News: Oberoi Realty: West Asia Conflict Lifts Costs 2-3%-18-05-2026

Rising construction and energy costs, costlier labour and difficulty in sourcing materials are weighing on real estate amid the West Asia conflict, Vikas Oberoi, CMD of Mumbai-based Oberoi Realty, said during the company’s Q4 FY26 earnings call. He said these pressures were "stressing us out" but were a problem for the entire industry.

Speaking on May 11, 2026, in reply to a question on the conflict’s effect on sentiment, construction, raw materials and project costs, Oberoi said energy, aluminium and glass had all become more expensive, labour costs had risen and material availability had become a challenge. The impact, he said, was slowly beginning to hurt.

On margins and earnings per share, he said the company builds substantial contingencies into its budgets to protect margins, but acknowledged these buffers are now being consumed. The company has repriced several aspects of its projects on the expectation of higher costs. It currently estimates an overall increase of around 2% to 3%, which remains within the contingencies and so will not affect the bottom line for now.

Oberoi said business development announced by the company covers nearly four million square feet of development potential across the Mumbai Metropolitan Region. Four launches are planned in the first quarter itself: Three Sixty North in Gurugram, a small development on Carter Road called Oceanic, another small project at Malabar Hill named Fairview, and Tower D of Forestville in Thane.

The company also plans a project on the 11-acre parcel acquired from the Rail Land Development Authority (RLDA). In February 2026, it had announced that it was the highest bidder for lease rights of the Bandra East plot at Rs 5,400 crore. Oberoi said very few Grade A developers are willing to sell commercial space, so a strata sale strategy should do well and help cash flows. The RLDA project will therefore follow a sale model more than a lease model. The split is undecided, he said, and could be 50-50 or 60% sale with 40% retained. Large business houses have approached the company wanting stand-alone buildings.

On Gurugram, a new market for the company, Oberoi said the sales strategy is still being worked out and it wants to see how it is received. Internal targets have been set given the buzz around the launch, which is planned for the ongoing quarter of FY27.

He declined to disclose prices for Three Sixty North, saying they would remain "a bit of a suspense" until closer to launch. The project will be similar to Three Sixty West in Mumbai, with apartments of 5,000 plus and 8,000 plus square feet at the top end of luxury. A show apartment is being readied on site.

According to the latest investor presentation, Oberoi Realty’s pre-sales rose to Rs 5,447 crore last fiscal from Rs 5,281 crore in 2024-25. The company plans to raise up to Rs 6,000 crore by issuing securities to fund expansion. Consolidated net profit for 2025-26 rose to Rs 2,507.64 crore from Rs 2,224.05 crore.