Impact of Satyam layoffs on real estate

We all know that Satyam cooked books. They had over 47,000  employees in various locations, primarily in Hyderabad. There is news that maybe 10,000 would be let go. The question is where will they find the "high" paying jobs. Everyone knows that service companies don't pay as much as MNC's and Satyam is one of the worst paymasters in this lot. I know several satyam folks who quit in US well before the scam since they were underpaid and overworked to the point of no return. Hyderabad has seen a boom which will rival no other city since AP folks are heavily  invested in lands, plots and apartments. The common acres to plots conversion technique is heavily ingrained in the local population and I was surprised to see many IT people buying acres on outskirts of Hyderabad just on speculation of the new airport in Shamsabad. Now with the airport hype dying down, and the disappearing  act of a regular paycheck, where does it leave Hyderabad. Maytas is another story and I know several people who have booked and now stuck with no exit. These folks are bleeding pre-EMI interest and will do so for years. It goes to show the due-diligence done by banks on properties in nil.

Here is a DNA article on Satyam layoffs.

Layoffs at Satyam set to begin with BPO unit

Hyderabad: Tech Mahindra, after gaining control over the troubled IT major Satyam Computer Services, seems to be getting straight to business.

The company intends to downsize operations beginning with the business process outsourcing arm Satyam BPO (formerly called Nipuna).

Sources in the company saidthe layoffs will begin with the support department. "The billable staff is not going to be disturbed now. It is the support staff that is likely to exit," the source said.

Satyam BPO has over 3,000 associates and the ratio of billable staff and the support staff is about 35:1. "The target is to make it 80:1. This means a major shake-up in the BPO arm," the source said.

About 60% of the support staff face the axe.

Tech Mahindra has decided to use Satyam's existing marketing, HR and other support functionaries for the BPO too instead of having a separate set-up.

Sources among employees said that there are about 80 people in the HR department alone and about 60 of them are likely to go.

"Particularly the support functions in both Satyam BPO and Satyam are obscenely overstaffed. Any effort to resurrect Satyam would happen only by rationalising these functions," the source said.

Tier 2 cities in bubble now

Hectic builder activity in small towns
Source : Moneycontrol.com

A snapshot of the real estate scenario in Vishakapatnam, Mangalore, Mysore, Coimbatore and Cochin.

Vishakapatnam

A number of Grade A integrated townships are springing up in the city - mostly in the peripheries towards the north east - in Madurawada and Rishikonda.

Apartment prices here are up 33% over the last three months. Vepagunta is another area in the northern outskirts where the housing board has taken the initiative to develop a 52 acre township.

Mangalore

In Mangalore, the area between Bijai in the northeast to the KS Rao Road continues to be in demand but industry watchers say that the demand is primarily from investors at this point.

Nantoor too has witnessed an increase in demand with an appreciation of 5% in two and a half months.

Bangalore based Purvankara Group plans to develop between a 40 to 75 acre township near Bondel in the city's western outskirts, while the Raheja Group from Mumbai is developing a 100-acre township in Kulai in north Mangalore. Thirty acres of the township has already been handed over to a Singapore based software company for their set up.

Mysore

In Mysore, the north and northwest belt of the city is where all the residential activity is concentrated. Jayalaxmipyram has seen the maximum growth over the last two months with an increase of 10% in apartment prices. Vijaynagar too is in demand. The Prestige Group from Bangalore has its project underway here.

Further north, the Sankalp Group is developing a 28-acre township in Yadavgiri. In the south of the city, development of villas is being proposed in Koodanahalli and Nanjangud. The average price quoted for villas is about Rs 3000 per sq ft today.

Coimbatore

Avinashi Road continues to be in huge demand in Coimbatore. Apartment prices have touched Rs 3,500 per sq ft now - up 9% in two months. The Peelamed area along Avinashi Road is also witnessing some demand now. Shreeram Properties have launched their project in Pellamed at Rs 2100 per sq ft and villas are priced at Rs 2,600 per sq ft.

Sai Baba colony too has seen a significant increase over the last two months, with close to a 50% appreciation, and higher end projects now command Rs 4000 per sq ft.

According to estimates, approximately 3,000 apartments are under construction in Coimbatore. Major development is also underway on Trichy Road and Mettupalayam Road where many developers hold large land parcels.

Cochin

Lastly, in Cochin, new developments continue to spring up along the suburban belt of Kakkanad, Edappally and Kalamasery. The demand for residential space has increased significantly here and national level players like Puravankara, Shobha, Brigade Group, DLF, Prestige and Dubai-based Emaar groups have now joined the development bandwagon in the region.

The traditional prime area of Marine Drive is also not loosing steam � in fact, prices have touched a high of Rs 6,500 per sq ft there, compared to Rs 2,000 per sq ft last year.