Puravankara Projects Ltd, a Bangalore-based real estate developer, is set to acquire 200 acres of land in Bangalore, Mysore, Chennai and Kochi at a cost of Rs 2-3 crore per acre for its affordable housing project. The company has indicated that it has signed a memorandum of understanding for the land bank and has issued some advances for the same.
Ravi Ramu, director, Puravankara Projects confirmed that they are in negotiations with land owners and some progress has been made to acquire them. Puravankara Projects is executing this affordable housing project through a wholly-owned subsidiary — Provident Housing and Infrastructure Limited — and has envisaged an investment of Rs 8,000 crore over a period of five years. Company officials maintained that they are not going slow on this project.
The company already has 70 acres of land and it is looking at a total land bank of 550 acres in all for this project which will see the rollout of close to 65,000 homes sized between 750-1,000 sq feet. The houses will be priced between Rs 12 lakh and Rs 20 lakh.
Puravankara is set to roll out its initial two projects within the next three months which will see the construction of 6,000 houses in Bangalore and Chennai. A further 3,500 houses are expected to be launched during the latter half of 2009. The company, which for the last quarter reported a 70 per cent drop in net profit, has said that its net debt of Rs 757 crore is manageable and the company is leveraged 0.56 times.
The company is looking at raising private equity investment for the project, while the rest of the investment will be raised through internal accruals, debt and sales advances. Ravi Ramu confirmed that they have a ready credit line but declined to spell out the specifics.
Puravankara in a recent statement said they have repaid all loan installments as per the requirements of individual loan agreements and there has not been any loan repayment defaults.