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The great Nagpur boom
Ravi Teja Sharma in New Delhi | March 17, 2007 15:16 IST
Spurred on by the Multi-modal International Hub Airport at Nagpur, Nagpur is turning hungry for commercial and residential spaces.
The city of Nagpur is literally the centre of India and this strategic location is the reason why the Multi-modal International Hub Airport at Nagpur might be very successful.
Proof of this can already be seen in the interest shown by global aviation major Boeing for setting up its $100 million regional maintenance, repair and overhaul facility for its aircraft. This is expected to create upto 3,000 highly paid jobs and another 30,000 jobs indirectly.
Ask anyone from the city and they will tell you both MIHAN and the Boeing MRO are fuelling the real estate growth in the city -- commercial, retail and residential.
What were open fields around the MIHAN periphery are still open fields but ownership has shifted to local and national developers.
According to estimates, land in a radius of about 20-25 km around MIHAN has been acquired already by various small and big investors. Pankaj Roshan, of Roshan Real Estate, says international real estate funds (British and Indonesian realty funds) too are looking for big land parcels of 150 acres and above, in and around Nagpur city.
Even though IT is at a nascent stage in Nagpur, by the looks of it now, it seems its boom is just round the corner.
Leading IT firms have expressed interest in developing their campuses here. Inside MIHAN will be a 1,500 hectare special economic zone where Satyam has already bought 100 acres of land for a new campus. Shapoorji Pallonji & Co has got 100 acres and L&T Infocity has got 120 acres for IT parks.
Expectedly, all of these have pushed up residential development in the city. The cargo hub is situated in the southern part of Nagpur, hence several developers are anticipating demand for houses from employees to be recruited in IT companies and BPOs which are planning to set up their operations in the IT parks here.
According to Knight Frank, two-third of the new supply in the city is concentrated in the south-eastern zone due to large township projects planned in this part, as well as the upcoming cargo hub. Around 14 townships are expected to come up in Nagpur city, four of them in the northern part of the city, seven in the southern part on the outskirts, and about three in central Nagpur.
While a few like Empress City and Vyankatesh City have begun construction and bookings, most others are still in various stages of implementation.
Apart from local developers like Sukhkarta Developers, Pawansut Real Estate & Developers, N Kumar Group, Sandeep Dwellers, Hindustan Builders, Himalaya Builders, Aditya Builders, Alankar Real Estate, Narang Builders and Shriram Builders, national players too have acquired land near the cargo hub.
DLF, Sahara Homes, Raheja Universal, Reliance and Hiranandani have got land here. According to local sources, Parsvnath too has been looking for land here.
Most investors have bought land in and around Wardha Road, which connects to MIHAN. The other major road which is seeing major land banking is Amravati Road (NH6) which goes to Mumbai. This road is being four-laned.
Most residential development until now has been within city limits. The upmarket zones of the city include areas like Dharampeth, Ramdaspeth, Gokulpeth, Ramnagar, ShivajiNagar, Byramjee town, Gandhinagar and Ravi Nagar. As with the tonier areas of major cities, these have more bungalows and large apartments.
According to Knight Frank, bungalows are being sold at over Rs 1 crore (Rs 10 million) in Ramdas Peth, Civil Lines, Byramjee Town, Chavni and Daga Layout, and the prices are set to go up further in the near future.
The residential supply in Nagpur has grown by almost 100 per cent over the last few years. The upcoming residential locations in Nagpur are on Kamptee Road in the north-east, Khamla and Hingna Road in the south-west and Besa and Wardha Road in the south.
These locations have a number of apartment complexes as well as standalone buildings coming up. A majority of the new supply is concentrated in the southern zone (Wardha Road) near the upcoming Cargo Hub. The increasing demand for housing has encouraged local developers to come up with new apartment projects in Nagpur.
Some of the notable residential projects in the city are Vyankatesh City by Sukhkarta and Vyankatesh Builders, Sahara City Homes and Empress City by KSL Industries. The concept of developing large-scale township projects is getting a good response from local residents and investors.
Empress City, construction for which is already underway, is spread over 25 acres in central Nagpur. The project, expected to be completed in the next 12-18 months, will have an IT park, a mall, a multiplex and a five-star Taj property along with about 300 two, three and four bedroom apartments.
Sahara City Homes in Nagpur, on Wardha Road, spread over 107 acres, will offer a combination of highrise, midrise, row houses, semi-detached houses and independent bungalow of premium specifications. The township will also include a Sahara mini hospital with telemedicine, educational facilities, a shopping mall and multiplex, a hotel and a club.
Rates have already touched a high of Rs 4,500 per sq ft in some locations. Apartments at Empress City range between Rs 4,000-4,500 per sq ft. Other areas range between Rs 1,800-2,700 per sq ft.
There is demand for quality commercial space too across Nagpur. The gap between demand and supply is expected to go up in the next five years, says Vivek Dahiya, associate director, DTZ India.
The main commercial centers in Nagpur are Sitabuldi, Dhantoli, Sadar, Civil Lines, Gokulpeth, CA Road and Mahal. There has been a steady appreciation in the rentals across Nagpur, to the tune of about 15-20 per cent in the past two quarters.
During 2005-06, the appreciation has been around 25 per cent and the areas next to the proposed cargo hub have witnessed an appreciation of around 40 per cent over the last one year.
Office space of approximately 6,40,000 sq ft was added in Nagpur in 2006-07 as both speculative and built-to-suit alternatives, but this is certainly not enough for the growing IT and ITeS tribe in the city. A cumulative 1.19 million sq ft of commercial office spaces is expected to come into the market by 2009.
Nagpur currently boasts a low percentage of organised retail, in terms of malls. However, according to Cushman & Wakefield, there are 11 malls that are scheduled to be operational by 2009, which will offer approximately 1.89 million sq ft of built-up space.