Economic Times reports
CHENNAI: The Bangalore-based Mantri Developers has successfully bid for a 4.9 acre plot of land at Siruseri IT Park on the IT Highway for developing an amenities centre. The price — Rs 10.5 crore per acre for a 75-year lease — is considered a new benchmark in Chennai’s real estate market.
The plot of land, located at the entrance of the IT Park and adjoining the IT Highway, was originally acquired by the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT). It was handed over to the Tamil Nadu Road Development Company (TNRDC) — which develops the IT Highway also known as Old Mahabalipuram Road (OMR) or Rajiv Gandhi Salai — on a 99-year lease for developing world-class facilities for the IT and ITES sector as well as the road users.
The TNRDC’s earlier efforts to identify a business partner for the project failed because all were far below the upset price of Rs 10 crore fixed by the company.
When the TNRDC floated a revised bid recently, Mantri offered to pay Rs 10.5 crore per acre and emerged successful. The TNRDC will hand over the land on a 75-year lease to Mantri for setting up a hotel — four star or five star — and an amenities centre with shopping mall and club house measuring roughly 6.5 lakh sq ft. The developer will be at liberty to identify a viable business proposition.
While sources in the TNRDC and Mantri refused to comment, it is learnt that the two firms are working towards the conclusion of the bid process. Mantri will have to make a one-time payment of Rs 51.45 crore for the plot of land. Mantri’s offer is more than double of what many IT companies have paid for acquiring land from SIPCOT in the Sirusseri park.
However, the commercial value of private properties along the IT Highway between Sholinganallur and Sirusseri range from Rs 15 crore to Rs 20 crore per acre. Mantri is also developing a residential project — Mantri Synergy — at Padur on the IT Highway.
The builder is already promoting luxury and business hotels in Bangalore and Hyderabad and IT space in Bangalore and Pune. The group started by Sushil Mantri with a low capital of Rs 10 lakh in 1999 in Bangalore, has so far completed more than a dozen residential projects in Bangalore.
CHENNAI: The Bangalore-based Mantri Developers has successfully bid for a 4.9 acre plot of land at Siruseri IT Park on the IT Highway for developing an amenities centre. The price — Rs 10.5 crore per acre for a 75-year lease — is considered a new benchmark in Chennai’s real estate market.
The plot of land, located at the entrance of the IT Park and adjoining the IT Highway, was originally acquired by the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT). It was handed over to the Tamil Nadu Road Development Company (TNRDC) — which develops the IT Highway also known as Old Mahabalipuram Road (OMR) or Rajiv Gandhi Salai — on a 99-year lease for developing world-class facilities for the IT and ITES sector as well as the road users.
The TNRDC’s earlier efforts to identify a business partner for the project failed because all were far below the upset price of Rs 10 crore fixed by the company.
When the TNRDC floated a revised bid recently, Mantri offered to pay Rs 10.5 crore per acre and emerged successful. The TNRDC will hand over the land on a 75-year lease to Mantri for setting up a hotel — four star or five star — and an amenities centre with shopping mall and club house measuring roughly 6.5 lakh sq ft. The developer will be at liberty to identify a viable business proposition.
While sources in the TNRDC and Mantri refused to comment, it is learnt that the two firms are working towards the conclusion of the bid process. Mantri will have to make a one-time payment of Rs 51.45 crore for the plot of land. Mantri’s offer is more than double of what many IT companies have paid for acquiring land from SIPCOT in the Sirusseri park.
However, the commercial value of private properties along the IT Highway between Sholinganallur and Sirusseri range from Rs 15 crore to Rs 20 crore per acre. Mantri is also developing a residential project — Mantri Synergy — at Padur on the IT Highway.
The builder is already promoting luxury and business hotels in Bangalore and Hyderabad and IT space in Bangalore and Pune. The group started by Sushil Mantri with a low capital of Rs 10 lakh in 1999 in Bangalore, has so far completed more than a dozen residential projects in Bangalore.
21 comments:
Bangalore-based developer, Purvankara Projects has announced its foray into the affordable segment in an effort to beat the property sector slump. The company will launch these projects in two phases. In the first phase, they will develop projects in Bangalore, Chennai, Hyderabad, Coimbatore and Mysore with an investment of Rs 8, 000 crore. Purvankara will develop 64,500 homes with a total built-up area of 59.80 million sq ft in the next five years. These apartments are priced at Rs 10 lakh, Rs 15 lakh and Rs 20 lakh for one, two and three bedrooms respectively.For more view- realtydigest.blogspot.com
And once the houses don't sell, they will wind up. Declare bankruptcy, fire their employees and relax in Switzerland.
