Realty firm Puravankara Ltd’s affordable housing arm Provident Housing plans to launch 6-7 affordable housing projects across 10.3 million sq. ft, and invest around Rs 25 billion to develop these over the next year or so.
These projects, most of which are in different stages of approval, will be launched in Bengaluru, Mumbai, Chennai and Pune, priced at around Rs2.5-5 million per unit.
The projects will largely be funded through sales and some construction finance will also be raised, said Ashish R. Puravankara, Managing Director of Puravankara Ltd.
Recently it launched an affordable housing project spread over 20 acres on Kanakpura road in Bengaluru, in a joint venture with Keppel Puravankara Development Pvt. Ltd, which owns the land.
Keppel Puravankara, formed in 2006, a joint venture between Singapore-based property group Keppel Land and Puravankara, is mandated to develop luxury housing projects. It has developed two projects so far in Bengaluru and Kolkata.
For the Kanakpura road land, the developer decided to do an affordable or mid-income project, moving away from its earlier strategy of building high-end homes.
“The Kanakpura road land seemed more suitable as an affordable housing location, where we have priced the apartments between Rs2.7-6 million of 550-1,300 sq. ft in size. Most inventory is one and two-bedroom homes and only some are three-bedroom apartments,” Puravankara said.
The joint venture will, however, continue to look at opportunities for premium housing projects and development of commercial real estate such as office space, he said.
Affordable homes in the mid-income category have attracted buyers in the past with low-income homes not fetching enough margins and luxury homes not finding enough takers.
Several builders such as Shapoorji Pallonji Real Estate and Hiranandani Group are looking to launch projects in this price category.
A Knight Frank India Ltd report said the share of affordable housing has gone up significantly from 47% in 2016 to a steep 79% in 2017, displaying an inclination towards the less than Rs5 million price bracket,” the report said.