U.S. Markets close in 6 hrs 15 mins

Edited Transcript of PRESTIGE.NSE earnings conference call or presentation 13-Nov-19 10:00am GMT

Q2 2020 Prestige Estates Projects Ltd Earnings Call Hosted By Axis Capital Ltd

Bangalore Dec 3, 2019 (Thomson StreetEvents) -- Edited Transcript of Prestige Estates Projects Ltd earnings conference call or presentation Wednesday, November 13, 2019 at 10:00:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Irfan Razack

Prestige Estates Projects Limited - Chairman & MD

* Konanki Venkata Narayana

Prestige Estates Projects Limited - CEO

* V. V. B. S. Sarma

Prestige Estates Projects Limited - CFO

================================================================================

Conference Call Participants

================================================================================

* Adhidev Chattopadhyay

ICICI Securities Limited, Research Division - Assistant VP

* Mohit Agrawal

IIFL Research - Assistant VP

* Parvez Akhtar Qazi

Edelweiss Securities Ltd., Research Division - Equity Research Analyst

* Puneet J. Gulati

HSBC, Research Division - Analyst

* Sameer Baisiwala

Morgan Stanley, Research Division - Executive Director

* Swagato Ghosh;Franklin Templeton;Analyst

* Tanuj Mukhija

BofA Merrill Lynch, Research Division - Associate

================================================================================

Presentation

--------------------------------------------------------------------------------

Unidentified Company Representative, [1]

--------------------------------------------------------------------------------

Yes, good afternoon, everyone. Thanks for taking the time out to attend this con call. From Prestige Estates management, we have today Mr. Irfan Razack, Chairman and Managing Director; Mr. Venkat K Narayana, Chief Executive Officer; and Mr. V.V.B. Sarma, Chief Financial Officer.

I would like to now hand over the call to the management for their opening remarks. Over to you, sir.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [2]

--------------------------------------------------------------------------------

Good afternoon to all of you. Thank you for taking time out for participating in the post results conference call of Prestige Estates. Let me take you through the macro highlights of the quarter and the half year that has gone by.

Q2 operationally has been a very good quarter. In terms of presales, we clocked INR 1,226 crores of presales, sold 1.46 million square foot of area. The total collections for the quarter stood at INR 1,078 crores, up by 5% compared to the last year. These collections do not include the incomes from annuity portfolio and also the hospitality and maintenance sales. This is purely developmental portfolio.

And in terms of deliveries, we had delivered 1.52 million square foot of area this quarter. And overall, for the 6 months, 11.84 million square foot is what we have delivered. As you all know, last year, we had deliveries of 24 million square foot. So overall, in the last 18, 24 months, our deliveries have set a record 36 million square foot. We're very happy with the completions and the execution track record that we are creating.

And in terms of launches. This quarter, we had one residential project that is being launched called The Prestige Elysian, which actually met with a very, very good response in spite of whatever you've been reading in the newspapers about the market scenario and all of that. Even the leasing has been pretty much okay. So this is about the operational highlights for the quarter in terms of presales and launches and completions.

If you look at the half year as a whole as against the guidance that we have given, we are at 41% of the presales. A bulk of our launches are now towards the second half of the year. We are very confident that we'll be able to surpass the guidance that we have given. We have 6 major launches that are coming up in the next 6 months, namely Prestige Smart City at Sarjapura, Bangalore, almost around 7.5 million, 8 million square foot. We have Prestige Finsbury, a mid-income housing project coming at North Bangalore, again, 3.5 million square foot. We have a project coming up, a large...

--------------------------------------------------------------------------------

Unidentified Company Representative, [3]

--------------------------------------------------------------------------------

(inaudible) is also very (inaudible)

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [4]

--------------------------------------------------------------------------------

Prestige Tranquil at Hyderabad. We have Prestige Jasdan Classic in Mumbai, and we have a project that's coming up in Sector 123 in Noida, and Prestige Highline in Chennai. These are the major ones. We have many more in pipeline as well.

So with these kinds of launches, we are very confident that we will be able to cross the guidance that we have given at the beginning of the fiscal. And as at end of first half of the year, we are at 41%. In terms of collections, INR 2,203 crores of overall collections over the first half of the year, in line with the guidance that we have given. Completions, as I told you, we are way ahead. Launches are at 7.88 million square feet. So these are in terms of operations.

If you look at the financial highlights. This quarter, we had a total revenue of INR 1,962 crores, with EBITDA of INR 649 million crores and PAT of INR 157 crores; EBITDA at 33% and PAT at 8%. Major contributors in terms of revenue recognition are Falcon City and Lakeside Habitat. Falcon City, which got completed last quarter. So on a completed basis, these are the 2 projects that have contributed. In addition to that, we have other projects also, where we had a completed -- sale of completed inventory, which has come straight away for the revenue recognition.

If you look at half year as [a whole], the total revenue was INR 3,500 crores, and with the EBITDA of 34%, standing at INR 1,200 crores and the PAT 8%, again at INR 281 crores. So operationally as well as financially, it's been a good quarter. In terms of the acquisitions, we had 1 major acquisition during the quarter, apart from the little projects that we have tied up where we have given JD deposits, is a property in Hyderabad, which is at (inaudible), close to [14 acres] of land, where we are going to do residential and also commercial property. So this is one of the major acquisition that we had during the quarter.