The OMR deal reiterates the continued viability of good projects even in the current market conditions. The crash which we have been reading lots about but fortunately not seen yet, I feel, is unlikely to be anything more than a slowdown. To get a perspective substantiated by reason, pl read www.meridharti.com.
Later,
Ashish Abrol
www.meridharti.com
Ashish, fortunately for whom? Fortunately for investors and builders maybe. But very unfortunate for buyers. I think the Govt should regulate house prices and fix a ceiling to check unwanted speculation.
Housing is an essential commodity like food, fuel, water, and edible oils. The Govt controls speculation in essential commodities. Therefore, there should be laws against speculation in housing also. In particular, housing should be used only for primary housing, and all other investors should be completely banned.
There are anti trust laws. There are monopolies and restrictive trades acts in india.
Builders associations are blatant violations of these laws. They propmote collectve pricing and cartel. This is illegal.
Its we people who do not raise voice, hence this is allowed. Government itself is a part of this lobby as most of the politicians are related to real estate.
We should raise voice to all possible forums. Then may be these laws will bring some kind of regulation.
Don't ever listen to estate consultants like Ashish.
It is in their interest to keep the market hot, even if it means incerased speculation. They don;t care about you or people. They care abt money and thier own career.
Suggestions from Ashish are to suit his own interests. Kick his ass whenever possible and follow your own common sense.
I agree with the previous poster. In my observation, here in the US, when the crash started, everyone who had a vested interest in RE always misled the people - either knowingly or unknowingly. In most cases, they would lose money or face if real estate would go down, so it was natural for them to keep their optimism and cheer-leading, hoping that real estate would keep its uptrend. It didn't matter to them whether others lost money - they were more worried about themselves. Frankly, I think they have absolutely no clue about what they are saying.
Some more intersting observations -
1. When the bull run is on - these people tell people that real estate never goes down, you will be priced out, etc.
2. When the price increases stop, they will tell that its good time to buy.
3. When prices seem to soften, they say its bargain and that prices will sooon firm up or increase.
4. When prices decline further, they repeat what they said in 3.
5. When builders and banks start failing, these people accept that there is a big problem and then they start talking about the bottom.
6. More banks fail, recession sets in, more people lose homes - at this point all these people are completely hopeless and suspect that its going to continue. Guess what, it does continue.
In US we are at stage 6, and there is more to come. In India, we are at 2 or 3.
Ahsish, Realty Rider and others - I don't necessarily believe that you really know how bad its going to get in India - you are being completly influenced by the mainstream media, who has vested interest in RE and hence has not fully accepted the problem. You, like most people, are also influenced by the most recent history - since the RE has been going up for last few years, you think that it must be true that it will continue to do so. Is that sensible? Rather than holding onto a sinking real estate ship, it will serve you better to start thinking about making money in declining market. Maybe change your expertise to sell foreclosed flats - this is what many sensible realtors did here in US. You will not regret. Good luck - and do review http://www.chrismartenson.com/bubbles to understand how common the bubbles have been in history and how everyone experiencing them denies it - no exceptions.
Prashant,
Screw Ashish, Boss Et. al...
They are a bunch of jokers who will understand only with time.
What is more problematic is that due to the vested interests of greedy banks, builders and bastards, naive people will get screwed.
There will be a bloodbath in India by the time they reach your point 6 stage, which could be 6-12 months from now. It took a long time in the US because of all the Steroids Alan GREEDspan, Helicopter Ben and joker Paulson has been doing. But no one could avoid this and it is finally coming to haunt Americans in their ASS.
I wish that the Indian bubble bursts faster. Unfortunately, I have leared that it takes its own sweet time - and the fact that it takes time is THE MAIN REASON why most people think that the burst is not happening. The builders will hold on as long as they can. Similarly, it will take time for banks to repossess flats and put them back on the market. Price declines because of these two reasons will fuel further similar problems. IMO, one year from now, we'll be at 4 or 5. For the real bloodbath to start I think it will take another year. Hope I'm wrong and it happens earlier :).
