Ansal Properties to hold hotel plan

New Delhi: Real estate developer Ansal Properties and Infrastructure said that it expects to sell 10,000 dwelling units in the affordable housing segment this year, but has put on hold plans to build 30 hotels.

The affordable dwelling units are being sold in two categories – Rs 2.5 lakh for 200-sq ft unit and Rs 9.50 lakh for 850-sq ft unit. This means that the average cost for the buyer works out to between Rs 1,120 and Rs 1,250 for every sq ft as compared to Rs 1,700 to Rs 2,000 a sq ft for mid-income housing. The construction cost for the company for these projects is expected to be between Rs 500 and Rs 550 a sq ft.

Ansal Properties which derives nearly 70 per cent of revenue from mid-segment housing has already launched the affordable housing projects in UP and Rajasthan and has sold 2,000 units. It is targeting a sale of 10,000 such units this year.

“These projects are coming up in Lucknow, Meerut, Agra, Jaipur, Jodhpur and Ajmer and also in Bhilwara as part of our townships,” said Mr Pranav Ansal, Vice-Chairman and Managing Director of Ansal Properties and Infrastructure Ltd.

“There is a strong demand for affordable housing projects, as banks have announced attractive rates for loans up to Rs 5 lakh and up to Rs 20 lakh. Beside this, we are also talking to the States and urging them to bring down the stamp duty for affordable housing projects,” Mr Ansal said.

Now, the stamp duty in UP is pegged at 8 per cent and in Rajasthan it is 8.5 per cent.

The total cost of these projects would be close to Rs 400 crore spread over the next two years. This includes investment for land.

Mr Ansal said the company’s investment requirement for the ongoing projects would be Rs 1,500 crore in the next two years, and claimed that a significant proportion of this would be supported via internal accruals. “Our debt requirement will be only Rs 100-200 crore,” he said.

The company is planning an engineering industrial SEZ in Murthal (near Sonepath); and two IT SEZs in Greater Noida and Gurgaon.

While HDFC has come in as equity partner (33 per cent) for the Greater Noida project, IL&FS has committed a 49 per cent equity holding for the Gurgaon project, Mr Ansal said.

The company had initially planned a follow-on public offer for 2008 but ruled it out after the markets plummeted.

The lacklustre demand in the hospitality business also seems to have taken a toll on the company’s elaborate plans to come up with 30 hotels.

“The hospitality plans are on hold. We are not pursuing it aggressively. For all the 30 hotels that we had planned, we already have land. But due to the slowdown in the market, we are not looking at developing them. We may evaluate our plans in one years’ time,” he said, adding that bulk of these hotels were in the three-star and four-star categories.