Developers spot chance to plug India’s affordable housing gap
By Amy Kazmin in Ahmedabad
“These are absolutely viable projects,” Nehal Shah, managing director of Ahmedabad-based developer Foliage. “There is very little chance of you sitting with inventory.”
Wed, Jan 23 2013. 12 38 AM IST
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“Nehal Shah, managing director of Foliage Real Estate Developers Pvt. Ltd, an Ahmedabad-based real estate developer, confirms that the local authorities do a good job. “When they announce a TP scheme in the area, I know that even though I will have to give up 40% of my area, the value of my remaining 60% land will go up. This has been happening since 10 years.”
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Foliage Developers is developing a pilot project of 1,000 houses in Ahmedabad
Wed, Jan 23 2013. 01 12 AM IST
A market solution to affordable housing; Growing ecosystem may mitigate perception that low-income housing is solely govt’s responsibility
Nehal Shah, the managing director of Ahmedabad-based Foliage Real Estate Developers Pvt. Ltd, was persuaded by Monitor in 2009 to switch from the family business of building high-end, city-center apartments to low-income projects on the city’s periphery.
His first low-income project, Navjivan Flats, located in the industrial area of Vatva, offered apartments in the range of `2.81 lakh to `7.25 lakh. The property attracted a variety of self-employed, informal workers, such as gardeners, lorry drivers, rickshaw owners and tailors as well as industrial workers.
Deepak Patel, a 32-year-old textile worker, who cycles 3-4 km to work in a nearby factory, is an illustrative example. He bought a flat for `3.8 lakh for himself and his mother, having migrated from his village to Ahmedabad several years ago. Happy with his home, he spread the word; 40 friends and family members have booked apartments in Navjivan Flats.
Shah was prepared to manage a vastly different customer base from those in his earlier projects. “You are dealing with people who don’t have a credit history, who are probably uneducated; who are needy. Dealing with these kinds of people needed a change in our perception,” he says.
Importantly, the business has also met his financial expectations. The first 464-unit Navjivan project “was smaller in turnover than the one I did in the city with 16 units”, he laughs, but adds that margins are good, and capital requirements are lower than for high-end projects. Shah has since launched three more low-income projects in Gujarat, and aims to remain in this space. It is a win-win situation for developers and customers alike, although not without challenges.