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Rediff.com  » Business » Why Mysore is a real estate hotspot

Why Mysore is a real estate hotspot

September 22, 2007 14:03 IST
A  trip to Bangalore for most Indians cannot end without a visit to  the   Mysore Palace. Go a bit further and you will also reach the World Heritage Site of Hampi. In a way, Mysore, or Mysuru as it is now officially called, has been the entry point to the other nearby and wonderful tourist attractions of Karnataka.

Now there are other reasons to know Mysore. With Bangalore growing faster than one ever fathomed, its traffic mess growing even more, Mysore has become the next favoured destination for companies. Many domestic IT companies have already started their campuses in Mysore, notable among them being Infosys.

There is news that Accenture, IBM, Cognizant Technologies and Honeywell too might extend their operations in Mysore. And wherever IT companies go they usually provide a push to other residential and retail sectors too.

Mysore will also get heritage funding under the "Jawaharlal Nehru National Urban Renewal Mission". Alongside this, other infrastructural projects like the upgradation of the airport, doubling of the Bangalore-Mysore railway track and the brand new Outer Ring Road (ORR) will also help boost the city.

The most significant though is the Bangalore-Mysore Infrastructure Corridor (BMIC) which includes an expressway. This will reduce the travelling time between the two cities (140 kilometres) to just 90 minutes.

Land prices in Mysore have shot up significantly, says Anurag Mathur, deputy managing director, India, Cushman & Wakefield. The asking rate for land in Mysore city in the new ORR area is in the range of Rs 1,200-3,000 per sq ft (Rs 5.2 crore-13 crore per acre approximately) for converted land. In the outskirts (beyond ORR), it is in the range of Rs 70 lakhs-2 crore per acre.

In comparison, a year ago, the rates were approximately half the present price range - within the city, prices varied between Rs 600-1,500 per sq ft (approximately Rs 2.6 crore-6.5 crore per acre) and in the outskirts between Rs 25 lakh-1 crore per acre. The BMIC is likely to further fuel growth in this market.

"Mysore is seeing its first cycle of real estate which usually starts with residential, gets along retail, hotels and then commercial spaces," says Srinivas Anikipatti, regional director, Colliers International.

What's with housing?

The apartment concept is pretty new to Mysore, just as it is to most of our secondary cities. In Mysore, it started as late as 2005 but since then it seems to have caught up. Many local as well as outside developers have come in, notable of them being the Brigade Group, Sankalp, Mittal, Premier Properties, Puravankara Projects, Sobha Developers, says Knight Frank India. But there is still very little grade A residential space in the city. With these quality developers coming in that gap is sure to be bridged.

Bangalore-based Puravankara Projects has got 8 acres of land in Mysore and is developing luxury homes at two other locations in the city. According to a source, the company is looking at acquiring more land because it sees a lot of potential in the city. And with the expressway coming up, it might even be looking at an integrated township here.

The high-end residential areas in Mysore are Jayalakshmi Puram, V V Mohalla, Gokulam, Yadavgiri and Lalith Mahal Road while some of the upcoming ones are JP Nagar, Chamundi Hills, Siddhartha layout, Rajiv Nagar and Vijay Nagar.

With the entry of regional and national developers it is expected that the city will witness more integrated and multi-storey projects. The expected increase in number of industries, IT/ITeS companies coupled with SEZ developments in the city, the floating population in the city is expected to grow manifold and thus the need for multi-storey residential projects, says Mathur.

Sensing this, developers have already started developing residential apartment projects. Local developer Sankalp is doing the Sankalp Central Park with 1,500 apartments or approximately 1.3 million sq ft of residential space and a Rs 8 lakh sq ft Prozone mall.

According to Cushman & Wakefield, approximately 600 units are expected to be complete by 2007 and about 2,000 units in the next 2-3 years.

Knight Frank India tells us that in upcoming residential areas the current rate is between Rs 2,550-2,750 while prime areas rate is between Rs 3,000-3,500. These new projects are being sold to NRIs, Bangaloreans, and the new upcoming IT crowd in the city. The impact of BMIC, some say, might be such that in a few years there might be people staying in Mysore and working in Bangalore.

On the residential front, the biggest push will be on the BMIC itself. BMIC is being developed by Nandi Infrastructure Corridor. According to Knight Frank India, the same company is planning to develop five townships spread over 2,000 acres along the expressway.

The development will be in a phased manner and will take at least 7-8 years to complete. About 60 per cent of each of these townships will be residential while the rest of it will be commercial and retail. Along the same stretch, the Bangalore Metropolitan Region Development Authority (BMRDA) is also planning four new townships.

Where will the new Mysore-wallah shop?

At the moment there are no malls running in the city. All that the city has are traditional shopping complexes and streets. However, there are at least three decent sized malls under construction in Mysore - Prozone in Yadavgiri (8,00,000 sq ft); Habitat Shelters off Hunsur Road (3,00,000 sq ft) and Premier Properties.

The list is longer when we look at the pipeline. According to Knight Frank India, in the pipeline are malls by Kshitij on 5 acres near Mysore Palace, Garuda on 2.5 acres on BM Road, Shobha Developers on 5 acres, Ideb on 1.85 acres and Valdel Unitech on one acre in Nazarbad. A majority of these malls are expected to be up and running by 2010 by which time there would be enough demand for retail space in the city.

The current Bangalore-Mysore Road, which is close to the new expressway, is set to become a hub of retail activity for Mysore. There are 3-4 malls being planning on this stretch.

Not too much demand for office space as yet

The commercial space scene in the city is still at a nascent stage. Mysore already has some IT companies and some manufacturing facilities. To keep industries away from the city, the Karnataka Industrial Areas Development Board (KIADB) has created four different industrial areas.

Most of the IT companies today have got land at the Mysore-Hebbal Industrial Area. Infosys is planning to further expand its campus on another 300 plus acres. Wipro too is looking at expanding on over 200 acres and so is TCS. Other large IT players include L&T Infotech and Software Paradyme India.

Most of these domestic companies have developed built-to-suit office space in their campuses. Within the city, Brigade Group is developing a 28,000 sq ft office building, primarily to cater to banks and other smaller businesses.

At the moment, in commercial, most developers are land banking at the moment. Nothing is taking off the ground but many grade A office space projects are expected to start in the next few months. Since the demand at the moment, for commercial space, is not that great, builders are looking for commitments from occupants before they start construction.

The Mysore story looks very healthy right now. And with the father-like hand of Bangalore on its head (and if Bangalore's growth is anything to go by), it won't be long before Mysore too would catch up. Buy land in Mysore now when the rates are going only one way. Up.

Ravi Teja Sharma in New Delhi
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