Units in sub-Rs 5 lakh price range.
Bangalore, April 8
Janaadhar Constructions, promoted by Mr Ramesh Ramanathan, has launched Janaadhar Shubha, an affordable housing project targeted at first-time home owners among urban low-income groups.
The project has housing units in the sub-Rs 5 lakh price range, targeting the households with a monthly income of Rs 15,000. The typical customers would include shop floor workers, security guards, auto-rickshaw drivers, nurses and petty-shop owners.
Mr Ramesh Ramanathan, Chairman and Director, Janaadhar Constructions, said that the company, a for-profit organisation, “wants to service those whose needs are currently not met, because this segment is priced out.”
The promoters say that EMI (equated monthly instalment) for buyers would be anywhere between Rs 3,000 and Rs 5,000, “which is about Rs 1,000 more than the rentals they would be paying,” said Mr Ramanathan.
Explaining that this is a market which has hitherto been serviced by state housing boards, he said that “just because we are going out to the lower end of the spectrum doesn't mean that it should be low on specifications and quality.”
The project, located on a 12-acre property on the Attibele-Anekal Road, would include amenities such as primary education centre, primary healthcare centre, retail and commercial spaces, children's play area, 24-hour water supply, power back-up and round-the-clock security.
The project would develop about 1,140 units, and under the first phase about 530 units would be developed. “Work has already started and we hope to deliver phase I by June 2011,” said Mr V. Naresh Narasimhan, Principal Architect, Venkatramanan Associates.
Explaining the target segment, Mr Ramani Sastri of Sterling Developers said that the market the company addresses is one where buyers find it difficult to get structured finances “because they do not have the necessary documents”. This is where a relationship with a micro-finance institution (MFI) which understands the need for financing and takes up the risk of paying for them is needed.
“This is one reason why developers have not entered this space in a big way, even when there is a huge market to cater to,” said Mr Sastri. According to him, the ability to enter this space and scale up operations rests in the ability to have a relationship with an MFI.
The company plans to launch a few more such projects this year. “We plan to acquire land for this across the country,” said Mr Ramanathan, adding that one more project would be located in Bangalore, while the rest would be in other cities. On the company's radar are other metros and tier-II cities.
The project has received funding support for land purchase from Michael and Susan Dell Foundation.