“Urbanrise Jubilee Residences” was honoured as the “Best Affordable Housing Project of the year 2018” by Tamil Nadu Real Estate Consultants Association (RECON) during the recently concluded annual conference. Affordable Housing took center-stage in this meet’s focus (held on Feb 4th, 2019) at the TAJ Coromandel. Urbanrise is a brand of the Alliance Group, a successful and leading real-estate developer in the Chennai market over the last 14 years.
Chennai has long been a flag bearer for the affordable housing market in India, registering a trend leading up to 2019 and beyond. These are homes that are priced below the usual Rs. 40 lacs ticket price for a home, whereas most of the current overhang inventory is for homes priced between Rs. 50 lac – Rs. 1.5 cr.
A great push for this segment of housing was brought on by the recent central government policy decisions that reflected in GST based incentives as well as the Pradhan Mantri Awas Yojana (PMAY) – a one-time upfront subsidy up to Rs. 2.67 lacs, and Bank Lending credits (for first time how buyers in designated Urban areas)
While Private Equity investors are betting high on the Affordable Housing market with over Rs. 576 Million investments on this segment in 2018 – which translates to a 15% YoY increase.
Of the 3 Panel discussions held, the first one on Affordable Housing is what held the most interest amongst the participants.
Speaking on the occasion, Mr. Manoj Namburu, CMD, Alliance Group articulated many of the evident aspects of this segment and also why they are bullish on this offering for the next few decades.
Mr. Namburu conveyed, “We have realised over the last few years that the supply-demand scenario on the regular housing (Rs. 50 Lac – Rs. 1.5 Cr.), has been skewed with a lot of inventory overhang, resulting in projects taking longer to market. It was also not solving the problem of housing, which catered to only the upper 1/3rd of the population pyramid. A majority of the citizens have resigned to either paying high rents for a large portion of their lives, or finding sub-par homes on the outskirts of the city.”
“We followed a Blue Ocean Strategy, which resulted in us coming us with a new brand Urbanrise to solely focus on this segment with specific objectives of furthering the cause of housing-for-all”, he remarked. We aim to bring 50,000 “Aspirational Homes” to the market in the next 3 years across high-density metros in South India.
When asked by the audience, how the company planned to sell 2000+ homes in each project whereas developers currently are facing difficulty offloading small numbers like 500, the following were the salient points highlighted by Mr. Manoj Namburu.
- There is a huge market today for “non-buyers”, those that are renting and trying to strike a balance between their homes and their work place.
- Imagine an individual spending Rs. 10,000/month as rent today. With the PMAY scheme, this individual can become a proud owner by paying the same as EMIs, thus investing in equity. This is an unbeatable option.
- All of Urbanrise projects are in growth-oriented neighbourhoods even though the cost of land acquisition is premium; the final product is closer to their workspaces thus making their work-life balance better.
- In the recent years, it has become a distant dream to acquire property in the vicinity of the rapidly expanding OMR stretch. Our first project launched 6 months ago is already sold out. We have many more coming up on this and similar locations.
- All of our locations ensure that the homebuyer will benefit from the appreciation of their buy.
- We have invested in state-of-the-art technologies like MIVAN to provide top quality homes, without the usual occurrences like leakages and cracks.
- Our amenities for Urbanrise homes, are on par with, or exceed the specifications of luxury builders.
- Usage of this technology also reduces the time to market for these developments.
- We have spent over 2 years to come up with the right formula for developing our unit specifications – ranging from Studio, 1BHK, 2 BHK, 3 BHK homes. This means right sized homes for the right prices.
- With homes that are functional in every way, our planning extends to square foot of the layout to be optimised for full use, resulting in breathing homes to suit individual needs.
- We practice strong financial discipline making each project self-sufficient and not risk with any other projects within the organisation.
- We curtail the marketing spend to 50% lesser than the traditional paradigm – and that translates to the savings to the final homebuyers.
Finally Mr. Namburu concluded that by creating a new market out of non-buyers, we expect to further the notion of “Housing is a Birth Right” in the new Indian generation. The democratisation of home buying ensures social equity; similar to the way it is practiced in countries like Singapore.