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Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q4 FY '19 Earnings Conference Call. We have Mr. Oberoi, the Chairman and Managing Director of the company; and Mr. Saumil Daru, Director of Finance of the company, with us on the call. Please note that this call will be for 60 minutes. [Operator Instructions] And this conference call is being recorded and a transcript for the same may be put up on the website of the company. [Operator Instructions]Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risk and uncertainties and other factors that could be -- cause actual results, opportunities and growth potential to differ materially from those suggested by such statements.I now hand the conference over to Mr. Oberoi. Thank you, and over to you, sir.
Good morning, good afternoon, good evening to all of you as per the time zone from which you have logged in, and welcome to the conference call of our fourth quarter financial year 2019 results and business updates. Thank you for taking time out to attend this call. Before I begin, I'd like to share with you a few quick updates. Firstly, we are glad to let you know that we have crossed INR 2,500 crores of top line for the first time in any financial year. It happens to be this year. Oberoi Mall also continues to throw healthy number. We've grossed INR 150 crores of revenue, which is the rent that we have collected in this year itself. With this now, I'll hand over the call to Saumil who will take you through the details of all the numbers. I'll be happy to answer any of your questions that you will have during the conference call.
Thank you, Mr. Oberoi. I guess most of you must have gone through the presentation by now, and if not, the same is also available on the website -- on our website and along with the results which have been filed with the exchanges. In terms of consolidated financials, we achieved a total consolidated revenue of about INR 597 crores for this quarter as against INR 352 crores for Q4 FY '18. For FY '19 full year, we achieved consolidated revenue of INR 2,661 crores as against INR 1,292 crores for the full year FY '18. Consolidated PBT numbers, INR 222 (sic) [220] crores for Q4 FY '19 as against INR 178 crores for Q4 FY '18. And for the full year FY '19 consolidated EBITDA of INR 1,177 crores as against INR 649 crores for FY '18. The same PAT numbers were at about INR 155 crores for this quarter as against INR 142 crores for -- of Q4 FY '18. And for FY '19, our total consolidated backlog stood at INR 816 crores as against INR 458 crores for the full year. Moving on to the asset level performance and the investment properties. The investment properties beginning just Oberoi Mall, which is a retail asset, contributed INR 38 crores to the operating revenue for this quarter as against INR 29 crores for Q4 FY '18. For FY '19, Oberoi Mall contributed INR 150 crores to the total operating revenue as against INR 110 crores for FY '18. And the EBITDA margin in this vertical stands at about 95%. Commerz, which is our office-based asset, contributed INR 10 crores to the operating revenue as against INR 11 crores for Q4 FY '18. For full year FY '19 Commerz contributed INR 41 crores as against INR 45 crores for FY '18. The EBITDA margins for this asset continued to be in excess of 95%. For Commerz II Phase 1, this contributed INR 25 crores for Q4 FY '19 as against INR 12 crores for Q4 FY '18. For FY '19 full year, it contributed INR 83 crores to the operating revenue as against INR 48 crores for FY '18. EBITDA margins in this asset are about 90%. Lastly, The Westin Mumbai Garden City. That contributed about INR 37 crores to the operating revenue for this quarter as against INR 34 crores for Q4 FY '18. For the full year FY '19, The Westin Mumbai contributed about INR 137 crores to the operating revenue as against INR 128 crores for FY '18. The EBITDA margins in this vertical continued to be in excess of about 33%. Quickly moving then to the development properties, beginning with Esquire. This quarter, we booked about 46,700 square feet. Till date, we have booked about close to 16 lakh square feet, which is nearly 75% of the inventory. The total booking value in this quarter was INR 97 crores as against INR 92 crores for Q4 FY '18. Cumulative booking value and till date is INR 2,554 crores. The total revenue recognized for the project in this quarter is INR 97 crores and cumulative recognition till date is about -- is the same as INR 2,554 crores on account of 100% of project completion. For Mulund. Eternia, till date, we have booked about close to 6 lakh square feet. The total booking value for this quarter was INR 14 crores as against INR 10 crores for Q4 FY '18. Cumulative booking value till date is about INR 871 crores. Total revenue recognized for this project in this quarter was INR 77 crores and cumulative recognition till date is INR 369 crores. For Enigma till date, we have booked close to 4.1 lakh square feet. The total booking value in this quarter was INR 17 crores as against 8 quarters -- INR 8 crores in Q4 FY '18. The cumulative booking value till date is INR 601 crores. The total revenue recognized for this project is at least INR 28 crores in this quarter, and cumulative recognition till date is about INR 133 crores. Thus for Mulund booking, till date, we have booked a little over 