Buoyed by robust sales in mid-income housing, real estate giant DLF said on Monday it will invest Rs 15,000 crore (Rs 150 billion) over the next three years to develop various residential projects across the country in Rs 15-40 lakh (Rs 1.5 million-Rs 4 million) range.
DLF, country's biggest real estate developer, had last year announced its plan to enter into mid-income housing segment, realising the huge untapped demand in this category.
"We will be investing Rs 5,000 crore (Rs 50 billion) a year over the next three years on mid-income housing projects," DLF Home Developers Vice President A Harikesh told PTI.
"Mid-income homes will be our focus area and will witness significant growth in the coming quarters," he added.
DLF's investment plans for affordable housing coincides with announcement by public sector banks to boost the segment by cutting home-loan interest rates, putting caps of 9.25 per cent for Rs 500,000-20 lakhs (Rs 2 million) and 8.5 per cent for loans of up to Rs 500,000.
Harikesh said internal accruals, advances against sales and capital raised through private equity would take care of the planned investment.
DLF had raised Rs 1,675 crore (Rs 16.75 billion) as private equity in eight projects in November 2007.
DLF Home Developers, wholly-owned subsidiary of DLF, would construct about 40,000 housing units in the mid-income category, sizes of which would vary between 1,000 sq ft and 1,800 sq ft, he added.
The company has witnessed tremendous response for its mid-income housing projects and sold over 7,000 flats so far this year, despite slowdown in the housing demand for the last six months on account of high interest rate and capital value.
DLF has launched mid-income housing projects in Bangalore, Gurgaon, Hyderabad, Indore, Kochi, Kolkata and Pune.
The company would launch similar projects in Chandigarh, Jalandhar, Ambala, Goa and Lucknow within next six months.
DLF Homes plans to launch such projects in all 31 cities where the company has presence by 2009-10, Harikesh said.
"The price would vary from city to city but majority of the units would be in the price range of Rs 2,000-3,000 per sq ft," he said, adding that in metros, the apartment prices would be higher compared to smaller cities because of high land cost.
He noted that the demand for its affordable housing is largely coming from end-users.
As part of strategy, DLF is discouraging speculation in its properties by introducing a lock-in-period of one year for re-sale and selling only one flat per family.
DLF currently has a land bank of over 750 milion sqft of saleable area.
