Essel Group enters affordable housing segment

Mumbai-based Essel Group on Monday announced its foray into the affordable housing segment, with a target to deliver 200,000 homes by 2022.  The Subhash Chandra-promoted group will deliver 10,000 affordable homes next year, entailing an investment of Rs 800 crore. The affordable homes would be launched under the brand name ‘ASHA (affordable shelter housing for all) 2022’, in line with the government’s plan for affordable housing. Essel Group already has presence in the real estate sector through Suncity Projects (P).     

Chandra said the first project would be launched next month at Panchkula in Haryana, at the rate of Rs 1,500 per sq ft. The starting price of a flat will be Rs 15,00,000 and will go up to Rs 2,500,000. It will also build affordable homes in Hisar, Bahadurgarh and Rohtak in the first phase.

After Haryana, housing projects would be launched in Uttar Pradesh, Chandra said. Essel Group will facilitate projects in terms of technical know-how and management execution skills, and is scouting for partners to come on board.

“We are entering into affordable housing as there is a huge demand in this segment. We will develop 10,000 affordable homes in 2016 and the target is to construct 200,000 units by 2022,” said Chandra.

According to estimates, the shortage of housing units is expected to touch Rs 11 crore by 2022.

The project cost for 10,000 homes would be Rs 800 crore and the same would be funded through internal accruals and advances from customers against sales, the company said.

Essel Group is in talks with a Japanese construction company for developing these projects. “We will be tying up with a Japanese construction firm in the next two to three weeks,” Chandra said without revealing much detail.

The group would develop these projects through dedicated special purpose vehicles for each state. For Haryana, the group has short-listed a partner and it is looking for entrepreneurs for other states such as Uttar Pradesh.

The company would undertake outright purchase of land and also form joint ventures with land owners to develop the housing projects. “It is the best time to enter the affordable housing with real estate sector facing demand slowdown.”

Essel Group has presence in various sectors, including media, entertainment, packaging, infrastructure and education and technology, among others. The group's listed entities have a combined market capitalisation of around $6 billion.