Bengaluru: Mahindra Lifespace Developers Ltd, the real estate arm of Mahindra Group, has partnered with HDFC Capital Advisors Ltd to jointly invest Rs500 crore over the next three years to develop affordable housing projects across cities.
HDFC Capital, a unit of Housing Development Finance Corp. Ltd, will invest through its HDFC Capital Affordable Real Estate Fund-1.
The projects will be undertaken through a new entity called Mahindra Happinest Developers Ltd (MHDL), with a 51:49 equity shareholding between Mahindra Lifespace and HDFC Capital. The first development under the joint venture is ‘Happinest, Palghar’, a project which is expected to be launched in the latter half of 2017-18.
Mahindra Lifespace ventured into the affordable housing segment in 2014, through the brand, Happinest. It has since launched two projects—in Boisar near Mumbai and Avadi, Chennai—and has launched 1,600 units in these two projects and handed over close to 1,000 homes thus far. Homes under the Happinest brand are currently priced between Rs17-27 lakh.
The Mahindra-HDFC joint venture platform will look to rapidly scale up in order to address the demand-supply gap in affordable housing in India, with an estimated development footprint of between 5 to 10 million square feet, depending on the locations selected for its projects, under the Happinest name, the companies said on Wednesday.
“Affordable housing is a critical component of quality urban infrastructure as also a growth driver for the real estate industry in India. We are delighted to partner with HDFC Capital in a venture that will leverage the experience and commitment of each organisation, to develop affordable homes that will create sustainable value for our customers, while also addressing the largely unmet demand in this segment," said Anita Arjundas, managing director, Mahindra Lifespace said in a statement.
Mahindra Lifespaces said that it has also focused on creating an ecosystem for access to home finance for its customers in the segment, which includes partnerships with non-banking financial companies (NBFC) that survey the financial capability of prospective customers, and accordingly approve home loans.
“The objective of this platform is to invest in residential affordable housing projects by providing long-term equity. Lack of patient long-term capital is one of the key challenges facing growth and development of low and middle-income housing in India. HDFC Capital’s first fund is dedicated to addressing this funding gap by providing long-term equity-oriented capital for development in urban and semi urban peripheral areas," said Vipul Roongta, chief executive, HDFC Capital Advisors Ltd.