IL&FS infra will build affordable housing starting with 3 new projects

By Realty Quarter Bureau

IL&FS Townships & Urban Assets will be forming joint ventures and participate in PPP partnership projects initiated by the government.

IL&FS Group infrastructure and financial services company is now foraying into affordable housing business with 3 projects in Hyderabad, Chennai & Ahmedabad. This would be done under the new separate subsidiary called IL&FS Townships and Urban Assets.  The main objective of entering into the affordable housing is to build affordable houses and provide homes at cost effective rates, upgrade the lifestyle. The projects going to build on the land it already poses and is suitable looking at the connectivity to the places, transportation, geo-physical aspects. Around 40 acres of land has been allocated for this initiative in three locations of GIFT in Gujarat, Hyderabad and Chennai.

The group is looking to use construction finance and funds infusion by private equity firms to support the venture apart from customer advances.

“Formalization of housing presents a huge opportunity for private players in India. We have put together a plan for affordable residences that addresses the need for housing by keeping in mind the limited ability of people to pay, individual aspirations for a better lifestyle and potential avenues for livelihood within the ecosystem,” Hari Sankaran, vice chairman & managing director, IL&FS, told.

IL&FS will be launching its first smart homes project in GIFT City, Gandhinagar, Gujarat, and the company is looking to build 1,000 such homes in the first phase of development by 2020, and thereafter rapidly scale the model across the country. According to Sankaran, the funding required would be largely in the nature of working capital for which the group has adequate access to lines of credit. The peak working capital requirement of any one of these projects is expected to be more than Rs 125crore and around Rs 60 to 70crore on an average.

“Private equity investors would find this opportunity attractive once the model has been established and proven,” he said.

According to various estimates, there’s a gap of around 18 million urban housing units in the low and mid-income category by 2022 across tier 1, 2 and 3 cities across the country.