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Ladies and gentlemen, good day, and welcome to Oberoi Realty Limited Q4 FY '21 Earnings Conference Call. We have Mr. Oberoi, the Chairman and Managing Director of the company; and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 60 minutes. [Operator Instructions] And this conference call is being recorded, and the transcript for the same may be put up on the website of the company. [Operator Instructions] Before I hand the conference over to management, I would like to remind you that certain statements made during this course of this call may not be based on historical information or facts of the company may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause the actual results, opportunities and growth potential to differ materially from those suggested by such statements. Mr. Oberoi, the Chairman and Managing Director of the company, thank you, and over to you, sir.
Thank you. Good morning, good afternoon, good evening to all of you as per the time zone from which you have logged in, and welcome to the conference call of Q4 FY 2021 results and business update. Thank you all for taking time out for this call. I hope your family and you are doing well and keeping yourself safe. These are very testing moments. Before I begin, I would like to share a couple of updates. In Q4, we commenced booking for the third phase of Oberoi Garden City with the launch of one tower, Elysian for -- which is the -- and also for the fixed tower in our Sky City project, Borivali. Both these projects received overwhelming response, and our cumulative sales in this quarter crossed INR 2,000 crores mark as we sold 1 million square feet across all our projects. We ended this year with our highest ever sales value in any given year with INR 3,400 crores of sales and with 1.7 million square feet of areas booked. With this, now I hand over the call to Saumil for details of the numbers. I'll be happy to address your individual questions once we begin the Q&A. Thank you.
Thank you, Mr. Oberoi. I guess most of you would have gone through the presentation, which has been uploaded on our website. If not, it's already there right now. We'll keep things short and sweet so that we have enough time for Q&A. In terms of consolidated financials, we achieved a total consolidated revenue of INR 800 crores for this quarter as against INR 837 crores for Q3 FY '21 and INR 625 crores for Q4 FY '20. The consolidated PBT for this quarter was INR 354 crores as against INR 360 crores for Q3 FY '21 and INR 350 crores for Q4 FY '20. The consolidated PAT stood at INR 287 crores for this quarter as against INR 286 crores for Q3 FY '21 and INR 250 crores for Q4 FY '20. Moving on to the asset level performances, beginning with the investment properties. Oberoi Mall, which is the retail asset, contributed about INR 30 crores to the operating revenue in Q4 FY '21 as against INR 49 crores in Q3 FY '21 and INR 39 crores for Q4 FY '20. The EBITDA margin in this vertical is at about 83% this year. Commerz, which is our office-based asset, contributed INR 6 crores to the operating revenue for Q4 FY '21 as against about INR 6 crores for Q3 FY '21 and INR 4 crores for Q4 FY '20. The EBITDA margin in this case is in excess of 73%. And Commerz II, which contributed about INR 29 crores for Q4 FY '21 as against INR 33 crores for Q3 FY '21 and INR 32 crores for Q4 FY '20. The EBITDA margins in this vertical in this asset is in excess of 91%. The Westin Mumbai Garden City contributed INR 12 crores to the operating revenue for Q4 FY '21 as against INR 11 crores for Q3 FY '21 and INR 29 crores for Q4 FY '20. Moving on to the development properties. For Exquisite, we booked about close to 14,700 square feet in Q4 FY '21. Till date, we have booked about 15.05 lakh square feet, which is about 97% of the total inventory in that project. The total booking value this quarter was INR 35 crores, and the total revenue recognized in this project is also INR 35 crores on account of 100% project completion. Similar numbers for Esquire, we booked close to 64,000 square feet in this quarter. Till date, totaling 19.14 lakh square feet. And the total booking value for this quarter was about INR 148 crores as against INR 234 crores in Q3 FY '21 and INR 41 crores in Q4 FY '20. The total revenue recognized for the project in this quarter is also INR 148 crores on account of 100% project completion. Moving on to the third phase in Goregaon for Elysian. Of the total project launched of about 11.75 lakh square feet, we booked close to 5.32 lakh square feet, and the total booking value stood at about INR 991 crores. For Maxima, of the total project of 4.1 lakh square feet, we have booked close to 44,000 square feet in this quarter. And till date, we have booked