Prestige Estates Projects , a leading real estate developer, has taken significant financial and strategic actions recently. The company has issued a corporate guarantee worth ₹1,000.00 crore for loan and construction finance availed by its wholly owned subsidiary, Prestige Acres Pvt Ltd. This guarantee provides financial backing for the subsidiary's borrowing requirements.

In a separate development, Prestige Group has expressed strong disapproval of the Karnataka government's recent decision to increase property registration fees. Irfan Razack, Chairman and Managing Director of Prestige Group, labeled the move as 'unfair' to homebuyers, particularly given the current market conditions.

Fee Hike Details

The Karnataka government has announced a doubling of property registration fees from 1% to 2%, effective August 31. This increase pushes the total property transaction fees from 6.60% to 7.60%. To put this into perspective:

• For a ₹1.00 crore property purchase, the additional cost burden is ₹1.00 lakh
• The timing of this hike coincides with a period of reduced registrations due to regulatory challenges, such as e-khata implementation

Impact on Real Estate Market

Despite his criticism of the fee hike, Razack expressed confidence that the real estate business would not be significantly impacted, citing healthy market conditions. He highlighted several positive factors:

• Strong IT sector performance
• Increased commercial space leasing to Global Capability Centres in key cities like Bengaluru, Pune, Hyderabad, and Chennai
• Continued job creation in these sectors

However, Razack did caution about potential market slowdown if property prices breach affordability barriers. He emphasized that the current market drivers include a strong economy and positive sentiment.

Appeal for GST Input Tax Credit

Razack also used this opportunity to appeal for the reinstatement of input tax credit in the upcoming GST Council meeting. He stated that the removal of this credit has caused an 18% increase in costs for the real estate sector.

Market Response

The market seems to have reacted positively to Prestige Group's stance and overall market outlook. Prestige Estates Projects shares closed 1.42% higher at ₹1,584.00 on the National Stock Exchange (NSE).

Looking Ahead

While the property registration fee hike presents challenges, Prestige Group's leadership remains optimistic about the real estate market's resilience. The company's ability to navigate these regulatory changes and maintain investor confidence will be crucial in the coming months.

As the real estate sector adapts to these new fees, all eyes will be on the upcoming GST Council meeting and any potential relief measures for the industry. Meanwhile, the corporate guarantee issued for Prestige Acres Pvt Ltd demonstrates the company's commitment to supporting its subsidiaries' financial needs and growth strategies.

Prestige Estates Projects , a leading real estate developer, has set its sights on ambitious growth targets for the fiscal year 2026 (FY26). The company's Chairman and Managing Director, Irfan Razack, has expressed confidence in exceeding their pre-sales target of over Rs 25,000 crore for the year.

Strong Q1 Performance Sets the Pace

The company's optimism is buoyed by a robust performance in the quarter ended June, where it achieved sales of Rs 12,126.40 crore. This figure represents nearly half of their annual target, indicating a strong start to the fiscal year.

Substantial Inventory and Development Pipeline

Razack revealed that Prestige Estates currently holds an impressive inventory worth Rs 20,000.00 crore. Additionally, the company has a pipeline with a Gross Development Value of Rs 42,000.00 crore. Combined, this represents a potential stock of Rs 62,000.00 crore, underlining the company's strong position in the market.

Mid-Market Segment Drives Consistent Demand

The company has identified the mid-market segment, comprising properties priced between Rs 1-3 crore, as the consistent driver of demand. This insight into consumer preferences could play a crucial role in Prestige Estates' product strategy and future growth.

Cautious Outlook on Property Prices

While the company's sales targets are ambitious, Razack offered a cautious perspective on property values. He noted that prices have reached a peak and warned against rapid increases that could potentially impact affordability for buyers.

Hospitality Arm IPO on the Horizon

In a significant development for the company, Prestige Estates has received clearance for the draft prospectus of its hospitality arm's Initial Public Offering (IPO). The company expects to complete the offering by mid-September, potentially opening up new avenues for growth and capital.

Positive View on RBI's Monetary Policy

Razack welcomed the recent rate cuts by the Reserve Bank of India (RBI), viewing them as beneficial for homebuyers. He also expressed support for the RBI's decision to maintain the repo rate at 5.50%, suggesting a favorable environment for the real estate sector.

As Prestige Estates Projects aims for new heights in FY26, the company's strong inventory position, robust pipeline, and strategic focus on the mid-market segment appear to be key factors driving its ambitious targets. However, the company's cautious stance on property prices indicates a balanced approach to growth in a dynamic real estate market.