So with this brief, I would like to open the forum for the question and answer.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from the line of Puneet Gulati from HSBC.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [2]

--------------------------------------------------------------------------------

Can you give some more color on what kind of construction spend you've incurred this quarter on residential and on the CapEx related projects?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [3]

--------------------------------------------------------------------------------

Sure, Puneet. Overall, the spend during the quarter towards the construction has been INR 910 crores.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [4]

--------------------------------------------------------------------------------

Okay.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [5]

--------------------------------------------------------------------------------

Of that, INR 631 crores was towards residential and INR 219 crores is for the commercial CapEx and INR 38 crores is towards the retail and INR 22 crores is towards the hospitality, the total INR 910 crores.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [6]

--------------------------------------------------------------------------------

Okay. And in terms of collection, how have the collections been, apart from the residential? The annuity income is -- is everything coming on time? And what would that number be?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [7]

--------------------------------------------------------------------------------

Annuities are around INR 220 crores. And then hospitality anyway is a separate segment that we look at differently. In addition to development the company point of view, in addition to this, it was INR 222 crores.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [8]

--------------------------------------------------------------------------------

Okay. So in addition to the developmental collections, INR 222 crores annuity, okay. And any progress on -- there was some plan for monetization and reduction of debt, any progress there?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [9]

--------------------------------------------------------------------------------

In terms of the CapEx portfolio?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [10]

--------------------------------------------------------------------------------

No, no. He's talking about some REITs or any other thing [special].

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [11]

--------------------------------------------------------------------------------

Yes. Yes.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [12]

--------------------------------------------------------------------------------

The discussions are on -- reached certain milestones, but we would take another quarter to come to a finality and probably keep you all informed. And both in terms of retail as well as office portfolios.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [13]

--------------------------------------------------------------------------------

Okay. So is that the only fast track plan to reduce debt? Or are you taking any other initiatives to reduce debt?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [14]

--------------------------------------------------------------------------------

I think if you look at the completion cycle and the launch cycle, there is slight mismatch because given the new regulatory mechanism, the launches were (inaudible) on the entire system, not just at Prestige, but even the ecosystem in terms of regulatory approvals and all of that. They were taking some time to settle down and understand. So therefore, our completions are almost to the extent of 36 million square feet. Our largest were not many, both last year, this year, together it was around 10 million. So if we want to launch more projects, automatically cash inflows also will substantially increase.

And again, the completed project inventory also, though we had very less inventory in comparison with anybody else, a substantial portion of our residential projects are sold to the extent of almost 74%, what we have in total, okay. We do have completed inventory. As and when we are selling the completed inventory, there is no outflow obligations against it. That should [further] reduce the debt, that is now standing at around INR 3,000 crores.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [15]

--------------------------------------------------------------------------------

Yes. But you seem to have done quite well on the launch pipeline; already, you're more than halfway through your launch program. So should we expect that the launch volume would be actually much higher than what you had guided?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [16]

--------------------------------------------------------------------------------

It will be.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [17]

--------------------------------------------------------------------------------

It will be because there are some 2 very large projects in the pipeline.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [18]

--------------------------------------------------------------------------------

Okay. What -- should we expect it [soon]?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [19]

--------------------------------------------------------------------------------

We've got 2 projects that we are now focusing on and somehow trying to liquidate. That will also give us a whole lot of cash because the money is already spent. So it's a ready inventory, which is the luxury -- 2 luxury developments, White Meadows and Golfshire, right. And hard to see that somehow we managed to liquidate that. If we liquidate that, we'll -- I think my residential segment, there should be no debt at all.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [20]

--------------------------------------------------------------------------------

Okay, nice. Also, I noticed in your segmental debt that you gave, the debt on the residential side seems to have come off.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [21]

--------------------------------------------------------------------------------

If I now liquidate that further, this inventory, which we've already spent the money, will be like nil sort of thing. So that's the focus. We've analyzed that. And then wherever now we've created the assets with -- either income-generating assets in terms of office or malls or hospitality, that will continue.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [22]

--------------------------------------------------------------------------------

In -- since you've raised about debt, just to -- as a strategy to tell you debt and the cash flow related. In terms of CapEx portfolio, we're looking at 3, 4 options. Let's look at office.

Yielding portfolio, we're evaluating of what needs to be done, public market a better option, et cetera. And in the construction portfolio, we're looking at 2 strategies. One, the largest are people who are showing lot of interest (inaudible) under construction, the private equity players, evaluating those options. And also office earlier, we used to own pretty much whatever we are building because we wanted to grow our rental income portfolio, [not just] whether we can start ourselves portions of it; [special] ones, not yielding ones. So therefore, that also brings some cash inflows. So this has been the strategy. And you would see going forward, in coming quarters, that helping us.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [23]

--------------------------------------------------------------------------------

And also the rental securitization loan has gone up. So you've moved some debt from resi to the asset-backed?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [24]

--------------------------------------------------------------------------------

Cost of that debt being lower.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [25]

--------------------------------------------------------------------------------

Okay, okay, fair enough. Lastly, just on your balance sheet, the intangible assets seem to have gone up. What is that number really?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [26]

--------------------------------------------------------------------------------

That is more to do with AS 116, I just went with respect to that, that we have done last time and then [where I picked up] it doesn't come into the book. Maybe I'll look at it and get back to you.

--------------------------------------------------------------------------------

Operator [27]

--------------------------------------------------------------------------------

The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [28]

--------------------------------------------------------------------------------

My question is on the recent hotel project we have signed in Delhi. So just some clarifications I wanted. So in the press release, you said we are reinvesting around INR 2,000 crores. Office Prestige will be putting in around INR 355 crores for its 50% stake. So will dealer partner, DB Hospitality (sic) [DB Realty], also be putting in a similar amount? Or will all the incremental CapEx be funded 50-50?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [29]

--------------------------------------------------------------------------------

No. So whatever we are going to put in now is going to be used for the construction. In addition to that, we also have got -- we have achieved a financial closure. There is a balance to draw money from a lender. So for every rupee that we are going to put in, the lender is going to disburse 2. That's how the balance of [finish] is going to be done up to, in particular, the construction cost. If the costs were to go up beyond the agreed numbers, and they also need to contribute 50%.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [30]

--------------------------------------------------------------------------------

So just to understand correctly. The DB will not be putting any incremental equity right now, it's just us putting in money and the balance money will be funded through debt, is it the right understanding? Or...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [31]

--------------------------------------------------------------------------------

That's right. Your understanding is right.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [32]

--------------------------------------------------------------------------------

Okay, okay. The understanding is correct. Okay. And sir, secondly for this quarter, our debt has gone up by INR 350 crores, our net debt, is all of it attributable to the land buy you're running in Hyderabad, means if it had not been for that, it would have been flat quarter-on-quarter?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [33]

--------------------------------------------------------------------------------

200 -- around INR 200 crores is attributable to that project.

