It is a matter of privilege to present to you the Company’s performance for financial
year 2011-12. During the year, the deteriorating global economy impacted the real
estate sector in India as well. However, even in a hostile environment, Peninsula
Land executed its projects in time and launched projects in new cities.
The last one year has been tougher than what we expected. The world economy has
gone through a very tough time. It clocked an annualized growth of 3.9% in 2011
and the fourth quarter last financial year has been pretty bad.
The debt crisis in Spain, Greece and Italy impacted the stronger countries like
Germany, France and UK. Nine Eurozone nations were downgraded by Standard & Poor
Over the last few weeks, there have been some positive developments and the financial
indicators seem to have stabilized, especially in the US. The US economy has regained
some traction but there are concerns about its sustainability. Even as the prospects
for recovery have improved a bit, significant risk still remains.
Real GDP growth should pick up gradually during 2012–13. It is forecast to slow
to about 3.5% in 2012, from about 3.9% in 2011, and to return to 4% in 2013 as against
the 3.6% projected earlier for both years.
During the year, Indian economy grew at a nine-year low of 6.9% in 2011-12, which
can be attributed to external as well as domestic issues. International crude oil
prices have surged and have been consistently over $100 per barrel for most part
of last year. Exports from India to Europe were also affected due to the financial
crises in Europe.
During the year, the Inflation has been a major cause of concern and has been on
the rise. The Reserve Bank of India did intervene and implemented measures such
as increase in interest rates and CRR. Food inflation, after a seasonal decline,
rose again. The growth rate of investment in the economy is estimated to have registered
a significant decline during the current year.
The Indian economy is estimated to have grown by 6.9% per cent during the financial
year 2011-12, after growing at the rate of 8.4% in each of the two preceding years.
Agriculture is estimated to grow at 2.5% for 2011-12, a little lower than expected.
The International Monetary Fund (IMF) as well as Asian Development Bank (ADB) has
projected only a 6.9% economic growth for India in 2012. This is below the 7% projected
in January this year.
India is the only emerging economy for which growth projection has been pared.
Real Estate Sector in India
Over the last one and a half years, though the real estate sector witnessed a gradual
consolidation, according to reports by rating agency Fitch: demand for office space
is likely to be maintained at 2011 levels. This momentum in demand will basically
be driven by the additional hiring momentum by IT/ITeS sector which is the major
consumer of office space in India.
Though the real estate sector contributed only 5% of India’s overall GDP in 2011-12
as compared to a contribution of 10.6% in FY 2010-11, according to ULIPricewaterhouseCoopers
(PwC) report, India still leads the pack of top real estate investment markets in
According to industry experts, the real estate sector in India is being recognized
as an infrastructure service that is driving the economic growth engine of the country.
In fact, foreign direct investment (FDI) in the sector is expected to increase to
US$ 25 billion in the next 10 years, from present US$ 4 billion, according to a
latest industry body report.
Peninsula Land: Way Forward
Peninsula Land has completed and executed 6.4 million sq ft of development in the
residential, commercial and retail space till date.
During the year, having completed Mumbai projects, the company spread its wings
and launched projects outside Mumbai in new cities like Nasik, Pune, Goa, and Lonavala.
With the launch of these projects, the company has undertaken an additional development
close to 3 million sq ft in these cities. And the value of these projects will be
about 1500 crores.
In Goa, Peninsula Land is constructing premium residential development – Ashok Beleza,
which is expected to be completed by the end of 2013. Since its launch, this project
has received a favourable response from customers.
Ashok Astoria, the residential projects at Nasik has already been launched and part
of the project has already been sold. At Lonavala, work has started at Ashok Nirvaan,
a second home project which will have modern contemporary villas.
Even as the company is busy breaking ground and launching new projects, acquiring
land had been the focus for the last 18-24 months. Over the last two years, the
company has strengthened its land bank and acquired land parcels to the tune of
1150 crores. During the year, the company acquired properties in Mumbai, Pune and
With all this, Peninsula Land has embarked on the second phase of growth. And going
forward, we will focus on monetizing our land parcels and executing our projects
in time that will further strengthen our financial position. The company has a surplus
of cash and healthy debtequity ratio.
Let me thank all of you for the immense support and faith reposed in the company
that has helped us to move closer to our goal. I am confident that this continued
support will help us sustain our growth.