Mumbai

Land of insolvent companies may give affordable housing a boost

 

The vast unused industrial land available with the insolvent companies can considerably help meet the country’s low-cost housing targets provided the state governments agree, experts said. The government’s mission is “Housing for All” by 2022.

 

Development of affordable housing projects on such land will not only fetch higher valuation for lenders seeking to recover their loans, but also support the weaker sections of society by providing them with shelter. The only catch is the fact that an industrial land is not allowed to be developed for residential housing.

 

Liquidated companies LML, the motorcycle maker, and picture tube manufacturer Samtel Color have 140 acres of land in Kanpur and Ghaziabad, while real estate group Amrapali holds 25 acres in the National Capital Region. In the case of Amrapali, the Supreme Court has asked the developer to submit a plan to deliver apartments to all homebuyers.

 

“This would be a win-win situation for lenders, workers and economically weaker sections and the lower-income group segment of society,” said Anil Goel, founder of AAA InsolvencyProfessionals, who is the resolution professional-cum-liquidator for LML and Samtel. “The government will also meet its target of affordable housing. Even the workers can be offered a home partly against their claim of wages in these companies.” 

 

LML owns 70 acres in Panki Industrial Estate in Kanpur, while Samtel holds a similar area at Chhapraula, about 8 km from the industrial town of Ghaziabad.

 

“It all depends on land locations,” said Gagan Banga, chief executive officer of Indiabulls Housing Finance. “If the authorities allow low-cost housing in those lands, which are well-connected places with workplaces and good commutability, developers will surely show interest.”

 

The move, if permitted, will also satisfy lenders as they would get customers for such industrial land, which otherwise may be difficult to sell, being expensive for setting up a viable industry.

 

“If state governments allow such a move for giving shelter, it will increase marketability, fetching higher prices,” said Arvind Singh, founder of Elite Insolvency. “Such a move will bring liquidity for lenders, whose money is at stake. Also, it will have a positive social impact in terms of giving shelters to the homeless.”

 

Singh said such a move would provide operational ease for many struggling insolvency cases. According to Mamta Binani, a member of the All India Insolvency Professionals Association, there could be a big economic impact as it will help create or protect jobs. “Overall, this will also hasten resolution processes, which is evolving in every case,” she said.

 

The size of a low-cost housing unit typically ranges from 300-600 sqft, with people earning Rs 1.5 to 5 lakh a year opting for such residences. 
 

Written by The Realty Paper


No comments yet

Leave a Comment

Your email address will not be published. Required fields are marked*