Metro zooms, so does realty

With Bangalore Metro Rail up and running soon, property value is also looking up along the Reach 1 Metro corridor.

"The announcement of the Metro project itself attracted many investors for residential and commercial complexes on this stretch," says Bijay Agarwal, managing director, Sattva Group.

"We have four or five projects coming up along the stretch of the Metro Rail project. Metro provides better connectivity and is one of the reasons why we chose the area. We have a wholesale mall just 5km from the Old Madras Road station," he said.

"There was a jump of 10-15% in property value within 1-2km radius from the stations, when the Metro project was announced. Once the train starts, there would be an increase of up to 40%," he said.

From Old Madras Road to Byappanahalli, realty has zoomed up by the sqft -- from Rs 2,500-3,000 to Rs 6,000-7,000 per sqft now.

Besides, an increase in Floor Area Ratio from three to four has resulted in 15% appreciation in value, and more commercial activity is expected on this stretch.

TS Sateesh, managing director, Hoysala Projects, said the area around the stations would turn into a commercial zone.

Anshuman Magazine, chairman and managing director, CB Richard Ellis South Asia Pvt Ltd, said: "Only the first stretch of Bangalore Metro between Byappanahalli and MG Road is expected to open soon. The entire 18.10km East-West corridor from Byappanahalli to Mysore Road terminal will be fully operational only from 2013. At this juncture, the Metro cannot provide access to Whitefield (ITPL) or Outer Ring Road."

Realtors say property rentals will shoot up along Old Madras Road, CMH Road and 100 Feet Road, and these areas will witness increased commercial interest and investment. A number of real estate developers are concentrating on areas adjacent to Old Madras Road for key residential projects and retail malls. Demand for real estate will continue to be high and may result in an increase in rentals. Availability of large land tracks for development along the Metro line, though, is limited.

Developers say that in the next 5 to 10 years, Old Madras Road and the surrounding areas would turn into a major commercial and residential hub. It is one of the roads linking the Central Business District -- MG Road, Kasturba Road, Lavelle Road -- to East Bangalore. "Metro connectivity adds a perfect finishing touch and projects high growth here," says Magazine.

Honda starts work on 1,000-cr Kolar plant near Bangalore

In Honda, Karnataka has managed to get another big automotive giant to drop anchor in the state after Japanese car major Toyota, and Swedish bus manufacturer, Volvo.Honda Motorcycle & Scooter India (HSMI) a whollyowned subsidiary of Honda Motor Company, Japan, has begun work in setting up of its 3rd manufacturing facility in India, at Kolar (near Bangalore ), at an investment of Rs 1,000 crore. 

The facility, which is spread across 350,000 sq metres, will become operational in the first half of 2013 with an annual production capacity of 1.2 million units. Both scooters and motorcycles will be produced at this facility . HMSI's product line-up in India includes three automatic scooters, six motorcycles in the 110cc to 250 cc segment, and three superbikes in the 1000cc segment that are imported as completely built units. 

Once the new plant becomes operational HMSI's total annual production capacity will go up to 4 million units per annum, including 1.6 million units at its first plant at Manesar, Haryana, and 1.2 million units at its second plant in Tapukara (Rajasthan). Speaking at the foundation stone laying ceremony of the new plant, Keita Muramatsu , president & CEO, HSMI, said the increase in capacity by the addition of the new plant would prepare the company for further growth, cut down the waiting period of vehicles, and cater to rising demand in India's 11.32 million units two-wheeler market . At present three products -- Activa, Shine and Unicorn -- have an average waiting period of three months, which the company wants to bring down to 15 days to 30 days. 

"India is too big a market. We have two facilities in the north, but we needed a facility in the south and in particular Karnataka as it is one of the big southern markets for HSMI," said Muramatsu. The southern region is the largest for HMSI, accounting for 30% its total sales. Company officials said that a number of ancillary units will come up around its new plant, which will help them have a localization level of 80%. As of 2010, HMSI had a 13% market share in the Indian two-wheeler market, which it plans to increase to 14% (21 lakh units) by the end of December 2011. 

While HMSI enjoys a 40% market share in the scooter segment, it has only a 7% market share in the motorcycle segment. HMSI sold 16.56 lakh units in 2010-11 , a growth of 30% over the 12.7 lakh units of the previous fiscal. Scooter sales account for 54% of the total sales.

