Capital Growth, Business Today, All Edition [26 April, 2007]

BHOPAL

CAPITAL GROWTH

Madhya Pradesh capital city is witnessing a boom in real estate, thanks to availability of huge tracks of land. KAPIL BAJAJ

Given the relatively cheap property prices, Bhopal has become the delight of those looking at investing in property with medium to long term outlook in addition to the people seeking to become homeowners.

"Bhopal offers plenty of cheap land for every purpose-residential, commercial, institutional and industrial. But now with many big players like Reliance Retail looking to set up retail stores here, the prime commercial property are seeing a 20-30 per cent increase," said Lalit Airon of L.V. estate, a local property dealer.

The capital of Madhya Pradesh is also seeing considerable housing construction with Sahara building Sahara Estate; Raj Homes, a local builder, coming up with Minal Residency; and Dainik Bhaskar Group executing Aditya Avenue Project. "Bhopal has traditionally been the city of salaried people employed mainly in government jobs. So consumption and investments in quality housing have been very limited. But now investments in Real Estate are mainly coming from outside with investors being attracted by large availability of land,” says Satish Shukla, whose Shukla Associates deals in local property.

Shukla says the returns on investment in property are not bad; the price of an independent duplex house in Minal Residency, a township developed by local builder Raj Homes, for example has appreciated about 15 percent since last year. When completed, Minal Residency will have about 5,000 independent houses and over 400 shops within the township. Raj Homes is also building Sidharth Lake City, another township, along Raisen Road (NH-8),which offers slightly costlier bungalows. Currently, a 1,500 sq ft duplex in Minal Residency is priced at Rs.15-18 lakh and one in Sidharth Lake City can be had for Rs.20-21 lakh; the duplex prices can go up to Rs.70-80 lakh.

Sahara Group's Sahara States at Bhojpur-Hoshangabad junction near Waterway Park is considered the first township of the city. Spread over an area of 57.07 acre, the township, when completed, will have 1117 dwelling units.

Amaresh Garg, a local resident, says he purchased his 800 sq ft duplex seven years ago for Rs.5 lakh; its current market value is Rs.10-11 lakh.

Aditya Avenue is another large township being built by the Dainik Bhaskar Group. "Because of ample supply of land, Bhopal's residents and builders have a preference for independent houses rather than flats. The going rates for flats/apartments range from Rs.6 lakh to 12 lakh," says another local dealer.

Bhopal is also inviting considerable interest from investors in commercial space, organised retailers and multiplex builders. Reliance Retail, for example, is looking for 8-9 sites in Bhopal for setting up its stores in various formats, according to local dealers. The company has already tied up space in Old Bhopal, JK Road and Ayodhya Nagar. V. Mart, another retailer, already has a presence in Bhopal. "The price of commercial space is appreciating at the rate of 25-30 per cent.

Large investors like Essel World are also looking at setting up resorts and amusement parks in and around Bhopal. They seem to be encouraged by the growing number of private sector employees with good incomes and generally rising consumption levels.

Shukla says the state government seems very amenable to making available farm land for commercial purposes, making it easy not just for resort and fun park builders but also industries to make investments.

Bhopal's institutional facilities are also well developed with more coming up. The city has nine engineering colleges, National Law Academy, Indian Institute of Foreign Management, and other institutes. The Central government is planning to build an All India Institute of Medical Sciences in Bhopal. The People's Group, a non-profit public trust, runs a 1,000-bed hospital, a dental academy, a medical college, and a school in Bhopal. More institutions in Bhopal are likely to spur knowledge economy.