Kolkata real estate emerging as a gold mine & KMDA makes plans for city expansion

News Posted - 2010-08-25, Last Updated - 2010-08-25

Now that it’s almost impossible to find living or office space within the city, Kolkata Metropolitan Development Authority (KMDA) is focussing on expanding the city by developing areas just beyond Kolkata’s present limits—peri-urban areas in KMDA parlance.

These areas, on either bank of River Hooghly, cover a whopping 609.05 sq.km of land over 37 mouzas that include both rural and urban hamlets.

On urban development minister Asok Bhattacharya’s instructions, KMDA is preparing a comprehensive development plan for these peri-urban areas. “We are preparing a plan on developing civic infrastructure of the city’s surroundings,” said KMDA chief executive officer Vivek Bharadwaj.

The authorities are concerned that the high population growth in peri-urban areas is resulting in pressure on land, water supply and basic amenities like sanitation, drainage and transport. These result in haphazard growth, unplanned and uncontrolled land use and environmental degradation.

Officials said the comprehensive plan, when implemented, will help create an eco-friendly environment with proper infrastructure and pave the way for housing projects and employment generation in these areas. The plan will outline a land-use plan for the area, specifying building by-laws. The authorities have huge plans to develop the areas alongside Kona Expressway on the Howrah end and to further develop Kalyani area.

Ongoing development of Baruipur township is a classic example of how a peri-urban area surrounding the city could be developed, say officials. The state has a more comprehensive plan for developing Baruipur township over a 500-acre area. The South 24-Parganas district headquarters will be shifted to Baruipur from Alipore. A research and development hub spread over 140 acres of land will also come up in Baruipur.

“Several prestigious central government organisations, like Indian Association for Cultivation of Science, National Institute of Pharmaceutical Education and Research, Council of Scientific and Industrial Research, Energy and Resources Institute, Defence Research & Development Organisation, have already been allotted land to set up offices there. Hopefully, they will start construction from early next year. We are, meanwhile, working on developing the land in the area,” said Bharadwaj.

KMDA is working on developing infrastructure for the township. There will be dedicated roads for cycling and walking, bus shelters with kiosks and link roads to the state highways so that the township gets properly connected with rail links and has easy access to Kolkata airport through EM Bypass. Apart from developing transport, the authorities are working on developing sewerage and drainage lines. For water supply, they plan to use surface water and even rainwater. There will be sufficient open space, parks and small water bodies in the township to maintain ecological balance. The authorities are expecting to fully develop these infrastructure facilities within the next three years. Source: Magicbricks 23/8/10

Kolkata real estate emerging as a gold mine

It’s a gold mine out there, and everybody wants to rake in the moolah. EM Bypass has seen a spurt in land prices since the mid-’80s. And the nature of land, too, has changed over the years to enable the agencies concerned to maximize their earnings from these plots. Less than a decade ago, KMDA and KMC entered into joint venture partnerships with private developers to offer housing projects off EM Bypass based on the public-private-partnership model.

With the city witnessing a real estate boom in the next few years and land prices soaring, the agencies gave priority to the more lucrative commercial ventures over housing projects. KMC and KMDA made a killing by auctioning plots along the Bypass until the global economic meltdown slowed things down in 2008. KMDA earned over Rs. 640 crore by selling land off EM Bypass and Salt Lake, while KMC made more than Rs. 500 crore. What’s more, both the agencies have some more land left to mop up another Rs 1,000 crore.

While KMDA has plans to set up a business park at Nonadanga on around 100 acres, KMC, too, has some land left to sell. However, in view of the ongoing EM Bypass land controversy, the plans seem to have been put on the back burner. Much of the land originally belonged to the state refugee, relief and rehabilitation department. KMDA and KMC acquired the plots from the department through requisition a long time ago. Several acres were acquired for development purposes, but the authorities later utilized them for commercial ventures as the real estate sector witnessed high growth.

According to KMDA’s land use records, the agency sold nearly 2,000 acres it had on EM Bypass, Salt Lake, Baishnabghata-Patuli, Garia, Sonarpur and other places in the Kolkata Metropolitan Area over the last couple of decades.

