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Bhubaneswar's successful realty story
Ravi Teja Sharma in New Delhi | May 19, 2007
If the real estate market in Bhubaneswar is taking giant leaps today, it's because investment is coming in with IT gaining a firm footing in the capital to lay the foundation for growth in the near future.
Most big IT majors like TCS, Infosys and Wipro have entered the city to tap into the city's trained manpower. One hears that real estate major DLF is also looking at developing an IT Park on 54 acres of land which will house other IT companies like Accenture and IBM as well. Posco is another driver here.
Of course, as disposable incomes and incomes in general have gone up over the years, there is better demand for retail and higher-end residential spaces.
Rahul Saraf, MD, Forum (a Kolkata-based company), recalls that when they started operating Bhubaneswar's first mall, also called Forum, about four years ago, they faced a problem of handling the kind of footfalls they were getting.
"Sometimes people would treat the airconditioned mall as a picnic spot while there were others who even walked in with their tiffins to have lunch in the mall's atrium," he says.
Thankfully, the situation today is quite different. Forum has managed to organise footfalls and even launched small format stores in the mall which didn't do too well initially, but are now making progress in terms of sales.
Saraf says that while most customers who ventured into Forum headed straight to Big Bazaar for value shopping, today the situation is changing.
"Now we see customers moving beyond Big Baazar," says Saraf. In the last 18 months, he says, sales for these smaller retailers have grown at least three times.
Abhijit Das, regional director at property consultants Trammell Crow Meghraj, informs that there are 4-5 malls being planned in the city, most of them in the newly developing Chandrashekharpur area.
The upcoming suburbs in the city include Chandrashekharpur in the north, Khurda, Jatni, and Choudwar towards the south, and along Cuttack-Bhubaneswar Road which is on NH-5.
Looking at the maturing consumer, Saraf is planning a 5,00,000 sq ft mall on 5.5 acres of land which in all probability will include the city's first multiplex, a large plaza and a 100-room, three-star hotel on top. "We intend to fill the big gap in the retail segment here," explains Saraf.
Another retail mall project, also on the larger side, is the 6,00,000 sq ft Junction Mall from Bengal Shrachi Housing Development (another Kolkata-based company), coming up in the Jaidev Vihar area en route to Infosys City.
The company's MD, Rahul Todi, says this will be the city's "first organised retail" destination. Set to cost around Rs 120 crore (Rs 1.2 billion), it will launch later this year (October-November). South Africa's Bentel will be the architects on this project, and it will boast of a two-level car parking in the basement.
But retail is not the only area which interests developers coming to the city. There is quite a bit of short supply in the quality residential segment in Bhubaneswar, according to Anup Mohapatra, president, Real Estate Developers Association (REDA).
He points out that over the last two years, rates in the city have increased at least four-fold. "There is demand for high-end residential property in the city, most of which is coming up towards the new IT developments taking place near Chandrashekharpur. If, for instance, the demand today is for 100 homes, the supply is lagging far behind at only 10-12 at the moment," he says.
For some Kolkata-based companies, Bhubaneswar is almost like an extension of their home ground and makes an attractive investment alternative. No wonder that apart from just malls, Todi is also planning to launch a high-rise, high-end residential project with 550-600 apartments spread over 14 acres. Situated on the Cuttack-Bhubaneswar National Highway, Neo City will have a club, swimming pool, and other lifestyle amenities.
The Sureka Group, which bought a 10-acre plot in Bhubaneswar recently, is also looking at a high-end residential development. Its MD, Pradeep Surekha, informs that the company is trying to procure more land at the same place.
"We are looking at a total of 20 acres for the Rs 400 crore residential project," he confirms. He is also eyeing the growing organised retail demand in the city. The Surekha Group is planning a 5,00,000-6,00,000 sq ft mall but if it gets suitable land at the right place (at least 10 acres), a mall might be developed on 1 million sq ft space. "Such is the scope for retail in the city," he explains.
Big townships, though, still haven't hit the Bhubaneswar market. "One of the reasons for this is that local builders do not have the strength to invest Rs 200-400 crore in a project. Also, larger national players are only now coming in and there might be plans for larger townships in the near future," says Mohapatra of REDA.
Land acquisition too is a big problem in the city. Being the capital, 70 per cent of the land here belongs to the state government. There is a mad rush for the balance 30 per cent of which 50 per cent has already been developed.
A consortium of local builders have joined together to start a new company, Arcon, which is planning a residential-cum-commercial complex with 200 high-end apartments on three acres of land close to Chandrashekharpur.
There's also news that Unitech has bid for a 10.5 acre plot at a prime locality (it is being processed at the moment) and the tender conditions put it as a mixed use development - residential, commercial as well as a retail mall.
The 54-acre IT Park being developed by DLF will also be a mixed use development with, sources tell us, as much as 30 per cent dedicated for just residential development. Most of it is likely to cater to the IT personnel within the park.
The developments at the moment are muted but there is reason to believe that there will be continued progress in the near future. Mohapatra informs that IIT Kharagpur is preparing a perspective development plan for the city which will be unveiled in the next couple of months.
Based on this, a new master plan will be developed and there are chances that new areas will be opened in this document. Meanwhile, the city's residents, we learn, are already buying property in these newer areas.
Perhaps they're hoping that these areas will be developed in the near future. From what we see, all of Bhubaneswar might be readying for a facelift.