Wednesday, July 12, 2006
Hyderabad gets high on real estate
When Vijayendra Vasu, 33, first arrived in Hyderabad in ‘02, he liked what he saw. A quiet, nice, clean and well planned city. For the Seattle-returned IT executive, settling down wasn’t difficult. In the past four years, he has grown.
And yes, the city has managed to keep pace with him. “It is a lot busier, a bit chaotic and a little noisy — but it also packs in a lot more buzz and fizz today,” he says. His house-hunting story will give you a flavour. In ‘02, he saw a nice 3,000 sq ft house for Rs 50 lakh, but decided to buy three plots of land instead. His investments have already appreciated 400%.
Houses? — “Nothing comes for less than Rs 1 crore today”. He just saw one which he liked — built on 500 sq yard land, in a gated community which comes with a swimming pool, tennis court, clubhouse, children play area — all of it a given these days in most residential complexes here.
The complex is well built but 20 km from the airport, located in the outskirts, right now in the middle of nowhere without even roads. And the price tag? A cool Rs 1.3 crore. “Prices are close to the US levels. Even for those coming from the US, it is a stretch. The price tags have factored in the city’s growth and future appreciation,” says Mr Vasu.
Hyderabad is amidst a construction boom. The heart of the city like Banjara Hills and Begumpet are throbbing with life as old buildings are being razed to build new and grander ones. Prices have gone crazy — from 2.5 lakh to 7.5 crore in the last 10 years for the same property. But this isn’t the big story — with a buoyant economy it is happening in all major Indian cities. Where Hyderabad stands out is in dispersing growth, creating new business hubs and rapidly expanding the city infrastructure in public-private partnerships. It is because of this, that vast swathes of barren rocky land with no roads yet, out in the wilderness 20-30 km from the city have suddenly become prime properties with businesses, realtors and investors entering the fray. Ask Varshaa Ratnaparke who works at ISB Hyderabad.
Four years ago when she started working there it was like “going out of Hyderabad” with not much traffic and little activity around the campus. “We normally went that side if we had to take the highway,” she says. It is as if suddenly the city’s centre of gravity has shifted 22 kms from the main city to in and around Shamshabad where the new international airport is coming up.
The government is gently nudging the city to grow that way by willing to provide good infrastructure. Beginning with the Rs 1,760-crore international airport the city has lined up, infrastructure projects of over Rs 50,000 crore to develop, populate and connect far flung areas to the city (see the box).
A Rs 4,400-crore 8-lane ring road is being built connecting the airport to the main city. Eight new townships worth Rs 15,000 crore and an NRI township is being planned in public-private partnership around the expressway. From the $3-bn Fab City to Financial District and Genome Valley project, new business hubs and townships, the government hopes to grow the city beyond limits. And they are being planned well. Each of the eight townships will come with infrastructure, like underground gas pipes, internet, electricity, worldclass drainage system, solar-system for power, water treatment plant, water harvesting pits, school, shopping centres, swimming pool, gym, indoor and outdoor stadium.
The government will chip in with land and private sector with development costs. “We want to create hubs with infrastructure and atmosphere such that people would be tempted to shift to these outskirt townships,” says D Sudheer Reddy, chairman, Hyderabad Urban Development Authority. Most of it will be in public-private partnership.
Going by the experiences of Manjit Singh Brar, COO of Swarnnandhra-IJM Township — India’s first FDI JV in township — it should not be difficult. The Rs 600 crore, 35-acre project started in ‘02 will be partly ready in October. Located in Kukatpalli, almost 15 km away from the busy Hitech city, the real estate prices for houses here hovered around Rs 1,000 per sq ft. Then the Malaysian firm offered to build a road at their cost which would reduce the distance from Hitech city to 3.5 km and make the project more attractive. The government agreed and the road has been built. As a result, the prices have shot up to Rs 2,500 per sq ft.
Encouraged, the Malaysian firm is developing another 36-acre township closeby. “Not interfering too much and willing to listen to our needs in a transparent manner gives us the confidence,” says Mr Brar. It isn’t just about the hard infrastructure.
Softer issues from basic cleanliness to more refined areas of environment and aesthetics are being given due importance as the government manages growth. From garbage collection to well manicured garden and smooth wide roads — the city looks neat, tidy and well taken care of.
The city spends Rs 100 crore annually on just its upkeep and cleanliness. Environment, entertainment and people’s changing lifestyle are also being factored in. The Moosi River is being cleaned at a cost of Rs 330 crore. Another Rs 300 crore is being spent to clean and maintain Hussain Sagar Lake.
Sanjeevaiah Park is being redeveloped by the company which had helped develop the popular Santosa Island in Singapore. Hopefully the Metro will take 30-40% vehicles off road, says LV Subramanyam, vice-chairman and managing director, Andhra Pradesh Industrial Infrastructure Corporation (APIIC): “We want a balanced growth for Hyderabad.”
What is so special about Andhra that’s creating the buzz among investors? Ask those in the thick of things and they say: In this economy, the government does not need to do much except, not play politics. For Hyderabad — it is about just being there at the right time. And not messing it up.
