Rising raw material and construction costs are putting pressure on real estate developers, with Shriram Properties estimating an 8–10 per cent escalation in project costs following the Iran and West Asia crisis.
The increase is particularly pronounced in construction products linked to oil imports, including lifts, sanitary fittings, and tiles. While cement and steel prices have remained relatively under control, the increase in other inputs is becoming a significant cost burden for developers, the company said, Murali Malayappan, Chairman & Managing Director, Shriram Properties Ltd.
The company has limited ability to pass on the entire increase to homebuyers, as affordability remains a constraint. The company is currently absorbing most of the cost escalation, even as it expects housing demand to remain strong, he told newspersons on Thursday.
Imports from China
The real estate company is hoping that increased imports from China could provide some relief. China has substantial excess capacity in several manufacturing segments, and allowing greater imports could help bring down prices of some construction materials, he said.
Despite the macro situation, Shriram Properties is targeting a sharp expansion in sales and revenue. The company recorded pre-sales of about ₹2,300 crore last year and is targeting ₹4,600–5,000 crore in pre-sales over the next two years. Pre-sales refers to selling properties before they are fully constructed or ready for occupancy.
It also aims to increase revenue from around ₹1,000 crore to ₹2,700–3,000 crore and profit from about ₹60–70 crore to ₹250–270 crore over the next three years, he said.
Key market
Malayappan said Chennai remains a key market in this expansion.
He expects residential demand to remain resilient, supported by rising employment and household incomes.
It plans to remain predominantly focused on housing while taking a more cautious approach to commercial real estate because of uncertainties around artificial intelligence and work-from-home trends. Nearly 10 per cent of the development is commercial, said Malayappan
Published on October 1, 2026
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