Unitech Looks to Invest Rs 600 cr into Affordable Housing

Unitech Ltd, India’s second largest real estate developer, is looking at investing Rs 600 crore to develop and launch affordable houses under its Uni Homes brands across seven cities in the country. The developer would launch these homes in the price range of Rs 10-30 lakh in Noida, Greater Noida, Chennai, Kolkata, Rewari, Bhopal and Mohali. The total area in the phase one of the launch would be about 4.5 million square feet with about 5,000 flats. The company would fund the development with a combination of debt and internal accruals.
The developer had earlier said it would launch 30 million sq ft of development of commercial and residential properties in the current fiscal, which included 20 million sq ft of residential projects. By August it has been able to launch 17 million sq ft of projects, mostly in the affordable housing segment and has already sold 6,000 flats. However, analysts covering the company believe that Unitech’s margins would go further go down with its concentration in the lower-margin affordable housing segment. “We expect the profit margin to reduce going forward as affordable and mid housing are low-margin segments compared to commercial, retail and luxury housing segments,” K R Choksey analysts said in a note to clients.
The company plans to launch 40 projects, and would develop 35 million sq ft properties in the next two years. The company may require Rs 6,000 crore over the next two years for funding the expansion, and would use the cash generated from two qualified institutional placements (QIP) of shares, asset sale and internal accruals. The developer has already raised about Rs 4,410 crore through QIPs. It is also looking to raise Rs 500 crore by selling about 20-25 hotel land parcels as its hospitality expansion plans have been deferred due to low demand. The realtor currently has debt of around Rs 7,000 crore, which is expected to go down to Rs 4,000 crore by the fiscal end.
Ref:http://www.indianrealtynews.com/real-estate-india/unitech-looks-to-invest-rs-600-cr-into-affordable-housing.html