In a buoyant economy, when Bangalore was blundering and big cities like Mumbai were floundering, Mr Naidu’s regime gave Hyderabad the big push it needed. Credit to the Reddy government, it did not let politics come in the way of the city’s growth.
And yes, the city has managed to keep pace with him. “It is a lot busier, a bit chaotic and a little noisy — but it also packs in a lot more buzz and fizz today,” he says. His house-hunting story will give you a flavour. In ‘02, he saw a nice 3,000 sq ft house for Rs 50 lakh, but decided to buy three plots of land instead. His investments have already appreciated 400%.
Houses? — “Nothing comes for less than Rs 1 crore today”. He just saw one which he liked — built on 500 sq yard land, in a gated community which comes with a swimming pool, tennis court, clubhouse, children play area — all of it a given these days in most residential complexes here.
The complex is well built but 20 km from the airport, located in the outskirts, right now in the middle of nowhere without even roads. And the price tag? A cool Rs 1.3 crore. “Prices are close to the US levels. Even for those coming from the US, it is a stretch. The price tags have factored in the city’s growth and future appreciation,” says Mr Vasu.
Hyderabad is amidst a construction boom. The heart of the city like Banjara Hills and Begumpet are throbbing with life as old buildings are being razed to build new and grander ones. Prices have gone crazy — from 2.5 lakh to 7.5 crore in the last 10 years for the same property. But this isn’t the big story — with a buoyant economy it is happening in all major Indian cities. Where Hyderabad stands out is in dispersing growth, creating new business hubs and rapidly expanding the city infrastructure in public-private partnerships. It is because of this, that vast swathes of barren rocky land with no roads yet, out in the wilderness 20-30 km from the city have suddenly become prime properties with businesses, realtors and investors entering the fray. Ask Varshaa Ratnaparke who works at ISB Hyderabad.
Four years ago when she started working there it was like “going out of Hyderabad” with not much traffic and little activity around the campus. “We normally went that side if we had to take the highway,” she says. It is as if suddenly the city’s centre of gravity has shifted 22 kms from the main city to in and around Shamshabad where the new international airport is coming up.
The government is gently nudging the city to grow that way by willing to provide good infrastructure. Beginning with the Rs 1,760-crore international airport the city has lined up, infrastructure projects of over Rs 50,000 crore to develop, populate and connect far flung areas to the city (see the box).
A Rs 4,400-crore 8-lane ring road is being built connecting the airport to the main city. Eight new townships worth Rs 15,000 crore and an NRI township is being planned in public-private partnership around the expressway. From the $3-bn Fab City to Financial District and Genome Valley project, new business hubs and townships, the government hopes to grow the city beyond limits. And they are being planned well. Each of the eight townships will come with infrastructure, like underground gas pipes, internet, electricity, worldclass drainage system, solar-system for power, water treatment plant, water harvesting pits, school, shopping centres, swimming pool, gym, indoor and outdoor stadium.
The government will chip in with land and private sector with development costs. “We want to create hubs with infrastructure and atmosphere such that people would be tempted to shift to these outskirt townships,” says D Sudheer Reddy, chairman, Hyderabad Urban Development Authority. Most of it will be in public-private partnership.
Going by the experiences of Manjit Singh Brar, COO of Swarnnandhra-IJM Township — India’s first FDI JV in township — it should not be difficult. The Rs 600 crore, 35-acre project started in ‘02 will be partly ready in October. Located in Kukatpalli, almost 15 km away from the busy Hitech city, the real estate prices for houses here hovered around Rs 1,000 per sq ft. Then the Malaysian firm offered to build a road at their cost which would reduce the distance from Hitech city to 3.5 km and make the project more attractive. The government agreed and the road has been built. As a result, the prices have shot up to Rs 2,500 per sq ft.
Encouraged, the Malaysian firm is developing another 36-acre township closeby. “Not interfering too much and willing to listen to our needs in a transparent manner gives us the confidence,” says Mr Brar. It isn’t just about the hard infrastructure.
Softer issues from basic cleanliness to more refined areas of environment and aesthetics are being given due importance as the government manages growth. From garbage collection to well manicured garden and smooth wide roads — the city looks neat, tidy and well taken care of.
The city spends Rs 100 crore annually on just its upkeep and cleanliness. Environment, entertainment and people’s changing lifestyle are also being factored in. The Moosi River is being cleaned at a cost of Rs 330 crore. Another Rs 300 crore is being spent to clean and maintain Hussain Sagar Lake.
Sanjeevaiah Park is being redeveloped by the company which had helped develop the popular Santosa Island in Singapore. Hopefully the Metro will take 30-40% vehicles off road, says LV Subramanyam, vice-chairman and managing director, Andhra Pradesh Industrial Infrastructure Corporation (APIIC): “We want a balanced growth for Hyderabad.”
What is so special about Andhra that’s creating the buzz among investors? Ask those in the thick of things and they say: In this economy, the government does not need to do much except, not play politics. For Hyderabad — it is about just being there at the right time. And not messing it up.
In a buoyant economy, when Bangalore was blundering and big cities like Mumbai were floundering, Mr Naidu’s regime gave Hyderabad the big push it needed. Credit to the Reddy government, it did not let politics come in the way of the city’s growth.
# posted by mashup @ 10:12 PM 
