Tier 2 cities are witnessing a growth like never before and the opportunity to tap the young Indians' dream of owning a luxurious yet affordable home is tremendous.
VNV Housing and Infrastructures Pvt Ltd is company owned and driven by youngsters. What started as a hobby to help out friends either buying residential units or building homes, has now developed into a full fledged business model. We have been in the South Indian market as contractors for quite sometime now and recently started a Pvt Ltd enterprise to expand our horizons.
VNV Housing and Infrastructures plan is to acquire lands fit for residential development in catchment areas of Tier 1 and Tier 2 cities in South India such as Chennai, Bangalore, Hyderabad. The development in most places has been concentrated in one direction towards a particular region. But there are several other untapped regions and areas where development of infrastructure by the government is on full swing. Acquiring lands in such areas is easy and cheap which will have a direct impact on our development cost and this will in turn make our residential projects easily available to the younger generation.The sales volumes will be higher, so will be our returns.
The general rule as far the construction development scenario is India is concerned, the returns of investment will be of minimum 45-50%. That is the profit after tax will be 45-50% on what has been invested into one project. And the investor also stands to gain categorically with us.
The opportunity for the investor will be that in addition to his foray into the Indian market, his returns in the period where land is procured, developed and the residential units sold, will not be comparable to any returns he makes elsewhere or in anyother business venture. And foreign investors are not required to pay any taxes on their earnings here in India.
This makes for a sensible business proposal because it offers more returns in lesser time. With just the profits earned, the investor can safely take back his capital and re-invest the profits made in another project and of course make more money. And the investment will not be made into one single project, but distributed over a couple of them, which means that the returns will start flowing in from day one. The concept of residential units selling starts from the day the project is announced and will be done within a very small timeframe due to the demand.
This development concept sells in the Indian market which is growing at an annual rate of 47%, for only one reason, the supply vs demand curve is dependent on the emerging class of youngsters whose dream once they land up with a job is to OWN a HOME.
With home loans being disbursed by nationalised banks and other NBFC's at very competitive rates and to everyone who has a decent salary, the demand is way ahead when compared to the supply.
To summarise things, the fact is the mindset of any typical Indian is to OWN a HOME. This matters a lot and is a factor considered in an Indian's resume socially. A own house matters to an Indian much more than what he eats, drives or breathes!!!
At this juncture, we have the demand for housing, the dream and the urge. Things are as simple as this.
The Residential Development segment is on the rise in developed Tier 1 Indian Cities like Chennai, Bangalore, Hyderabad, Vizag, Mumbai, and Delhi. Tier 2 cities are witnessing a growth like never before and the opportunity to tap the young Indians' dream of owning a luxurious yet affordable home is tremendous.