Bengaluru: Known for its luxury villas, Bengaluru’s Adarsh Group is venturing into the affordable or mid-income housing category as demand for houses costing less than ₹ 50 lakh gains traction in most cities. Over the next few months, Adarsh plans to roll out a sub-brand, under which it will launch three projects to sell more than 8,000 homes in the mid-income category across different locations of the city.
The largest inventory of affordable homes will be in a project to be launched at Yelahanka, in north Bengaluru, of 4,000 units in 27 acres. “While we will continue to develop premium homes, we decided to enter the affordable housing category as it’s a sustainable model that will thrive on high demand for such homes. Given that the margins are comparatively thin, the business is built on scale and volume," said chairman and managing director B.M. Jayeshanker.
Adarsh, whose current homes start at ₹ 85 lakh, going up to ₹ 2.5 crore and above, plans to price the one bedroom-hall-kitchen homes in the new category at around ₹ 38 lakh and two bedroom-units for ₹ 60-62 lakh.
Alongside mid-income projects, it is also launching premium villas and apartments to create a balanced portfolio.
Adarsh joins other premium developers who have ventured into affordable or mid-income housing. Bengaluru developer Prestige Group, which has signed a ₹ 2,500 crore residential joint venture pact with HDFC Capital Advisors Ltd, is set to build a mid-income housing portfolio. So did Embassy Group which diversified into mid-income housing.
In India’s most expensive property market, Mumbai, developers are making attempts to launch projects at below ₹ 1 crore, mostly by shrinking the size of homes.
Jaishanker said given the quality of homes that Adarsh has built in the past, there will be a certain quality assured even if the homes are cheaper.
“These homes may be slightly smaller-sized, with some compromise on quality of material used," he said.
Close to 55% of sales in the September quarter were contributed by the sub- ₹ 50 lakh segment, in which the segment of ₹ 25-50 lakh is beginning to gain more traction with 16% year-on-year growth, showed data compiled by Liases Foras Real Estate Rating and Research Pvt. Ltd.
In comparison, sales in the ₹ 50 lakh- ₹ 1 crore price bracket grew 7% in the same period.