10 lakh square feet. The total booking value is INR 31 crores in this quarter and cumulative booking value in Mulund stands at INR 1,474 crores. And the cumulative revenue recognition till date is INR 502 crores. Sky City. We booked nearly 51,500 square feet in this quarter. Till date, about close to 16 lakh square feet. The total booking value for this quarter was INR 83 crores as against INR 84 crores for Q4 FY '18. And till date, the booking value stands at INR 2,560 crores. The total revenue recognized for this project in this quarter is INR 233 crores and the cumulative revenue recognition till date is about INR 1,222 crores. For Three Sixty West. This quarter, we have booked about 24,420 square feet. Till date, we have booked about 5.5 lakh square feet. The total booking value in this quarter was INR 105 crores. And till date, the gross booking value stands at INR 2,240 crores. Coming back to some key financial parameters. Our adjusted EBITDA margins for this quarter was 43%. PAT margin stood at 26% for this quarter. EBITDA margin for a moment from the office business is much higher than average, as mentioned before. Excluding from the margins for our pure residential business stands at 34% for this quarter. Thank you, and with this, we will hand over to the floor for any questions that you will have.
[Operator Instructions] The first question is from the line of Abhishek Bhandari from Macquarie.
I have couple of questions. I'll take them one by one. So because last year same time, you've spoken about some of your first-ever joint venture projects in South Mumbai. We haven't really heard much since then. So if you could probably update on that. And have you restarted looking at some of these joint venture opportunities in the market with fresh eyes?
Well, we already are in the process of developing the rehab component of the South Mumbai company that we are talking about. We're still awaiting certain clearances for the resale component. Once we have that, we will announce it in the market. So it's a nice -- it's a beautiful location, very low on investment. But like I said, that we have a small component of rehab to be done. Once that rehab gets completed, then we will do the resale component. This is redevelopment and not purely SRA or something like that. And it -- this belonged to somebody who's done a JV with us. And to answer your second question, are we open.Of course, we are open. And the present time line doesn't really suggest anything because after all the NBFC mess, we only see very tainted properties or absolutely something that one can't touch. So you have to tread very carefully.
Sure. So second question regards on your new subvention scheme, if I can use that word, for Esquire. So now it looks like 25, 25, 25, 25 has been extended to 25, and 15 into 5. So is it any indication of a slow movement in those [rare] inventory? Or have you raised the prices to probably account for the time value of the default payment what will come to you?
So obviously the -- a bit both. One is like as a company, we are getting used to developing so much more. And if you look us 5 years ago, the amount of construction we were doing was far lower than what we are doing. So can't have the same strategy to sell what I was selling then applied today. My production has gone up literally 5x. The good part is that literally only 10% was developed when I left as such. On your third component, as far as prices go, what we've really done is we have added that cost onto the price, and not absolute, absolute, but almost of it. And if you see for -- from the customer's perspective what he is really looking at is a finite cost and a finite time. We came up with this after discussing a lot with some of our customers. This also puts them into some sort of a discipline that they will pay off 15% every year. We also realized that a lot of people have apartments which are very -- which they are staying in, they want to sell them and move into these apartment of ours. But they're not able to time their sale. So this gives them mental comfort that they can sell their existing apartment within the first 1, 2, 3 years and a lot of them change their mind that they don't want to sell it because they feel that they are able to generate this sort of money within the business and pay off. So as far we are concerned, we have inventory of already close to 1,000 crores left to be sold. I mean if you look at apartments in numbers, they're less than 200. On a total minimum Goregaon stock of close to 2,500-plus apartments. So less than 10% of the stock is left to be sold. The other good part is that there is no fresh inventory that comes into play for the next 3 years. My Phase 3 of 5 buildings will only be ready in the next 3 years. So whoever really wants to move in into a ready apartment and wants to do it now, it's just these apartments. And so that's like how it is like.
Sure. And because my last question would be on this [ending] resolution both on debt and equity side. It's a little surprising because we are looking at a scenario when our Worli project will start throwing positive cash and hopefully, that can meet most of the CapEx requirement for our investment properties. So why it's such a large INR 2,000 crore kind of achieved equity rate in [development]? Is that just an annual ritual what you do? Or is anything in your mind?
