The Tata group, which recently launched the low-cost car, Nano, has entered the low-cost housing segment to target industrial workers and other low-wage earners.
Tata Housing Development Company, a unit of Tata Sons, will open from Saturday the sale of application forms for over 1,000 houses under the brand “Shubh Griha”, priced between Rs 3.9 lakh and Rs 6.7 lakh, in Boisar, a distant suburb of Mumbai. It would launch around 4,000 such houses in other cities in four years, said Tata Housing Managing Director and Chief Executive Officer Brotin Banerjee.
The Mumbai project is expected to be completed in the next two years and buyers will be barred from selling the house for six to nine months after the purchase.
The company would also launch two to three such projects in Bangalore and the National Capital Region (NCR) in the current fiscal, Banerjee said.
“We believe there is a huge opportunity in this segment as our study has shown that around 48 per cent people in the lower segment are currently staying in a rented accommodation and there is a lot of migrant population in industrial belts in cities,” he added.
The Mumbai apartments will be available in three categories — 283 sq ft, 360 sq ft and 465 sq ft. The company has brought in State Bank of India for sale of applications. The buyers need to book the flats within 20 days of the launch. The initial booking amount is Rs 10,000. Based on a lottery, as done in the Nano’s case, the company will declare a first list and a waiting list within 15 days of the final booking.
Tata Housing is expecting a revenue of Rs 100 crore from the Boisar project. It will do a joint development with the land owner, with the latter getting a certain percentage of revenues. It will also follow the joint development model and outright purchase in other planned projects and is talking with state governments across the country in this regard, according to Banerjee.
The Tata move closely follows those of other developers such as Unitech, Omaxe, Raheja and Ansal, who are also planning low-cost projects in suburbs of satellite towns or smaller cities to target the bottom segment and generate more cash.
Unitech plans to launch residential projects in the Rs 5-10 lakh range in metros like Chennai and Kolkata and suburban cities like Gurgaon over the next few months. Omaxe has already launched a sub-Rs 4-10 lakh project at Peetampur and the Dewas industrial area near Indore to target industrial workers. It had sold half the project, a company spokesperson said.
According to a research report released by the Tata housing arm, the country faces shortage of 24.7 million dwelling units, of which more than 70 per cent fall in middle and low income groups.