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Provident Sunworth a case study of affordable luxury

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: In a housing market where affordable luxury is a suspicious segment due to over promise and under delivery, Provident Sunworth promises to be a case study for both homebuyers and developers in the segment.  

Provident Sunworth, Provident Housing, Puravankara Projects, Best affordable housing, Affordable housing case study, Investment in affordable housing, Best affordable housing in Bengaluru, India real estate news, Indian realty news, real estate news India, Indian property market news, Investment in property, Investment in Bengaluru, Track2RealtyAs an outside view Provident Sunworth is no different than any other housing project dotted in and around the stretch along Mysore Road. There are very many projects across the budget range in this part of the world.

A look inside the project nevertheless suggests the developer has gone into too much detailing and research into this project. It seems there has been a conscious effort to minimize the demand & supply mismatch that most of the housing projects are weathering today.

As I enter inside the under-construction project with less than 6000 apartments spread over 60 acres to be built in four phases, the first visual impression is that the project is a premium or luxury housing. The sports theme-based landscaping, elevated walkways and greenery beneath does not give the impression that the ticket size in this project starts with INR 55 lakh only.

And it is here that the real estate critic in me could not resist appreciating the project. Even with a moderately priced product, Provident Sunworth is definitely not a housing project meant only for roof over the head; something that has been the bane of most of the affordable housing projects.

I am conscious of the emerging market realities in this part of the world where today’s homebuyer, howsoever constrained with budget, has certain aspirations when it comes to buying a house. One would wait for a year or two to make sure one ends up buying an aspirational house. 

The reason is quite simple: the fact that most of the middle class Indians buy a house only once in their lifetime, they know it could hurt them in few years time if the house could not match their aspirations. The emergence of affordable luxury as the fastest selling housing segment is a result of this change in taste and aspirations of the middle class homebuyers.

Provident Sunworth seems to have this research and realization in its very DNA. The project has the potential to be a case study in how an affordable luxury housing should be conceptualized.

The sports theme has been centered around the kids, even though the project could not be called a child centric project. I feel the marketing strategy of the developer should have realised the advantages of positioning the project as a child centric housing project. Provident Sunworth has a number of sports amenities like cricket, tennis, swimming, hockey, kabaddi, boxing, archery etc. There are also cultural activities that have been planned as an integral part of the project.

With a land parcel of 60 acres and given FSI of 2.25, the developer has actually done well to make sure that the project does not come across as a high-density project. Its Master Plan comprises of 62 Wings arranged in the shape of a crescent or half-moon.

On a visit to the project site, I am being told that in the given space of ‘affordable luxury’ the focus has been as much on the ‘luxury’ side as the ‘affordable’ side. To meet that challenging job the developer has reduced the size of the apartment, instead of cutting corners on other specifications of the apartment.

What makes this affordable luxury property an attractive proposition is also the fact that it is not a project that is on the periphery of the city, meant only for the retired homebuyers. As a matter of fact, the project has easy access to various job catchment areas within 10-15 kms of its radius. IT employment hubs in close vicinity to the project are Global Village Tech Park and Electronic City (30-40 minutes drive).

The project also has an added advantage of having proximity to key manufacturing hubs like Bidadi, Toyota Kirloskar Motors and Coca Cola plant. The other catchment areas are Bannerghatta Road and Tumkur Road.

The region is already well connected through local bus terminals and metro rail. As a matter of fact, the latest metro line extension will terminate at Kengeri (Challaegatta) which is at close proximity to Provident Sunworth, making the nearest metro station at 10-15 minutes drive from the project.

With Provident Sunworth located 3.5 kms from the NICE Expressway, it has a distinct locational advantage of signal free connectivity to Hosur Road and Tumkur Road. Furthermore, the project is located on Mysore Road and hence addresses the major concern of water scarcity in Bangalore as it falls under phase 3 of the Cauvery water supply project.

The developer has also been smart to not throw an inventory of around 6,000 apartments in one go and then sit over the piles of unsold inventory. The project is split into four phases and that marketing strategy seems to have resulted in a decent launch to sales ratio. First phase is almost sold and sales velocity of the second phase is also quite satisfactory. The third and fourth phase has yet not been launched.

Ever since Mysore Road Metro got operational there has been lower inventory overhang in this catchment area. Provident Sunworth has the first mover advantage in this market and today this market is dotted with a number of affordable housing projects. Despite this, new launches have fared well in this region and as per a conservative estimate the market has an average absorption rate of 42 per cent in the first year post launch.

In terms of social infrastructure and amenities, there are educational institutions, hospitals, eateries and entertainment park around its periphery. Film city, water park and other entertainment hubs are within the travelling distance from this project.

Track2Realty assigns this project with ‘A Rating’ and recommends it to be seen as a case study of affordable luxury. The project has just completed the phase-I and it is yet a work in progress, but if the overall execution goes the way it has been conceptualized, the project would definitely be a case study for other developers looking to foray, or have already failed to deliver, an affordable luxury project.

By: Ravi Sinha

How affordable housing could be a brand statement

Posted on by Track2Realty
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Bottom Line: In the midst of the global housing crisis, however, the prospect of homeownership has gradually slipped further and further away for many low-income families in India, and elsewhere.