Basically, it's an annual ritual that we do. We make sure that whenever opportunity comes our way, we are ready. That's our first and foremost objective. We are mindful of the fact that yes, Worli will start giving us cash. But I cannot time the cash flow with the...
Opportunity.
With the opportunity that we have within our rent-yielding asset that we are intend to create. So we just want to be ready. I mean, if you really look at the math, Worli can actually almost fund its own construction also. But that means that 3 other towers need to come into the market. I don't want to create a situation where I'm -- it -- myself, like, created too much supply of the same product and defeated the original purpose by itself. So what we really want to do is ensure that. And moreover, these rent-yielding assets also give a flip to my property because who does not want to stay within the convenience of what we are building, like literally like a mini township. So we are just timing it in a way where we may need monies upfront for these rent-yielding assets and we could do that. Here again, you have seen that we've not even touched our rent receivable discounting and stuff like that. So now we now have enough fuel for us to go about. It's just being prudent keeping our options open. Nothing indicates anything as such.
The next question is from the line of Puneet from HSBC.
Yes. Just to dwell upon this part a bit more. Are you indicating that you will launch the commercial projects first? And you will [prepone] the residential part of Borivali for the second phase of Borivali? Or sorry, postpone the second phase of Borivali?
Not really. So just for your information, the construction work for the 3 additional towers has also started and mall work is also happening as we speak. So there is no delay in starting the work. We could time the sale as such. Like as far as the fifth tower goes, the minute we started this subvention scheme in Borivali, we got fantastic response and we were back onto almost similar numbers that we were doing in its prime. So those sort of numbers are back, and so what we really want to do is we've launched 5 towers and 5 towers are close to about 1,800-odd apartments. So we don't want to now add another 1,000, 1,200. So we just want to pace them out. We want to make sure that these get taken. And our entire market is actual user market. I would say, 95%. So that's a huge positive. And we just want to phase these out, nothing else as well as we have scattered sales at different buildings. People always want a view and then those other apartments get left and then they get difficult to sell. All lower floors get sold first. So there are many wheels within wheels that one has to strategize, supply being just one, what kind of supply and so on and so forth. And then different buildings are at different progress level. Like if you see Borivali, some buildings are almost 70%, 80% super structure done. It's unfortunate that a lot of you don't end up passing by that building. But when you see, you really see that magnanimous scale of work that's been happening there is a real delight. And even we haven't done work at that pace and that quality in the past. So we are surprising ourselves also and really enjoying doing that.
Okay. Okay. Secondly, can you give some sense on what kind of CapEx you plan for your investment properties for this year and next?
Well, our endeavor is to finish the entire CapEx for our commercial properties, as in the mall. We can take you off-line and give you the breakup. I mean obviously, we need to invest in TDR. We need to invest in the construction of that. These are the 2 components that we need to put our monies in.
Okay. Okay. I also noticed that Commerz II area has gone up 725,000 to 782,000 square feet.
So Commerz who is now fully leased, literally barring one floor where we have given some optionality to somebody. We are completely done with the entire building. And this also actually brings me to another point, which I'd made long ago and I'll try to correlate it with the residential demand. There was a huge lull in the commercial building -- the commercial market, and we saw that a lot of developers were converting their commercial building into residential buildings. And then there was a slowdown in the residential bit. But when these guys stopped building commercial buildings -- today if you see BKC, there has not been a new building addition for the last 5 years. These are high CapEx businesses and a lot of people refrain from building commercial buildings. But that demand has now caught up, and you saw that literally in 2 quarters, we were able to lease almost 800,000 square feet of our building. You will be happy to know that we are now starting Commerz III, which is -- which actually, we already started building 1.8 million square feet. So that is the third addition that we will be doing. So -- and now I want to correlate this into the residential bit. See with all the, what you call, NBFC meltdown, most developers are not able to raise money from banks. Banks are not easily giving monies to these guys. They also don't have a great reputation that they are able to sell -- presell this in the market. The third and the most important component is they also don't have ready material like how we have. We have today Esquire, if we sell all of it, we have INR 8,000 crores coming from Esquire. That itself can take care of a lot of our own construction for the residential building. And very soon, we'll have similar stock in Borivali and Mulund, which will be ready with lock and key. So while we are strategizing and creating this marketing spiel of how to sell ready product, we are continuing to invest and build our stock. Just fast forward yourself 2 years down the line with the kind of financial mess most developers are in, most of these buildings are not going to get completed. You see a lot of them in and around my South Mumbai or in and around Goregaon, which have [green lining] on top of that and nothing being done inside. So obviously, buying a house is not going out of fashion. What this will in turn do with this is divert customers to good developers, and this will divert customers to developers who are in a position to deliver. And this is where we see both demand and price going up. I am very carefully wording it that prices will also go up because supply will completely diminish. We all talk about inventory. I consider inventory of apartments that are like surely going to be built or more importantly, either they are already built. There is a lot in the pipeline, but there's a huge clog in the pipeline, and nothing seems to be passing through. And this is when people will realize that at the other end of the pipe, whatever little is left will start getting appreciated and getting sold at. So I just want to tell you, yes, it's a game of patience, but it's a very short game of patience because unlike other products, our lead to market is a lot longer. And so if one wants to like today, after I'm done with these 200 apartments in Esquire, my next launch will come only after 3 years. So if somebody were to be buying next year or a year after that, it will not be available. So this is my 2 bit on it.
