The Hindu Business Line : Realty counters witness renewed interest

Mumbai, April 23 There appears to be renewed interest at the realty counters on the BSE, shrugging off the gloom of a possible price correction and slowdown in the real estate segment. Shares of most real estate majors are up close to 10 per cent over the week.

The Bangalore-based Puravankara Projects was up 8.2 per cent over the previous day’s close at Rs 300.30; it jumped 16 per cent over the week from Rs 257.55.

Akruti City gained 3.83 per cent over the previous close of Rs 1,131.90 and a 12 per cent jump from Rs 1,008.50 a week ago.

The Delhi-based DLF recorded a jump of 10.02 per cent week-on-week at Rs 684.35, while gaining 1.48 per cent over Tuesday’s close of Rs 674.40.

Over the week, Omaxe Ltd gained 10 per cent at Rs 232 and 3.64 per cent over the earlier close of Rs 223.90.

Unitech Ltd was up nine per cent over the week at Rs 286.60 and 2.17 per cent over Tuesday’s close of Rs 280.50.

Sobha Developers gained 4.36 per cent over the week to close at Rs 609.95 on Wednesday. On Tuesday Sobha closed at Rs 609.75.

The realty index too closed marginally higher at 8,056.17.

“Realty stocks were the worst affected during the market fall and hence prices now look attractive, though they may be moving along with the Sensex. The rise is a corrective one,” said Mr Sanjay Someshwar, Sub-Broker, Ventura Securities.

Unaffordable

A real estate report by Goldman Sachs said Mumbai price points do not appear affordable and that the rates quoted for the city suburbs were high and likely to be beyond the reach of many upper middle income families.

A feedback on the sector, based on interaction with Asia-based investors over the last one month, indicated that they were generally bearish. In the absence of a correction in property prices and interest rate cuts, the end-user demand would continue to languish.

Unless the FY-2008 results season that kicks off at the end of April provides some reassurance on volume growth and execution, property stocks might struggle to perform in the near-term, it said.

Meanwhile, there were unconfirmed reports that DLF is in talks for a stake in US-listed global hospitality giant Orient-Express. However, officials of the two companies were non-committal on the issue.

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