Arkade Developers Ltd Management Discussions

Global Economic Overview

The global economy remained resilient in CY 2025, with GDP expanding by 3.3% even amid trade tensions and policy uncertainty. This stable momentum was driven by industrial and residential properties, while the office and life sciences sectors continued to face challenges. Inflation moderated to around 4.1%, strengthening capital inflows and currency stability 2 . This environment enabled Central Banks to transition towards a more accommodative stance with a gradual reduction in interest rates and continued policy easing.

Growth outcomes varied across regions. Advanced economies grew by 1.9%, supported by strong domestic demand in the United States and continued investments in technology, while emerging economies expanded by 4.4%, driven by robust export performance across Asia. In urban markets, limited housing supply and demographic pressures are sustaining high rental demand, particularly in developed economies. This has shifted investor focus towards mid-to-long-term rental formats, which offer more stable occupancy and sustainable returns.

Overall, global economies have demonstrated resilience amid ongoing geopolitical uncertainties. Real estate continues to serve as a reliable inflation hedge, providing consistent income and long-term structural value. Revived transaction volumes and new capital inflows are driven by improved access to debt, rising investor confidence and attractive pricing discounts.

Outlook 3

The global economic outlook remains uncertain, with rising geopolitical tensions and ongoing conflicts continuing to weigh on growth prospects. Assuming these conflicts remain limited in duration and scope, global growth is projected to moderate from 3.4% in CY 2025 to 3.1% in CY 2026 and 3.2% in CY 2027. Supportive factors, including easing tariff regimes and continued fiscal and monetary measures, are expected to help sustain underlying economic momentum.

Global inflation is expected to edge up to 4.4% in CY 2026, before moderating to 3.7% in CY 2027, reflecting easing labour market conditions across several economies. In this environment, investors are likely to adopt a more selective approach, focusing on specific geographies and asset classes rather than relying on broad-based market trends 4 .

Indian Economic Overview 5

Indias economy demonstrated strong resilience in FY 2025-26, despite external economic turbulence, recording an expansion of 7.6%. This performance can be attributed to a confluence of factors, such as stable macroeconomic fundamentals, continued policy support and steady expansion across crucial sectors. From a policy standpoint, the recent GST reduction has provided welcome relief to home buyers, improving affordability and strengthening consumer demand across categories. Moreover, as inflation moderated to 3.4%, the reduction in price pressure allowed the RBI to implement a cumulative 125 basis points cut to the policy repo rate 6 . These measures maintain stable borrowing costs and support the market sentiment necessary for sectoral growth.

The year also witnessed significant progress in infrastructure development, backed by a government capex allocation of H11.11 Lakhs crore for FY 2025-26. This record outlay reflects a sustained policy focus on infrastructure-led growth as a key driver of economic expansion.

Outlook 7

Indias economic outlook is expected to remain supported by continued structural reforms and favourable supply conditions. Tariff-related trade disruptions and volatility in capital flows may occasionally impact exports and investor sentiment. However, healthy capacity utilisation, improving credit growth and continued government focus on capital expenditure are expected to support investment activity, with GDP growth rate projected at 6.9% for FY 2026-27.

Supply chain disruptions from the West Asia conflict may drive up construction material costs. Despite these challenges, CPI inflation for 2026-27 is projected at 4.6%, supported by favourable supply-side conditions, including adequate reservoir levels and the continued benefits of GST rate rationalisation.

Industry Overview

Real Estate Sector

Global real estate volumes grew 14% year-on-year to $888.6 billion in 2025. This growth stems from expanding construction development, rising urbanization, increasing housing demand, commercial infrastructure growth, and higher property market investments. Office leasing demand stayed healthy worldwide despite regional variations, retail expansion continued in prime spots, and industrial activity increased across major markets. In Asia, volumes grew to $187.8 billion, a rise of 3%. Industrial real estate is also evolving. Technology-enabled manufacturing and the continued expansion of e-commerce are fueling demand for modern, tech-ready facilities, particularly urban and infill logistics locations

The Union Budget for 2026-27 proposes a 9% increase in public capital expenditure, raising the allocation to H12.2 lakh crore . This massive outlay focuses on enhancing roads, utilities, and high-speed rail corridors, particularly across Tier 1 and Tier 2 cities. Such infrastructure advancements are expected to stimulate real estate sales and drive long-term property value appreciation in emerging urban centres as they transform into self-sustaining economic hubs.