close to 1.03 lakh square feet. The total booking value in this quarter is INR 66 crores as against INR 61 crores in Q3 FY '21 and INR 14 crores in Q4 FY '20. The cumulative booking value till date is about INR 164 crores. The total revenue recognized for this project in Q4 FY '21 is INR 59 crores, and the cumulative revenue recognition till date is about INR 85 crores. In Mulund for Eternia, we booked close to 44,000 -- 45,000 square feet in Q4 FY '21. Till date, we have booked close to 7.68 lakh square feet. Total booking value in this quarter was INR 69 crores as against INR 76 crores in Q3 FY '21 and INR 33 crores for Q4 FY '20. The cumulative booking value till date is about INR 1,121 crore, and the total revenue recognized in this quarter was INR 35 crores and similarly, revenue recognition till date is about INR 719 crores. In Mulund for Enigma, we booked close to 98,000 square feet in this quarter, till date about 6.93 lakh square feet. Total booking value this quarter was INR 153 crores as against INR 157 crores in the Q3 FY '21 and INR 18 crores in Q4 FY '20. Cumulative booking value till date is INR 1,036 crores. Total revenue recognized for this project in Q4 FY '21 is INR 68 crores, and cumulative revenue recognition till date is about INR 624 crores. Fourth, moving on to Sky City, we booked about close to 2.56 lakh square feet in this quarter, till date about 23.48 lakh square feet. Total booking value this quarter was at about INR 443 crores as against INR 293 crores for Q3 FY '21 and INR 74 crores for Q4 FY '20. Till date, the booking value is about INR 3,794 crores and the revenue recognition in this project was INR 281 crores for this quarter, and cumulative till date is roundabout INR 2,649 crores.For Three Sixty West in Oasis, this quarter, we booked 1 more apartment. And till date, we have booked 6.6 lakh square feet. The total booking value in this quarter was INR 48 crores, and total booking value till date stands at about INR 2,770 crores. Coming back to some key financial parameters. Our adjusted EBITDA margins for Q4 FY '21 was at 47%. PAT margin was 35%. The EBITDA margins for Mall and Commerz, as usual, are higher than average, as mentioned before. And excluding them, our margins for our pure residential business is 46% for this quarter. With this, I will hand over the floor for questions. So back to Arvind. Thank you so much.
[Operator Instructions] The first question is from the line of Puneet from HSBC.
Congratulations on great sales momentum here. Can you comment a bit more on what you see in terms of sales momentum going on from the Q4 levels?
[Operator Instructions] The line for Mr. Oberoi has been dropped. [Operator Instructions] [Technical Difficulty] Ladies and gentlemen, thank you for your patience. We have the line for Mr. Oberoi reconnected back to the call. Puneet, may I request you to repeat your question once again, please?
Sorry, Puneet, the line got disconnected.
Yes. No worries. So congratulations on great sales recorded in the last quarter. What I want to understand is whether you see this kind of sales momentum continuing into April as well? Obviously, the current environment is all shut. But do you see that going into April as well?
So Puneet, frankly, we are in a lockdown situation again. So April and May pretty much look like a washout. We had that window when the lockdown opened post September, and we saw this entire sales momentum in the last 5 months. What is happening and good to know is that we don't deal in product that is perishable. So whatever doesn't get sold today will get sold later. We more than covered up for the whole year last year. I had, in fact, told my team that we literally will have to land our planes with both engines shut, as in like we probably not have any sales and not have any fuel coming in, but we'll really need to use the height and glide it down. But luckily for us, we got super tailwind. We not only managed, but managed it beautifully well. I'm very hopeful that whenever you see a quarter like what we are seeing this year, between March and -- sorry, April and June, we always have a quarter which will do exceptionally well and cover up. And to answer your question, April and May look like a washout because there's been a lockdown. We have not been allowed to show apartments to anybody. I mean -- and these are how much ever one does in technology, people still want to touch and feel the property. So once the lockdown opens, one will know really how the momentum gets set. But I'm very hopeful, whenever it opens up, we'll obviously see this sort of latent demand come in and forcefully catch up like how it did the last year.
But first 10 days of April, when it was still open, was there any slowdown because of stamp duty going back? Or there was...
