From: The Wall Street Journal India

Source: http://online.wsj.com/article/SB124218338028313861.html?mod=googlenews_w

Tatas’ nano housing plan takes off in style

Tata Group has sold around 3,500 application forms for its low-cost housing project, Shubh Griha near Mumbai, in the first two days of booking, three-and-a-half times the number of apartments the company is planning to build under the project, a company executive said.

The pricing of the project has taken many by surprise. Its Shubh Griha website has received 15 lakh hits in four days since announcement of the project. This includes 6.7 lakh hits from the US and 3.3 lakh hits from India, as per the executive.

From: Time.com (Nandini Lakshman, Mumbai)

Source: http://www.time.com/time/world/article/0,8599,1896894,00.html

India’s giant Tata conglomerate, whose subsidiary Tata Motors just successfully launched the $2,000 Nano, the world’s cheapest car, is ready for an encore: ultra-cheap homes.

Tata Housing Development, the real estate arm of the giant Tata group, is poised to start building apartment-style homes priced from $7,800 to $13,400 in a township being planned at Bhoisar, an industrial suburb located 31 miles (50 km) north of Mumbai. Like the Nano, which was designed to bring some middle-class comforts to the masses, the homes are geared for the hundreds of millions of Indians making less than $5,000 a year who are unable to afford decent dwellings. “We have realized that there is an opportunity at the bottom of the pyramid,” says Brotin Banerjee, CEO of Tata Housing Development. The homes will be built in three sizes, all extremely cramped by Western standards: 283 sq. ft. (one room, including kitchen plus a bathroom), 360 sq. ft. (ditto), and a 465-sq.-ft. model with a tiny bedroom. In addition to the modest proportions, Tata is relying on economies of scale and careful sourcing of materials to keep costs low. The Mumbai project, for instance, will get its steel from group company Tata Steel, which has plant at nearby Tarapore. Land-acquisition costs will be minimized by giving the original landowner a percentage of each project’s returns. The homes will occupy cement buildings no more than two stories high, because construction costs go up as buildings get taller. There will be eight to 12 homes per building.

Bargain-basement housing is a departure for Tata, which previously has developed luxury apartments costing upwards of $220,000, along with office complexes and shopping malls. The property company is planning to build 4,000 of the low-cost homes across India over the next four years. Projects near Bangalore in the south and Gurgaon in the north are the next destinations.

Tata officials say they expect demand to be strong, even though India’s once-booming real estate market has been deflated by a slowing economy and the global credit crunch. India has a shortage of 24.7 million dwellings in its major cities, according to a recent joint study by McKinsey and the Federation of Indian Chambers of Commerce. Housing shortfalls are exacerbated by migrant workers streaming into many cities who are forced to live in slums made up of shanties lacking basic amenities like sanitation and running water. Roughly 70% of India’s 1.2 billion people live on less than $1 a day.

With the high end of the property market in a downturn, other developers such as Unitech, Puravankara and Ansals are now eyeing low-income housing. ICICI Ventures, the venture funding arm for India’s largest private bank, has a project underway in Pune. The apartments, which come in 450 sq. ft. and 800 sq. ft. versions, are priced at $22,000 and $38,000.

Buyers are already flocking to the Tata construction site at Bhoisar. Overwhelmed by the response, the company is beefing up security to handle the rush. Customers can book flats by paying an initial installment of $200; successful applicants will be chosen by lottery. The Bhoisar township, the first phase of which will have 1,244 apartments, is expected to open for occupancy in two years.

From: Telegraph.co.uk (Barney Henderson in Mumbai)

Source: http://www.telegraph.co.uk/news/worldnews/asia/india/5291477/Tata-builds-the-Nano-home.html

First it launched the Tata Nano – the world’s cheapest car. Now, the company that owns Jaguar Land Rover and Corus Steel is giving India the world’s cheapest home.

Dubbed “Nano homes” by the Indian media, Tata’s housing project will sell one-room, 283 sq ft flats, less than half the size of a squash court, for 390,000 rupees (£5,200) on the outskirts of Mumbai – a city where property prices compete with those in London or New York.

A more expensive option, for 670,000 rupees (£9,000) is 465 sq ft and has a living room and separate bedroom.

The cheaper property costs just 1,378 rupees, or £18.50, per square foot, thought to be the cheapest urban real estate in the world. Like the £1,300 Tata Nano car, the homes are aimed at Indian families who could not normally afford to get onto the property ladder.

Millions of slum-dwellers are expected to jump at the chance to own a home in a proper building.

“This is a huge opportunity to serve those at the bottom of the pyramid,” Brotin Banerjee, CEO of Tata Housing, said. “Our inspiration is the millions of Indians who cannot afford proper housing and live in shanties.”

Tata Housing expects a turnover of 1,000,000,000 rupees, £13.4 million, in the first phase.

“Parents don’t want their children to grow up in unhygienic shanties. It is the dream of anyone in the world to own their own house and that is what we are offering – brand new homes in clean, hygienic, well-built buildings,” Mr Banerjee continued.

The first complex of 1,000 homes is under construction in a town called Boisar, 60 miles from Mumbai.

It will include a hospital, school, playground and gardens.

By the end of 2009, Tata Housing plans similar projects in Delhi and Bangalore. The group may eventually expand the model to Europe or the US.