Infrastructure development and financing group IL&FS will partner with Jaithirth Rao’s VBHC Value Homes to develop affordable housing projects across various states, according to a top official.
IL&FS announced its entry into the affordable housing segment in April this year. “In the first phase, we are developing affordable homes in land parcels that are in our possession or very credible parties like value & budget housing, etc,” said Hari Sankaran, vice-chairman and managing director for IL&FS. The company will look at a joint development model for these projects.
For IL&FS group, Sankaran added renewable energy and affordable housing will be the two main focus areas going forward. As part of its housing entry, the group plans to look at states like Gujarat, Andhra Pradesh, Rajasthan, Tamil Nadu and Karnataka. “These are the early markets for joint development projects where we see that the affordable housing business model is working," he added.
An email query sent to VBHC on Monday did not elicit any response. VBHC Value Homes was incorporated in July 2008, with Jaithirth Rao also known as Jerry Rao as one of the founders.
“Urban India today houses 377 million people, constituting 32 per cent of the country’s population, with an annual addition of 8 million as per Census 2011. This is further estimated to increase to 40 per cent with a population of close to 600 million living in the urban centres by 2030,” according to JLL report in March 2018.
Sankaran added the group will limit its real estate focus to affordable housing and not expand to commercial and other property developments at present. The JLL report added affordable housing reflected a growth of 27 per cent between January and September 2017 year-on-year compared to an overall residential housing contraction of 33 per cent. Part of its affordable housing entry, IL&FS, overall looks to develop one million homes in the next five years time.