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Indore set to be a real estate hotspot
Ravi Teja Sharma in New Delhi | March 24, 2007
It has traditionally been a hub for the automobile, alloy steel industry and textiles. Pass through the Pitampur industrial hub and you can spot major companies like Hindustan Motors, Eicher Motors, Bajaj, Nicholas Piramal, Bridgestone, Larsen & Toubro among others. Indore is also a hub for soyabean cultivation and processing.
For smaller towns of Madhya Pradesh and other parts of central India, Indore is the place to be, for education and for work. More employment opportunity are in the offing with the government declaring a budget of Rs 5,000 crore (Rs 50 billion) for building Asia's largest auto testing track at Pitampur for ground breaking research and development.
The Madhya Pradesh government has earmarked 2,000 acres of land for an IT SEZ near the proposed international airport. The airport itself will be a catalyst for future real estate development in neighbouring locations.
A noteworthy development is the Crystal IT Park on 24 acres of land at Khandwa Road. Prospective growth of the IT sector has fuelled the growth of residential real estate in the city. Indore is on the radar of a number of IT companies.
According to the Knight Frank Report on Emerging Growth Centres, developers like K Raheja and Unitech have already been allotted land in the proposed IT SEZ.
Indore has a large population of entrepreneurs with high purchasing power. The city has a number of strongly entrenched local brands along with national and international retailers. Traditional unorganised markets are slowly giving way to new organised retail markets with the arrival of new malls and shopping centres.
The major retail growth can be seen in the central part of the city close to the high-end residential locations of Palasia, Race Course, Saket and Gulmohar and also in upcoming locations like Vijaynagar and MR 10.
Not surprisingly then, a Tramell Crow Meghraj study reveals that a number of domestic and international real estate funds are expected to or are investing in Indore.
Needed: More homes
Recent years have seen a growth in demand for apartments, partly because of rising aspirations of the populace and also due to a 47 per cent increase in population in a decade. According to an estimate, there is a demand for at least 1,00,000 units a year in Indore to accommodate the constantly floating population.
Land prices have behaved in an extraordinary way, confirms Joy Sanyal, vice-president, strategic development initiative, Trammell Crow Meghraj.
"The prices have soared 300 times in some cases. In a recent transaction, Kalpataru from Mumbai picked up 3.12 acres of NTC land for a whopping Rs 90 crore (Rs 900 million)," he says. On average, the land cost in Indore is between Rs 30 lakh to Rs 1 crore (Rs 10 million) an acre, depending on the location.
Shalimar Township (23 acres) along the bypass was the first township concept successfully implemented in Indore by the Mirchandani Group. Today, according to an estimate, there are about 18-20 integrated townships in the pipeline.
Entertainment World Developers Private Limited are doing two projects with Eredene Capital of Mauritius. EWDPL is doing a Rs 350 crore (Rs 3.5 billion) Market City on 19.5 acres of land near the junction of Indore bypass and major route 10 (MR 10), which will entail a 1 million sq ft mall, a five-star hotel, 4.4 lakh sq ft of office space and a total of 8 lakh sq ft of residential development over 7 towers.
Omaxe City spread over 89 acres, will be at Mayakhari on NH-3, Agra-Bombay bypass and will house duplex villas, ground + 2 independent floors along with a swimming pool, sauna, steam, jacuzzi, shopping complex, food court and a banquet hall. Omaxe had earlier launched a township in Indore.
Vineet Nanda, GM, sales and marketing at Omaxe, informed that 85 per cent of the project was sold out within a year of launching. Three bedroom villas here cost somewhere around Rs 22 lakh. The average rate of apartments in the city is between 1,200-1,500 per sq ft.
Sahara India Infrastructure and Housing has planned Sahara City Homes on the bypass at Bicholi Mardana on 89 acres of land. Suncity is also doing a township spread over 150 acres on the Agra-Bombay bypass. It will include a commercial centre, a star hotel and a shopping complex.
A lot of land in Indore has already been bought by major national players like DLF, Rahejas, Ansal, Parsvnath. Each of these, says a local source, has over 100 acres in and around the city.
Small town retail frenzy
On the retail front, Indore already has a number of national and international brands. EWDPL's Treasure Island (0.6 million sq ft), located on MG Road, was the first organised retail format in the city. According to Knight Frank, the retail industry has great prospects in the city.
Mumbai-based K Raheja developers are coming up with a hypermarket on 11 acres of land around the bypass. Besides this, there is news that a number of national-level multiplex operators have also announced their entry.
Existing retail space in Indore totals to about 0.86 million sq ft. Knight Frank indicates that around 1 million sq ft of new retail space is expected to enter the market in the next few months. About 4-5 malls are in the pipeline and it is expected that by 2009 approximately 3 million sq ft of retail space will be operational in the city.
A recent Sun Microsystems press release reads, "Sun Microsystems India announced the launch of its operations in Indore. Sun will commence operations in the city through its partner, Wipro Infotech." Sunrise for the IT and IT services sector in Indore? Maybe.