Mumbai: Housing Development & Infrastructure Ltd will spend Rs6,500-7,000 crore on its Virar project, over the six years it will take to complete it, a top official said.
“The total cost is based on current prices which is based on current calculations,” Sarang Wadhawan, managing director, told reporters at a conference on Tuesday.
The company expects margins in the range of 30-35% from this project, he added.
The real estate firm signed a joint venture deal with Mumbai Metropolitan Region Development Authority (MMRDA) for developing 525 acres of land in Virar, it said in a statement to the Bombay Stock Exchange earlier on Tuesday.
The company will develop about 13 million square feet for rental space and hand it over to MMRDA for free, while the remaining 39 million square feet space will be available to HDIL for sale, it added.
Refusing to comment on the pricing for each apartment, the company, which is also building apartments in Kurla and Ghatkopar and offices in New Mumbai, said the Virar project will be completed in four phases by 2015.
The project will cater to the middle- to low-middle income housing category, Wadhawan said.
Last month Tata Group also launched a low-cost housing project near Mumbai, joining a spate of Indian developers that have moved to the affordable housing segment, as demand dries up for more expensive homes.
Demand for homes in India has slumped more than half from a year ago after prices more than doubled and the central bank hiked interest rates to calm inflation.
Developers such as HDIL, Puravankara Projects and Omaxe have launched less expensive houses to revive cash flows.
The company is also executing the largest slum rehabilitation project for about 85,000 slum dwellers for the expansion and renovation of Chhatrapati Shivaji International Airport, Mumbai. It received the letter of intent for the project in 2007.
The real estate firm last month also said it intends to sell shares to raise up to $600 million through a qualified institutional placement.
Shares of the company on Tuesday ended down 0.5% at Rs305.65 in a choppy Mumbai market.