Yes. No, that's fine. So what's the plan for the launch for the third phase of Goregaon, then?
So the third phase of Goregaon, see, what we have done is we have really benchmarked Esquire. Today, if you do the math, Esquire, basically, at a base price works to about INR 18,000 plus [indiscernible] is what the price of Esquire is. If you derive the net present value, invite all mathematicians, you can really do it. For our buyer, it probably works if you give -- give or take, about INR 15,000 plus. What we are thinking is that we will be launching the third phase very soon. Once we are able to get another push in sales of a ready apartment, then these are noncompeting products, actually. One is ready. They pay the money and move in. The other one is under construction. And we have a very attractive scheme.We internally have also thought that if we're going to be a relative company with literally a marketing FMCG hat with a financial solution hat, with a design hat, with many things, we're going to be -- we want to be a relative company, which actually uses IT so much that we would be called an IT company doing real estate. We want to be an FMCG company doing real estate. So these are the new things that we are trying to inculcate within ourselves. And this is only at the back of opportunity, opportunity not literally created by market but created by competition, by their absence as such. So this is a field where whatever we look at gaining market share and pushing our [guide] forward and become the choice of -- the first choice of any buyer or such like that.
Okay. So I appreciate the -- all the strategies, and I also appreciate your under competition is pretty much becoming absent. But do you see momentum coming back on the sales pick-up side, in general? Or do you think that's still about a couple of years away before people would come back?
So I don't know whether it was your question or the one earlier, but nevertheless, the answer relevant to what you're suggesting. We have sold more apartments in this financial year than we sold in the last financial year, almost like 2x and 3x. And in some of the projects, that 1 quarter has been better than the entire year put together. Now there are multiple reasons to this. Again, if you really look back until margin, it's not been that great. We still had that entire confusion of GST about whether the government is going to charge 5%, going to charge 12%, what will it be to the customer X, Y, Z. Then, we are also having a huge overhang of election. I mean, this is a large project. You're not buying popcorns or a movie ticket. This is serious money and people do get affected. They want to know what kind of government are we headed going forward and so on and so forth. So once all this is in place, I clearly see -- so even with all the factors that don't seem positive, there have been enough and more sales happening. And I told you that some quarters have been better than the year put together. Having said that, I feel going forward, with everything put to rest, we only are looking at a positive push to economy.
Okay. Okay, fair enough. Lastly, on Thane, if you want to comment.
Well, we are focused to closing. Give us just one more date, and we will come back to you with good news.
The next question is from the line of Abhishek Anand from JM Financial.
We see -- I was expecting you to actually talk about an acquisition for residential and the distress in the market. But to my surprise, you were leaning towards the [bank yielding] asset further and [indiscernible] resolution. So just I'm trying to understand from you, has the opportunity been lesser or the quality of opportunity been much inferior to what we usually target? So just understanding the business relevant side of things.
