Mahindra Lifespace Developers Ltd, the real estate and infrastructure development arm of the Mahindra group, is in talks with banks and micro-finance institutions (MFIs) to put in place a financing system for its proposed affordable housing foray.
The company has been working on a strategy to target the Rs5-12 lakh per annum income group. Currently, it is focused on the high-end segment with residential properties priced in the range of Rs4,000-5,000 per sq ft.
"It is the documentation and other legal requirements that matter. The banks though not lending to the target category are willing to finance if the developer is of repute. We are right now talking to banks and also to MFIs to back the projects with funding the buyers. We will enable funding but not get into directly financing the purchases," Sangeeta Prasad, CEO, Mahindra World City Developers, said.
According to the company officials, there is demand for about 25 million units of houses in this category. This income category also has problems in raising loans from the banks. The plan to tie up with the lenders is expected to make the company’s strategy comprehensive.
The affordable housing plan of the company would be rolled out shortly and the first project in this segment is coming up in Tamil Nadu.
"Right now, we have a plan to roll out affordable houses in Tamil Nadu and Maharashtra," she said without disclosing the details of the projects.
In the affordable housing category, the company would build houses of 300-550 sq ft while promising to provide all amenities.
"Affordable housing is going to be a major plan for the company. It is also going to be a good revenue contributor," she said.
Mahindra Lifespace has about 10 million sq ft space at various stages of development across the country. It has already completed the development of about 7 million sq ft space. Apart from residential projects, the company also has the industrial property development. In this category it has two properties one each at Chennai (1,500 acre) and Jaipur (3,000 acre).
The company currently has land bank sufficient to build 12 million sq ft.
On Friday, the company has announced its plan to build its first premium residential complex – Ashvita in Hyderabad. Spread in about 9 acre, the complex would have 660 apartments built in five towers. The two, three and four BHK apartments are priced at Rs3,900 per sq ft.
While the apartments are of different sizes between 1,218 sq ft and 2,082 sq ft, the basic price of an apartment in the complex is at about Rs48 lakh.
"We are planning to complete the project in about 30 months. All the approvals are in place and the works would commence shortly," she said.