Realty firm Godrej Properties may look at launching affordable housing projects in the price range of Rs 5-15 lakh per unit by the next financial year.
The first such project could be launched in Mumbai or its suburbs, said Pirojsha Godrej, executive director of the company on the sidelines of a press conference on the proposed initial public offering (IPO) of the company.
“We have started initial studies on the model. However, volumes are important in such projects,” he said.
In the backdrop of a marked slowdown in the real estate sector over the last one year, major real estate developers have been experimenting with low-cost housing projects to set off the slowdown.
Godrej Properties is hoping to raise about Rs 500 crore through the IPO to fund projects and repay a part of debt. The IPO will hit the capital market on December 9.
Godrej said in future the company would continue with its “joint development model”, which entails entering into a development agreement with the owners of the land parcels to be developed. Under this, the land owner is paid an advance amount at the time of executing the development agreement.
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As on October 2009, the company had land reserves of 391.04 acres, or approximately 82.74 million square feet of developable areas, and 50.21 million square feet of saleable area in areas like Mumbai, Pune and Bengaluru and Ahmedabad.
The company would use 40 per cent of the money raised through the IPO for acquiring land (through joint venture development) and 34 per cent for debt repayment, among other things.