While it was in the last decade that KMDA and KMC decided to use the Bypass land for commercial purposes, the idea was conceived in the ’90s. KMC had planned to hand over an 8-acre plot on a 33-year lease to a private developer at Rs. 15.73 crore per acre. Though the plot was given to a hotel group in 1995 at Rs. 10.86 crore per acre, the market value was hovering at Rs. 22 crore per acre. So, the civic authorities decided to take the land back to reap the benefits of the higher price.

In 2005, KMDA struck gold by selling a 6.2-acre plot along EM Bypass for a whopping Rs. 209 crore to real estate major Emaar-MGF for a five-star hotel project. Then, in 2007, KMC sold a 5-acre plot opposite Science City for Rs. 176 crore, or Rs. 35 crore an acre. KMDA had formed a bulk land committee in the ’80s to determine land prices, particularly in east Kolkata and Baishnabghata-Patuli. Plots were sold to several private firms and individuals, including well-known sports persons.

In the ’80s, KMDA used to sell each cottah of residential and commercial land for Rs.2 lakh and Rs. 2.5 lakh, respectively. The price increased in the ’90s, when the authorities started selling a cottah of residential and commercial land for Rs. 3 lakh and Rs. 3.5-4 lakh, respectively. After 2000, KMDA fixed a price of Rs. 5 lakh per cottah for residential plots and Rs. 5.6-6 lakh for commercial ones. Source: Magicbricks 19/7/10

New real estate projects transforming the Howrah-Hooghly belt

If poor infrastructure and lack of development held back real estate prices on the western front of the Hooghly for the last couple of years, the upcoming real estate projects are changing the industrial landscape in the Howrah-Hooghly belt, pushing up property prices.

Less commuting time, excellent connectivity and real estate ventures by large branded players like the Unitech, Universal Success, Forum Projects, Peerless, Merlin Group, Keventer Projects and the Salim-Ciputra group indicate that the area seems to be tantalisingly poised on the threshold of the next wave of realty action.

It may be mentioned that land prices had skyrocketed on Kona Expressway and stretches of National Highway-2 and National Highway-6 with projects like the DLF township in Dankuni, Kolkata West International City and the logistic hub on Kona Expressway coming up. Several brokers purchased land in the area hoping for the price to shoot up further.

“Though there has been an impact on the price of land in that belt after the Tatas decided to leave Singur, real estate prices do not change overnight. Had the Tatas decided to build their plant in Singur itself, land prices would have shot up. After they left, real estate prices still moved northwards but the pace was slow. It is only recently that the real estate price picked up momentum,” says a senior real estate consultant on conditions of anonymity.

What should, however, be kept in mind is that the real estate market in this part of the city has not developed as fast as it has in Kolkata. Most of the developments, which have come up in and around this area and offer some 10-200 flats per project, have been done by small and mid-sized local players.

Lemongrass Advisors joint managing director Abhijit Das said, “Howrah is densely populated — more in terms of numbers — than the Kolkata Municipal Corporation areas of Kolkata. It is inhabited primarily by low and middle income Bengali and non-Bengali business families barring some clusters within the area which are occupied by high income business families. Since the inhabitants are into un-organised and semi-organised businesses, the buying power of the catchment area is weak compared to that of proper Kolkata. Skilled professionals from these areas usually travel to Kolkata for their jobs.”

Some of the city’s leading realtors second this emotion. “People staying in the suburbs of Kolkata do not relocate to Howrah, till such time they are offered something different or unique than what Kolkata has on offer and that too, at an attractive price. Besides, it is easy to woo Howrah consumers to projects being developed in proper Kolkata but not so easy vice versa,” they say.

Among the various projects, Kolkata West International City is probably one of the first large scale organised developments in the Howrah district and Merlin Uttara at Konnagar, one of the first organised branded realty projects in Uttarpara. Developed by Merlin Group, Merlin Uttara was conceptualised to meet the growing demand for urban living standards in Kolkata’s fringes, especially on the other side of the Ganges.

Source: Magicbricks 21/7/10