Affordable housing sector now lures big PE firms and HFCs. Government’s push with lucrative incentives, advanced infrastructure and prompt approvals is turning this segment a major investment zone for Indian realty market. So far, this segment has been witnessing investment coming from small-scale investors. But now for meeting the deadline of 2022, government has geared up to attract biggies to generate major inflow in this segment.
Many major PE companies are now reaching this segment, for instance- Kotak Realty Fund which used to venture for MIG housing estates, now stretched its steps towards affordable housing segment. Kotak thinks, they can earn actually a lot more against minimum investment. This segment has swift turnover to fulfill the cost of construction to the builders as well. Similarly, major construction companies have seen investing in low-budget flats in Kolkata in order to rotating a quick inflow.
‘’Low-budget flats have been receiving inflows from small-pockets of the country so far, thus these developers collect the resource from cheaper source of funds. Thanks to the latest infrastructural development the market is witnessing some of major contributions,” – said WB RERA expert Mr. Mahesh Somani.
As per the latest statistics, there is a shortage of 1.87 crore affordable homes, which is 95% of the scheduled housing program. Since, there is an increasing market demand; more developers should put their effort for this development to derive quicker money. Still some of the biggest market players think, when the inventories would achieve higher demand and higher selling volume, and then it would be correct time pour investment on this very segment. On the other hand, some find it really flexible on the stage of financing. In that case early-stage development would be the proper choice of investment. Based on location, price might differ, but again it reduces the risk of investment as well.
Experts, think that PE companies should set out new strategies while investing in low-budget projects. Normally PE investment comes on ‘last-in-first basis’ which they should alter for affordable housing segment. PE firms can take intermittent exits at early stage where small-ticket investment will keep the project going.
_LNN (Liyans News network)