Unitech to invest Rs2,500 crore to build homes for middle class

Unitech to invest Rs2,500 crore to build homes for middle class

New Delhi: Country’s second biggest realty firm Unitech Ltd plans to invest Rs2,500 crore to launch 10,000 residential units in the Rs30-50 lakh category by the next fiscal.

The company would launch affordable housing projects in Gurgaon, Noida, Greater Noida, Kolkata and Chennai, where it has land banks.

“We have land at various places. We are in a position to launch a number of projects," Unitech Chairman Ramesh Chandra told PTI.

Asked how many housing units the company plans to launch, he said, “It could go up to 10,000 units by next fiscal. It will need an investment of Rs2,500 crore on construction. Land anyway I have it".

The housing units would be offered to customers in the range of Rs30-50 lakh, Chandra said, adding that the company would launch the housing projects taking into account the affordability of that particular city.

Chandra noted that affordable housing is determined by two things - market conditions and location.

“These two things will determine how much will be luxury housing and how much will be affordable. But naturally affordable housing has a far higher percentage," he added.

Chandra pointed out that the company would not launch any luxury housing project in the near future seeing the present market condition.

“Luxury housing will continue, but that may form a much smaller percentage of the total offering. When it was more investor oriented, may be luxury housing was 30%. Now, it may be 7-8% ," he said.

Chandra said it was possible to offer houses in the “affordable range" if developers reduce the size of the units, focus on value engineering and are prepare to work on lesser margins.

Besides, Chandra said the prices also come down, which would lead to reduction in construction costs.

Asked whether Unitech was adopting the four strategies to bring down the prices, Chandra said, “Yes, we are working on few projects. Recently, 3-4 months back, we launched some apartments of Rs35-40 lakh in Gurgaon.

“If the apartment size is reduced from 1,600 sq ft to 1,000 sq ft, you are straight away reducing the ticket size by 35-40%," he said.

By reducing overall ticket size by about 40%, construction cost could be brought down, he added.

Earlier this month, the company had announced investing about Rs2,500 crore to develop 35 hotels across the country over the next seven years.

Unitech also plans to raise up to Rs2,500 crore through sale of some assets and equity to retire part of Rs8,000 crore debt by March, 2009.