Rahul Nahar XRBIA Developers, Affordable housing in Navi Mumbai, Mass housing in Mumbai, Compact housing in Mumbai, Affordable housing case study, How XRBIA could do affordable housing, Real estate news India, India real estate news, Indian property market, Track2Realty, Track2Media ResearchAs our cities fill up with unoccupied luxury houses, our slums too are expanding as people are priced out of the housing market. A quick overview of the statistics reveals the scale of the challenge we face. 10 million of us are choosing to move to cities every year.

There is currently a shortage of 20 million homes. By 2030, 590 million Indians will live in cities, necessitating a further $2.1 trillion of capital investment in infrastructure. The challenge to house the future population is urban in scope and unprecedented in scale.

Unparalleled urbanisation, increased life expectancy and changing living patterns have all contributed to the current shortage of 20 million homes that are needed across India (BBC, 2015). Fortunately, India is not alone in facing this shortage, with housing challenges being replicated across the globe.

If nothing is done to avert this crisis, it is estimated that 889 million of us worldwide will live in slums by 2020 (United Nations, 2003).  While some countries’ strategies have failed to make a dent in the dearth of affordable homes, others have risen to the challenge and could provide valuable lessons for our own efforts.

Considering India, the government’s mission to achieve “Housing for All by 2022” was welcomed across the country following its launch in 2015. The slogan marked a significant shift in the government’s approach to housing policy; finally, those in power started acknowledging that the country is in the midst of an acute housing shortage which could no longer be ignored.

So far, the government has focused on the demand side of the issue. Demonetisation, RERA and GST have all been introduced to increase transparency and accountability in the sector, and reassure homeowners that they can trust real estate developers. At the same time, PMAY- which provides a credit linked subsidy of INR 2.43 lacs to homebuyers purchasing residences below 60 sq. meters. – has significantly reduced the costs of buying a house and expanded the possibilities of homeownership to a greater number of individuals and families.

However, reality has failed to live up to the rhetoric; Under the Pradhan Mantri Awas Yojana (PMAY) that was launched on June 25, 2015, for example, only 19,255 houses were built across all states in the first year. If the government is serious about its commitment to increasing supply of affordable homes, it needs to match rhetoric with resources. The scale of the task at hand is immense, however, and will require radical rethinking of housing policy if this rhetoric is to become a reality.

Living on a low-income in contemporary India means dealing with times pressures, stress and isolation on a daily basis. Taking away a major cause of concern, housing, can alleviate a significant portion of this burden, and can provide families with a secure foundation from which they can build their lives.

For vulnerable people who have never had a place to call home, experience of owing their home which they could afford to buy for the first time can be life-changing. The importance of having a permanent place to call home at the end of each day cannot be underestimated.

What does all this mean for the supply of affordable housing? While larger developers have traditionally focused on the luxury sector of the market, demonetisation has already compelled the big players to look towards providing more affordable housing units catering to end users.

Indeed, recognizing the potential in the affordable housing market, Real estate developers are gradually entering this market space. As supply gradually increases, there is possibility of developers will increasingly compete on buyer’s growing preferences for flexible housing finance and integrated infrastructure.

A developer will only be succeeded in meeting critical housing shortage along with government’s innovative policies if it prevents housing prices from spiralling out of control, and encouraging social cohesion. They must develop a distinct business model in many respect to meet the affordable housing need. Focusing on two core aspects would lead them to establish as a leader in the affordable housing.

First one is they need to focus on the fact that we have a very large segment of the population at the bottom of the pyramid which has no access to housing finances in the form of buying their first home.

A very significant segment not really catered to for various reasons and we think that as time goes it is going to be very important for the industry to be able to address this segment.  One way in which they should be considered as through various finance schemes by developers. Major stumbling-block to them while applying for home finances is lack of proper documents with which bank could land a housing finance.

Developers with financial assistance and strategies to these informal sectors will boost the home ownership among this category thereby allowing them to purchase their apartments and along with it, allows residents to use their social security payments to pay deposits and monthly instalments.

The second goes back to the very core of how we look at the affordable housing business, which is about sustainable urbanisation. Developers must commit on expanding access to homeownership of the buyers and need to understand India’s need for smarter, efficient and sustainable cities which offer a higher quality of life to its people.

Affordable housing developers need to embark on a journey that lays the benchmark for quality and modern urban development in the country. High-quality housing improves resident health, educational attainment and employment prospects. Expenditure on public housing is not a drain on public resources, but an investment that can yield significant returns.

Evidence also suggests that affordable housing can boost the local economy by leaving residents with more disposable income to spend. Therefore, developers should long campaign for increasing collaboration between the public and private sector.

The technology driven developers in all they do from construction & operations, enabling customers to measure, manage and pay for services that they use will sustain in the affordable housing market. Green spaces, community facilities and high-quality security systems are all integral aspects of every affordable housing development.

Developers need to match the global trend of increasing affordability by designing homes that are smart utilization of space and offering standard social infrastructure. the aim should not be to build only mass houses but cities that are environmentally friendly, technologically advanced, committed to education, dedicated to health, and that foster community spirit.

By: Rahul Nahar

CMD, XRBIA Developers