets will attract a tax rate of 12.5% but the indexation benefit for property sales would be removed.

“This is a positive move too as sellers would always have the option of selling a plot and buying into a new one. It should be noted here that land appreciation is generally higher than an apartment,” he said.

Also Read: Budget 2024: Planning to sell a property bought after 2001? Here are 7 things that you should know

Plans for vertical real estate development

The company does not have any short-term plans to get into high-rise developments. “We are hoping to get there three to four years from now. It is definitely part of our mid to long-term thought process. Mumbai will be the first stop but that will not stop us from revisiting the cities where we have or intend launching branded plotted developments,” he added.