Well, when I take a decision, I look at multiple indicator on the dashboard. One indicator is that what sort of alignment am I sitting on. If you really see I've got Goregaon, I've got Worli, I've got Borivali, I've got Mulund, I've got JVLR [indiscernible]. So I have enough of my own land bank. If you really do the math, you'll know that the amount of square feet and building multiplied by the price that I am selling, and these are discovery of price very clearly done. And I'm not talking about 1 or 2 apartments. These are 500,000 apartments. So the amount of revenue I'm going to generate in the next 4, 5 years. Having said that, that still does not deter us from buying new land. It clearly depends on the quality of the land that's available. A lot of my friends thought that with this NBFC crisis, with this GST and there are a lot of these developers that would die a slow death which is absolutely true. But unfortunately, what has happened is that the land that they have got -- they are offering or what is available is so bad that you can't make business out of that. I can clearly see the NBFC and the developer both lose their shirt. And in this tug off, we have to only wait and watch until this entire [markets] are over. Until and unless we lend that stock, if we jump into this, we also run the risk of losing our own shirt. So I want this dust to completely settle between the developers and the NBFCs and the bank and some of these guys because a lot of these guys have borrowed money from NBFCs and [digged] themselves. So all this has to come out. All the toxic that is there in the asset has to come out. Somebody has to take a risk. As we see today, nobody is willing to take the risk when we go. And so let this happen. We'll be back in the market. We are very much looking at it. And we are very keen to buy. It's not like we are not keen to buy. Like I said that there are multiple. I don't have any pressing urgency. You just heard people asking me when am I starting Goregaon Phase-III. Goregaon Phase-III is close to how many square feet now?
45 lakhs square feet.
About 45 lakhs square feet saleable. I mean, 45 lakhs square feet saleable, and the price in this area, we are talking of INR 8,000 crores, INR 10,000 crores of sales. So I have very serious business happening here. Similar to then I've got Borivali. I've got Mulund. Mulund is about 4 million square feet. Only a million of the 4 are sold. We've got Thane. Thane is bigger then. So all this put together, we now have more land. I don't have to be desperate. Of course, I am seen in every transaction that gets sold, and we have a price where we would love to enter, come what may, but if -- and the state of the property. But if either of them are not met, then we are happy to let go of it.
Makes sense. Makes sense. Secondly, coming to Mulund, of course, Esquire, we can launch a subvention scheme, and it has got its own [USP] of people shifting to that property. Mulund, I think it's still a couple of years away from completion and the sales velocity has been below par. So what's the plan of action on that side? And just a related one will be that realization at Enigma declined. Is that a mix -- because it's a material decline from 15,500 to 13,800. So just trying to understand on that trend.
So 2 things. One is in FY '18, we did 32 apartments. In FY '19, we did 74. So it's more than double. And here, again, if you see we started subvention only in the last quarter of that year. And almost all of the sales are of that period. Going forward, you will see the velocity increase. And again, I would say that from what I read, there's a clear shift and this -- in the minds of the customer. And as developers, we are responsible for the shift. Today, the customer does not have enough faith that this developer will finish this project in time. I'm not talking about a few of us because we have been able to deliver, a few of our other developer friends have been able to deliver. But by and large, people have delayed deliveries. And a lot of people have gone [hold] because they borrow money, they pay our installment. If their houses get delayed, they have costs added to that. So going forward, I feel subvention is going to be the name of the game. I don't even call this as subvention. The customer says that if you are going to give me a product in that finite time, I'm okay for you to add that interest cost and give me a fixed number. I don't want to be in a situation where I pay the bank interest, and you don't deliver me the product. And when we tell the buyer that, oh, this is our RERA date of completion, but my RERA date could be a little faster, but I'm not willing to commit on that. I can only give you an indication. But the customer, in his mind, then wants to take the RERA date of completion, and he's right about it. If I want to build that aggression, I can build that aggression in price by telling the customer that, okay, I will give you a subvention scheme at this price, which will be more dated towards my internal date of completion. And if I did it, then I am getting hurt on that and not the customer, which is only fair, I would say. So I just can tell you that the markets are moving towards this sort of scenario, and I'm telling you that very soon, everyone will have to do that. Everyone will have to do that.
Sure. And the decline in Enigma realization?
More of a mix factor.
It's -- so we have got different pricing for different views. And what had happened was that in Enigma, one of the -- not -- I would not call it a premium view, but a better view, better view [ big ] was not launched in the market because of certain approvals. We got those approvals. We started selling them. So the lower floors of that, we have been sold, and that's why you'll see the decline. We have introduced any prices in any of the projects, yes.
Sure. And finally, on GST status across the projects, are happy you adopted 12% for the ongoing months. So [there are] some projects where we have adopted 5%.
