India: Piramal Group’s real estate unit eyes affordable housing segment

Powai, Mumbai, Maharashtra, India. Photo: Aniket Bhattacharya

Piramal Group’s real estate unit Piramal Realty is looking to build affordable homes with plans to expand its portfolio and double residential development to 30 million sq.ft over the next year, said a senior executive.

Piramal’s move to explore opportunities in the segment also comes at a time when several of its top competitors such as Macrotech Developers, formally known as Lodha Group, and Oberoi Realty are either entering or focusing on mid-income or affordable housing.

“The market landscape is changing fast. There is clearly a growth that we see in the affordable housing segment. This is one of the areas that we would like to explore. If this is important to the customer, then we think Piramal would like to participate and play a key role in the segment,” said Gaurav Sawhney, president (sales and marketing), Piramal Realty, in an interview.

Sawhney said a large chunk of deals in the residential segment is happening in affordable housing, which offers a huge opportunity for developers.

Apartments costing less than 50 lakh comprised 57% of total sales in the September quarter across 35 cities, according to property advisory firm Liases Foras.

The highest number of new launches were in the 30-50 lakh bracket, contributing almost one-third (31%) of launches in the quarter.

As per the Goods and Services Tax (GST) Council, under-construction homes priced at up to 45 lakh are categorised as “affordable”. As per carpet area, homes of up to 30 sq.m (323 sq.ft) in metros and 60 sq.m (646 sq.ft) in non-metros are defined as affordable.

Sawhney said Piramal Realty would look to build affordable homes as part of a larger residential project. He, however, did not provide details on price points.

“For us when we say affordable housing, this is not an isolated space. What we are looking at is an option to house different segments of the consumer in the same land parcel or same project. For us, prime land parcels are important. This would remain the focus of the company and we wouldn’t dilute it just to enter into a segment,” he said.

At present, the firm has four under-construction residential projects spanning 15 million sq.ft in Mumbai. It plans to add three-four projects by 2020, Sawhney said, adding growing distress in the sector due to the ongoing liquidity crisis has opened up huge opportunities for joint developments and partnerships.

This story was first published on Livemint

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.