After Budget incentives, Oberoi Realty & Lodha to enter affordable housing

After Budget incentives, realty majors plan new avenues

Some of the biggest names in real estate such as Oberoi Realty, Lodha and the Prestige group are looking at entering the affordable housing segment, after the incentives announced in the Union Budget.

Beside infrastructure status to the segment, which enables access to cheaper funds and other concessions, the finance minister said under the profit-linked income tax deduction for promotion of affordable housing, the carpet area would be counted (up to a limit), instead of built-up area.

The minister made a compelling case for affordable housing, says Vikas Oberoi, promoter of Oberoi Realty. Known for its premium-priced projects, it will now look at the National Capital Region, Pune and Bengaluru. Oberoi's operations have been in the Mumbai region till now.

His comopany, said Vikas Oberoi, was looking to invest about Rs 1,000 crore, with 15 per cent of the portfolio to be affordable housing.

Lodha, largest developer by sales, is also looking at this segment seriously, said Abhishek Lodha, managing director. Known for its upcoming skyscraper in this city, The World Towers, it has been focusing around the Mumbai Metropolitan Region and Pune for its affordable projects. They'd launched Palava, an affordable homes unit, on the outskirts of Mumbai a couple of years earlier.

Now, however, said Lodha, "The government wants more affordable housing to be built and is creating appropriate policy incentives."

Bengaluru-based Prestige is also looking into the affordable segment, said chairman Irfan Razack. It has exposure to mid-income housing projects and now wishes to look at units of 60 sq metres or less, Razack said.

Adding: "The focus has to be to allow customers and the company to get the fiscal benefits as announced in the Union Budget."

Another Bengaluru developer, Brigade, is looking to launch affordable projects in Chennai and Hyderabad, said its chief executive. Om Ahuja.

Beside incentives from the government, there is a market need for affordable housing, say observers. "Big developers are developing projects they like and not what buyers want. Today, the right product at the right

price and at the right location is needed in real estate," said Ajay Jain, executive director and head of real estate at Centrum Investment Banking. Buyers will get cheaper finance, quality projects and in-time delivery once reputed developers get into this space, he said.

He adds that getting into affordable housing won't affect the brand image of big developers. "India has a huge population, with inequalities of income. There would be demand for each category of houses. Both premium and affordable products can co-exist."

However, DLF, the country's largest realty developer in terms of market capitalisation, would stay away from the segment, said Rajeev Talwar, its chief executive.