The Indian real estate sector experienced a pivotal shift in 2025, accelerated by successful IPOs across the residential, flexible workspace, Real Estate Investment Trust (REIT), and Small and Medium Real Estate Investment Trust (SM REIT) segments. This initial momentum demonstrated strong investor confidence and significantly advanced the industrys institutionalisation. Due to this heightened trust, year-on-year equity investments rose 25% to reach a record USD 14.3 billion, fuelled primarily by major capital inflows targeting land, development sites, and built-up assets. Alongside these financial shifts, ongoing urbanisation and environmental considerations are actively driving the industry to transition toward green buildings and modern construction, anchoring the sectors long-term evolution firmly in sustainability and technology 8 .

Prominent sectors driving capital inflows in India

The global real estate market may record an average annual unlevered net return of around 7.5% over the coming years. This return is expected to be primarily driven by entry yields for better quality stock and rents projected to grow around 3% annually. Additional support to the outlook may come from lower interest rates, reduced debt margins, and returning liquidity, despite medium-term monetary policy uncertainty. Technology is also projected to address environmental challenges by enabling buildings to mitigate climate impacts and adapt to physical risks 9 .

Indias real estate sector is poised for sustained investment momentum in 2026, building on the previous years robust activity through increasing institutional maturity and a transition toward more resilient, long-term capital flows. Segment growth is led by the office sector, which is set to surpass the 1-billion-square-foot threshold as Global Capability Centres (GCCs) expand into high-complexity R&D roles and product ownership alongside investment-grade supply. Concurrently, the residential sector is moving toward market equilibrium, guided by premium demand and disciplined supply-demand parity. Further, GST 2.0 reforms aim to simplify real estate taxation by cutting rates on major construction inputs, boosting transparency, and lowering development costs, which could improve project viability and industry growth.

Residential Segment

The global residential segment drives real estate market expansion due to sustained demand across formats like single-familyhomes,condominiums,cooperatives,duplexes, townhouses, and multifamily developments. In 2025, global luxury residential prices rose by 3.2% while mainstream global house prices increased by 2.9%, demonstrating that prime markets outperform wider national peers due to lower reliance on mortgage finance and higher insulation. This momentum occurred despite a challenging backdrop of persistent inflation, higher interest rates, and geopolitical volatility that has reshaped cross-border wealth flows 10 .

In 2025, Indias residential real estate market shifted toward premium housing segments. This period was marked by premiumisation across both demand and supply, with properties priced above INR 10 million expanding their market dominance as developers strategically pivoted toward higher-margin projects. Despite short-term volume fluctuations, the sector demonstrated resilience and long-term growth potential through robust price appreciation, sustained investment activity, and strong performance across key metropolitan markets.

India Residential Real Estate Market Highlights

Source: https://www.jll.com/en-in/insights/premium-housing-grows-despite-volume-correction-in-india

Global residential sector opportunities could be unlocked by emerging technologies like autonomous vehicles, which are already prevalent in the U.S. and China and expected in Europe by 2026, while also reshaping urban landscapes, repositioning retail, and altering logistics corridors. Despite short-term volume fluctuations, Indias residential market maintains strong fundamentals with no signs of deeper corrections. Property prices are expected to maintain upward momentum, though growth velocity may temper. The shift toward premium housing reflects a commitment to quality, while lower mortgage rates are anticipated to enhance affordability. Major listed developers are expected to gain market share through execution and diversification, with overall demand supported by infrastructure initiatives, urban reforms, stable employment, and migration trends.

Mumbai Metropolitan Region Residential Segment

Mumbais residential real estate market continues to remain structurally strong, supported by sustained end-user demand and improving affordability. Consumers are demonstrating a clear preference for premium, lifestyle-oriented housing, driving a significant market transition from purely need-based purchases to upgrade-driven buying. This evolution is fuelled by aspirational homeownership, enhanced infrastructure connectivity, and redevelopment-led supply. Reflecting this robust demand environment, regional inventory has compressed significantly, with the years to sell metric hitting a historic low of 1.2 to 1.4 years as demand outstrips the pace of new launches.

