Real Estate Recovering Faster Than Expected

Positively surprisingly the recovery in pre-sales in real estate, has picked out some of its key names for potential stock upside. As per HDFC Securities the pre-sales recovery momentum is building up in the sector post unlock. It added that while the market is expecting a slow recovery in the real estate sector, the brokerage's channel checks suggested an accelerated recovery is taking place, at least for the organised developers. "Mixed-use players will outperform as compared to pure-plays, with office segment least affected followed by residential, retail and hospitality," said HDFC Securities. HDFC Securities' top sectoral bets are DLF, Brigade Enterprises, Phoenix Mills and Prestige Estates. It added that the recent stamp duty cut in MMR will trigger deal closures in the region. Therefore, the completed projects will be sold out soon followed by under-construction projects. According to HDFC Securities, the office segment continues to see strong collections of 95-98 percent but clarity is awaited on how ‘work from home’ will impact overall office demand and vacancy. The pricing in the near term is expected to remain soft as owners try to retain tenants. Cash flow management will be crucial; land acquisition/commercial capex will get deferred, it further added.