Real estate developer Nirmal Lifestyle is planning to develop 20 townships across India.
The company has marked an investment of $5 billion for the first phase, which includes five townships under the brand name of Lifestyle City, a company release said. Spread over 300-1,000 acre, the phase I townships will come up one each in Pune, Indore and Panvel, and two in Mumbai.
The company is looking at generating $10 billion from these five projects in the next 10 years.
Nirmal Lifestyle chairman and managing director Dharmesh Jain told that the houses in these projects would be priced between Rs 20 lakh and Rs 1 crore. He declared, “Houses in Mumbai cost much more than the price we have put to our projects. So we hope to successfully tap this market”. Nirmal Lifestyle, which has built over 50 lakh square feet of residential and commercial space, is one of the top real estate players in the Mumbai market.
It is known for developing Mulund, a central suburb of Mumbai, into a real estate hub. The company also operates the Nirmal Lifestyle shopping mall.
Each township will have a sports centre modeled on international standards, an IT SEZ, hotels and malls. Jain expects the projects to be completed in seven to nine years.
He said, “The construction of two townships will begin towards the end of this fiscal and for the others in early 2009″. He further added that private equity investment for one of the projects has been received and more is expected once construction begins. Nirmal Lifestyle is also looking at launching an IPO in the next 12-18 months.
Thanks to the steep rise in the cost of housing, the middle segment is seeing a boom, with many PE players eyeing mid-tier projects priced between Rs 35 lakh and Rs 70 lakh and premium projects with price tags of Rs 65 lakh to Rs 1 crore.
Sashi Makapatti, a senior investment officer at Rutley Capital Partners, the investment arm of global property consultant Knight Frank, said that the company was investing $300 million in mid-segment housing projects in tier II cities. He pointed out, “The demand is enormous in these regions. We are looking at Hyderabad, Indore and suburban Mumbai”.
According to Anuj Puri, country head and chairman of Jones Lang LaSalle Meghraj, investors are now realizing the potential of mid-segment projects. He added, “Projects in areas where land prices are Rs 2,000-3,000 per square feet are not feasible. This is why such projects are likely to succeed in suburbs, where land rates are low”.
Nirmal Lifestyle will invest $5billion in Phase I, which includes five townships under the brand name of Lifestyle City.
Spread over 300-1,000 acre, will be one each in Pune, Indore and Panvel, and two in Mumbai.
Houses in these townships, complete with sports centres, malls, IT SEZs and hotels, will be priced between Rs 20 lakh and Rs 1 crore.