Nirmal Lifestyle, a prominent player in real estate development, is embarking on an ambitious project to create 20 townships throughout India. The company has allocated a substantial budget of $5 billion for the initial phase, which will encompass five townships branded as Lifestyle City, according to an official announcement. These townships will span areas ranging from 300 to 1,000 acres, with one each set to rise in Pune, Indore, and Panvel, alongside two located in Mumbai.
The developer aims to generate an impressive $10 billion from these five initiatives over the next decade. Dharmesh Jain, chairman and managing director of Nirmal Lifestyle, revealed that housing prices in these projects will be between Rs 20 lakh and Rs 1 crore. He articulated a keen observation: "Houses in Mumbai cost much more than the price we have set for our projects. Therefore, we are hopeful to effectively penetrate this market."
With a record of constructing over 50 lakh square feet of both residential and commercial spaces, Nirmal Lifestyle has established itself as one of the leading real estate entities in Mumbai's landscape. The firm is noted for transforming Mulund, a central suburb of Mumbai, into a thriving real estate hub. Additionally, it oversees the functioning of the Nirmal Lifestyle shopping mall.
Each township is designed to include an international-standard sports center, along with an IT SEZ, hotels, and shopping malls. Jain anticipates that these projects will reach completion within a span of seven to nine years. He specified, "The construction of two townships will commence by the end of this fiscal year, while work on the remaining projects will begin in early 2009."
Private equity investment has already been secured for one of the projects, with expectations of further investment once construction kicks off. Moreover, Nirmal Lifestyle is exploring the opportunity to launch an IPO in the coming 12 to 18 months.
The considerable increase in housing costs has led to a booming middle segment market, attracting numerous private equity players who are eyeing mid-tier projects priced between Rs 35 lakh and Rs 70 lakh, as well as premium projects with prices from Rs 65 lakh to Rs 1 crore. Sashi Makapatti, a senior investment officer at Rutley Capital Partners, associated with Knight Frank, disclosed that the firm is contributing $300 million toward mid-segment housing in tier II cities, emphasizing, "The demand is enormous in these regions. We are focusing on Hyderabad, Indore, and suburban Mumbai."
Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj, remarked that investors have started to recognize the potential of mid-segment projects. He elaborated, "Projects located in areas where land costs range from Rs 2,000 to Rs 3,000 per square foot are not viable. This indicates that such projects are likely to flourish in suburbs, where land rates are more accessible."