There was INR 50-odd crores of payment with respect to the acquisition that we had done in the last quarter, that is Forum Mall in Hyderabad where we had a land owner...

--------------------------------------------------------------------------------

Unidentified Company Representative, [34]

--------------------------------------------------------------------------------

I am looking (inaudible).

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [35]

--------------------------------------------------------------------------------

Of 50% stake we bought out. There was a balance payment of INR 50 crores that we did, which was the final leg of payment. And the remaining is various other lands JD.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [36]

--------------------------------------------------------------------------------

Okay. Okay. And sir, last question, sir, on all the launches which you have said we'll now be doing over the next 6 months. Sir, do we have all the approvals in place, and is it just a question of us waiting for the right time to launch it? Or it is still contingent on some approvals coming in?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [37]

--------------------------------------------------------------------------------

No, we are waiting for the approvals because once the approval comes, we won't wait. Now actually, now the -- like Finsbury Park, we've already got the approval. We just need to get the RERA number. It will take not more than 15 days more.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [38]

--------------------------------------------------------------------------------

Okay. And [like several projects] in Mumbai and all, those are on track or again, there is some like approval related thing over there as well?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [39]

--------------------------------------------------------------------------------

No, sir, we're in advanced stages, we should be able to get all the approvals done by mid-December.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [40]

--------------------------------------------------------------------------------

Mid-December. Sir, lastly, we have done a recent KEYS exhibition, again, I think in the month of October. So could you just give us some indication, how has been the festive season? What are the early signs? And how do you see demand shaping up now?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [41]

--------------------------------------------------------------------------------

And we're talking about the KEYS event.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [42]

--------------------------------------------------------------------------------

Yes, KEYS event, yes, and -- yes.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [43]

--------------------------------------------------------------------------------

It did very well. We were able to sell some 500 properties into more than INR 500 crores worth of sales also. So that -- we were a little skeptical whether to do it or not, but then it's worked out well for us and it's done well.

--------------------------------------------------------------------------------

Operator [44]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Tanuj Mukhija from Bank of America.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [45]

--------------------------------------------------------------------------------

Congrats for a good set of numbers in a subdued market. Sir, my first question was, you spoke about Prestige Estates reaching certain milestones for you to thinking about [where you can reach]. Can you share some of those milestones that you have in mind for your office and retail portfolio?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [46]

--------------------------------------------------------------------------------

In terms of the annuity portfolio, office and retail put together, if you look at this year, with this rental income, we should be crossing comfortably INR 1,000 crores. And then lot more in pipeline. So pipeline as well as under planning stage. So there are some projects which are very close to completion. For example, we have a project called Prestige Star Tech, 1 million-plus square foot and nearing completion. We have got last block of [this now] that is nearing completion. And there are some projects which will move under planning to under construction, which are very high in value. So we are also thinking, that's why I said there's no finality, should we mix up these 2 portfolios and look at the (inaudible), how should we segregate retail, segregate office and look at segment wise, because the science of running these 2 business is very different, because retail has got upside, they have got revenue share, they have got huge amount of additional income coming in, in terms of parking, in terms of signages and [jobs] and all that. Whereas office is straightforward pre-agreed escalations and all of that. So this is more of completing some projects, which are almost in the final verge of getting completed. And also moving some of the projects to ongoing from upcoming. So the 20% of under construction also we can add to that, coupled with taking [a decision] internally, should we combine them, should we segregate them.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [47]

--------------------------------------------------------------------------------

Got it. So if I can understand correctly, you're basically saying that in 12 months, you would have a lot more clarity on your development pipeline and also you've got -- rental income would be significantly higher, so should 12 months be sufficient for you to reach your milestones?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [48]

--------------------------------------------------------------------------------

Absolutely. So there are some projects that we are pursuing in, for example, commercial properties, where we intend to build office in Mumbai as well. We're not able to right now comment on that because we've not completed with the legs of due diligence and other critical aspects. So therefore we would also see the finality of those in the next 3 to 6 months' time.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [49]

--------------------------------------------------------------------------------

Understood. And my second question is, you mentioned about your launch pipeline being across now Hyderabad, Mumbai and Noida as well, so which [mentioned there], which clearly suggests you branching out to more cities. Is your expansion plan outside of Bangalore and South India contingent in any way upon monetizing the rental portfolio?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [50]

--------------------------------------------------------------------------------

No, not really. Because most of these developments are either JDs -- these projects are JDs or JVs. And wherever there's JDs, there is not much of a capital outflow. Wherever it's JVs, there again, we are not looking at putting capital upfront, it is going to be more towards the construction on a staggered basis. Look at our investments in Aerocity, the [dial], one of the reasons that made a lot of financial sense is that whatever we have to infuse, we have to infuse over a period of time, not upfront. And secondly, that's got 20,000 capacity convention center, 932 keys. And also 650,000 square foot of almost office space, where rentals are in the range of INR 200. So the office bid actually is very, very attractive in that. And the acquisition also does not require upfront capital. So therefore, across whichever cities that we are looking at, either JDs or JVs. And we are collaborating with the land owners because we want to partner with them, so understand the local nuances, so that we don't take much time in starting our projects. So they are not contingent upon capital raising of annuity portfolio -- some annuity portfolio.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [51]

--------------------------------------------------------------------------------

Got it. And if I can ask a question regarding your Slide #11, which gives us the business vertical review. If you look at, let's say, the equity in the office segment and also in the retail segment, that has declined sequentially. So your equity, let's say, in office is about INR 158 crores as of 1st of FY '20, which was about INR 730 crores. This is despite your actually PAT going up. So can you explain, I mean why did the net worth decline for office and retail despite Prestige reporting profits in second quarter FY '20 in both of these segments?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [52]

--------------------------------------------------------------------------------

You're referring to Slide 11 or 12?

