Mumbai: Piramal Group’s real estate unit Piramal Realty is looking to build affordable homes with plans to expand its portfolio and double residential development to 30 million sq.ft over the next year, said a senior executive.
Piramal’s move to explore opportunities in the segment also comes at a time when several of its top competitors such as Macrotech Developers, formally known as Lodha Group, and Oberoi Realty are either entering or focusing on mid-income or affordable housing.
“The market landscape is changing fast. There is clearly a growth that we see in the affordable housing segment. This is one of the areas that we would like to explore. If this is important to the customer, then we think Piramal would like to participate and play a key role in the segment," said Gaurav Sawhney, president (sales and marketing), Piramal Realty, in an interview.
Sawhney said a large chunk of deals in the residential segment is happening in affordable housing, which offers a huge opportunity for developers.
Apartments costing less than ₹50 lakh comprised 57% of total sales in the September quarter across 35 cities, according to property advisory firm Liases Foras.
The highest number of new launches were in the ₹30-50 lakh bracket, contributing almost one-third (31%) of launches in the quarter.
As per the Goods and Services Tax (GST) Council, under-construction homes priced at up to ₹45 lakh are categorised as “affordable". As per carpet area, homes of up to 30 sq.m (323 sq.ft) in metros and 60 sq.m (646 sq.ft) in non-metros are defined as affordable.
Sawhney said Piramal Realty would look to build affordable homes as part of a larger residential project. He, however, did not provide details on price points.
“For us when we say affordable housing, this is not an isolated space. What we are looking at is an option to house different segments of the consumer in the same land parcel or same project. For us, prime land parcels are important. This would remain the focus of the company and we wouldn’t dilute it just to enter into a segment," he said.
At present, the firm has four under-construction residential projects spanning 15 million sq.ft in Mumbai. It plans to add three-four projects by 2020, Sawhney said, adding growing distress in the sector due to the ongoing liquidity crisis has opened up huge opportunities for joint developments and partnerships.