Provident Housing To Foray Into NCR, Mumbai Markets – The Economic Times – 14-Nov-2014
November 15, 2014 - Uncategorized
Provident Housing, the affordable housingsubsidiary of Bengaluru-based Puravankara Projects, plans to foray into bigger property markets including Mumbai, National Capital Region, Pune and Hyderabad in the next one year, a top company executive said.
The company is currently in advanced talks with other developers and land owners in these markets to enter into joint development agreements for undertaking projects totalling over 10 million sq ft. “We will be working on capital-lite joint development model. In the long run, we will be a pan-India developer of affordable housing, which is the most in-demand and under-serviced segment,” said Jackbastian Nazareth, group CEO, Puravankara Projects. “For now, we will be focusing on these new cities and our existing markets in the next 3-5 years.” In Hyderabad, Provident Housing and its partner have already sought civic approvals for a 2.2 million sq ft development.
In Mumbai Metropolitan Region, the company is in talks for a project that will have total development of a little less than a million sq ft, while in Pune it is in talks for two projects, he said. The company is currently developing projects spread over 9.38 million sq ft comprising total 9,048 units, while it has already delivered 4,430 units spread over 4.55 million sq ft so far.
“Out of our seven ongoing projects, four are through joint development agreement with landlords. This works better in managing cost as we enter as development manager, while the landlord brings land parcels as his/her equity participation,” Nazareth said.
In 2008, Puravankara Projects launched wholly-owned subsidiary Provident Housing to exclusively focus on affordable housing projects. The company has four major projects in Bengaluru and has also ventured in other markets in southern India like Chennai, Coimbatore and Mangalore in the last six years since its inception.
Provident Housing was among the first property developers to focus on affordable housing. In order to reduce its construction cost, the company incorporated precast technology wherein panels or units are manufactured at site and assembled.
“Contrary to general perception that affordable housing is mere volume game, we have enjoyed operating margins of around 35% due to precast construction technology and other efficiency measures,” Nazareth said. “However, now the operating margins stand slightly reduced at around 25-30% due to rising raw material cost.”