Not really. I mean, again, like in those few days, one does end up doing some sales. But we were just getting out of a period where everybody exhausted their energies, buying everything before March because they all were saving on stamp duty and stuff like that. I mean we did exceptional numbers. I mean we had our sales at Elysian stand beyond INR 1,000 crores. And these are payments where people have made us anywhere between 35% and 45% of the payment. So that when you see INR 1,000 crores, INR 1,100 crores sales, you're also seeing a collection of INR 300 crores, INR 400 crores coming from people. So to answer your point, we had exhausted ourselves out in March. And we were looking at the momentum, obviously, to build up. And first few days of April are always a bit slow. So that's where we are. But like I said, we don't deal in perishable product, number one. Number two, there are many answers to your question. I feel India is hugely underbuilt. Number three, there are hardly any developers who will probably be able to stand the test of COVID and the financial mix. So we will be few of us who will probably build in there. I mean I'm very hopeful, and I'm telling my team and gearing up for that sort of mindset. So we will be building volumes, we will be building a lot. And we feel that we will have a very large share of the market just because we have the ability to give quality. We have the brand name to back it up. And we have the knowledge. So that's where we are, really.
Great. Can you also comment a bit upon your 3 projects at potential Thane launch? What is the status on the Glaxo land project? What is likely to be the final build up between commercial, office and mall? And third, whether the progress on Commerz III is on track for March '22 delivery?
So let me begin by talking about Thane. We are designing-- we are currently designing Thane, and according to the initial feel of the project, it's probably one of the best we have ever done. We haven't done anything like till today. And it's going to be one of its kind. So -- and we are gearing up for a launch somewhere around October. September-October launch, we will be fully ready with our full apartment, everything. And so that's one. On the second bit, which is our Worli project, we intend to do -- we see a huge demand in resi, so we are tempted to do resi. In fact, design work for that is also ready -- or rather getting ready. We may play with a little bit of commercial on the ground floor. We are talking to a very high-end retail player. So if that happens, we'll probably look at doing that. But otherwise, it's out and out resi project. That's the second. The third, work progress despite all the challenges is amazing. I wish we were on a video call. I would have shown you because it's happening right behind my desk. And we are on the sixth level, and we are gearing up for the 2022 finish.
Okay. And rent will start from?
No surprises being thrown at us. The overall date -- at least internal target is to meet that date.
Okay. And rent will start from April 23 onwards?
Correct.
So Worli, how do you see this? Won't it be conflicting with your existing products, which you still have to sell for a bit?
Not really. No, in fact, I want to just tell you that even another project, society has appointed us as their developers. This is the Shivshahi Society, which the other developer holding -- somebody has to help me with the name.
HBS.
HBS. So we will have 3 projects in that very close vicinity. We've taken over HBS. In fact, the society has appointed us, we have nothing to do with HBS. We have our own GSK project, and we have Three Sixty West. So we -- it's one of the best areas. We are putting ourselves a Ritz-Carlton there, the resi product has turned out to be really well. So I don't see that as a problem.
And can you also give some number on what was the construction spend for FY '21?
That, you will -- you'll talk to Saumil, I'm very bad with numbers. Because he is good with numbers, I'm bad with numbers.
Saumil, can you hear?
Do it off-line.
Yes. I can discuss it with you off-line. We are -- I'll just ask the team to just do the total computation. If I can get it before the call is over, I'll let you know on the call itself.
Got it. My last question is on the enabling resolution, which you guys were intending to pass on for raising equity. Any thoughts on what is the intent?
Not really. You just said it, it's only an enabling resolution. We just want to be ready. It's not only gun power, it's gun powder loaded. As and when we require to fire, we will fire, but right now, we don't see a target, so it's okay.
The next question is from the line of Kunal Lakhan from CLSA.
Just quickly on sustaining sales right now -- barring the new launches, I think sustaining sales were also very strong this quarter in the ongoing projects, particularly Mulund and Esquire and Exquisite. So should we expect like it will continue to clock INR 200 crores per quarter at Esquire going ahead?
We want to do much more than that. And I'll tell you something that the Mulund project has eventually and finally come into its own. You can see the difference between the products and the quality that we have built, we now have multiple floors, the finishings are done. We started taking our buyers, existing buyers, to see what the apartment looks like from inside. Even new purchases are coming. So everybody who was on a border line, wanting to buy our product but waiting has now realized that this is a different product. And I feel that we will do something very similar that we did in any of our projects, be it Borivali or Goregaon. By sheer quality and the design now that we are able to create, we've been able to drive sales. I think Mulund's time has come. This entire financial year, Mulund will be the one that will, like, lead the pack or at least will be at par. Actually, if you see between Borivali and Mulund, if I remove the F-Tower, both have done pretty similar numbers. So it's very heartening to see that Mulund has come into its own, and it's so much more ready today. So very excited about Mulund. And thank you for that question. I think we will be able to -- like I said, we are not dealing in a perishable product. Whenever it opens, it is bound to catch up and do well. So I'm clearly looking at a lot of quarter-on-quarter because last year was the way it was, where you think more like an annual target. And we know that whenever the markets open up, we will be able to do that.
