Tier II and III cities will be engines of growth in the next 2 years: Sundaram Home Finance

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Sundaram Home Finance has identified Tier II and Tier III cities as growth engines over the next few years and has drawn up plans to recruit 200 people in the southern market, said the company’s Managing Director, D Lakshminarayanan. The company was optimistic about the long-term prospects for the real estate sector, he said.

“The housing market will continue to hold up and grow this year, marked by strong underlying end-user demand and growth in small towns. pandemic,” he told PTI. .

According to him, the company headquartered in the city has seen a monthly increase in disbursements over the past six months, comparable to the figures recorded during the pre-pandemic period.

The residential market picked up momentum after the second wave and buyers again explored several options.

There is renewed confidence among buyers and the general buoyancy of the market is reflected in the number of new projects, he said.

When asked, he said the Covid-19 pandemic has changed the way we live, work and learn.

General health, hygiene and well-being concerns during Covid-19 have shifted the focus significantly to spacious homes away from densely populated cities, he said.

“Surprising more on the wave of sustainability and potential investment, vacation homes and secondary housing segments have become a sought-after option for buyers,” he said.

Lakshminarayan said society has witnessed a “paradigm” shift in the real estate sector towards Tier 2 and Tier 3 cities.

“With the Indian economy continuing its growth trajectory, despite the pandemic, the long-term story of the real estate sector remains intact. Due to the consideration of prices, demand and congestion in the metros, real estate developers also started moving towards these small towns,” he said.

“We expect Tier II and Tier III cities to see significant growth. Nearly 70% of our disbursements in the first nine months of this fiscal year were made from these locations,” it said. he declares.

“The contribution of Tier II and III cities to activity was just over 50% in the past. Tier II and Tier III cities are expected to grow faster in the future and this provides us with opportunities for growth,” he said.

On another question, he said affordable housing was mainstream and would likely be one of the fastest growing segments.

“We have a strong presence in this segment and hope to exploit opportunities in this space.”

Regarding recruitment plans, he said there was a lot of “significant potential” for growth in the southern market and the plan was to penetrate more into Tier II and III cities over the next few years.

“We expect these markets to be growth engines for us over the next few years. In line with this growth strategy, we plan to add approximately 200 front-line employees to serve the smaller sites,” a- he declared.

On the fundraising plan, he said he is on track and the company’s plan is to raise about Rs 3,500 crore in FY22. “In the first half, we had raised about Rs 1,600 crore and we are in the process of locking in the balance in the second half partly through NHB lines and market borrowings,” he said.

Lakshminarayanan said that one of the main lessons learned during the pandemic was that there were several tactical changes that were made, to continue running the business, such as preparing for the unexpected, digital changes, retraining, technology adoption and working from home.

“The most important lesson, however, was the renewed commitment to resilience…we collectively discovered our strengths and how we can work together and collaborate,” he said.

Lakshminarayanan was optimistic about the long-term prospects for the real estate sector.

“We are optimistic about the long-term prospects for the real estate sector. The government’s vision of housing for all and affordable housing projects will ensure that there are enough opportunities in the segments we are in for Sundaram Home Finance develops in the long term,” he said.

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