Another real estate giant Mahindra Lifespace Developers is set to launch an affordable housing business with pilot projects in Mumbai’s distant suburb Boisar and another in Avadi, north Chennai. The company will launch whichever of the two projects gets approval first, said the company's Managing Director and Chief Executive Anita Arjundas.
She added that the company wanted to start pilot projects in Tamil Nadu and Maharashtra and is are looking at one more project in each of these two states for this segment. While affordably priced housing is a low-margin business, it promises high sales volumes for real estate companies, Arjundas said. Real estate firms are still struggling to improve sales in most large cities with buyers put off by the depressed economy and high interest rates.
Mahindra, which has set up a separate team for its affordable housing business, will sell these homes at Rs 5-15 lakh across cities, but the sizes may differ depending on the market. While there may be one-room-kitchen homes in Mumbai, we may have slightly bigger one-bedroom-hall-kitchen units in Chennai, Arjundas said.
In the past few years, a number of corporate groups have diversified into realty and have announced plans to service the affordable housing segment.
Boisar, about 75 km from central Mumbai, shot to fame for low-cost housing when in 2009 Tata Housing first announced its project there. Since then, other firms such as Usha Breco Realty have launched similar projects there. Real estate firms backed by corporate groups realized that (low-priced housing) is a large segment which no one has catered to, and that (it) is a business which is recession-proof and has high customer demand, said Rajeev Bairathi, Director, DTZ International Property Advisors.