Mahindra Lifespaces Developers (MLDL), the housing and real estate arm of the $ 7.5 billion (Rs 30,566 crore) Mahindra Group, is planning to enter the business of building low-cost houses for the middle-income group. Low-cost houses have become a fad among young people, as they are available at an affordable cost of Rs 25-30 lakh.
The company has tied up with BE Billimoria and Co (BEBL), which specialises in construction technology, to bring down construction costs in the long run.
This means, in a horizon of five years, MLDL might be building flats or apartments targeted at the middle-income group. Though the group's current focus is firmly on luxury and premium properties, the company is keenly watching these lower segments. "We are currently studying the opportunity, and we believe that is where the growth will come from," Pawan Malhotra, MD and CEO, MLDL told Hindustan Times .
The tie-up with BEBL would be expanded to future projects and at the same time, MLDL would be open to other similar tie-ups in construction technology that would enable them to bring their costs down. "While most sectors in India have constantly upgraded their technological capabilities, real estate firms have lagged behind. We feel that is where the costs can be brought down by at least three to seven per cent," Malhotra added.
The present plan though, would be to focus on premium housing for the company, which not long ago, was a focussed construction company – GESCO. The company, where Mahindras' involvement began with a stake to stave off a hostile takeover bid by the AH Dalmia Group in 2001, was later bought over by the Mahindras. It later merged with Mahindra Realty, and was renamed MLDL in October 2007.
Since then, the group's principal activity has shifted its focus to developing residential and commercial real estate, with a special focus on housing. The company has announced on Monday that it is going to develop 25 acres of land at the Multimodal Internal Hub Airport of Nagpur (MIHAN), at a total investment of close to Rs 500 crore.
The company's two Special Economic Zones (SEZ) in Chennai and Jaipur are well on its way, said Malhotra. 400 acres out of the 2500 acres in the Jaipur SEZ has already been contracted out, while the 1400-acre Chennai SEZ has already commenced operations, he added.