After Being allowed by the Reserve Bank of India to restructure their loans, slowdown-hit real estate companies are getting their act together to generate revenue that would take care of interest payment on high-oat loans.
Builders say they are diverting land set aside for high end homes, malls and hotels to cut ensile in long-gestation pullets, and using the space to think up affordable housing piglets while reduced prices in older to perk up demand and cash flows.
Developers told Hindustan Times that fund flows flam private equity players and the cap, ital market have dried up, leaving them to court debt, for which cash flows are critical.
Listed companies have raised more than Rs 35,000 crore in debt while unlisted ones are in a crunch that makes it difficult for them to repay loans after Ivalty prices crashed.
Realtors have borrowed at rates ranging from 12 to 20 per cent from institution sand private elixirs and are hungrily down to spend the next two years managing and servicing debt, say industry insiders.
In a scenario like this debt is going tube the Imagistic way of funding a new pumiced or continuing construction of an existing project For the next two and half years all of one's profits will go towards servicing the debt," said Ram Yadav, chief financial offices Orbit Corporation, a BSE-listed real estate company
Angi Puri, country head of property consultant Jones Lang LaSalle IVI goral believes de1elopers will focus on volumes.
"Whenever developers have bought land at cheap rates, say for Rs 600 a squalls foot, they can cut prices sharply to make attractive for buyers," he said.
Courtesy:- HT dtd:- 05-02-09
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