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [53]

--------------------------------------------------------------------------------

This is your slide on the business vertical review.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [54]

--------------------------------------------------------------------------------

Yes, business vertical review, yes. (inaudible)?

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [55]

--------------------------------------------------------------------------------

So if I look at, let's say, your equity and debt numbers for office and retail segment. The equity for office segment is INR 157 crores.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [56]

--------------------------------------------------------------------------------

Equity for office segment is, no, INR 757 crores.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [57]

--------------------------------------------------------------------------------

Okay. Then maybe...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [58]

--------------------------------------------------------------------------------

Oh, sorry, I don't know which one you're referring to. There is -- there was a slight correction to the numbers. They uploaded some -- with some modifications, some time ago, I don't know whether you're referring to the old one or the new one.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [59]

--------------------------------------------------------------------------------

Maybe the old one in that case.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [60]

--------------------------------------------------------------------------------

Actually INR 757 crores. I'll tell you, the number that you're referencing to also, during the quarter, we had a redemption of debenture from one of the AFPVs. So when we redeemed the debenture -- sorry, the [preference share], that got reduced. So we wanted to equate the whole thing, it is INR 757 crores just to be precise.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [61]

--------------------------------------------------------------------------------

Okay, understood.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [62]

--------------------------------------------------------------------------------

And just equity numbers for office are INR 757 crores, the retail are INR 613 crores, hospitality is INR 932 crores, services is INR 96 crores and residential is INR 832 crores, totaling to EUR 3,232. I'm sorry for referring to the old one, (inaudible).

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [63]

--------------------------------------------------------------------------------

Understood. That is very helpful, sir. And just last question from my end. Sir, you actually have a completed inventory of 3.7 million square feet.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [64]

--------------------------------------------------------------------------------

Correct.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [65]

--------------------------------------------------------------------------------

If I understand correctly, there's a very high demand for ready to move in inventory. But I think in Prestige Estates' case, you have a disproportionately higher proportion of completed ready to move in unsold inventory. So can you elaborate why is there a subdued demand for your completed product?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [66]

--------------------------------------------------------------------------------

No, no. Actually, it's completed inventory has been moving very well. As I mentioned in my opening remarks, close to 36 million square foot in that, majority of it has been residential that got completed. So it just moved from ongoing inventory to complete inventory. See, it's also directly linked to the pace of completion. It's not that it's not changing. So something else is moving and the new things are getting added into.

--------------------------------------------------------------------------------

Operator [67]

--------------------------------------------------------------------------------

The next question is from the line of Swagato Ghosh from Franklin Templeton.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [68]

--------------------------------------------------------------------------------

Sir, I have a few very short questions. First one is on the Elysian project, our economic interest is only 30%, who is the -- who is holding the other 70%?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [69]

--------------------------------------------------------------------------------

The Project Elysian, one of the SPVs has entered into joint development with the land owner. In that SPV, we had 51% share. So because whatever the JD ratios that we are getting, that is going to the SPV. In that SPV, we hold -- had an economic interest. Therefore, this has been arrived at. One of the -- yes, sir?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [70]

--------------------------------------------------------------------------------

One of the -- no, no, no. What happened there is AAA Investments is the project that we are doing it in. And in AAA Investment, we have a 50% shareholder, which is [in Chennai], and [EPL] is 50%. Yes, that's right. That's right. So that's how it is. And then the -- it's a JDA, so basically, again, our JDA ratio is 40-60. So that's how we become 30%, because 50% we have a shareholder.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [71]

--------------------------------------------------------------------------------

Understood, understood. So but going forward, see, because once you are investing your time and resources into a project, 30% economic interest will not give you enough upside.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [72]

--------------------------------------------------------------------------------

I agree with you. Sometimes what happens is the land is brought by someone, so the landowner is someone. So ultimately, but I got your point. And I think some of our very, very large projects are being done by the company itself or through the HDFC platform.

--------------------------------------------------------------------------------

Tanuj Mukhija, BofA Merrill Lynch, Research Division - Associate [73]

--------------------------------------------------------------------------------

Okay. So this is like a one-off?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [74]

--------------------------------------------------------------------------------

Yes. One-off, it's old projects, the land where we are tied up and it took...

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [75]

--------------------------------------------------------------------------------

Some time ago, but it took a long time to clean it up.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [76]

--------------------------------------------------------------------------------

Fair, fair, sir. And sir, on the Hyderabad, it is not showing up on our land bank slide. Will it show up from next quarter's?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [77]

--------------------------------------------------------------------------------

[There is the project itself].

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [78]

--------------------------------------------------------------------------------

It shows as core CapEx [that's the thing].

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [79]

--------------------------------------------------------------------------------

[It says in the] projects itself.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [80]

--------------------------------------------------------------------------------

There's a main...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [81]

--------------------------------------------------------------------------------

Commercial and residential.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [82]

--------------------------------------------------------------------------------

In that it's either called Prestige Tranquil-- the name of the project is Prestige Tranquil. Yesterday on the slide, it was showing as [core CapEx].

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [83]

--------------------------------------------------------------------------------

It's been added to the upcoming projects, not the land banks.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [84]

--------------------------------------------------------------------------------

Okay, okay. So basically, whatever we have acquired, that itself has got added in the upcoming...