So when -- wherever we adopted 12%, if you recollect, we have actually passed on the benefit to people. So for us, for my buyers, effectively, they are paying me the same 5%, 5.5% only. And what we thought is that we do the shift, then we will lose out on all the credit that I would get in credit. So we just thought that we continue with the status quo and finish this project this way. But from buyer's perspective, nothing changes. He buys it at the same price we've been able to communicate to them, convince them, and they are all very happy about it.
The next question is from the line of [ Niraj V. ] from Goldman Sachs.
So question on Three Sixty West. When do you expect the OC to come?
So we are looking at applying for OC now, as in like within this quarter, hopefully. And we should get OC before the end of this September for at least a part of the development. And then -- full OC should also follow within the next 3 months. So before the end of this calendar year, we are hoping that we'll get OC for the entire building. We're expecting part OC between June and September. And we are going to start giving possession to people for them doing [pick outs] and stuff like that within this quarter itself.
Okay. And in terms of [notice] sales of Three Sixty West, you sold 3 apartments, the rule applies that now -- that the G -- the taxes will have to pay whether you get the customer -- whether you get OC or not, the taxes will have to be paid by the customer. Is that the rule right now?
Not really. Once we get OC, then there will be nothing. And what we have done is we have moved to an all-in price now. We are now moving on to an all-in price where everything is included. The GST, which is also included, everything is also included in the price. So the customer does not separately pay or not pay for GST. For him, it will be 1 ticket price. It won't change.
Got it. And in terms of investment in Three Sixty West, what is the -- what I noticed is around INR 3,700 crores. Is that number right?
That -- well, probably, the total cost [indiscernible]
That also is not the total cost.
That's also not the total cost.
Okay. So much cash flow would your -- be invested? Or how much money would you have [first lighted] before it's shared within the...
All the money that we have invested comes out to us first in a 80:20 ratio: 80% comes to us, and 20% goes to the line partner. So all our cash will start coming out as we start selling. And that's why we are very -- I mean, either way, we are very motivated to make sure that we do the sale.
So -- but before the OC, don't expect much sales to happen, right, before of the taxation issues?
Not really. Like I say, there is now 1 price. Irrespective whether there is GST or no, we have decided to absorb the cost and move on, either we sell it now or we don't get any benefit off GST. So we are really not separately handling or charging GST anymore.
Okay. Second question is on the placing of the [bottom] mall for [Vari and] [indiscernible]. Can you give some thoughts on that?
We just had 1 deal. We will now start doing other transactions also. We are finalizing the plan as we speak. Cinema is something that we need a lot of input from the operator, and hence, we were keen that we sign the Cinema deal first. Having done that, we are now looking at closing other tenants who don't really have much of an input on the structure of the mall should be and stuff like that.
Right, right. And when do you expect this malls to be given to fit out for those rented?
So I think end of 2020 or like maybe a little earlier than that.
End of 2020 or December 2020?
December 2020.
December 2020 is when we expect the malls to -- actually, the Oberoi Mall to be kind of operational.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
A couple of quick questions. First of all, because you said that your presales velocity has been increasing, and you're quite happy with that. But when I see the total year's number, about INR 1,750 crores, if I'm not wrong, and that includes the first and second quarter where you had Esquire activation. As I see INR 1,750 crores in absolute terms and compare it with the other players, even smaller Bangalore companies, which are 1/4 your market cap, are doing INR 2,500 crores of sales. So comparing your sales to your history is one thing, when comparing it to your peers, and that, too, in more competitive markets versus here in Mumbai, you are having a field day, doesn't look very impressive. Any thoughts on this?
Well, we are very mindful of what you said. My statement was more towards the last quarter and not really for the entire year put together. And two, we are also reasonably happy given the past 9 months that we went through with projects like Mulund and other places. So we are very mindful. We are absolutely -- we've taken definitely to our heart that smaller companies with half the market cap are doing much larger sales than what we are. So we are putting our act together, and that's why I said you may not have been privy to the few questions that were asked. And we want to be...
I was on the call.
We want to be a real estate company with a FMCG hat, what a marketing hat. We want to be a company that gives financial solutions. We want to be aggressive. We want to use IT to do all these things. So we are gearing up to what you said. And my -- again, my only defense is that our margins are much better. But that still does not take away the volume gain that we want to play. We won market share, especially in line when most developers are falling apart. We should use this opportunity and if we don't, then really, shame on us. So completely take your point. We are mindful of it, and we are taking very serious steps towards this.
