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The square feet saga

Just try this out for numbers. More than 132,00,000 sq ft of housing stock is being readied for launch over the next 12 months. Rajarhat alone will see the flag-off of around 70,00,000 sq ft of residential stock in the coming year. In addition to Rajarhat, city developers will roll out more than 50,00,000 sq ft of residential stock in large-format complexes in other areas like Garia, VIP Road, the EM Bypass and residential corridors like New Alipore, Hazra and Gurusaday Road. This is over and above the small, non-branded G+4/G+5 structures, which will add at least another 5,00,000 sq ft to the mortar matrix.

Has Calcutta suddenly come to a stage where it can consume all the above stock with existing demand' Is there an adequate market within the present economy or are developers announcing so much stock in anticipation of the IT and ITES boom which the city is expected to experience by 2006-2007'

'Calcutta has been witnessing a huge demand for residential stock over the past three to four years due to growth in the insurance, telecom and other service industries. But the projected IT-ITES boom could play a vital role in further fuelling the demand,' feels Abhijit Das, city head of Chesterton Meghraj.

A study of forthcoming stocks by the international property consultant that has now set up office in the city clearly indicates that real estate in Calcutta is poised for a quantum leap in the medium to long term in residential, commercial and retail sectors. Though the positive feel has been doing the rounds for quite some time, available data reveal it's on the verge of take-off in a year or two.

The residential category is witnessing a never-before deluge of very large complexes getting announced almost every month, in addition to the New Town in Rajarhat being touted as the next Gurgaon. Bengal Unitech Universal Ltd from the Unitech stable is set to develop the largest project in the government's showpiece model township over 100 acres of land allotted to them for residential stock in addition to 50 acres of adjacent land to be developed for IT-ITES facilities and retail.

And Unitech boss Ajay Chandra is confident his product will have the cutting edge. 'There are a lot of MNCs looking at Calcutta for expansion. We will come in with the right kind of stocks to suit the needs of the new-age professionals. The city doesn't have too much of the required product-mix. So there's a hole to be plugged,' Chandra stresses.

Advantage IT

The 'Advantage Bengal' government promises that the IT bubble, on which many builders are banking, won't burst. 'The infotech sector is poised for an exponential growth in the state given the intrinsic strength we have. The existing companies are expanding in a huge way and more and more new players are joining the fray,' says G.D. Gautama, principal secretary, IT.

Home-turf biggies seem to have faith in the state machinery. Says Rahul Saraf, who is developing the 6,67,000-sq ft Technopolis, the largest IT/ITES facility in Sector V: 'The entire IT industry is convinced that the boom will happen since the government has been so proactive. Maybe we will need to expand the education base and set up more finishing schools to cater to the ever-increasing demand for IT professionals,' says the Forum man.

Saraf, however, doesn't see the demand for residential stock rising back-to-back with IT. 'There will be a time lag of around two years when the youngsters settle down in their new jobs. And, of course, the developers will need to look at more properties which are IT-specific.'

Residential property rates at Rajarhat have witnessed a significant appreciation since the first joint-venture projects were announced. The initial bookings were in the range of Rs 950-1,050 per sq ft just two years back and have climbed to Rs 1,350-1,500 for the projects recently launched. Real estate rates have witnessed a steady appreciation ' to the tune of 10 to 15 per cent annually ' in all major upcoming residential locations like the EM Bypass, Garia, VIP Road and Rajarhat.

The current resale rates prevailing at Hiland Park ' instrumental in creating a significant trend in the city's organised residential scenario ' are around Rs 1,750 per sq ft, up from Rs 1,250, the rate at which initial bookings happened. Piyush Bhagat's Silver Spring and the Mani Group's Mani Karn and Rukmani Parasmani on the Bypass have been huge hits as well. These projects witnessed significant appreciation in prices even before being delivered and were booked in record time.

Realty check in Rajarhat

# Bengal United Credit Belani 3 lakh sq ft (launched)
# Bengal Park Chambers 3 lakh sq ft (launched)
# Bengal Shelter 3 lakh sq ft (launched)
# Bengal Ambuja 3 lakh sq ft (to be launched)
# Bengal Peerless 3 lakh sq ft (to be launched)
# Bengal Shrachi 3 lakh sq ft (to be launched)
# West Bengal Housing Board 3 lakh sq ft (launched)
# Bengal Unitech Universal 20 lakh sq ft (to be launched)

** There are other projects in various stages of finalisation to be launched in New Town by this year

Demand and supply

Will this building buoyancy go boom or bust' Harsh Neotia, who pioneered the large-format housing product and the joint venture route in Calcutta with his Udayan, The Condoville, takes a tempered view amid the square-feet surge.

'While there has been a significant growth in demand, I still see a supply overhang in the near future, given the intensity of activity in the housing sector. There will be unsold stocks and since the buyer can afford to be selective, a host of factors like the developer's track record, location advantage, etc, will come into the picture,' observes Neotia, who has another housing project and a mall coming up in Rajarhat's Action Area II.

The Confederation of Real Estate Developers' Associations of India (CREDAI) Bengal chapter, though, is confident the recent momentum will be sustained. CREDAI-Bengal honorary secretary Pradip Chopra doesn't see a glut situation happening in the next three-four years. 'True, the projection that 4.5 lakh IT professionals will settle down in Calcutta over the next three years is a touch ambitious. But even if we have 3 lakh IT personnel working in the city, we will struggle to provide them with ample accommodation. And if the enhanced job prospects can hold back the 500-odd youngsters we lose to Bangalore and Hyderabad every month, the demand for housing stock soars even further,' he points out.

Chopra, however, doesn't agree that the off-take of residential stock is entirely dependent on the IT boom happening. 'IT will account for maybe 20-25 per cent of sales, the rest being consumed by other sectors. There is a huge pent-up demand for flats. With the rise in double-income families and easy availability of home loans, the average age of the house hunter has also come down and 50 to 60 per cent of purchase is made by those in the age bracket of 25-35,' he adds.

Chesterton Meghraj adds a global dimension to the realty run. With talk of 100 per cent FDI into real estate and the deletion of the minimum 100 acres clause, it's only a matter of time before Calcutta too becomes the destination for international players, it points out. The city already has one huge FDI commitment in the proposed West Howrah township project by the Salim and Ciputra groups from Indonesia scheduled to be launched later this year.

'A lot of latent need was converted into demand due to the innovative and well-planned large residential complexes with lifestyle amenities and facilities which Calcutta witnessed on a large scale after Udayan set the trend,' says Chesterton's Das.

Developers, home-grown and beyond boundaries, hope the demand is strong enough to gobble up the mammoth stocks. And for dwellers hunting down a dream home, the building basket is just getting broader and better.

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