Aerospace SEZ attracts heavy traffic

A Rs 11,700-crore investment proposal from European Aerospace and Defence Systems (EADS) is among the many aerospace projects received and approved by the State Government for its aerospace SEZ in Bangalore.

The aerospace investment plans on the 250-acre SEZ at Devanahalli, north of the city, are around Rs 14,500 crore, according to Ms Manjula Geetha, Deputy Secretary, Infrastructure Development Department.

Defence PSU HAL plans to invest Rs 2,095 crore in an aero engines facility; BEML has earmarked 400 crore.

Private companies such as Dynamatic Technologies — with plans for Rs 466-crore investment — are also keen on expanding into the SEZ, she said at a seminar held to mark a century of civil aviation in the country.

The event was organised by Society of Indian Aerospace Technologists and Industries on Monday.

Karnataka Government is promoting the aviation and air infrastructure sector. A policy on minor airport development is in the offing to encourage local connectivity and rope-in private investors as airport developers.

About half a dozen minor airports in tourism hubs and tier-2 cities have been assigned for private development and land had been earmarked for these projects.

There is a huge growth in Karnataka, which is the preferred investment destination in this sector for components and MRO projects, she said. Karnataka accounts for 75 per cent of the country's aerospace business.

Equinox Realty Forays into ‘Non Captive’ Real Estate: Plans to Launch Residential Projects in Bangalore

Essar Group-promoted Equinox Realty — which until now developed only ‘captive’ residences, that is, those for group companies — will start building residences for the general market with the launch of a project in Bangalore early next year. The company already has 8 million square feet of residential projects for employees of group companies under various stages of development. The first project, Water’s Edge, will see an investment of over Rs 500 crore, with about 400 upscale residences across five 40-storey towers.

According to Cherag Ramakrishnan, chief executive officer, Equinox Realty, the project in Bangalore would be spread over 7.6 acres in Hebbal, for which land has already been acquired. “We are planning to launch the project in mid-January,” he said, adding that the soft launch, which is by invitation only, would happen soon.

Besides, the company is currently acquiring land in the Bangalore suburbs for future projects, “which would be in the Rs 50 lakh to Rs 1 crore price segment”, he said. “We are looking at mixed-use developments and want to have a good pipeline for the next six-seven years,” he added. Ramakrishnan pointed out that the group has committed Rs 4,000 crore as capital for its realty arm.

Equinox Realty also plans to launch its second residential project in Thane, near Mumbai, which will see development of 1 million sq. ft, a year later. The company is already developing a commercial project — Equinox Business Park off Bandra-Kurla Complex in Mumbai at an investment of about Rs 1,800 crore.

Cities such as Chennai, Hyderabad, Pune and Gurgaon are also on the company’s radar, “but we want to start delivering in Bangalore and Mumbai, before we enter these markets”, said Mr Ramakrishnan, indicating that it would be three to five years before the company launches projects in these cities. The company currently has 14.5 million sq. ft under various stages of development

As land prices stabilise in city, hospitality industry sees boom

The city real estate sector has witnessed a stabilisation of prices, and the hospitality industry is grabbing the opportunity to expand.

Areas like Sarjapura Road, Yeshwanthpur, Marathalli, Kanakapura and Whitefield are set to see the opening of new star hotels.

The boom is resulting in a number of hotels in different ranges launching their projects. 

"Any land bought for a hospitality project should be considered as an asset as usually there is a five-year window we place for such projects from the time it is conceived.

Land rates on the outskirts of the city had skyrocketed about six months ago

"Many groups had invested in various projects when the BIAL started operations. Some are now ready, others are cashing in on this period of boom. There was a time when it was difficult to find rooms in the city and even if you did find something, it was very expensive," said Irfan Razack, CMD, Prestige Group.Industry data shows that there is more supply, and that is good for the consumer. "There is enough and more choice, and the prices are quite affordable with more chains opening up," said Razack. "This means that the prices will remain affordable for the consumer."Nailing the targetExperts who have been in the business for over two decades believe that the market has become quite mature in the city over the years. "The supply and demand has stabilised, the market has become mature and each group today is focusing on appealing only to its target clusters," said Prem Joseph, director (sales and marketing) of Movenpick Hotels and Resorts, which recently opened in the city.Now trendingTrends show that earlier a techie working in Electronic City would live in the heart of the city but now, with the land rates stabilising, there are a lot of residential options around that area itself.For a hospitality group, the break-even period is between five years and eight years. "It is a long-term investment and many are showing faith in Bangalore," said Joseph.Also, land rates on the outskirts of the city, which had gone through the roof about six months ago, are now stabilising and this is appealing to real estate tycoons too.