Yes. And regarding second question, again, is in some time frame, I don't know, about 3 years, 5 years, your 3 key big projects, Goregaon, Mulund and Borivali, would all be done. And what would be become then as a [indiscernible] company? I mean...
Assuming that I'm not going to buy any land for the next 5 years.
No. The question comes because to replace these large projects and then to have a right -- in the big land parcels evenly spread out, good locations, good micro markets can't be done very quickly. So should we not be seeing signs of that earlier than later?
Okay. So I just want to tell you, we bought Thane, we bought Borivali, literally in a span of 3 and 6 months. After we bought Borivali, we were -- with the entire DP map, put together, we were able to launch that project within less than 18 months. Less than 18 months. And so on and so forth. With hardly any competition in buying land, don't you think that we are far better positioned than what we were in 2014 when we bought the Borivali land or 2018 when we bought -- last year, when we Thane land? So if you are to compare, we are much better situated from both our own company point of view and from completion point of view. We are far better placed. Why would we worry about all this?
I would worry about it because if you look at it, 5 or 6 years, 2 land acquisitions.
Why will it take 5 or 6 years for land acquisitions?
No, no looking back in history, over last 5 or 6 years, what you have done, you acquired 2 large projects, isn't it? So therefore -- and you have always been a fairly strong balance sheet company, market has not deteriorated. Today, it's been struggling for, I think, 3, 4 years, right? And this [effect] is a recent one but not a sector one. So I'm not trying to give you a hard time because of [indiscernible]
Please go ahead, and let me [indiscernible]
Yes. The pace at which you are deploying capital versus your commentary on the opportunity side don't seem to be matching up and doesn't sort of play out your strength in the balance sheet and the cash flows.
Well, firstly, caution has always been our strength. And if you -- I just correct you that it's not been 6 years. We bought Borivali exactly 5 years ago. It took us 18 months. We launched Borivali 3.5 years ago. In 3.5 years, we have done accumulated sales of how many?
INR 2,500 crores.
INR 2,500 crores only on Borivali. Line purchase was at INR 1,000 crores. We are on the 45th or the 48th slab of the building. We top up this year [done invested]. [indiscernible] stock for 2022, we should be delivering in 2020. So as far as the deliveries go there are really -- I really thought that they're not -- they're reasonably okay. And Thane, we bought exactly, give or take, 15 months ago, and we are just about to close the documentation, and we will be in the market before September. So -- and these are really large projects. If you talk about Borivali, we are constructing, physically constructing more than 10 million square feet, and residential and the mall put together is almost 70 lakhs square feet. So -- and 70 lakhs square feet, if you multiply by the base rate, they're talking about INR 10,000 crore, INR 12,000 crore project, which is literally the size of the Bangalore project with all humility that I'm seeing, I can talk about. We make more money in 1 single project than they've made in their entire life cycle put together. So my 2 bit, but completely respect what you say. I'm mindful we need to increase speed, mindful we need to ensure buying more land. But against all these, I want to do it at the back of a lot of caution. Market has appreciated us for the stand we've taken. At some point in time, we are given a pat on our back for showing discipline, and sometimes we have to answer questions that is discipline coming in the way of growth. So this is a choice we as promoters have to make. And we play this fine balancing act between the 2 and try and work out it through. But we will never be right for everybody, so we just thought that we'll try and be right for ourselves first and then allow the market to judge our company the way we want to work and rework. But again, all and every one of you make amazing projections because you guys have your eyes and ears for everybody. You allow all our [revision]. I take your comment very seriously, and we will go back to the drawing board and see where we have missed a point or 2 and come back.
That's great, Vikas. I guess in short, the point I'm trying to make here is once you're buying 2 projects, you said 5 years, I'm saying even 8 or 10 years because before Borivali, there must have been 3 to 5 years of not having done anything. Are we getting into a place where you would be probably be buying some nice land, large land parcel, say, 1 every 12 to 18 months, I guess, over the next 3, 4 years because that's exactly what is required for you to then replenish what you lose in those 3 locations?
I agree with you. If there is an opportunity that comes my way, I will make sure that I will take that. We are financially able to. As a company, we have the capability to build also. So I think I agree with what you say. It only then comes down to what sort of land parcel I'll be offered. And I'll take a call basis property that's being offered to us.
Yes. Just a couple of more, if I have permission.
Oh, okay. Go ahead.
