The Essel Group‘s announcement to build two lakh homes in the country by 2022 has led to a huge excitement in the real estate sector. The Subhash Chandra-led Group has an impressive track record of successes across the spectrum and that’s precisely the reason why its real estate foray is being viewed with great deal of enthusiasm. The cash rich Group has a well thought-out strategy in place and there is every reason to believe that its latest initiative will provide a massive push to the Government’s ambitious ‘Housing for All’ proramme.
The man with the Midas’ touch is here! Subhash Chandra, Chairman of the diversified business conglomerate Essel Group, has now turned his eyes towards the real estate development and promised to “bring about a revolution” in the sector. One only needs to be a hardcore cynic to doubt his claims considering the track record of the visionary businessman. The $6-billion Essel Group which Chandra set up has seen shining success across diverse fields it is present in, be it entertainment, packaging, infrastructure & integrated utilities, education, precious metals, media or the technology. With the Essel now announcing an affordable housing foray, it may well be the turn of the real estate sector to see achhe din!
At a high-profile event in the national Capital on November 9, the Essel Group announced ASHA 2022, its real estate foray with a target to build two lakh homes across the country by 2022. The initiative, the Group claimed, was in line with the Government’s vision of ‘Housing for All by 2022.’ It has plans to develop 10,000 homes next year entailing an investment of ~800 crore.
Strictly speaking, the development can’t really be dubbed as a fresh foray as Essel Group already has presence in the real estate sector through Suncity Projects (P) Ltd. But going by the roadmap it unveiled at the Delhi event and the financial strategy it shared with the media persons, one can say without doubt that Essel Group is certainly the newest serious player in the real estate development scenario.
Elaborating on the Group plans, Subhash Chandra said the first project will be launched next month in Panchkula, Haryana, at about Rs 1 ,500 per sq ft. The starting price of a flat will be Rs 1.5 lakh. Besides, the company plans to develop affordable homes in Hisar, Bahadurgarh and Rohtak in the first phase.
“We are entering into the 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 two lakh homes by 2022,” Chandra told reporters. The affordable homes would be launched under the brand name ASHA (affordable shelter housing for all) 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. Chandra said, the group will ramp up the construction capacity every year and meet its target of two lakh flats by 2022 with focus on fast construction less margins and timely deliver; 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-three weeks,” Chandra said without disclosing details. The Group would develop these projects through dedicated special purpose vehicles (SPVs) for each state. For Haryana, the group has shortlisted a partner and it is looking for entrepreneurs for other states like Uttar Pradesh.
Asked about the land bank, Chandra said the Group would undertake outright purchase of land and also form joint ventures with land owners to develop the housing projects. Chandra said it is the best time to enter the affordable housing with real estate sector facing demand slowdown.
The founder-Chairman concluded by saying, “Essel Group has always worked towards providing access to basic services for the betterment of society. With the launch of ASHA 2022, we are committed to provide two lakh homes to support PM’s vision of ‘Housing for All’. Our endeavour is to bring about a revolution in real estate development”.
Speaking at the same event, Suresh Bhandari, President, ASHA 2022, said “With ASHA 2022, consumers will get to witness a whole new dimension of the real estate industry. 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”.
According to the data available, currently, Urban India has an estimated 19 million families either living in low income neighborhoods on rent and this housing deficit is likely to rise to 38 million by 2030.
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