On Monday, Essel Group has announced its plan to construct one lakh affordable housing units by 2022 in support of Housing for all by 2022 scheme of government.
Meanwhile, the chairman of Essel Group said in his statement that the better time to enter in the market is when it slow downs.
According to the source, the group will undertake real estate projects in various states under Affordable Shelter and Housing for All (Asha) 2022 by linking up with different partners and entrepreneurs to construct affordable houses.
Evert Scheme will be different depending on the availability and price of the land and other parameters. About 10,000 affordable houses would be constructed with the worth of Rs. 800 crore in the first year and the group will line-up the construction gradually to reach 50,000 houses by 2022.
Dr. Chandra said that Landowners and entrepreneurs will be our stakeholders. Essel Group will act as a facilitator with technical knowhow, management and execution expertise. We will also give funding support.
According to the report on affordable housing, there is a shortage of six crore houses and by 2022 it will be 11 crore. To reach the demand, India needs to spend Rs. 16.25 crore every year. Estimates also point to a 12-13% compounded annual growth rate (CAGR) from now to 2022.
Dr. Chandra explained the entry of the Essel Group into affordable housing sector and said that my philosophy is to do something meaningful for the country. It is quite attractive for us to support such people (entrepreneurs and partners in affordable housing segment).
The first project of the group will take off in Panchkula in Haryana at Rs 1,500 per square feet (sqft) with a delivery price of Rs 15-25 lakh per house. In the start-up, Asha 2022 will cover North India locations including Panchkula, Hisar, Bahadurgarh and Rohtak. After covering these locations the group will step to Uttar Pradesh and central India, where it is in the process of shortlisting partners.
Dr Chandra said unsold inventories were piling up today because their prices were outside the range of consumer’s affordability. Most of the unsold inventories are expensive flats costing in the range of Rs 1 crore to Rs 2 crore. This emphasizing that Asha 2022 was all about thin margins and huge volumes.
The president of Asha 2022, Mr. Suresh Bhandari said that the group’s real estate effort would stand on the four pillars of speedy construction, standardization of design, lower margins and timely delivery of projects. The group had already tied up for land of over 200 acre and would follow a model of fully-owned or joint ownership, where it would enter into revenue or profit sharing pact with partners. The Group have tied up 200 acre. We have more than sufficient land. The model for our projects will be full ownership or joint development. The idea is to reduce the cost of land.