Real estate Q1FY27 preview: Luxury, premium housing demand to boost branded developers

India's listed real estate developers are expected to report a resilient June quarter, with healthy pre-sales from branded players offsetting concerns around geopolitical tensions and equity market volatility that weighed on buyer sentiment early in the period.

Brokerages HDFC Securities and Emkay Global Financial Services remain constructive on the real estate sector, citing sustained demand for premium housing, strong launch response and healthy absorption in key markets.

HDFC Securities sees earnings growth, margin expansion

HDFC Securities expects the listed real estate universe to post 15.5% year-on-year revenue growth, 35.7% growth in EBITDA, and 14.6% growth in net profit for Q1FY27. The brokerage also expects EBITDA margins to expand by around 55 basis points, supported by operating leverage and an improving project mix.

The brokerage said launches by Prestige Estates, Godrej Properties, Oberoi Realty, Sobha and Mahindra Lifespaces witnessed strong expression of interest (EOI) collections and conversions, indicating demand for branded developers remained intact despite concerns over the wealth effect following the West Asia conflict.

"Following the resolution of the West Asia conflict, the recovery in pre-sales has been stronger than our estimate of a three-to-six-month slowdown," the brokerage said in a report.

It added that escalating geopolitical tensions and the equity market correction earlier in the year introduced a fresh layer of uncertainty, but the impact has proven shallower than initially anticipated.

Although residential sales across the top seven cities are estimated to have declined about 6% year-on-year during the quarter, HDFC Securities said the slowdown was concentrated in select cities and the mid-income segment rather than reflecting broad-based weakness. It expects the strong response to launches in southern and western markets to support healthy pre-sales in Q1 and improve visibility for the September quarter.

Office leasing remains a bright spot

The brokerage also highlighted continued strength in commercial real estate. Gross office leasing reached a record 21.5 million sq. ft during Q1CY26, up 10.2% year-on-year, while pan-India vacancy declined to a five-year low of 14.7%. Global capability centres (GCCs) accounted for nearly 46% of total leasing activity, easing concerns over AI-led workforce rationalisation impacting office demand.

HDFC Securities said housing demand has recovered faster than anticipated, with Sobha, Godrej Properties and Mahindra Lifespaces likely to report their highest-ever first-quarter pre-sales.

The brokerage's preferred picks remain Prestige Estates, Oberoi Realty, Sobha and Mahindra Lifespaces, supported by strong launch pipelines, stable pre-sales and rental income visibility.

Emkay expects healthy pre-sales across key markets

Emkay Global Financial Services also expects demand to remain resilient across key residential markets during the quarter. It said Bengaluru continued to witness strong absorption, while Mumbai and Hyderabad maintained healthy momentum. Although Gurugram has seen some moderation, recent launches by Oberoi Realty, Godrej Properties and Sobha received an encouraging response.

"Due to seasonality, the overall number of launches remained muted in Q1 and is typically bunched up in the second half of FY27," the brokerage said in a report.

The brokerage noted that only a handful of developers launched new projects during the seasonally weak first quarter, including Godrej Properties, Prestige Estates, Sobha, Mahindra Lifespaces, Oberoi Realty and Kalpataru. Most of these projects witnessed healthy absorption, while developers without major launches are expected to report stable sustenance sales.

Godrej, Prestige expected to lead pre-sales

Among developers, Emkay expects Godrej Properties to lead the sector with around ₹8,000 crore of pre-sales in Q1FY27, followed by Prestige Estates at ₹6,000 crore, Lodha Developers at ₹4,700 crore, and Sobha at ₹3,000 crore. DLF is expected to report pre-sales of around ₹1,200 crore, while Mahindra Lifespaces could clock bookings of about ₹900 crore.

Retail REITs seen delivering another strong quarter

Beyond residential real estate, Emkay expects another strong quarter for retail mall operators, driven by premium brand additions, category expansion and higher experiential spending.

"In the retail malls segment, consumption momentum remained healthy in Q1FY27, supported by premium brand additions, category expansion and stronger experiential retail," the report said.

The brokerage forecasts high double-digit consumption growth for Phoenix Mills and Nexus Select Trust during Q1FY27.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)