Attibele, Karnataka: This quiet town, 35km from Bangalore on the border of Karnataka and Tamil Nadu, could well be the lab where India’s next big real estate revolution is being incubated.
Value and Budget Housing Development Corp., promoted by Citibanker-turned-IT-entrepreneur Jaithirth Rao, Bangalore’s CSC Constructions Pvt. Ltd and Tata Housing Development Co. Ltd are among the companies that have either announced projects at Attibele or are looking for land there. The common thread that runs through their plans: affordable housing.
Zoning in: Attibele, 30km from Bangalore, has attracted attention from big developers such as Tata Housing, which is keen to buy a 100-acre plot there. Prices range between Rs70 lakh and Rs1.5 crore an acre. Hemant Mishra / Mint
Attibele would seem to have all that is needed to build affordable homes: land that isn’t priced out of the market and proximity to an industrial hub as well as to a big city.
Ramesh Ramanathan, another former Citibanker who runs citizen’s movement Janaagraha, has identified Attibele for his low-cost housing initiative that will sell 1,500 homes, developed on a 12-acre piece of land, for Rs5 lakh or less. Ramanathan, who is also a Mint columnist, says he was agnostic about the location for the project, but admits that Attibele met all his requirements. It is close to Electronic City, where firms such as Infosys Technologies Ltd, Wipro Ltd and Hewlett-Packard Co. are located. The four-lane road that connects the town to Bangalore passes by factories of firms such as TVS Motor Co. Ltd and Hindustan Granites Inc. Then there’s the cost: analysts and executives in the real estate business say land can be bought in Attibele for between Rs70 lakh and Rs1.5 crore an acre. That compares with around Rs1.5-4 crore an acre in Delhi satellite town Noida or Rs2-3.5 crore an acre in Bangalore suburb Whitefield.
“We were looking at other industrial hubs before we selected this location because we got a decent price,” says Pramod Kumar, executive director (operations) at Value and Budget Housing.
The company will spend Rs100 crore developing around 300-400 houses on 16.5 acres and will sell them at a sub-Rs7 lakh price tag. It hopes to see demand from people working in factories along Hosur Road or in firms in the Electronic City.
To be sure, the concept of affordable housing isn’t a new one. It is at least a few decades old, with the local development agencies of big cities being the original pioneers with their LIG (lower income group) flats. While a market for affordable homes never went away, large real estate firms started focusing almost exclusively on premium and luxury developments between 2004 and 2008 as the economy expanded rapidly and banks loosened their purse strings and issued loans to almost all loan seekers.