Mahindra Lifespace Developers Enters Into Affordable Housing Segment

Mahindra Lifespace developers, a wholly owned subsidiary of the USD 16.5 billion Mahindra group, have announced to enter into affordable housing segment. This project is named as “Happinest” with offerings of 1BHK and 2BHK flats. The targeted customers of this project will be families having monthly income in the range of Rs 20000- Rs 40000. Initially the company will launch the project in two cities that are Mumbai and Chennai. These homes will cost less than 20 lakh.

The low cost housing business will bring in low margins but of high volumes. The highest cost would be that of the land and speedy approvals from the government authorities will also be a concern. To ensure speedy execution and to keep the costs low Mahindra Lifespace has collaborated with IIT Madras.

According to the company, currently 19 million people live in slums or on rent and this is likely to increase to 38 million by 2030. This will lead to a housing deficit. Furthermore, during the last decade, 20.3 million people have migrated from the rural areas to the urban area and this number is expected to increase further. One of the major reasons for this shift is employment. The total number of migrants that migrated to city because of employment stands at 14.4 million (Census of India).

Currently there is a deficit of 20 million units in the cities and with increasing prices within the city’s urban areas such as South Mumbai (Rate: above Rs 50000/ sq.ft) purchasing a house has become very expensive. But, suburb areas like Boisar (Rate: between Rs 3500-5000/ sq.ft) near Mumbai have become a centre for affordable housing where purchasing a house is less expensive. Companies like Tata housing, Value and Budget housing Corporation (VBHC), HDIL etc. are already into this affordable housing segment.

The growth drivers for Mahindra Lifespace Developers’ foray into affordable housing will be an added increase in rates of areas in the city. There are very few notable players like Tata housing; Mahindra Lifespace, S Raheja which will be able to provide branded housing for the low income group as there is a paucity of land within the city limits. Furthermore, with the new government coming into power various infrastructural changes are expected which will improve connectivity from the cities to these locations and facilitate commute.

Anand Mahindra, Chairman, Mahindra Group said, “Our commitment to sustainable urbanisation is to be in business and develop projects that promote culture, connectedness and community. “Happinest” epitomizes the concept of shared value where companies seek to do business in a manner which combines profitability with advancing the economic and social conditions of the communities which they operate in. I welcome this foray into the affordable housing space which is critical to India’s growing urbanisation”. 

“Happinest stands for our intent to enable a cross section of Indians to fulfil their dreams of home ownership in a safe, secure and healthy environment. Enduring and thoughtful design, swift execution using technology and enabling access to home ownership through financial inclusion will be both the enablers and the pillars of success,” Said Anita Arjundas, MD & CEO, Mahindra Lifespace Developers.