Market demographics across the Mumbai Metropolitan Region (MMR) are shifting rapidly. The affordable housing segment continues to contract, with properties priced below 1 crore accounting for a steadily shrinking proportion of total sales. Conversely, the premium housing ecosystem has expanded dramatically to take its place. The luxury segment now commands a dominant 44% share of sales by area across the MMR, marking a sharp increase from 31% in FY21. Within this category, properties priced between 2 crore and 5 crore now dominate sales registrations and drive the bulk of current market momentum.

Infrastructure expansion is acting as a major structural catalyst, broadening the real estate markets traditional centre of gravity. Mega projects like the Mumbai Trans Harbour Link (MTHL) and expanding metro networks are significantly boosting local property values. These connectivity corridors are transforming peripheral hubs, including Thane, Navi Mumbai, and Mira Road, into high-velocity residential destinations.

Due to the acute scarcity of vacant land in core micro-markets, urban redevelopment has cemented itself as the primary vehicle for high-grade supply. This structural reliance on redevelopment, combined with systemic premiumisation and deep-tier infrastructure integration, positions the Mumbai residential market for highly resilient, medium-to-long-term growth.

Economic Growth and Employment Generation

Economic expansion across the Mumbai Metropolitan Region (MMR) is driving employment generation and enhancing household incomes, supported by sustained business activity, logistics growth, and ongoing infrastructure development. This growth concurrently strengthens end-user housing demand and supports long-term investment activity in the region.

Redevelopment-led Supply Growth

Redevelopment continues to be a key structural driver in MMR, with developers increasingly undertaking redevelopment projects to unlock land in densely populated urban areas. This is enabling supply creation in established locations where land availability remains constrained.

Greenfield Development in MMR

Greenfield development is gaining momentum, supported by planned urban expansion initiatives such as Mumbai 3.0 and rising demand in peripheral locations. Improved connectivity and availability of land are facilitating the development of new residential clusters across the region.

Premiumisation of Housing Demand

The share of premium and luxury housing in MMR continues to rise, driven by evolving consumer preferences and higher disposable incomes. This shift towards high-value residential assets is contributing to an increase in average selling prices across the market.

Favourable Interest Rate Environment

The central bank has stabilized benchmark lending rates, with the Monetary Policy Committee holding the repo rate at 5.25% under a neutral policy stance. This long-term predictability in the macro corridor removes volatility from borrowing parameters, anchoring steady retail market sentiment 11 .

Environmental and regulatory constraints

Stringent environmental regulations and pollution control measures continue to impact construction activity in MMR. Recent regulatory actions, including the closure of non-compliant ready-mix concrete plants and stricter enforcement norms, have led to project execution delays and increased compliance requirements for developers.

Urban Pressure from Slums and Housing Gaps

MMR continues to face structural housing challenges due to a significant proportion of the population residing in informal settlements. This places additional pressure on redevelopment initiatives and underscores the persistent gap in the availability of formal, affordable housing.

Execution and Planning Challenges in Redevelopment

Redevelopment projects in MMR remain complex, given the need to navigate multiple approvals, regulatory clearances and stakeholder coordination. Environmental considerations and urban planning constraints further contribute to extended project timelines and execution risks.

Supply Chain Disruption

Geopolitical disruptions in the Middle East affecting shipping and energy routes cause construction delays and raise transport and material costs for steel, cement, and glass. Developers must either absorb these costs, reducing profit margins, or pass them on to buyers, potentially lowering demand.

Company Overview

Established in 1986, Arkade Developers is a Mumbai-based real estate company engaged in the development of residential and commercial properties across the Mumbai Metropolitan Region (MMR). The Company manages the entire project lifecycle, encompassing project conceptualisation, planning, execution, construction and marketing. Over nearly four decades, Arkade has built its brand around a philosophy centred on quality, customer focus and delivering developments that seek to exceed evolving homebuyer expectations.

The Company operates through a diversified business model comprising two core segments:

1. New Development Projects - Acquisition of land parcels for the development of residential projects.

2. Redevelopment Projects - Redevelopment of existing buildings and premises into upgraded residential developments.

This dual strategy enables the Company to capitalise on both greenfield opportunities and redevelopment-led growth within land-constrained urban markets.

Geographically, Arkade Developers maintains a strong presence within the Mumbai Metropolitan Region (MMR), with a strategic focus on key micro-markets in the eastern and western suburbs. Its portfolio includes projects in Mumbai and Thane in Maharashtra. Through its longstanding presence in Mumbai region, the company has positioned itself as a respected entity in the real estate sector, committed to delivering projects that reflect its legacy of excellence.