Sure. Just continuing on the same question. So the product configuration at Mulund is pretty premium to the market per se. Are we thinking of the sale listings of Thane also like earlier plans of making a little more aspiration over there? But how are you thinking of in terms of product configuration performing now?
Firstly, all -- I have realized one thing over the -- so 95% of people who buy homes from us are not first-time buyers. They are second-time buyers. And they are all looking at an upgrade. So very frankly, all my apartments are aspirational. So they aspire to be in a better place from where they are. So the idea is -- and then these are people who are willing to pay me my price. And then I'm not even competing with the rest of the ride. So obviously, our product configuration is going to be way -- it's not going to be the typical market configuration. Everyone is doing a particular product, I don't want to do that. You won't believe that we have got maximum revenue from Enigma, which is a product where we are 4-bedroom and 5-bedroom -- sorry, 4-bedroom and 3-bedroom, which are much larger than Eternia, which are smaller 3-bedroom and a smaller 4-bedroom. So literally, the larger 4-bedroom is, I mean, 2.5x of what the other one were. If you see Borivali, also the larger configurations are doing much better in all that. In fact, in Elysian, we're really surprised that we are a minimum 20% higher on area configuration from Esquire and done exceptionally well. I don't have a single 4-bedroom hall to sell up to a particular floor in that building. And we had -- internally, we were fighting, should we do 4 beds? Should we not do 4 beds? Should we do this larger 4-bedroom and not do that larger 4-bedroom? But it's been lapped up by the market. So it's been really amazing. So we will continue to follow that.
So one can expect like a 3 to 4-bedroom kind of configuration in Thane an as well?
I don't want to say anything until the surprise. I want to ensure that everyone is interested. And it will be something very unique. It will be something very unique. We are really working very hard on the plan and will come out to be something really amazing.
Sure, sure. And my second question was on the leasing side. Any update on new leasing at Commerz III? And if you can give us some -- just a brief on how much total area has been leased so far? And also, another part of the question is that the current momentum in office leasing has been kind of subdued with the physical occupancy being so low. Does that bother you because we are expecting completion next time -- next year this time around?
No, not really. See -- I just want to clarify. Thanks for asking me that again so that I can actually answer Puneet's question also. We are we are positioning ourselves to complete the project in 2023. We have to build Morgan Stanley entry in 2022 for them to do their interior. So they need a particular level of finish, which is what we are trying to achieve. The work above and around will continue, and we intend to finish it by 2023. So we are 2 years away from that. And I really hope that we all will be seeing the end of this pandemic by then, not just because I want to leave my buildings and we all are tired, and we all really are trained that we have this behind us, normalcy comes back. And so in fact, one of my board members very interestingly said that this is not the new normal. This is the new abnormal. So it's like even beyond the normal -- abnormal, and it's not being factored for in all that. So I feel that by in 2 years' time, the world will settle. You can see, hopefully, that continues also like in a part of the U.S. and all are like coming back to normal lifestyle. We also hopefully will within the next 1, 1.5, 2 years. And then things will be back.
Great. And can you share the data point on how much area is there to be leased?
So barring Morgan Stanley, we will lease anything else. We haven't lost finance anywhere else either. We did a few small additions in Commerz I, which was left by somebody. It's now acquired by some -- occupied by somebody. So barring that, there is nothing. There is no major shift since the last quarter as such. I'd say it's pretty consistent.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Vikas, congratulations on phenomenal numbers this quarter. So my first question is that now we are topping out in terms of sales for the year, we did INR 3,400 crores of sales for the sector base/for expectations into the future. So if I see your projects, they are reaching the potential in terms of developable area left with the OGC or Borivali or Mulund. So the growth will come from Thane. But I have -- this question was most on the revenue development side. So you said you want to gain market share. You are good and your brand is strong. So how do you build your market share from hereon? And if you can touch upon the business development side, what kind of opportunities you're looking at? Because traditionally, we have been doing very large time share projects. So do you see those kind of opportunities there? Or you will now spread out and sell in much smaller projects? And also if you can touch on geographies you are looking at.
