BANGALORE: Jerry Rao promoted Value and Budget Housing Corporation (VBHC), which is known for its affordable homes, is foraying into mid income housing category with a new project in Bangalore.
Rao, who had founded technology firm MphasisBSE -1.81 % in his earlier stint, had set up VBHC in 2009 with PS Jayakumar, his former associate at Citibank, to focus on homes under Rs 35 lakh. The company will now build homes in the Rs 40 lakh to Rs 50 lakh price segment.
"We are looking to generate around 20% of our revenue from mid-income and 80% from affordable homes annually compared 100% from the latter now. However our core business will remain affordable homes," says Rahul Sabharwal, chief operating officer of VBHC.
The first mid income housing project for the company will come up in the Whitefield area of Bangalore through an equal joint venture with a Mumbai headquartered real estate company Axis Spaces. The proposed project spread over 2.06 acre with have a total of 224 units.
"The specification is very different in mid income homes. The apartments are 20% bigger as compared to 650-750 sq ft, 2-bhk apartments offered in our affordable homes," says Sabharwal.
Vlue and Budget Housing Corporation, launched its maiden affordable project in 2010 near Attibele on the outskirts of Bangalore. The company so far has eight affordable projects totaling to around 3,600 apartments in major cities such as Bangalore, Chennai, Mumbai and the National Capital Region. Of the total apartments it has already delivered 1,400 units and the remaining are expected to be handed over in the next one and a half years.
Affordable housing has not really taken off in India due to increasing raw material costs, especially those of cement and steel. However, some of the big builders that have made a difference in this segment include Puravankara ProjectsBSE -2.81 %, Tata Housing Development Co, and Ramesh Ramanathan's Janaadhar Constructions (India), a firm dedicated to building budget homes.