Essel to build 2 lakh affordable homes in 7 years

The Essel Group has ventured into real estate development and plans to build 200,000 homes in the next seven years under a new initiative called Asha 2022, the company said on Monday.

In line with Prime Minister Narendra Modi's ambitious plan, Housing for All by 2022, Essel Group aims to sell homes at prices that are lower than prevailing market rates to enable more people to own homes.

The company will spend about Rs800 crore in the first leg of projects, primarily concentrated in northern India. The first project will be launched this year in Panchkula, Haryana, with homes priced at Rs15-25 lakh. The other three projects are being planned in Hisar, Bahadurgarh and Rohtak.

''Cost of land plays an important role in affordable housing projects, and we are going to buy land or enter into joint development with landowners in an opportunistic manner,'' said Suresh Bhandari, president, Asha 2022.

''Our project will focus on four broad pillars - speedy construction, standardisation of design, less margins and timely delivery of the project. Asha 2022 is our first project strategically designed to address the large and value driven home ownership market in India,'' Bhandari said.

Though the first few projects will be in north India, Essel eventually wants to spread out and develop projects in other cities too.

Real estate firms are struggling with a two-year downturn as speculators, spooked by high borrowing costs and project delays, stay away from the property market and genuine homebuyers find apartment prices unaffordable. That's prompting many developers to turn to affordable housing for the middle class.

In August, Mumbai-based Shapoorji Pallonji Group partnered with Standard Chartered Pvt Equity, International Finance Corporation (IFC) - the commercial lending arm of the World Bank - and the Asian Development Bank (ADB) to invest about $200 million and build 20,000 homes across the country.

Other large companies such as Tata Housing Development Co. Ltd and Mahindra Lifespace Developers Ltd are also present in the budget housing category.

''Essel Group has always worked towards providing access to basic services for the betterment of the society. With the launch of Asha 2022, we are committed to provide 2 lakh homes to support PM's vision of 'Housing for All'. Our endeavour is to bring about a revolution in real estate development,'' Essel Group chairman Subhash Chandra said in a statement.