"North West Bangalore is becoming the highlight now and will see a lot of growth over the next two to three years with the development of Metro, the launch of the World Trade Centre and Orion Mall.Bangalore has seen growth majorly due to the IT boom and hence it is quite true that hotels with close proximity to tech parks and the BIAL have seen a tremendous increase in demand," said Martin Wuethrich, general manager, Sheraton Bangalore Hotel (at Brigade Gateway). For now experts have given the hospitality industry the thumbs up. "The demands of customers are being met, people are only happy to cut down on the travel time and now even the mid-level hospitality groups are cashing in on this period of boom.There's a vast demand and Bangalore is living it up, by providing vast supply," said M Chandrashekhar, chief executive, Eco Pack real estate services.

Karnataka mulls 24X7 surveillance for Bangalore

Karnataka government is planning to bring the entire Bangalore city, which is on terrorists' radar, under a Rs 500 crore 24x7 surveillance system for effective monitoring and also to curb crime.
 

The government was thinking to install CCTV cameras and high resolution night cameras in all parts of the city in the backdrop of terror strikes in Mumbai and Delhi, state Home Minister R Ashoka told reporters.
 

The Centre has promised to fund the project by providing Rs 500 crore assistance, he said. The surveillance system, when becomes operational, will help police to keep a close watch on crime, traffic violations and other incidents and track criminals, he said. Similar system is also planned for other major cities in the state such as Mysore, Hubli and Belgaum, he said. The police have been directed to install CCTV cameras at busy locations like city markets, bus and railway stations, Ashoka said.
 

He said very soon CCTVs would be installed in the High Court premises as part of measures to scale up the security as per the advise of the Centre. Lower courts in the city would get the gadets in a phased manner.

Ashoka said the state police had furnished information to the Centre on the culprits responsible for the April 17, 2010 low intensity bomb blasts near the Chinnaswamy Cricket stadium, in which five persons were injured.
 

"Due to security reasons, the details shared with the Centre cannot be disclosed to the press", he said. Ashoka said high resolution cameras had been installed atop the Vidhana Sabha which will help police in maintaining a constant vigil over a three kilometre radius around the secretariat building including its annexe Vikas Soudha, high court and other places.

Government shelves five township projects

The state government has decided to drop the ambitious five integrated townships development project proposed to be set up at Bidadi, Sathanur, Solur, Nandagudi and Ramanagaram, adjacent to Bangalore Metropolitan and Bangalore Development Authority (BDA) area.

Briefing newsmen after a Cabinet meeting, Minister S Suresh Kumar informed that the proposal was shelved as the project failed to take-off even five years after its clearance.

The ambitious project was originally awarded to Delhi -based real estate giant DLF in 2007. Stating that ever since notification was issued to develop five towns as ‘integrated townships’ no development was allowed in the notified area, he said that all such barriers would be removed from now on.

He said that the notification to drop the project would be issued soon.

With the decision to shelve the project, the ban imposed on the development of private properties, including agricultural lands, in four towns around a 50 km radius of Bangalore will become fractious. “Soon, any development project to be placed before the Bangalore Metropolitan Region Development Authority would be approved by government,” he said.

Suresh Kumar said, “In future, those development projects which are placed before the Bangalore Metropolitan Region Development Authority adhering to all norms would be approved by the government.”

The minister, however, said the ban imposed on all developmental activities in and around Bidadi, where a pilot project was planned, would continue to be in force.

BDA’s biz plan beggars belief

A complex designed for increasing profitability of rehab centre land

The Bangalore Development Authority has drafted a blueprint to ‘develop’ the Beggars’ Colony by building a mega commercial-cum-residential complex on Central Relief Committee (CRC) land.