Thanks for asking this question because part of your question is very important. One is that we have never shied away from taking smaller targets. It's just that we, by default, ended up getting large projects, and we've enjoyed working on them. We are always open to doing smaller projects. It could be 3, 4, 5 lakhs square feet. We are pretty okay doing that. So that's one. Two, I still have at least 50-plus lakhs square feet of resi area to be built in good amount and 50 lakhs square feet is INR 12,000 crores to INR 15,000 crores of revenue here. We have 3 more towers in Borivali be built. Even if you see but development cycle of some of these projects, at least, Mulund will be done by next year, Borivali will be done in another 2 years. And we are very open and constantly buying. So I know that I have personally always been under pressure from the market to buy. So they -- after Borivali, what? Okay, so after Borivali, Thane happened. After Thane, what? This is the only business we are in, unlike many of my other competitors. And this is what we know best. So we will continue to buy land. We are very, very consistently and constantly looking at buying new land parcels. This is the best time, I would say, because most of the developers properties are empty, and they are doing well. They also have their brand erosion happening. So obviously, they know they cannot even sell. This is the best time for us to go out and look for land. There are very few options for the land owner, and we will look like one of those who will raise their hand when it comes to it.
And in terms of geography, besides MMR, anything to add? Earlier we had plans about NCR. So any part there now because most of your competitors are now looking at new geographies and even new JDAs. So there, I think a lot of people are chasing JDAs also. So if you can you give some sense on that?
So personally, I'm really not a big fan of JDA. I prefer buying them out, but I understand how JDAs function. We will give it our own twist and make sure that there is no -- there is clarity between land owner and us, wherein there is very little accounting that takes place. So we give them x amount of area and get done with it. So that's literally our land cost. So we are -- again, I want to say that we have realigned ourselves to be open to doing JDAs, but in a different way, where there is no conflict, there is complete clarity. We're open to it. We are open to buying new land. And we are very aggressively looking. In fact, I want to tell the people that we are building expertise within our business development and hiring. I have hired new people, and I'm hiring more people to make sure that we do this redevelopment business as aggressively as we do fresh line. So 1 team, their KRE will depend on how they pursue redevelopment projects. So we will be doing a lot of these redevelopments. They could be JDA, but it could be redevelopment of society, larger society and so on and so forth. So we are very open about it.
Just last thing on the Three Sixty West. Last time, I think, I had asked the question, you said that the fourth quarter, there will be some positive surprise there. But despite -- I mean, you're doing so well at Three Sixty so that project has really not done phenomenal sales this year as a whole. So your thoughts about how you see that developing there?
So we want to get occupation certificate, which we'll do now. We want to cross the threshold of 25% sales also at such a time. Then we plan our tax flows also within this financial year. So there are multiple reasons why we are where we are today. And going forward, like we're hoping to get OC. And then once you get OC, obviously, you have to pay taxes. So -- and then the sales momentum will also kick in. So we are trying to align all these 3 things together.
The next question is from the line of Abhinav Sinha from Jefferies.
So firstly, on Elysian itself. Now we have seen a strong sell-through, and how would you pace the remainder of the project now in terms of new launches? And also what would be the product positioning here?
Abhinav, very frankly, even we didn't -- we obviously were hoping for something amazing, but didn't expect it to be this great. So internally, our target was literally 25% or 30% of what we actually got. And we were so pleasantly surprised that with COVID and with all these also, people were queuing up, and it didn't really look like that there was COVID. So very heartening, I would say, and we came up with very attractive pricing. We really upped the product. I don't know how many of you know, but we introduced a Zoom meeting room in the apartment. So literally, people can be doing their Zoom meetings out of this small little area we have carved out in the planning. So that kind of really hit the core. We have 4 other towers to be built in the same vicinity and we will keep rolling out. In fact, this project has given us -- will give us enough cash flows to build all the 4, at least, the superstructure. So one, we are cash flow positive like that much of a mile literally. So the work for all towers is on, the work for the towers will continue, and we will open -- in fact, can I tell you, it's funny that I don't have a single 4-bedroom apartment to sell and I already have a list of people who want 4 bedrooms -- sorry, yes, they want 4-bedroom apartments. And so we are waiting and we will launch -- maybe one of those festive seasons. Surely, this financial year, we will launch one more building. It could be maybe close to September, October and November, that sort of time when other things will also settle. And we realized that the good part is Borivali has got nothing to do with Goregaon, Thane nothing to do with Borivali, and Mulund has nothing to do with Thane. So we have -- the good part is that I can literally do a launch for all 4 sites at one go on one day, and I'll still see the same momentum because they are different micro markets. And this is not by default. This has really been our strategy also, that we will be in multiple micro markets, so they're not competing with each other. And so that's why we are very confident that whenever we start we will be able to pull that through.