One is on the new South Mumbai project that you alluded to at the very beginning of the call. Is that a small boutique sort of project? Or is it a large asset in value terms project?
So totally, the whole -- the entire project is about 400,000-odd square feet, and the area is there one can easily get, let's say, INR 50,000, INR 60,000 square foot on cap rate. So I mean, this is a INR 2,000 crore revenue project. And we have 60% stake in it, and the partner has 40%.
Okay. And any update on, Worli mall? We've seen a lot of construction going on. But I get confused whether it's Metro or it's your project.
Well, it's both. It's both. Metro has not really started work on our site. I'm waiting for them to do that. So that a lot of our intertwining kind of situation gets sorted out. The plans are done. We continue to do a rough foundation. And yes, we are basically waiting to time the Metro and the mall such that we don't have Metro work happening in front of us once the mall is ready.
And is that underground?
Yes. We are on level 4 basement, and I invite you to see it any point in time. You are very close to the site.
Due to time constraints, we'd be able to take one last question. We take the last question from the line of Chintan Modi from Motilal Oswal Securities.
So just to extend on one of the previous question, can you speak in terms of the growth potential going ahead? If you can highlight a bit more in terms of -- because we also look at large land parcels, typically. So what is the kind of opportunity available? And which are the key micro markets within the MMR that you will be looking at for future growth?
So Chintan, I just want to clarify. I'd rather use this platform to clarify that it's not like we are only looking at large land parcels. For me, these same 6-, 7-acre land parcel is also big enough. 3-, 4-acre land parcel is also big enough. I'm only looking at return on time invested. And typically, when I look at a large project, what we really do is we have economies of scale. A lot of people have not noticed, but when we do a project like Esquire, we design 1 apartment. There are 6 apartments on one floor. They get replicated by 50 floors and these get replicated into 3 buildings. So you're looking at 900 apartments coming out of this. We do all value engineering for 1 apartment. When we design a show apartment, it's just 1 apartment. When we do all the costing and all the value engineering, it's only for that 1 apartment. We get the benefit of this multiples. If you see unlike many other developers who fancy making half the building of a particular shape then changing their shape and then again changing their shape and again putting something new on top, we don't believe in that. We like clean lines. We build clean structures. This helps us in obtaining speed, reducing complexity then stuff like that. So there are advantages of doing larger projects, which you see, and then you also benefit out of your own development. Had Borivali not been an 80-acre land parcel, I would have never been able to afford to do a mall, a hotel and office and resi. Each one complements the other one. Having said that, just because it has merit, doesn't mean others have demerit. They also have merit in doing what others do. We are mindful of that, open towards it. And you will see us seriously compete with even in smaller land parcels. So it's not like we are waiting for only large land parcels. I just want to use your question to clarify to others who are listening that it's not just that. If we have indicated, it's more out of smaller land parcels get sold more expensive because smaller players are able to bite into that deal, whereas larger land parcels, there are fewer developers who can buy that. So when you buy big, you get it cheaper. When you buy small, because many people are looking at buying it, they kind of push the price up. And that's what we are trying to avoid all the time. That's it. I don't know whether our market understands our strategy or our strategy is good. But honestly, we have been following this strategy.
Sure, that's helpful. And secondly, just to clarify that Exquisite 3 and Thane launch, we should be assuming that in FY '20 for sure, right?
Yes, 100%.
Okay. And with respect to your...
Should be second quarter or third quarter.
Okay. Sure. And what kind of average ticket size that we should be looking at Exquisite 3?
Leave us this to be answered in the next quarter. We are working on it and will be out soon.
Definitely. And just one last question. With respect to your personal stake in Worli, you had mentioned in the last call that you are considering certain options to make, say, an arm's length transaction. Any updates that you would like to share on that?
Well, the thought is the same, but nothing materialized as yet. But the thought is to elegantly get out in a way where others close this loop in a way where absolute transparency will work out. That's what I can tell you.
We'll take that as the last question. I would now like to hand the conference back to Mr. Oberoi for closing comments.
Thank you all for taking time to attend this conference call. Like I said earlier, I really like receiving feedback, even if they are not in tune to what we are doing. In fact, the most valuable suggestions are the ones that are contrary to what we are doing. They make us think a lot harder. They help us perform better. And this is your company. You guys really do a great job. And please continue to do so. I am really thankful to you, all. And thanks again. Good luck, guys.
Thank you very much. On behalf of Oberoi Realty, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.