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Lemon Tree Hotels, a popular chain of hotels, plans to make an entry in the affordable housing sector. The company is planning a new entity by the name of Lemon Tree Residences to focus on developing a million square feet of residential accommodation in Delhi-NCR, particularly Gurgaon.

The promoters propose to offload up to 70 to 74 percent equity in the real estate venture to private equity players. Lemon Tree Hotels has Warburg Pincus, Kotak Realty Fund, and Shinesi Bank as its investors. Warburg has invested Rs 210 Crore while Kotak Realty Fund and Shinsei Bank have jointly invested $30 million in the hotel chain. Warburg Pincus invested Rs 70 Crore separately in the company’s budget hotel chain Red Fox hotels.

The company has identified a few possible sites in Gurgaon, where they would be exploring to invest Rs 100-130 Crore for acquiring land developing apartments priced at Rs 30-80 lakh. The company desires to price its products less that the prevailing rates so as to cater to the affordable segment and thereby make an entry into the crowded market.

The total project cost is expected to be around Rs 250-300 Crore for building 1,000 apartments and the project is expected to be launched next year. The project will offer two, three and four bedroom apartments.

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