Shapoorji JV eyes tier-II cities for affordable homes.

The Shapoorji Pallonji group is seeking opportunities for affordable housing projects in Kochi, Chennai, Ahmedabad, Indore, Ghaziabad and Coimbatore. It plans to develop 10-12 million sq ft in the second phase of its joint investment programme with World Bank arm IFC, Asian Development Bank and Standard Chartered Private Equity.

Shapoorji Pallonji would, along with its partners, spend Rs. 800 crore, said Venkatesh Gopalkrishnan, chief executive officer, Shapoorji Pallonji Real Estate. The $5.5-billion group had last year tied up with investors to develop the affordable housing projects branded as Joyville. Shapoorji Pallonji and the investors brought in Rs 1,500 crore as initial capital for buying land and other purposes.

“We are looking at tier-II cities that provide jobs and reasonable infrastructure,” Gopalkrishnan said. The group plans to launch four more affordable housing projects in Pune, Gurugram, Hyderabad and Bengaluru in the first phase of the programme. The Pune and Gurugram projects will be launched in the next six months and the others subsequently,” Gopalkrishnan said. Shapoorji Pallonji has launched two projects in Kolkata and Virar near Mumbai. In total, the projects will comprise 16-17 million sq ft and will be completed in six years.

Shapoorji Pallonji bought a land parcel in the Hinjewadi area of Pune recently and was planning to buy two more land parcels by March, Gopalkrishnan said.

The group has raised Rs 300 crore in construction loans from banks and needs another Rs 400 crore for construction.

The UK-based Actis will replace Standard Chartered in the tie-up after taking over the latter’s Asian real estate portfolio for $500 million.

Besides, Shapoorji Pallonji’s contracting arm was constructing over 30 million sq ft of affordable houses in Andhra Pradesh, Maharashtra and Uttar Pradesh, said Subodh Dixit, executive director, engineering and division at Shapoorji Pallonji and Company. The contracting arm has a turnover of Rs. 7,500 crore and 30-35 per cent of its business comes from building affordable houses.

Housing sales in the country’s top eight property markets went up by 5 per cent from a year ago during the September quarter powered by a 24 per cent increase in affordable housing sales, according data by Liases Foras Real Estate Rating & Research.

Buoyed by strong demand and sops for affordable housing, many big realtors are developing such housing.

Mumbai-based Hiranandani Communities is planning to build 500 affordable homes within Hiranandani Parks at Oragadam in Chennai, where it has identified 10 acres for the purpose. The houses will measure 40-60 sq m. Hiranandani Communities has pegged their cost at Rs. 20 lakh each.

“We will not need to buy land specifically for affordable housing. We will develop units in the segment within our current projects. It can be as simple as a studio apartment within a township,” said Niranjan Hiranandani, chairman and managing director, Hiranandani Communities.

The Lodha group, another Mumbai-based developer, has sold more than 5,000 affordable houses worth over Rs. 2,500 crore and delivered 4,700 of these to customers in 2016-17. “We expect our affordable housing segment to grow by over 20 per cent this year with sales of over Rs 3,000 crore and deliveries of more than 7,000 units,” said Abhishek Lodha, managing director, Lodha group.

BS