Builder plans to invest Rs 3,000 cr in the affordable housing space
Provident Housing Ltd, a wholly-owned subsidiary of Bangalore-based real estate developer, Puravankara Projects is planning to invest around Rs 3,000 crore by 2012 to set up four affordable housing projects in Karnataka and Tamil Nadu.
Of these four projects, one will come up on Mysore road in Bangalore by the end of this fiscal and another three projects will be launched in next financial year.
“We see huge growth opportunities in the affordable housing space and have received an encouraging response for our ongoing projects in Bangalore,” Jackbastian Nazareth, chief operating officer, Puravankara Projects, said.
The company, presently, is executing an affordable housing project ‘Provident Welworth City’ on the Doddaballapur Road in North Bangalore in the price range of Rs 15 lakh to Rs 20 lakh per apartment.
“We will launch another project on Mysore road area with an approximate investment of Rs 1,000 crore shortly,” he said.
Referring to fund tie-ups, he said the company would not raise any money to fund these projects as fund flow from new bookings would be sufficient to take care of the operating cost.
The real estate company is also looking at setting up new projects in Tier-II and Tier-III cities under its affordable housing arm.
“We are looking at setting up new projects in 33 cities in next five years. As most of the projects are developed under joint development model, we can pass on the benefit of cost advantage to our customers,” he added.
Provident has been established as a subsidiary of the Puravankara Group to tap the rising housing need of the country and works under the business principle of high volume and low margin rule.
The company is also looking at increasing the share of provident housing in its overall residential portfolio in the near future.
“We aim to increase the contribution of ‘Provident’ to 50 per cent to the overall revenue of the company in the future,” he said.
He, also, said that the rising sales figure would reflect in the balancesheet of the company during next two quarters, propping the revenue and net profit figure.
Puravankara Projects posted a 41.36 per cent drop in its net profit at Rs 35.69 crore during the second quarter of this fiscal. Revenue of the company, also, posted a 32 per cent dip at Rs 154.24 crore against Rs 226.39 crore reported in the same period last year.
The company’s operating profit had also dropped by 56 per cent to Rs 38.89 crore.
By the end of September 2010, the company has 20.25 million square feet under construction in Bangalore, Chennai, Kochi and Kolkata.