Sure. Good to know that. And secondly, on various projects, the pricing was also a bit higher this quarter by about 3% to 5%. So have you taken some price hikes there? Or it's more of a mix change?
Sorry? Sorry, sorry, come again. I'm sorry, I didn't get your last part.
Sorry, sir. On most of your projects, with pricing -- or the realization what you got was higher by about 3% to 5% on a Q-on-Q basis. So you took some price hikes there?
No, no, no. So we didn't do any price hike. In fact, what we really want to tell everybody that all these sales were achieved without dropping a single rupee, we haven't reduced the price. We -- these are higher floors that obviously gets you a higher per square foot rate. And that's why the average is higher. So we probably don't want to take any credit that we increased the price. But the other part is that we did not even reduce because I saw a lot of my competitors literally discounting and selling. We didn't have to get down doing that. We were able to achieve these sales without reducing prices.
Okay. And lastly, if you can comment on how the construction space or the worker availability is right now because of the second wave?
So we've had a mixed bag, I would say. We have 1,700 people in Borivali that unfortunately came down to 400, 500 because like a lot of people decided to leave there. As far as Goregaon is concerned, we had a decent number staying put here, who did not leave us. So it's a mixed bag really, luckily or unluckily, I would say. There's nothing fortunate about COVID. But later realized that their best bet to get medical attention is in Mumbai. If they are here, they'll still get a hospital bed. Down in the village and all, they don't have that facility. So unlike the last year, you did not see a lot of people really leave as much. So that part was good. But yes, like I said, it's been a mixed bag, really.
The next question is from the line of Sameer from Morgan Stanley.
My compliments on the best ever quarter in a year.
Many thanks. Many, many thanks.
And so Vikas, the big story about Oberoi also was about rental scale up from INR 300 crores going to INR 1,500 crores and all the offices and the malls come to completion. So how is this prospect looking like? And especially in view of you thinking of converting Glaxo, Worli into residential? So I guess, just first on this.
So the Borivali mall is being built as planned. So that part is happening. The Morgan Stanley commercial building is continuing as planned. The only change really is the Worli project. If I give you numbers, really, in the back of the envelope numbers, I am looking at -- if I do resi, I can do a sale of about INR 8,000 crores and more, whereas my costs will be about INR 2,000 crores. So I can make a surplus of almost INR 6,000 crores. I mean I can give you numbers later. I'm just saying these are back of the envelope numbers. Very compelling reason, if I can do a PBT of INR 6,000 crores on one single project in Worli, should I be doing commercial? So again, I mean, value accretion to the company will be far higher than we do resi, and we decided to do resi. And so really, the toss up is between the 2. And given the pandemic, given the slowdown in office uptake and given probably, I would say, not even the slowdown, the opaqueness in which this will play out is kind of -- and at the same time, resi is really bouncing for us. We just thought that maybe it's not a bad idea to do that. And that's where we are.
Okay. And if I'm not wrong, the society that you mentioned, is this across the road HBS?
Yes, correct. Correct.
And it's an under-construction project. So what's society tell you? Have you taken over that project? Or...
So I will tell you that society -- the only thing that is under construction is the society building, and nothing on the resale component was built or is built. The society has terminated the earlier developer's agreement and has appointed us as a developer. And so the -- this is like, as I tell you. And so the appointment is done, we got 100% of the members' appointee as a developer. Now we'll obviously move in and start building.
And what's the economic arrangement for you?
So there is no economic arrangement. I mean we are we are developing the rehab component for the existing society. We have to pay them rent, and we have to pay them -- we have to pay them rent. And we have to pay them some quarters. It's a decent deal, I would say, it's a decent deal. It's a good deal. And we also get to control the micro market. That was also the idea, really.