In an apparent bid to increase the profitability of the open government property, the BDA has appointed a third party consultant to draft a design for optimum utilisation of the land. The decision to build the complex at the Beggars Colony, Sunkadakatte, has been taken despite the matter related to the protection of land pending before the High Court. 

BDA officials state that the ‘development’ of the CRC land will be carried out based on the response it receives for the Expression of Interest (EOI) invited for the project. The project is likely to be taken up under a public-private partnership (PPP) model to ensure that expenditure on part of the government is minimal.

Speaking to Deccan Herald, BDA Commissioner Bharat Lal Meena said: “The current position is status quo with the State Government and ourselves being party to the litigation.”

As per the plan, the BDA will be pushing the Rehabilitation Centre established by the CRC to the rear end of the land, away from the main roads connecting the City with Magadi and Mysore, to make room for the complex.

Development plan

In a detailed sketch provided by the BDA on its website, www.bdabangalore.org, 111 acres and 30 guntas of the 149 acre and 30 guntas of CRC land will be utilised for the construction of an international standard convention centre, apart from the Dr Babu Jagjeevan Ram Bhavan.

The plan also provides for the construction of a residential complex adjoining the CRC Rehabilitation Centre with commercial properties peppered around the area. 

The convention centre along with the residential property and commercial space will take up 32 acres of the land, with another 79 acres to be converted into a park to add to the value of the property.

The Authority has also planned to set aside certain space for preserving the plantation area that forms part of the entire property of 318 acres.

The sketch also shows that the land belonging to the Health and Family Welfare Department will remain with them and another five acres of land to be given to the Bangalore Metro Rail Corporation Limited (BMRCL) for the Namma Metro construction will remain untouched.

“Any suggestions or comments from the public on the same may kindly be uploaded for taking corrective measures,” states the BDA website urging the public to send their feedback.

YESHWANTHPUR COMMERCIAL HUB WITH SOCIAL INFRASTRUCTURE

Yeshwanthpur is on the road to development.The region,once considered a distant suburb,is now in focus with bustling retail and residential activity along with infrastructure development projects.

Yeshwanthpur is surrounded by densely populated localities such as Rajajinagar,Malleswaram,Mathikere,Jalahalli,Mahalaxmi Layout,Nandhini Layout and Sadashivanagar.The city has expanded much beyond this former suburb today.However,there was a need for good hospitals,hotels,schools and retail outlets to cater to this populace,and today,Yeshwanthpur is emerging as a self-contained locality with all these amenities.

Infrastructure
A slew of development projects are coming up here giving the area much better access.An underpass below the Yeshwantpur flyover near the police station,fresh ramp,and wider road from Tumkur Road for smooth flow of traffic to Yeshwantpur are some.The Circle Maramma Temple junction is also getting a new underpass to connect to the underpass under progress at the Prof C N R Rao Circle.

The C N R Rao Road underpass will be a unique Yshaped underpass as it is an important junction.The cost of the project is estimated at Rs 30.14 crores and began in January 2011 by the Bruhat Bangalore Mahanagara Palike (BBMP).This Y-Shaped underpass will ensure traffic flow towards Yeshwanthpur-Malleswaram and Yeshwanthpur-Mekhri circle.

The Metro Rail towards Rajajinagar,as part of Reach III of the north-south corridor which will be 24.20 km long,will also bring in tremendous commercial development to the region.The Metro Rail work is progressing at a fast pace here.Reach III of the Metro Rail project begins from Majestic and continues upto Hesaraghatta cross.The route goes through Sampige Road,Srirampura,Kuvempu Road,Rajajinagar,Mahalakshmi Layout,and reaches Peenya and Nagasandra.

This part of the city has been facing connectivity issues of late and the Metro will open up the traffic congestion in a big way.With better connectivity,property prices are bound to go up,and so will the demand for retail and commercial spaces.While Reach III of the Metro Rail will run from Swastik to Yeshwanthpur,Reach IIIA will be from Yeshwanthpur to Peenya.

Realty prospects

"Yeshwanthpur is a fairly well-developed locality today,"says Tufan Ghosh,CEO,Columbia Asia Hospital in Yeshwanthpur."The Metro passing through here will also make a significant impact,"he adds.

