[INDIA REAL ESTATE NEWS] Good morning everyone I am Rumi Dhar from Kama Group.|
Here I have important INDIA real estate news to share with you which is as mention under.
Credit profile of small-to-mid-sized real estate developers may get impacted thanks to a likely
drop in residential demand during this financial year ending March 31, 2021. Crisil says
residential demand is expected to plunge 50-70 per cent year-on-year in FY21 as the Covid-19
pandemic is crushing economic activity and big-ticket spends.
As a result, the rating agency expects credit profiles of small-to-mid-sized and leveraged
developers to take a bigger hit compared with their larger, experienced peers with healthy
The Crisil assessment showed small-to-mid-sized developers would face a sharp around 200
per cent rise in funding gap this financial year. However, their ability to raise capital will be
limited as debt-to-total assets ratio was significantly high at around 75 per cent as of March
2020. On the other hand, their interest cover is also weak at 1.2-1.5 times versus two times
for large developer groups.
With demand going down, capital values will remain under pressure across cities. Crisil
expects a 5-15 per cent price correction in the residential space across ticket sizes.
“Lowering capital values and attractive interest rates augur well for affordability which has
improved by 10-30 per cent across cities during the past five years,” says Isha Chaudhary,
Director, Crisil Research.
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