The developer is planning to invest up to Rs 1,000 crore over the next two years to develop these projects, said a top company official.
MUMBAI: Realty developer Sunteck Realty, known for premium residential projects, is forming a new vertical to explore the option of value housing in the backdrop of government’s recent thrust on affordable housing.
The developer is planning to invest up to Rs 1,000 crore over the next two years to develop these projects, said a top company official. The new vertical will focus on developing projects that will qualify for tax benefits and other incentives offered under the Union Budget in locations including Thane, Kalyan and Navi Mumbai.
“We will continue to focus on premium housing in Mumbai. For projects under our new value housing division, we will be looking at tier II locations that are closer to Mumbai. Given the tax incentives and other benefits offered by the government, home buyers in this category will also get up to 10% benefit on pricing,” said Kamal Khetan, CMD, Sunteck Realty.
Last week, Finance Minister Arun Jaitley, while presenting the Budget, proposed infrastructure status for affordable homes along with several other measures for the real estate sector that will help the government step up its efforts to provide housing for all by 2022.
The move is expected to help developers of affordable housing get access to institutional financing at lower interest rates as well as tax exemptions that will help them manage margins better.
The measures are aimed at encouraging companies to build more affordable housing, thus boosting supply and keeping prices in check. Also, the proposal to offer tax incentives for affordable housing based on carpet area, and not built-up space, will help home buyers get access to better-sized homes.
In last year’s budget, the government announced allowing 100% deduction on profits for housing projects, building homes up to 300 sq ft in the four metro cities and 600 sq ft in other cities.
This year’s budget has clarified that the basis for this benefit will be carpet area and not built-up space. This will bring more projects, particularly in tier II locations such as Navi Mumbai and Thane near metropolitan regions, under this category.
For these projects to be developed under the joint development agreements; Sunteck Realty is already in advanced talks with three land owners and the deals are expected to be concluded over the next two quarters.
“We will take an asset-light approach towards this and focus on joint developments in addition to joint ventures for growth than outright land purchases. We will be hiring a specialized team for this business as this would need a different skill and mindset than our premium projects,” Khetan said.
The budget has also eased land owners’ tax burden on joint developments by extending the point of taxation on such agreements to project completion. This is likely to ease land prices for projects developed under such pacts and thereby housing prices.
Source : economictimes.
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