Diversified group Shapoorji Pallonji has forayed into the affrodable housing segment by launching a separate vertical under the brand ‘Joyville’, which will build low-cost residential units across the country.
The company has joined hands with Standard Chartered Private Equity, International Finance Corporation (IFC) an arm of the World Bank and the Asian Development Bank (ADB) for investing in the segment.
The partnership will invest about $250 million, which will be used primarily for buying land, to meet project approval and initial infrastructure expenses.
“We have been present in the luxury segment as well as creating middle income group housing stock.
“But with the government focusing on creating affordable housing, we think this is the right time to get into the market in a big way,” Jai Mavani, Executive Director, Shapoorji Pallonji told reporters here today.
Besides, the company is likely to raise up to $500 million through debt.
Standard Chartered Private Equity, IFC and the Asian Development Bank will together hold 70 per cent stake in the joint venture, while the rest will be with Shapoorji Pallonji Group, Mavani said.
The company has around 9 million square feet of land available and will acquire another 20 million square feet in the next one-and-a-half years, Joyville Shapoorji Business Head Venkatesh Gopalkrishnan told PTI.
To start with, the company will launch its first project in Howrah, Kolkata on Friday. In March, it will launch its second project on the outskirts of Mumbai in Virar.
“Our intent is to first enter major metros. After Kolkata and Mumbai Metropolitan Region, we will launch a project in Pune followed by Chennai, Noida and Bengaluru.
“In the next phase of development, we are looking at tier-II cities like Durgapur, Ahmedabad, Nagpur, Coimbatore among others,” Gopalkrishnan said.
In the first phase, the company plans to create 20,000 affordable residential housing units in 6-7 years, which will be priced between Rs 20-30 lakh for 2-3 BHK apartments, depending on the locations, he said.
The real estate division of the company is engaged in the development of luxury and middle income housing. “We are eyeing nearly 50 per cent of revenue from the affordable housing segment in the next 4-5 years,” Gopalkrishnan added.