5.5+ Mn sq. ft.

Developed

2+ M sq. ft.

Under Development

32

Projects Delivered

5,500+

Happy Families

Key Highlights

Robust Project Pipeline: The development pipeline comprises an estimated Gross Development Value (GDV) of 12,800 crore across approximately 4.25 million square feet of saleable carpet area, establishing clear long-term growth visibility.

Strategic Business Development: The Company successfully advanced its business development initiatives through targeted land acquisitions across core micro-markets within the Mumbai Metropolitan Region (MMR).

Ecosystem Expansion: Continued scaling of customer-centric business verticals, including Arkade Finroof and Assist 360, further strengthened the comprehensive homeownership ecosystem.

Proven Execution Track Record: The Company sustained its operational track record of timely project execution and structural delivery across all ongoing developments.

Filmistan - Greenfield

This acquisition marks a pivotal moment, as the Company establishes its position in the uber-luxury segment and reaffirms its promise to deliver timeless and transformative spaces.

The project offers sweeping views of Sanjay Gandhi National Park and provides seamless connectivity via Ghodbunder Road and the Eastern Express Highway.

Thane - Greenfield

Woollen Mills - Greenfield

The MOU to acquire Woollen and Textile Industries Limited, marks the companys second acquisition in Bhandup West. This strategic move reinforces its commitment to value-driven development in prime micro-markets while unlocking the potential of key land parcels across the city.

With this acquisition, the Company is strengthening its footprint in the western suburbs. Featuring a mix of residential and commercial spaces, this acquisition aligns with the Companys vision to create vibrant, future-ready spaces that provide enduring value for homeowners, commercial users and the wider community.

Jal Ratna Deep - Society Redevelopment

Cluster Redevelopment at Ashok Nagar

The Company signed an MOU securing the redevelopment rights for the project. This cluster redevelopment involves the consolidation of 9 distinct housing societies. This development adds an estimated RERA carpet area of 3.25 lakh square feet to the residential pipeline.

Strategies for the future

Strong Near-Term Growth Pipeline

Eight new project launches are planned across key locations, including Goregaon, Thane, Borivali, Malad, and Santacruz, in the Mumbai Metropolitan Region (MMR). These projects are expected to have a combined Gross Development Value (GDV) of over 9,225 crore, providing significant visibility on future revenue growth.

Expansion through Greenfield and Redevelopment Projects

Arkade Developers continues to pursue a balanced expansion strategy by actively acquiring both greenfield and redevelopment projects across the Mumbai Metropolitan Region (MMR). This approach enables the Company to leverage opportunities in land-constrained urban locations while also benefiting from planned urban expansion in peripheral areas, aligning with its long-term growth objectives.

Augmentation of Front-End Operational and Execution Teams

The Company is systematically scaling up its internal execution capabilities by expanding its front-end teams within the project execution and sales divisions. This targeted addition to corporate manpower ensures the necessary operational capacity to support expanding project volumes, maintain strict project delivery timelines, and drive high-velocity sales conversions across all upcoming launches.

Growth Drivers

Expansion into Central Mumbai

The Company is expanding its presence into the central suburbs of Mumbai, such as Mulund and Bhandup. These locations add to its existing presence and increase its footprint across different micro-markets in the city.

Robust demand for luxury housing

Sustained demand for premium and lifestyle-oriented residential developments continues to support the Companys sales momentum. Increasing preference for high-quality configurations and amenity-rich projects is driving absorption in the higher-value segments.

Legacy of timely delivery (pre-RERA)

The Company has consistently demonstrated a strong record of delivering housing projects before the RERA deadline. This consistent delivery performance has contributed to strong customer trust and repeat demand.

Strong redevelopment pipelines

Arkade Developers has an established pipeline of redevelopment projects within its core operating micro-markets. This provides visibility on future project launches while leveraging its expertise in executing redevelopment-led developments in land-constrained urban areas.

Healthy balance sheet, strong cash flow, IRR-focused

The company maintains a healthy balance sheet supported by strong cash flows. It follows an IRR-focused approach in project selection to ensure efficient capital use and returns over the project lifecycle.