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [85]

--------------------------------------------------------------------------------

For sure. We have to be quick.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [86]

--------------------------------------------------------------------------------

As we are looking at finalizing agreements on the term sheets and all of that, we also finalized the dividend and [locked in].

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [87]

--------------------------------------------------------------------------------

Okay. Great, great, great. And sir, our -- on the office side, on our upcoming, there also the upcoming area has increased by 5 million square feet.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [88]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [89]

--------------------------------------------------------------------------------

Is it also the Hyderabad one.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [90]

--------------------------------------------------------------------------------

Partly Hyderabad. Hyderabad has contributed to that to the extent of INR 2.5 million. And there are also other projects in Bangalore, which was under planning, got added to the upcoming projects.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [91]

--------------------------------------------------------------------------------

Okay. So for this Bangalore thing, can you help me understand, have we paid anything for the land? Or is it happening on our existing land bank?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [92]

--------------------------------------------------------------------------------

No, no. It -- we have paid for the land. It's in

Varthur.

--------------------------------------------------------------------------------

Irfan Razack, Prestige Estates Projects Limited - Chairman & MD [93]

--------------------------------------------------------------------------------

It's a joint development.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [94]

--------------------------------------------------------------------------------

Okay. But we have made some payment towards this land this quarter?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [95]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [96]

--------------------------------------------------------------------------------

Okay. How much would be that, sir, if you can just help me?

--------------------------------------------------------------------------------

Irfan Razack, Prestige Estates Projects Limited - Chairman & MD [97]

--------------------------------------------------------------------------------

We don't have a breakup of that number. But this is among -- the major 2 being...

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [98]

--------------------------------------------------------------------------------

[Taking the forest]...

--------------------------------------------------------------------------------

Irfan Razack, Prestige Estates Projects Limited - Chairman & MD [99]

--------------------------------------------------------------------------------

It's [INR 20 crores, INR 25 crores].

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [100]

--------------------------------------------------------------------------------

INR 20 crores -- INR 25 crores of JD deposits.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [101]

--------------------------------------------------------------------------------

INR 25 crores of JD deposits. Okay, okay. And sir, the other question I want to ask is this leasing volume guidance, see, we are not behind by a long distance, but still, we are behind, whereas this is a more predictable part of the business. So has there been cancellations or project delays? Why are we lagging?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [102]

--------------------------------------------------------------------------------

I think we'll be able to surpass that guidance. It's just that we wanted to take it into consideration only after we execute the documents. There are quite a few under the pipeline, under discussion. And the next quarter, you'll see us on track with the guidance. We just have not taken

till it is signed.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [103]

--------------------------------------------------------------------------------

Okay, fair enough. And sir, one last question is that you mentioned that large projects will be launched in, say, fourth quarter or so, can we see for 1 to 2 quarters, debt in the resi segment also going up because we have seen that there are expenses lifted to launches? And then also maybe your collections don't start till a certain point [on the radar], so can we see a spike in the resi segment because of these launches getting bunched up together?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [104]

--------------------------------------------------------------------------------

No, no. Actually, resi segment, if we launch we'll have positive cash flows, so it'll be the other way around. See, there is a two-pronged attack that we are planning. One is we have certain inventory, which is the luxury segment inventory, which is there. We are planning to somehow sell that off. And apart from that, when the launches do happen, significantly, for the first 6 months, the money comes in, but it doesn't get utilized almost immediately. So we'll have quite a lot of surplus cash flow.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [105]

--------------------------------------------------------------------------------

Okay, okay. So we can presume then in under no circumstances, resi debt will go up?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [106]

--------------------------------------------------------------------------------

No, resi debt, our plan is to somehow make it 0. But having said that, the debt, as far as I'm concerned for the way CapEx projects are concerned, whether it's hospitality or whether it is office or retail, that will keep climbing up till we take some measures to do a REIT or some other tie up with some fund so that the equity comes in and the debt goes down. So that is a work in progress. Hopefully, even that will happen soon.

--------------------------------------------------------------------------------

Operator [107]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Sameer Baisiwala from Morgan Stanley.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [108]

--------------------------------------------------------------------------------

Venkat, I'm on the same Slide #11. And when we look at hospitality vertical, it kind of pales versus the all other business verticals that you have. So the question here is, do you want to retain all of these assets on your book, or at some point in time would you want to monetize them?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [109]

--------------------------------------------------------------------------------

Definitely look at monetizing. The reason right now for not doing anything is they're all going through stabilization mode. So we just opened 2 major hospitality properties contract in the Sheraton brand. So they will typically take the 24 months to 36 months to stabilize and give steady incomes. So at that point in time, we'll definitely look at monetizing.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [110]

--------------------------------------------------------------------------------

And which means taking them completely off the balance sheet or...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [111]

--------------------------------------------------------------------------------

Either bringing co-owner, or we'll look at, I mean if somebody's coming to the platform as a whole because we have 8 operational assets right now. All of them may be co-ownership, or maybe we can look at even asset-by-asset.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [112]

--------------------------------------------------------------------------------

Okay. And second is for the NCR project, the mixed-use one. When do you pay your share, INR 355 crores?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [113]

--------------------------------------------------------------------------------

That is staggered over a period of time, linked to the construction.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [114]

--------------------------------------------------------------------------------

I see. So do we expect net debt from here to go up and then down? Or should it start going down from this quarter onwards?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [115]

--------------------------------------------------------------------------------

See, I mean if we can launch a few projects and we can accelerate the completed projects inventory liquidation, that's what we've been doing, because we completed a lot many more properties in last 2 quarters again. So that debt doesn't have any construction cost obligations. Then say that we will go for the reduction. So that is contingent upon how fast we are going to liquidate the existing completed inventory.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [116]