I wonder if this unhealthy obsession with bubble will end up hurting people more than the 'real estate bubble'. All asset bubbles are notoriously treacherous. So called smart people think they will profit from a bubble as long as the prices are inflating and will exit leaving the other fools, so called
bagholders, to deal with the aftermath. But then there are even (so called) 'smarter' people who think they have already detected a bubble that is about to pop. They are confident that by staying on the sidelines, someday they will be able to buy the very same assets at much lower prices. Only if it were
that simple! The chances are both these 'smart' and 'smarter' people will suffer, no matter how supremely confident they are. Only survivors of a bubble are those who invest for long term based on their needs and keep their goals modest, usually aiming for growth of their savings at a rate that is somewhat above the prevailing rate of inflation. Sure signs of imprudent investors are inability to filter out short term noise and worst of all, trying to call tops or bottoms (or detecting bubbles).
On a lighter note, here is my version of interesting observations about bubble enthusiasts:
1. When a bull run is on, these people sense inflated price levels, even though some of the gains are
driven by fundamentals.
2. When the prices keep increasing, they get even more convinced of a bubble. Afterall, any gains on
'inflated' assets push them deeper into bubble zone.
3. When prices stagnate to maybe digest the gains, they say buyers are withdrawing (read sky is falling).
4. If there is a slight decline, the drums start beating faster about speculators in trouble, desperate investors looking for exit, trouble in economy, global slowdown and other fancy scenarios.
5. When the prices refuse to crash, they start talking about manipulation. All bearish reports are prominently highlighted, any less than bearish story is termed as propaganda by bulls/boomers. At this stage, the language usually gets abusive.
6. Guess what, even if there is a bubble and it pops, the prices never come down to the so called
inflated levels in step 1 above.
Follow this link to explore the phenomenon called 'Negativity Buble'
http://rightadvice4u.blogspot.com/2008/08/negativity-bubble-in-real-estate-market.html
Point No. 7 to add to above:
7. When investors get nervous because of growing realization about inflated real estate prices, they get desperate and start their propaganda stating that there is no bubble. The very fact that the real estate lobby starts visiting bubble websites to post negative comments is an indication that things are out of balance. In the US, UK, Spain and Australia, many homes have been on the market for almost 1-2 years without any offer meeting the seller's expectation. House prices are sticky on the way down, so what usually happens is that house prices may fall by 10-20% in nominal terms over 3 years, while inflation goes up by another 10-20%. The net result being, inflation adjusted prices fall by over 30% over that period.
The greater the frequency of comments from the real estate lobby desperate to entrap buyers, the firmer should be the resolve of buyers to wait it out. One can follow my advice listed above about the rental yield. Any visitors to this web site, please follow one simple rule.
DO NOT BUY PROPERTY UNTIL THE RENTAL YIELD IS CLOSE TO DOUBLE DIGIT PERCENTAGES (8-10%).
Observer.
I would like all visitors to this blog to think carefully about one point. If the real estate market was thriving with ever increasing sales etc, why would people from the real estate lobby visit websites?
The real goal of the real estate lobby is to give the impression that one should "buy now or be priced out forever". This is the standard trick of the real estate lobby in US, UK, Spain, Australia, Canada and many more places worldwide, now including India.
If sales were sky-high, and the real estate guys/investors/brokers were making lots of money off of poor debt slaves (slaves to EMI for 20 years!), why would they be visiting websites like this? I think this website is going up in the Google rankings for India bubble searches, so I hope more and more buyers see this message. I hope they think about this simple fact and hold off purchasing till prices fall substantially. DO not fall for the trick of "being priced out forever". Hold on, and save your money, and enjoy life and take a trip to Switzerland with the savings later this year!
What a joke! All those opposing fantacy bear case are from real estate lobby. This is as smart as calling all real estate bears ISI agents because under the garb of helping middle class people to buy homes, they are actually trying to crush India's real estate market :-)
If you wait for rental yields to climb to 8-10%, you might as well forget buying a home for at least one decade.
http://rightadvice4u.blogspot.com
WHat happens if the nominal home price doesn't change for 5 years when inflation is running at 8%? It results in more than 30% correction in real terms. To compare renting vs buying in this scenario, see:
http://rightadvice4u.blogspot.com/2008/08/rent-or-buy.html
This is a narrow example based on certain assumptions, but it tries to answer the blanket argument that nobody is supposed to buy a house in current environment, no matter what.
All these builders have announced so many projects which are close to 50B US$.I am not sure how they are going to raise capital.Foreign banks,PE Firms are not in a position to invest this much money; they are in need of capital to cover their ass.
All the indian consumers whoever this RE companies,RE lobby could exploit; they are almost with out their pants.Indian banks are not going to have any money to lend atleast for 1-2 years. PE firms in US are in deeep shit with many their investments gone wrong.
