Kiss your dreams of owning property in Bangalore goodbye

Land prices rocket to a new high
The Driving Force: Easing Of FDI Norms, Creating Land Banks
The Times of India

Bangalore: Landlords are kings. Bangalore is witnessing feverish land acquisition activity by developers, and anybody with a parcel of land is today hot property.

Consequently, land prices, which were beginning to stabilise some time ago, has once again shot up. A property consultant says he had closed a land deal in Whitefield a month ago for Rs 1,000/sqft, but today in the same area there are transactions happening at Rs 1,200/sqft. “Some land owners are asking for prices as steep as Rs 1,500/sqft,” he says.

In Hebbal, land prices have touched Rs 1,500/sqft against Rs 1,100/sqft about 6-8 months ago. And land owners are beginning to ask for up to Rs 1,700/sqft. Towards Yelahanka, land rates have touched 1,000/sqft and on Doddaballapur Road (near North West County), it is seen to be touching Rs 700-800/sqft.

Industry analysts say this is being driven partly by the expectation of foreign investment flows into the property business following the recent easing of norms for such investment. “A few months ago, local developers were saying land has become very expensive and this wouldn’t be the right time to buy. But that’s changed. Everybody’s now trying to block large parcels of land in good locations,’’ says Mayank Saksena of Chesterton Meghraj Property Consultants. Such land blocking would enable local developers to compel international developers to enter into joint ventures with them to develop these prime properties.

A number of foreign construction majors are seen to be interested in building integrated townships in India. Srikanth Srinivasan, director in management consulting company JCSS Global, says his company alone is working on three integrated township projects in Bangalore, all of them involving foreign majors and each on over 200 acres of land. The Puravankara-Keppel Land joint venture is planning three massive projects. Some see the frenetic land acquisition to be the result also of the trend towards built-to-suit facilities for corporates. Such facilities require large land parcels because companies want to consolidate all operations in that space and simultaneously provide for scalability.

“So developers feel the need to build a good land bank,’’ says Ankur Srivastava, managing director of property consultancy DTZ Debenham Tie Leung.