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Corporates with deep pockets from sectors like automobiles, telecom and financial services are diversifying into residential real estate sector to piggyback on the demand for housing.
Even as cost of funding remains a challenge for most other real estate players, several new entrants are using internal accruals or HNI investments to step up their real estate ambitions.
Land purchase Interestingly, most developments in the space are either through outright land purchase or even joint development, giving new entrants a hedge on their investments.
Birla Financial Services, a part of Yash Birla group, is the latest entrant into the real estate venture. Telecom major Bharti is also readying up its residential foray with projects at Surajkund in Haryana.
Earlier this month automobile major Hero Corporate Services announced its real estate venture Hero Realty.
Other players like Adani and Thapar Group are also slowly expanding their real estate business. Manoj Singh, MD, Birla Homes, said, “We are looking to capitalise on our brand name. Besides having in-house expertise in multi-disciplinary sectors like legal and financial, also gave us strength to foray into the residential real estate. Customers, on their part, also have confidence when it comes to investing in trusted brand names.”
He said the company is looking to invest over ₹100 crore in the housing project in Bengaluru. Birla Homes is currently focusing only on the residential sectors. Similarly, Hero Realty will invest ₹1,000 crore on developing a housing project in Mohali on 18.5 acres, which the Hero Group firm had won through an auction.
Hero Realty CEO Yogesh Verma said that the company had bid for the land for ₹181 crore, and the site is ready for construction.
The company is also targeting the mid-segment residential housing sector, and plan to construct in excess of 1,250 apartments of different sizes and types.
Meanwhile, Bharti Realty, the real estate arm of Bharti Enterprises manages about two million sq. ft. of Grade-A commercial space.
A company official confirmed that the company has entered the residential segment and is looking to develop premium land parcel in Surajkund.
It is being conceptualised as India’s first vertical smart community with a combination of quality construction and technology solutions.
It also recently appointed S K Sayal as Managing Director & CEO.
Delay across regions Industry players also note that residential real estate works favourably with good brand names as investors do not want to be plagued with delays and litigations regarding land and ownerships among others.
According to PropEquity Research, the Delhi-NCR region has an average delay of 33 months, while in Mumbai it is about 25 months, 22 in Chennai, and 20 in Bengaluru.
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