Janaadhar value housing project completes Phase-1

In one of the first attempts at a market-based approach to meeting the housing needs of those priced-out of the market, Janaadhar Constructions Pvt Ltd, on Sunday handed over keys to home buyers from lower income groups. About 480 beneficiaries from among the city’s denizens took possession of their 400 sq ft flats priced under Rs 5 lakh at Janaadhar Shubha at Medehalli in Anekal taluk, about 30 kms from Bangalore city.

Janaadhar has Janalakshmi Social Services as a majority promoter in the company apart from Sterling Developers Pvt Ltd, a real estate developer, and V ‘Naresh’ Narasimhan, architect-principal, Venkataramanan Associates, an architecture firm.

 

“Market here works only for the privileged. The under-privileged have no place in it. We have to find ways to make market forces work for them,” Ramesh Ramanathan, Chairman and Director, Janaadhar Constructions Pvt Ltd told Business Standard.

Janaadhar will follow differential pricing in its projects. While the single bedroom flats may be sold at cost price the two and three bedroom ones would be sold at a profit.

The people to take possession of their flats were tailors, mechanics, nurses, teachers among others who can't otherwise aspire to own a flat in Bangalore. He aims to address the affordable housing challenge in urban India through the “social business” model.

The project is funded by the Michael and Susan Dell Foundation to the tune of Rs 9 crore. The money went into part-funding the purchase of the 12-acre land which cost Rs 15 crore, while rest of the money came from the promoters. Central Bank of India provided the project finance.

Ramanathan hopes to replicate the model across the country and generate upto 10,000 flats per annum in five years time. As a start, he hopes to have another project in Bangalore, one in Chennai and another location, which he did not specify, to be developed parallely in the next 12-15 months. He hopes to keep down the cost of delivery through process efficiencies, by keeping raw material costs down and by squeezing the execution time. In addition to that, Ramanathan aims to use incremental technologies as he goes forward with his housing projects, instead of transformational technology that keep costs high.

He is focussed on inefficiency of supply chain. He is working on building templates just as in a manufacturing assembly. In about five years the company aims to have multiple projects going on simultaneously.

With margins of 10 per cent to 12 per cent on the overall project, it won't be difficult to attract potential investors in future projects is what he believes.