--------------------------------------------------------------------------------

Okay. And just your choice of partner for this NCR project, DB Realty, we know that they are in stress. So how do you protect your interests for this project?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [117]

--------------------------------------------------------------------------------

I mean, see, in terms of whatever the moneys that we are committed to pay, it's all going for the construction, there is no takeout from the partner. So he is also interested in completing this project and making it operational. And one good thing is, the land is secure, and the design [staff was in]. Of course, we also went through the diligence and we did spend a lot of time in going through the designs and all of that. What apart from the hotel, per se, because it's an established location, (inaudible) there are many hotels that are doing quite well already. So but this is going to be the [giant] in terms of the number of keys. But convention center, we also have a convention center in Sheraton Grand, which has been doing very, very well. 20,000 seater convention center, I think that's going to be a number more, in terms of hospitality tech. But as far as office is concerned, it's a large office. There's almost 650,000 square foot at current rental, even if we give it an 8% cap, that itself is around INR 1,900 crores, once it is ready. So that's what made it a little bit more interesting. So we evaluated the mix, we evaluated everything, the risks that are involved, and we looked at how to protect our interest. So we have taken enough safety precautions before we got into this.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [118]

--------------------------------------------------------------------------------

Okay. And this is a ring-fenced asset in a separate SPV, I presume, all of that?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [119]

--------------------------------------------------------------------------------

This is ring-fenced. I mean, if you are looking like they (inaudible) or something were to go wrong, maybe that'd be more linked to their stake in the SPV there could be [a fee], but JV is not affected at all.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [120]

--------------------------------------------------------------------------------

Okay. And when does it begin -- when construction begin, when does it end?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [121]

--------------------------------------------------------------------------------

Construction has already begun. In fact, it's -- the project has got 7 basements and almost all basements are done. Now it's about now the next steps. So we intend to make it operational sometime in 2022.

--------------------------------------------------------------------------------

Sameer Baisiwala, Morgan Stanley, Research Division - Executive Director [122]

--------------------------------------------------------------------------------

Okay. Okay, that's great. And one final one from my side. And this is for Smart City, this is -- will arguably be the largest project in your portfolio. Can you share some more details? I mean the 7.5 million square foot would be what kind of format you're planning in Phase 1? What do you launch? How do you want to price it, et cetera?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [123]

--------------------------------------------------------------------------------

This has got 3 components. And this is under HDFC platform. One is a plot, the other is villas, and the third is apartments. So in terms of launching, maybe plots will get launched first and the remaining 2 later.

--------------------------------------------------------------------------------

Operator [124]

--------------------------------------------------------------------------------

The next question is from the line of [Anjit Salka] from Edelweiss.

--------------------------------------------------------------------------------

Parvez Akhtar Qazi, Edelweiss Securities Ltd., Research Division - Equity Research Analyst [125]

--------------------------------------------------------------------------------

This is Parvez here. Sir, just had one question. What would be your pending CapEx in our annuity portfolio, including the hospitality one?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [126]

--------------------------------------------------------------------------------

Parvez, I don't have it handy. Can I have it mailed to you, please?

--------------------------------------------------------------------------------

Parvez Akhtar Qazi, Edelweiss Securities Ltd., Research Division - Equity Research Analyst [127]

--------------------------------------------------------------------------------

Sure, sir, I'll get it.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [128]

--------------------------------------------------------------------------------

We have also added some projects during this quarter, almost 4 million, 5 million square foot. So some of them, we're just yet to finalize the costing for it. But I'll have it sent to you, I'll share it with you.

--------------------------------------------------------------------------------

Operator [129]

--------------------------------------------------------------------------------

Next question is from the line of Mohit Agrawal from

IIFL.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [130]

--------------------------------------------------------------------------------

Sir, can you share how much of presales in 2Q have come in from completed projects? Broadly wanted to understand what's the run rate of being -- we being able to sell those completed projects?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [131]

--------------------------------------------------------------------------------

I'm just pulling that for you. Around 40%.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [132]

--------------------------------------------------------------------------------

Sorry, how much, sir?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [133]

--------------------------------------------------------------------------------

40%.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [134]

--------------------------------------------------------------------------------

40%. Okay. Sir, secondly, on the office side in the presentation have given there are upcoming projects of 17 million square feet on the office side. Can you give a ballpark, how much of this will be strata sales and how much will be for leasing? Any ballpark number on that? Because you are now focusing on strata sales again in the office space.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [135]

--------------------------------------------------------------------------------

Under -- whatever is under construction, around 50 million is what is under strata sale. As far as upcoming is concerned, we have not yet firmed up, but it could be in the range of, again, 3 million to 5 million.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [136]

--------------------------------------------------------------------------------

3 million to 5 million. Okay. And sir, lastly, could you give a sense of what would be the current occupancy levels across your office, retail and hospitality segments, broadly blended occupancy levels?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [137]

--------------------------------------------------------------------------------

Occupancy levels are in high 90s, 97%, 96%.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [138]

--------------------------------------------------------------------------------

For office and retail, sir?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [139]

--------------------------------------------------------------------------------

For both office and retail.

--------------------------------------------------------------------------------

Mohit Agrawal, IIFL Research - Assistant VP [140]

--------------------------------------------------------------------------------

Okay. And sir, any sense on the hospitality? I understand it's -- there's a lot of hotels, but any sense -- a broad blended number there?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [141]

--------------------------------------------------------------------------------

In hospitality, (inaudible), these are all where we are not holding any disjointed properties, except with a stand-alone, the rest are all part of integrated development, either it's office and hospitality or retail and hospitality. We just add value to the asset. And fortunately, though, hospitality being what it is, we've been able to clock in some great numbers, and there's no negative cash outflow for hospitality. Though the investment returns will come in a longer period, and like Vanket said, at some point of time when we have the portfolio grows into a bigger one, we can even look at monetizing it in some way or the other. But right now, what we want to do is make it into a stabilized asset. We are also doing some more hospitality assets, like the Aerocity, but -- the Delhi one that we are talking about. And that's again going to be a blue-chip asset for the company because there's not going to be any other asset like that in the capital area, and that's going to really trade well.