The Metro will mean a big boost and properties on West of Chord Road,Dr Rajkumar Road and Tumkur Road will certainly rise in value.There are many housing projects coming up at the Rajajinagar-Magadi Road junction.Huge retail outlets have already earmarked space for their upcoming stores.The availability of residential units will mean people looking at closer proximity to the Central Business District and Majestic,coming here to stay.The residential catchment is extending upto Mysore Road.

"We are scouting for space in this region",says Siddharth Indrakanti,Store Manager,Marks and Spencer."There are many nice malls coming up here and this area has potential of high spending customers.Good connectivity,number of households and infrastructure make this area upcoming,"he adds.

QUICK BYTES

• YESHWANTHPUR IS EMERGING AS A SELFCONTAINED AREA TO CATER TO THE NEEDS OF THE THICKLY POPULATED REGIONS OF MALLESWARAM AND RAJAJINAGAR 

• MANY INFRASTRUCTURE PROJECTS WILL MAKE THIS AREA WELL-CONNECTED.THEY INCLUDE THE METRO RAIL,ELEVATED ROAD OVER TUMKUR ROAD AND SEVERAL UNDERPASSES 

• YESHWANTHPUR IS SOUGHT-AFTER BY RETAIL AND RESIDENTIAL DEVELOPERS.MANY SOCIAL INFRASTRUCTURE FACILITIES HAVE COME UP HERE 

Cities of the Future: Bangalore

OUTLOOK POSITIVE FOR BANGALORE NORTH

The office space market in the northern belts of the city looks encouraging

After the airport was relocated to Devanahalli,the area became a much sought-after region for office development.Many corporates now have large chunks of land in the vicinity of the airport.Though development of these office spaces is yet to take off in a big way,there is a lot of buzz with the government also earmarking an aerospace park and IT park.
Infrastructure plans coupled with better connectivity is what will give this region the edge.The plan to make the Outer Ring Road (ORR) a signal-free seamless corridor will have far-reaching implications on growth along its route.The stretch from Hebbal flyover to Beninganahalli,in particular,has a lot of scope for commercial development.There are many residential projects along here and this will result in a reasonable number of commercial development too.
On the 3,000 acres of land on which the hardware,IT/BT and aerospace parks will be coming up near the international airport,there is also provision to develop residential facilities for people working in those industrial plants on about 250-300 acres of land.
The proposed high speed rail link,and signal free road which is being constructed,to the airport are the major factors driving demand in this region.

Residential catchments

The Doddaballapur Road has emerged as a destination for residential clusters.The Greater Peenya Industrial Project along with the National Highways of India's elevated expressway has resulted in many residential projects emerging here.There will be a demand for affordable housing projects too from the industrial workforce here.
Though there is a supply of good housing projects in this region,it remains to be seen how the absorption takes place.The connectivity factor will have to be factored in.

Retail sector

This part of the city is also witnessing a new retail market emerging.The New BEL Road is now a thriving high street shopping avenue.The Outer Ring Road (ORR) too is witnessing the emergence of retail outlets and chains to cater to the residential areas in the vicinity.
"The demand is there and the rentals are also quite high,"says Sanjay Tiwari,brand manager of a store."The introduction of FDI in multi-brand retail will lead to increased demand,which in turn will catalyse more investment opportunities in organised retail.A key differentiator of the retail sector is that it penetrates beyond the top seven cities,into areas where there is a significant shortage of wellplanned,well-developed and professionally-mana g ed shopping centres.In other words,the organised retail real estate market will spread more uniformly and more lucratively for all concerned,"says Sanjay Dutt,CEO - Business,Jones Lang LaSalle India.
"The spread of organised retail's geographic footprint is a factor that retailers,depending on their product categories as well as short-term and long-term business objectives,will target.Hypermarkets will absorb the highest amount of retail real estate in Tier II and Tier III cities.Among these,they will focus on the top 35 cities - those with population bases of one million or more - in the first and second phases.Though the spread will happen in all regions,it will take place in clusters rather than in the form of carpet-bombing,since availability of retail logistics and infrastructure play a significant role,"adds Sanjay.
All this will mean a sizeable chunk of the retail sector being located in the city,as its infrastructure and IT workforce will play a significant role.