Opportunities

Strong Housing Demand in MMR

The increasing demand for premium and lifestyle-oriented housing in the Mumbai Metropolitan Region (MMR), driven by a major structural consumer transition toward upgrade-driven buying and larger residential layouts.

Redevelopment Projects

Redevelopment continues to be the primary structural vehicle for new supply in Mumbais real estate market due to the extreme scarcity of vacant land in core pockets. By upgrading aging buildings and execution of cluster redevelopments, developers maximize vertical density and unlock premium residential inventory in high-value, landlocked micro-markets.

Infrastructure Upgradation

Infrastructure upgrades in Thane and the Western Suburbs in Mumbai are driving real estate growth by significantly improving connectivity and reducing travel times. Key projects like Metro Line 4/4A (Wadala to Kasarvadavali), Metro Line 6 and the Thane-Borivali Twin Tunnel are creating new development hubs in once-peripheral areas. This will create residential demand and higher capital appreciation.

Branded Residences & Lifestyle Amenities

There is a growing trend of developers partnering with hospitality and global brands to launch branded residences. These projects cater to evolving consumer preferences for premium living, offering differentiated features such as smart home technology, curated lifestyle amenities and enhanced service offerings.

Growth in Managed & Shared Spaces

Demand for flexible real estate formats is rising across both commercial and residential segments. Co-working spaces are witnessing an increase in demand as startups, SMEs and large corporations seek agile workplace solutions. Similarly, co-living formats are gaining traction among students and young professionals as an affordable, mobile-friendly solution to high urban housing costs, bypassing traditional rental hurdles like steep deposits and long lock-in periods.

Financial Performance

Financial Review

Rs. in crores

Financial Ratios

Risk Mitigation Strategies

Arkade Developers has established a structured Risk Management Policy, overseen by a dedicated Risk Management Committee. The Companys framework institutionalises risk identification and mitigation through periodic board-level reviews.

Human Resource

Arkade Developers prioritises its employees as key drivers of long-term success and remains_committed to comprehensive human capital development by fostering an inclusive, growth-oriented and supportive work environment. By focusing on engagement, well-being and retention through progressive policies, the Company cultivates a culture of respect and collaboration, viewing a safe and healthy workplace as essential for a competent workforce.

Company Outlook

Looking ahead, the Company remains confident and well-positioned for an accelerated growth trajectory. This momentum is driven by a robust pipeline of strategic acquisitions, high-value redevelopment projects, and future-ready greenfield developments. Operations will continue to prioritise sustainable development and disciplined execution, thereby ensuring long-term value for customers, partners, and stakeholders.

The Company remains optimistic about the market outlook and is well-positioned to capitalise on evolving demand trends. While near-term customer purchasing velocity has temporarily slowed due to the impacts of international conflict and global fuel price pressures, the domestic market outlook remains highly favourable. An agile operational approach combined with a healthy balance sheet provides the financial flexibility to capitalise on emerging trends while maintaining strict capital discipline.

Internal Control System and Its Adequacy

The Company has established a comprehensive and well-structured internal control system, suitably aligned with the scale, complexity and nature of its operations. These controls are designed to safeguard assets, ensure the accuracy of financial reporting, improve operational efficiency and ensure adherence to internal policies. The internal audit function plays a critical role in evaluating the effectiveness of these controls across various business functions. Audits are carried out on a regular basis to review key processes, identify potential risks and recommend areas for improvement. These assessments are risk-based and focus on critical operational and financial areas.

All major observations and action plans arising from these audits are reported to the Audit Committee, which closely oversees their implementation and provides strategic direction to further strengthen the control framework. The internal control system is continuously enhanced in line with evolving business requirements and industry practices. The Company remains committed to maintaining a robust control environment that supports effective governance and sustainable growth.

Cautionary Statement

Certain statements in the Management Discussion and Analysis relating to future expectations and estimates may constitute forward-looking statements within the meaning of applicable laws and regulations. These statements are based on currently available information, forecasts, assumptions and expectations and are subject to inherent risks and uncertainties. Actual results may differ materially from those expressed or implied due to various internal and external factors. These factors may include, but are not limited to, changes in political, economic, regulatory or environmental conditions in India and globally, market volatility, competitive pressures, employee costs, changes in tax or legal frameworks, technological disruptions and labour relations. Such forward-looking statements do not assure future performance and should not be regarded as conclusive. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.