--------------------------------------------------------------------------------

Operator [142]

--------------------------------------------------------------------------------

(Operator Instructions) Next question is a follow-up question from the line of Puneet Gulati from HSBC.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [143]

--------------------------------------------------------------------------------

Just wanted to understand, on the NCR project, have you assumed any debt with that project?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [144]

--------------------------------------------------------------------------------

In the sense, sorry?

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [145]

--------------------------------------------------------------------------------

So this project was done by DB, right? And you said there is a construction of 7 basements already done. So when we enter into an agreement, do we also assume debt from this project?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [146]

--------------------------------------------------------------------------------

Already any existing debt is what you're asking?

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [147]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [148]

--------------------------------------------------------------------------------

SPV?

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [149]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [150]

--------------------------------------------------------------------------------

Yes, there was around INR 500 crore.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [151]

--------------------------------------------------------------------------------

Okay. And do we consolidate that debt? Or does it go as an associate or JV?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [152]

--------------------------------------------------------------------------------

[We won't], because it is joint venture where the ownership rights are with other party also.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [153]

--------------------------------------------------------------------------------

Okay, okay. So it doesn't show up in our balance sheet, per se?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [154]

--------------------------------------------------------------------------------

It doesn't, and also the transaction has happened after 30th September. So therefore, the last quarter numbers also is not there.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [155]

--------------------------------------------------------------------------------

Yes. So if you show it in December, will we take a proportionate share, or will it just stand outside the...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [156]

--------------------------------------------------------------------------------

It will be joint venture accounting, only bottom line numbers will come and get added.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [157]

--------------------------------------------------------------------------------

Okay, okay. And also, can you tell us a bit about what you're doing in Mumbai? There's a lot of news going around. But so what all projects do you have right now in Mumbai?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [158]

--------------------------------------------------------------------------------

So Mumbai, what I can tell you right now is the Prestige Jasdan Classic, which is also there in the upcoming projects in the list, which is a residential property, it's near Mahalakshmi, abutting Planet Godrej. It's close to INR 3.5 lakh per foot of carpet. It comprises of 2-bedroom, 3-bedroom and 4-bedroom apartments. And we've received almost all -- we've filed [leg up] for getting approvals and should have everything in place by December.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [159]

--------------------------------------------------------------------------------

Okay. And sir, so you'll expect to launch it in December?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [160]

--------------------------------------------------------------------------------

Maybe December, January, yes, we will launch it.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [161]

--------------------------------------------------------------------------------

Okay. And this is also a JDA project, I presume?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [162]

--------------------------------------------------------------------------------

This is a JDA project. And the rest, there are quite a few developments at various locations. Two of them are large office properties. I'm not able to comment at this point in time because we are still under due diligence stage.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [163]

--------------------------------------------------------------------------------

Okay. So this is the only one which is finalized till date?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [164]

--------------------------------------------------------------------------------

Which is, yes, finalized and transactions happened. And the remaining are also in advanced stages. Hopefully, we should be able to tell something about it in next week or 2.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [165]

--------------------------------------------------------------------------------

So and the remaining are largely office?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [166]

--------------------------------------------------------------------------------

Largely office, yes.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [167]

--------------------------------------------------------------------------------

So for this Jasdan, what is this -- is it a DM agreement or is it JD?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [168]

--------------------------------------------------------------------------------

Joint development. Joint development.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [169]

--------------------------------------------------------------------------------

What kind of investment will it need?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [170]

--------------------------------------------------------------------------------

We have already made the investment that is required to be made. There's no more further, it's just launching the project.

We have given a deposit to them, and also given some area [share].

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [171]

--------------------------------------------------------------------------------

What would that be, roughly?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [172]

--------------------------------------------------------------------------------

We have given close to INR 200 crores of deposit. And around 80,000 square foot of area -- carpet.

--------------------------------------------------------------------------------

Puneet J. Gulati, HSBC, Research Division - Analyst [173]

--------------------------------------------------------------------------------

Out of INR 350 crores, okay.

Okay. And profit -- and just [area share]. Okay, fine. Great. Got it.

--------------------------------------------------------------------------------

Operator [174]

--------------------------------------------------------------------------------

The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [175]

--------------------------------------------------------------------------------

Sir, for the quarter, the INR 1,000 crores-odd sales we have done, sir, how much would be coming from strata sales like in projects like Tech Cloud?

--------------------------------------------------------------------------------

Irfan Razack, Prestige Estates Projects Limited - Chairman & MD [176]

--------------------------------------------------------------------------------

Tech Cloud was...

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [177]

--------------------------------------------------------------------------------

Tech Cloud? Out of INR 1,000 crores?

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [178]

--------------------------------------------------------------------------------

Yes. Broadly from commercial strata, what is the overall number? I mean it's not specifically for Tech Cloud, but overall, on the share?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [179]

--------------------------------------------------------------------------------

No, no. Tech cloud, we are planning to sell about 1 million square feet, out of which we've sold about 600,000 to 700,000 square feet already. So those numbers are not yet captured. You see those are -- some has come in Q1, some has in Q2. Now it will come -- some will come in Q3. The idea is, we retain the rest of it. And I think if you're asking what is detailed figure of Tech Cloud within the Q2, about 15%, I think.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [180]

--------------------------------------------------------------------------------

Okay. And on INR 150-odd crores...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [181]

--------------------------------------------------------------------------------

Yes, INR 150-plus crores.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [182]

--------------------------------------------------------------------------------

Sorry?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [183]

--------------------------------------------------------------------------------

15%.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [184]

--------------------------------------------------------------------------------

15%. And sir, and just to just clarify, you said 40% of the sales were from [competitive] inventory apart from this during further quarter?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [185]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [186]

--------------------------------------------------------------------------------

Okay. So on the [40%], so more than half of the sales have [come in] completed and is taken?