And your take home is the entire commercial portion of that?
The residential portion, the entire resi. Yes. So there is a rehab component for the people. There is a rehab component for -- sorry, the existing site, and there is a presale component for us.
So how big is the resale component?
If everything goes well, we are looking at close to about 800,000 square feet carpet.
Okay. Awesome. That's great.
And it quietly happened. I mean -- and again, like I want to tell you, this is all because of the brand name and the kind of trust the society had on us and the way we think about it and stuff like that.
Okay. Great. And I would presume both this project and GSK Worli would be running in parallel, almost overlapping...
Yes. Yes, pretty much. So we have to make a product differentiator and stuff like that. And all that, we will do, and yes.
Okay. One final question with your foundation. So Elysian, I think, very impressive. I was just checking in my notes, if I'm not wrong, I think what you did in 1 quarter, 0.5 million square feet or something like that. So Esquire, you took 3 quarters to do that when you launched in 2011. So a great job done. And in the brochure of that, I think there are 4 towers -- 4 more towers that it is reflecting.
Correct.
They're behind the Commerz I, II and III.
Correct.
So all of these 5 put together is 5 million square feet. Is that correct?
Correct, correct. So I just want to give you a little justification. Esquire was launched -- and prior to Esquire, I'd already given Exquisite and Woods. After we built Esquire -- I mean, when I launched -- when we launched Elysian, we had already delivered Esquire and we had Exquisite and we had Woods -- these developments. Now Elysian is working on not just brand Oberoi Realty, but also on Goregaon suburb is now woken up. Today, people are very happy to live here. And Oberoi also showed them that this contained environment, the way we had created the development and like -- so everybody -- got so many people complimenting us, and which is so heartening to telling us that when we look out, we don't feel claustrophobic. We feel so good when we come down and maybe walk in the lockdown and all. So when they use the common facilities and stuff like that, it's -- all that word that goes out and that kind of helped Elysian a lot. And I feel the rest of the apartments also will get the benefit of all the development that was done and happy customers living here and all that. That probably will play out for us, and we are hoping for that.
Vikas, it's been an awesome journey. I remember what used to be like 1,400 square feet per unit. So now from there to 3,500 square feet is, in one way, up journey.
Yes, yes, yes. In fact, Woods was 1,295 and 880 carpet and all that. From there to 2,500 carpet, so literally 3x. And you wouldn't believe that I have customers who are originally in Woods, then moved to Exquisite, then moved to Esquire and now have bought Elysian. So they are literally within the ecosystem, they are growing. They have made money, and they are very happy to upgrade within the same complex and stuff like that, and they are able to sell their old apartment. So technically, if you see the price difference between Woods and Elysian, it's not there. You can sell your 1,200 square feet, you invest on another 1,200 additional area, and you can buy 2,400 square feet. So they haven't depleted off their value also. On a per square foot carpet rate, they are pretty much the same. So you're only paying for the additional area. And there's always somebody who wants to buy 1,200. So that supply is continuing within the old apartments. And the new ones are the ones which are the additional area. So Exquisite was 1,000 square feet, 1,100 square feet carpet. Esquire was 1,400 carpet. And now Elysian 3-bedroom is 1,800 carpet. So there are buyers for 1,400, there are buyers for 1,100, and these guys are buying 1,800. And so I'm also understanding the psyche of the buyers and how -- and what they -- what drives them and all that. It's very -- it's an amazing -- what comes out is brilliant.
The next question is from the line of Swagato Ghosh from Franklin Templeton.
So Oberoi on Three Sixty West, if I understood you correctly, did you defer your sales intentionally so that we do not pay taxes in FY '21?
Very difficult question. Can we ask something else, please?
No, I think it's slightly important because all other projects we had -- like all other projects benefited from the stamp duty card, yet Three Sixty West did not. While it should have been a big beneficiary because of the overall numbers that we have seen from luxury projects, they have seen real upticks in the March quarter.
No. What we can say is that we've left it for it to be in this financial year rather than running for the last financial year, if let's say, one way to put it that way.
Okay. Okay.
So we've seen nothing planned and nothing -- I mean, it just played out that way, I would put it. It's just that we haven't planned anything of that sort.
Okay. Okay. Then probably back to the question that...
One will not defer a sale just because of deferred taxes.
