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Lessons from initial projects help Mahindra redraw affordable housing business plan

Rashmi Pratap Mumbai | Updated on January 17, 2019 Published on January 17, 2019

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Mahindra Lifespaces has tweaked its affordable housing strategy to ensure that its upcoming projects are on main transportation networks and not in far flung suburbs. The company has also created a separate team for Happinest, its affordable housing business, to provide focus to the category that is the fastest growing segment in the residential market.

The company currently has projects in Boisar and Palghar around Mumbai, and Avadi in Chennai. “We have learnt from these projects that being on the main transport line helps. Second, we have got feedback on what amenities are valued and what are not and that will help us to streamline our offering,” Arvind Subramanian, who took over as Happinest CEO last year, told BusinessLine.

End user orientation

Happinest will launch an 8 lakh sq ft development in Kalyan, suburban Mumbai, in a few months.

“There is a pipeline of future projects in Mumbai and Pune. Our model will be suburbs of these cities as opposed to futuristic locations such as Palghar and Boisar,” he said.

“For the next set of projects, we want to move closer so that we can get end-users to stay on the properties and it has to be on main transportation networks. In Pune, it will have to be well connected with bus service,” Subramanian added.

The company has a joint venture with HDFC, which has committed ₹500 crore to the affordable housing platform with a matching contribution from Mahindra.

Separate business

“We have a strong pipeline of projects. We are in negotiation for joint development as well as outright purchase of land. We will be pursuing multi-fold growth year-on-year,” he said.

“We have been cautious in growth. It (affordable housing) was part of a business that had three verticals — industrial clusters, premium housing and affordable housing.

The intent now with separating it and creating a different team is to give it the focus it deserves.” he said.

“The thought behind affordable housing has so far been sparse. The dialogue still retains flavour around investment. To us, affordable housing is about changing life prospects. The multipliers around getting into a good homes are enormous – both economic and social. It provides access to much better education, schools and hygiene. The whole category has to reposition itself around meeting these needs,” he added.

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Published on January 17, 2019
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