--------------------------------------------------------------------------------

V. V. B. S. Sarma, Prestige Estates Projects Limited - CFO [187]

--------------------------------------------------------------------------------

[Just] from Lakeside Habitat, INR 2,000 crores.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [188]

--------------------------------------------------------------------------------

Okay, Okay. Fine, sir. Then just -- sorry, just a follow-up on a previous question. Only for your office retail, only for the under construction portfolio, not upcoming, sir, what would be the balance CapEx required to complete, any ballpark number on that?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [189]

--------------------------------------------------------------------------------

Adhidev, I don't have it handy with me. I'll share it -- both the numbers, upcoming as well as under construction.

--------------------------------------------------------------------------------

Adhidev Chattopadhyay, ICICI Securities Limited, Research Division - Assistant VP [190]

--------------------------------------------------------------------------------

Okay. And sir, just on -- so all these are under construction, right? Not on the upcoming. Sir, when do all these projects get completed, by FY '21 end or...?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [191]

--------------------------------------------------------------------------------

No, no, no. They get completed sequentially year-after-year. So some of them, for example, there is one block in (inaudible) Business Park, we're under construction that will get completed now in next 2, 3 months. There's 1 more large project, a little over 1 million square foot Star Tech that we're doing, that'll get completed in 6 months' time. So they get completed various stages of construction they are right now in. Yes, but overall project cycle, if you take, all of them will get completed in 3 years' time, even just now started ones.

--------------------------------------------------------------------------------

Operator [192]

--------------------------------------------------------------------------------

The next question, follow-up question from the line of Swagato Ghosh, Franklin Templeton.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [193]

--------------------------------------------------------------------------------

Sir, a clarification. If I look at your Slide 26, did you say that under construction, whatever we see in office is for strata sales?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [194]

--------------------------------------------------------------------------------

No, no, not all of it. I said if -- by a particular project in under construction is for strata sale.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [195]

--------------------------------------------------------------------------------

Okay. So do we get that number in Slide 17, where it says that commercial projects is 1.78 million square feet, which is included in stock?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [196]

--------------------------------------------------------------------------------

Yes, you do get that.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [197]

--------------------------------------------------------------------------------

Okay. So out of this number of 5.65, 1.78 for strata sales, the rest would be annuity, right?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [198]

--------------------------------------------------------------------------------

Right.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [199]

--------------------------------------------------------------------------------

Okay, great. And sir, another clarification, this INR 200 crores of deposit for the Mumbai project, is it adjusted from the sales from day 1 (inaudible)...

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [200]

--------------------------------------------------------------------------------

It's nonrefundable.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [201]

--------------------------------------------------------------------------------

Sorry?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [202]

--------------------------------------------------------------------------------

It's a nonrefundable deposit.

--------------------------------------------------------------------------------

Swagato Ghosh;Franklin Templeton;Analyst, [203]

--------------------------------------------------------------------------------

Nonrefundable deposit. Okay, okay. Okay. But this is like contrary to how we generally structure deals, right, where we generally have refundable deposits?

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [204]

--------------------------------------------------------------------------------

They're refundable. But in this case, what we have done is a nonrefundable deposit and the area, both. That's why area share is lower.

--------------------------------------------------------------------------------

Operator [205]

--------------------------------------------------------------------------------

(Operator Instructions) Ladies and gentlemen, there is no further questions from the participants. I now hand the conference over to the management for the closing comments. Thank you, and over to you.

--------------------------------------------------------------------------------

Irfan Razack, Prestige Estates Projects Limited - Chairman & MD [206]

--------------------------------------------------------------------------------

Thank you, everyone, for quite a good participation, for all the relevant questions. And Venkat and Sarma and (inaudible) will be more than happy to do any follow-up later on, offline. And it's been quite a enthusiastic participation. At the company level, we always endeavor to do exceed our expectations, and we'll be hopefully doing better in the next few quarters and we [can promise] to grow the company in full strength.

--------------------------------------------------------------------------------

Konanki Venkata Narayana, Prestige Estates Projects Limited - CEO [207]

--------------------------------------------------------------------------------

Thank you once again. And as I've told in the opening remarks, we are pretty much on course to meet the guidance that we [gave] at the beginning of the quarter. Most of the parameters, if you see, we are in fact even ahead. So we are very confident. And even the new geographies that we are entering into, the vibes that we're getting are very positive. And it's a matter of getting 1 or 2 projects right and ensuring that the brand Prestige expands to those locations from there. Those are the new markets. I think that should contribute to growth in terms of presales, rental income and everything. We are building teams and we are scaling up, the opportunities seem to be plenty, and given the consolidation that is happening in the market. And we are pursuing opportunities at that same time, as I think some of you were mentioning in the call, we are also cautious, and we are also ensuring that the risks that we are taking are protected. As I said, all the new geographies that we're entering into, we are choosing the partners who can help us in terms of land approvals and all of that so that we can get going with the marketing execution and all of that. The strength the Prestige Estates has built over a period of time, as you have seen over a period of quarters, is deliveries and execution and on-time completions. 36 million square foot of completions in last 18, 24 months, by any standard, it's a big milestone for a real estate company to achieve. We are building on that further. And hopefully, with the launches that we have coming up in the pipeline, which are also spread across various geographies, we should look forward to scaling to new heights. Thank you very much for your support and look forward to continued patronage. Thank you.

--------------------------------------------------------------------------------

Operator [208]

--------------------------------------------------------------------------------

Thank you very much.