Puravankara, Mexico’s Homex talk JV

Realty major Puravankara Projects is in talks for an alliance with Homex, a Mexican company that specialises in affordable housing.

The idea is to give a boost to its affordable housing subsidiary Provident Housing.
Ashish Puravankara, director, Puravankara Projects, said, “We are holding discussions with Homex as they have build a large number of affordable homes. They like our business model and are very keen to tie up.” He did not divulge the nature of the alliance.

Homex is vertically integrated home development company focused on affordable-entry level and middle-income housing. It is also the largest home builder in Mexico, based on the number of homes sold, revenues and net income. It has so far delivered around 270,000 homes.

Its affordable entry-level housing ranges between 452 sq ft and 818 sq ft in size and its middle-income apartments are typically 818-1,851 sq ft.

Homex has operations in 32 cities located in 20 Mexican states as of December 2008.
Homex integrates aluminum moulds into its construction process. With this method, the shell of an entire home can be constructed from concrete poured into as many as 1,000 interconnected pieces of aluminium moulding for an affordable entry-level home.

Once the concrete hardens, the moulds are disassembled for use on another home. Each mould can be used as many as 2,000 times. The method also generates less waste, reducing materials cost. Most importantly, the mould system reduces the average time of construction.

Provident Housing has roped in SBI Capital and Housing and Urban Development Corp to raise funds for it affordable venture. The firm is currently at an advanced stage of talks with private equity investors for diluting stake on a project level and hopes to close the deal soon.

It has already launched two projects in Bangalore and Chennai and is in the process of launching its second project totalling 6 million sq ft in size in Bangalore with an investment of around Rs 900 crore.

The project is expected to have 6,000 apartments. It is currently waiting for sanction to kick start the project.

The real estate player will invest Rs 1,900 crore by 2010 on three affordable housing projects in Bangalore and Chennai. The three projects, slated to be ready by 2010-11, will house 15,000 units.

The one, two and three bedroom flats will be priced at Rs 10 lakh, Rs 15 lakh and Rs 20 lakh respectively spanning from 750 sq ft to 1,100 sq ft.

Provident Housing will also roll out the concept to other cities like Hyderabad, Coimbatore and Mysore in the Phase I. In Phase II it will set up properties in Delhi, Kolkata, Kochi, Jaipur, Pune and Nagpur.