After a successful stint in commercial and luxury residential development, Mumbai-based Hiranandani Communities, a real estate firm set up by builder Niranjan Hiranandani, is diversifying into affordable housing and industrial warehousing parks for its next stage of growth.
The company is in discussions with a strategic partner to start work on its first warehousing park spread across 5 million sq. ft, on a 250-acre plot it owns in Pune.
In an interview with Mint, Hiranandani said the plan is to create a new industrial warehousing business worth up to ₹3,000 crore over the next two-three years.
Besides Pune, it is also working on building industrial logistics and warehousing parks in Chennai and Nashik, where it owns around 200 acres and 77 acres, respectively.
It is also scouting for land at other warehousing hubs such as Bhiwandi (near Mumbai), Kolkata, the National Capital Region (NCR) and a few locations in Bangladesh.
“We are close to forming a partnership. We are trying to set up a platform, which will bring us into the premier league in terms of logistics, warehousing and industrial townships. We are starting out with our three land parcels, but we are also talking for lands in other places," Hiranandani said.
In December, Hirananandani had launched GreenBase, a warehousing and logistics parks vertical. It will develop built-to-suit warehouses, industrial facilities and cold storage, the company had said.
In 2016, Hiranandani Group had signed the biggest ever real estate deal in India, selling its entire 4.5 million sq. ft commercial and retail assets in Powai in Mumbai for $1 billion ( ₹6,700 crore). Subsequently, it had added another 1.5 million sq. ft of office space in Thane and Powai.
Hiranandani Communities is separately building another 2.5 million sq. ft of office space at Panvel in the outskirts of Mumbai. “Despite strong commercial development plans, the residential segment will continue to be the larger chunk of the company’s business," Hiranandani said.
However, the focus will be to ramp up its affordable housing business, as compared to its earlier strategy to build large luxury apartments.
At present, the company is building around 2,300 compact homes in Thane, Panvel and Chennai, with prices starting from ₹55 lakh.
The housing units comprise studio apartments and one bedroom-hall-kitchen (1bhk) flats of up to 60 sq. m, which adhered to the government’s earlier definition of affordable housing. According to the GST Council’s latest decision, only homes priced up to ₹45 lakh count as affordable homes.
“We haven’t done much in affordable housing so far, but that is something which I’m going to do more now. The affordable segment is growing much faster and has almost tripled in the last three years," he added.
The ₹45 lakh cap—necessary to get benefits under the new goods and services tax norms—has come as a challenge.
“There is no choice, but to grow this business (affordable). I’m only challenged with what they are calling affordable," he adds.