Yes, absolutely. And I'm curious to understand why only 1 unit was sold when -- like it actually tells the sales momentum?
We are not reading too much into it. We're okay with the rest of it now.
Okay. Okay. And on the HBS, Shivshahi thing, see, I want to understand the economics better in terms of you would be having some upfront investment in terms of the cost that's given and the cost incurred from that rehab part. How does it compare to owned land projects like the upfront investment and margins, et cetera?
They both are pretty similar. See, most people who do redevelopment forget, they think that the land is coming to them for free, but they forget that they have approval costs. They have rentals to pay. They have consults to pay. They have construction costs of the redevelopment, the rehab portion to pay. When you put all this together, they are either the same as buying new land, but you get a deferment to pay that kind of money or they are slightly cheaper because we are putting in all this effort. So I would put it this way. The economics of any redevelopment are not very drastically different. They are pretty much -- or I'd say they're as expensive as you buying a regular retail land. Like I said, you should get a bit of deferment. And in this case, the location is great. So it made sense for us to pick this up.
Okay. And so moving forward, if this works out well, will we do more of this? Or is there too much happening at this point?
No, no. In fact, I told you that I'm already hiring people to do specific redevelopment projects as our -- as their key area. So we'll have a separate team that will be chasing regular land parcels, and we'll have a separate team that will chase redevelopment projects. So we want to do more of this.
Okay. And quickly, one last thing. The OC for Three Sixty West, when is it expected exactly?
Well, we had a lockdown for the last 45 days, people are not even coming. Otherwise, we were -- we are still hoping that one can get it within a month or so. So the day things open up, we are literally 30 days away. There's small works to be done at site and then inspection we are good with that.
The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.
First question is on the Oberoi Mall. So I think we believe that we had an agreement to be waive off 50% of rentals for this financial year. And we have clocked around I think 72% of the FY '20 rentals. So could you just explain how it has been calculated? And April is the lockdown, where do you see the rental waivers going for this year?
I'll let Saumil answer the first question. On the second question, it's like looking into a crystal gaze, I'll tell you how this entire will go. If, let's say, the lockdown opens on 1st of June, then we are back in business, and we'll see how this plays out. But if there's going to be a start-stop, start-stop then obviously, like we all have to sit together. We all need to sit together and we'll work this through. So Saumil, I'll let you answer the first question, please.
So very simple. You're right, as far as the books of accounts are concerned, if you look at our disclosure on accounting policies, also as far as new rentals are concerned, there is an aspect of rent declining. So you are very correct that usually, it should have been at about 50%. But what happens is for the purpose of the books, you take into account the entire lock-in period of the lease and you are straight-lining your revenue recognition on the basis of that lock-in period. So that's where you're seeing that a little bit of an anomaly come through. But the cash collections would have been where you are stating. But this is how it pays as far as lease rentals are concerned.
So just to clarify on that. So the operating revenue is broadly the range which has been collected from the retailers? Is it that way? Or it is some other?
Yes.
Okay. And just a follow-up on the Borivali mall. So are you on track and sort of Diwali launch next year? Like any time line on that?
So we are -- again, it's all dependent on how we are able to get workers. But yes, we are likely to finish our superstructure within this year itself. And next year is when we will have all our retailers are doing their fit outs, and if everything goes well, we are looking at a Diwali launch, next year Diwali launch.
Okay. Okay. And the final question is on the Commerz I and also about Commerz II. So when do you expect some leasing traction, especially in Commerz I, considering the current environment?
So we -- it's very heartening and surprising, I would say, that we continue to get people who want to have office space. We leased, I think, a floor to Reliance just 2 or 3 months ago. So there -- like I told you that there has been uptake of office space within the little space that we have. And -- but once things get normal, right now, everyone is working from home, it's hardly anybody's priority. But once this opened, I mean, there is no other alternate, right? And the good part is, even commercial buildings take forever to build. So even, let's say, when the markets are bad, the supply won't be back with the same force, number one. Number two, we also are hoping that per square foot consumption of space per person go up because of these new norms, new issues that one will come with and all. So I guess these are a positive for us in the commercial office market. And anyone who is in the commercial office market will eventually benefit out of that. It's like a bit of a waiting game today but eventually will play out.
Thank you very much. Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to Mr. Oberoi for closing comments.
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Thank you very much. On behalf of Oberoi Realty Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.