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| Developers look abroad for better know-how |
| Raghavendra Kamath / Mumbai Apr 16, 2010, 00:11 IST |
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Indian property developers such as Unitech, Puravankara and Ansal, among others, are looking at emerging countries such as Mexico, China and Brazil for low-cost housing solutions.
This is a sequel to their plans to penetrate deeper into the lower end of the affordable segment, especially in the price range of Rs 5 lakh to Rs 12 lakh, where developers from China, Brazil and Mexico have an edge.
Recently, Bangalore-based Puravankara Projects (PPL) said it had formed a joint venture with the Indian arm of Mexico’s Desarrolladora Homex, called Homex India, to build entry-level affordable housing projects, in the range of Rs 5-12 lakh. Unitech, the country’s second largest developer, is in talks with developers in China, Brazil and Mexico to adapt their know-how to build affordable housing projects faster.
Developers such as DLF, Unitech, PPL and Lodha had launched projects earlier in mid-income housing, in the Rs 15-50 lakh category, to buck the slowdown in the property sector. Companies such as Puravankara, Unitech, Ansal and Tata Housing went a step ahead and launched sub-Rs 10 lakh housing projects.
“Companies in Mexico and Brazil have experience in building low cost homes faster. That comes in handy for Indian companies in rolling out such projects here,’’ says Anshuman Magazine, chairman and managing director of CB Richard Ellis, South Asia, an international property consultant.
With the know-how to roll out affordable housing projects faster, developers can save 10-25 per cent time and build more projects.
“Homex builds 1,00,000 homes every year and has the ability to deliver a ground or ground plus one (G+1) structure within 8 to 10 days. They have strong systems, processes and technology in place to achieve that,” says Ashish Purvavankara, director of PPL. With the Homex-Puravankara JV, the company plans to build its first such project in Chennai and then build others.
Homex defines the role of each skilled and semi-skilled labourer on each day of the construction to achieve maximum efficiencies. Processes like this are attracting Indian realtors towards them.
Unitech’s top management, including its chief, Sanjay Chandra, have already met Chinese and Mexican developers in this regard. “Various technologies are available across the world to reduce construction time. With that, we can increase the capacity by 25 per cent,’’ says R Nagaraju, head of corporate planning at Unitech. The developer is also in the process of implementing SAP and other systems techniques at project sites.
Unitech is testing one such model on an experimental basis in Gurgaon. Nagaraju says the company is looking at completing its projects in 12 to 18 months, instead of 24 months.
Apart from know-how, developers can also reap monetary benefits. CBRE’s Magazine believes that overseas partners of Indian developers might also co-invest in the projects and give more confidence to investors.
However, there are many Indian developers who believe in local technologies and solutions than looking abroad for these.
“We do not have to import any specific technology for affordable or low-cost housing. With standardised designs and efficiency, we can definitely achieve economies of scale,” says Lalit Kumar Jain, chairman and managing director of Kumar Urban Development Ltd.
Adds Rakesh Kaul, chief operating officer, Ansal: “Though we are talking to a few overseas developers, we ideally believe in using conventional technologies, processes and designs and adapting these locally, depending on a region.”
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