In the wake of low-cost airlines, budget hotels, and affordable gadgets, the focus has now shifted to branded low-cost housing solutions. Delhi-based real estate titan Omaxe has announced a robust plan to invest Rs 8,000 crore over the next five years specifically targeting affordable housing projects. To spearhead this initiative, the company has established a subsidiary known as National Affordable Housing and Infrastructure, which will be dedicated to constructing these affordable homes. Overall, Omaxe has set an ambitious goal to develop approximately 10 lakh low-cost housing units.
According to Mr. Rohtas Goel, CMD of Omaxe, “We are investing from the internal accruals. Going forward, we will also look at SPV level equity from India and abroad.” The company is also exploring the slum redevelopment model as a means to advance affordable housing. Proposals for this initiative have already been submitted to the state governments of Delhi, Madhya Pradesh, Punjab, and Rajasthan. To kick-start this slum rehabilitation model, Omaxe has allocated Rs 200 crore. This strategy not only assists in addressing social needs but also aids in acquiring land at a cost-effective rate, thus making the development of affordable housing a viable option.
For its upcoming affordable housing ventures, Omaxe has already secured land in Neemrana, Ghaziabad, and Lucknow. Mr. Goel further elaborated, “The land for the affordable housing projects will cost us around Rs 100-200 per square foot depending on the city, while the cost of construction will be Rs 700 per square foot. The units will be sold at Rs 1000 to 1100 per square foot.” The first project in Neemrana is slated for launch in three months, with an estimated completion timeframe of 2-3 years.
The company aims to build low-cost houses on land previously occupied by slums. However, some analysts express skepticism regarding the feasibility of this model. Mr. Anuj Puri commented, “Slum rehab is very popular in Mumbai. Real estate developers are now eyeing a similar approach in other cities too as land is becoming scarce and expensive. But it’s tough to make profits if low-cost houses are constructed on the residual land since slum inhabitants need to be rehabilitated at no cost to them, which puts financial pressure on developers. The costs can only be offset through the construction of luxury apartments.”
In Mumbai, real estate players like HDIL and Akruti City have successfully executed slum redevelopment projects. Enhancing its innovative approach, Omaxe has also launched an international design competition aimed at fostering efficient and cost-effective structural designs, along with optimal space utilization. The company is collaborating with the London School of Architecture to further this vision.