To reinforce my previous exhortations, please take the following typical example in Bangalore. On craigslist, look at the following advertisements for a 3-bedroom apartment in Bangalore, Rohan Vasantha:
Sale price: 66 lakhs
http://bangalore.craigslist.co.in/reo/807822965.html
DO not forget you will have to pay registration costs + parking etc, so add another 7-8 lakhs!
Rental price: 20K per month
http://bangalore.craigslist.co.in/apa/808807950.html
The rental yield is just 3.2%!
For someone taking out a loan for 60 lakhs, along with a cash payment of 15 lakhs, EMIs will be approximately Rs 80,000 per month for a 20 year loan at 13.5% interest. You will have to sink all your life savings of 15 lakhs into the property. At the end of the loan tenure of 20 years, what will you have in terms of assets? Just a flat in your name and that is it! Think about this one carefully!
Now here is the real "right advice" for you, the home buyer, instead of the "right advice" for the real estate lobby. Take the same apartment for rent, and invest the remaining Rs. 60,000 per month in an ELSS scheme which is also tax-deductible. One can find some balanced funds which can yield approx 10-15% average annual returns. If it is true that it will take another decade for rental yields to approach 8-10%, then you can keep investing the remaining 60,000 per month and in 10 years, it will be approx 1.4 crores! Do the calculations yourselves! Do you want the real estate lobby to get the above 1.4 crores, and is this why you were born in life, to be wage slaves to your company as well as the real estate lobby? They are making money off of your sweat and blood, like a bonded laborer for 20 years, with all your savings gone towards the downpayment and only asset at retirement, just a flat in your name. Think about this carefully. With 1.4 crores, you can even start your own business and achieve freedom from your boss, as well as the real estate lobby. Also, do not forget about the initial amount of 15 lakhs that you paid as downpayment. In the same ELSS scheme, over 10 years, that 15 lakhs will become over 50 lakhs! Think about this carefully. The real estate lobby (builders, PE folks, brokers, investors etc) will be more than happy to help themselves to your 1.9 crores over 10 years, so they can lead a good life, while you work 12-14 hours spoiling your health at your job. Do you think your job is safe for the next 20 years? What if there is a lay off or a medical problem? If you rent, and you have a layoff after 10 years say, you have 1.9 crores in your ELSS account, which gives you enough financial comfort to wait and search for another job properly, or even start your own company.
Make no mistake, the real estate lobby makes money off wage slaves like you, and will say anything to get you to help make themselves rich. "Buy now or be priced out forever!". So use the following simple advice, do not buy until the average rental yield in your area approaches 8-10%. This simple piece of advice will save you a lot of money, and will help safeguard your future.
Observer.
The very fact that now desperate people like Ashish, realty rider, boss and others are now on here is exactly the point. They want you, the hard-working techie, the 12-14 hour wage slave, to part with as much of your money as possible, so they can lead a good life. While you spoil your health and develop high blood pressure, diabetes, stress-related problems, they will be happy counting the money and going on vacation to Goa or Singapore.
So all we wage-slaves should revolt and fight back. What can we do to help each other? We should spread the word among all our friends and colleagues at our companies. We should talk to our friends and relatives, and point them at this website or discuss this issue. We should try to form associations and even construct our own apartments and cut out all these middlemen and investors and brokers. We should call our ministers and tell them they will not get a vote in the next elections. We should write letters to newspapers saying they can choose between us, or the ad money from the real estate lobby. Publish letters to as many different magazines as possible, and also raise this issue with NRIs and others who are not yet investors. Information is power, and do not fall for the propaganda of the real estate lobby under the guise of "right advice". It sure is "right advice" for them to pocket your money. Stay firm and resolve to fight back.
Ya i purchased on when i was working with http://www.omrhome.com
If you can afford it always preferable to buy land in suburban areas and build your own. Many people are scared of building their own house.The builders have taken advantage of this psychology entered the field.Just like any other consumer item they pack it well and sell it to you. Talking of building your home, this work can you can entrust to trustworthy building contractors, supervise their work and get your independent house constructed. The main advantage in the process is land value appreciation over the years.If you buy a flat you only own the brick built structure which will eventaully depreciate in value both in financial and physical terms.Your claim over the undivided share in the property is only good in theory. But the land you buy will apppreciate in many folds over the years. More over as sole owner of the land you are at liberty to sell or make use of the land as per your requirements.
Thanks for sharing, I will bookmark and be back again
Apartments in Chennai
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Independent House for Sale in Chennai OMR
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