The Hindu Business Line : DLF Home may bet on aggressive pricing

Chennai, Oct. 12 DLF Home Developers, which has started its prelaunch advertisement campaign in Chennai for its residential projects, has evoked interest in the market because of the aggressive pricing that it is contemplating.

According to market sources, DLF Homes’ apartments in the township project off Old Mahabalipuram Road (OMR), near Sholinganallur, are likely to be priced Rs 2,600-2,800 a sq ft, which would be the project’s unique selling proposition. This would have impact on projects and pricing on OMR where other developers have pegged prices at Rs 3,500 and above.

DLF is expected to formally announce the prices in November, the Diwali season. The pricing is of particular interest because of the market implications. The DLF Group, the largest player in real estate development, is entering the market at 20-25 per cent cheaper than the pricing announced by other players. DLF will construct over 2,000 apartments spread over high-rise towers, row-type houses and villas in the 40-acre township. It is also planning a second township project of over 150 acres, which is to come up later. The number of apartments planned is a significant chunk, nearly half that planned in the immediate future by a number of developers.

Some the leading names in the residential segment are putting up residential projects on OMR, considered one of the attractive locations in the city. Market leaders including Hiranandani, Puravankara, Mantri, Lancor and a whole host of other local players are setting up residential projects on OMR.

Estimates indicate that over 4,000 apartments are under various stages of implementation. Overall, there are between 15,000 and 20,000 apartments in the pipeline.

Market sources say developers are finding off take of apartment units slow. While prices have not dropped, the developers are offering various incentives and schemes that effectively offset prices by up to 10 per cent. These take the form of the developer bearing the interest cost of the housing loan during the construction period. Under the circumstance a market leader coming in with a major project at markedly lower price levels would have an impact.

Apart from the company’s own marketing, DLF has also entered into arrangements with leading marketing agents with access to the domestic and international markets. There is keen initial interest for the project, say sources.

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