Devanahalli gaining momentum

Devanahalli gaining momentum
The Economic Times

Afew years ago northern region was a neglected area and the proposed international airport changed the scenario now. The Bangalore International Airport Areas Planning Authority (BIAAP) was specifically formed to envisage a planned development wherein three nodes were selected as magnets like Devanahalli, Doddaballapur and Vijaypura. The overall zoning was made to accommodate various activities to sustain and support the international standards of the proposed airport. In a nutshell, it was a counter city to be developed in order to sustain the exponential growth of Bangalore.

The entire Bellary road is being widened into a sixlane highway now which will add value to the real estate development. The proposed 4-lane road linking the IT hub with Devanahalli will also provide hassle free connectivity to the corporate personnel from the IT corridor to the new international airport within the next two years. Presently the city has expanded upto Jakkur and Yelahanka on the northern side. Further growth has been curtailed by the greenbelt area. In anticipation of good growth prospects, developers have acquired large tracts of land beyond the green belt. Land rates in the Jakkur plantation area are Rs 2200 per sqft for large plots of 2 - 6 acres and for plots of smaller sizes Rs 2000 to Rs 2400 per sqft. Land prices jumped from Rs 4-Rs5 lakh per acre a few years ago to Rs 70 lakh- Rs 1 crore per acre now. Larger land parcels on NH7 are Rs 100-Rs 150 lakh per acre. Those located inside the national highway range from Rs 85 lakh to Rs 95 lakh per acre. Beyond international airport on the IVC road, it is said that land acquisition is aggressive where prices hover between Rs 65 lakh and Rs 70 lakh per acre. On Devanahalli-Doddaballapur road, land rates vary from Rs 40 lakh to Rs 45 lakh per acre whereas on Devanahalli-Nandi Hill road they vary from Rs 35 lakh to Rs 40 lakh per acre. The current zoning is agricultural and the CDP is still awaited to get a clear picture.

The huge potential engulfing the area has lured not only local developers but also national developers like Raheja, DLF, Ansals, TSI Ventures and Unitech to its fold. While Raheja and Hiranandani are said to have acquired land parcels others are in the process of negotiation.

Incidentally there are no commercial, hotel, retail, entertainment, educational developments as of now. However, two large parcels of land are said to have been purchased by Infosys and Fidelity Investments respectively. The KIADB is procuring about 600 acres of land in Kannaangala near the international airport.

The Oberoi hotel group is said to own about 300 acres land in the Devanahalli area and other hotel groups are contemplating hotel projects, which will intensify once the international airport becomes operational.

The Seattle based hospital chain, Columbia Asia, has entered India via Bangalore and it will invest $20 million in three hospitals in Bangalore over the next two years, the first of which was opened recently on Bellary road. The other two hospitals are coming up on Kanakapura road, and Bannerghatta road.

The Esteem mall is coming up near the Hebbal flyover with ground plus three floors. Some individual units also span up to 10,000 sq.ft. of super built up area. The prevailing rentals for the mall are in the range of Rs 40-45 per sq.ft. It is a small format mall and one of the first in that part of the city.

Township Projects

The entire stretch along Bellary road from the Hebbal flyover to the Devanahalli airport site has some large township projects, a clear indication of the impending residential property development.

Spurt in Prices:

The main driving force for the spurt in real estate prices in Devanahalli is the proximity to the proposed international airport. As such realty deals are speculative ones and residential plotted layouts are being developed in large numbers in the primary catchment areas. Since large portions of land lie in the green belt, there have been no developments in these areas. The growth of the city in the northern area has been upto Yelahanka and Jakkur. However, when the green belt is lifted, it is possible to assume that there will be a flurry of real estate activity in these areas, which may lower the values in the micro-market due to increased supply and availability of multiple options.

There has been hectic activity in terms of investment in residential property in the last two years in the last two years towards IT corridor in the south-west quadrant of Bangalore. However, as property prices shot up from Rs1400 per sqft in 2004 to Rs 2000 per sqft now, it has moved out of the purchasing capacity of homebuyers. Apartment rates on the outer ring road and Marathalli are as high as Rs 2300 per sqft for projects built by large developers. All this has made the residential projects in Yelahanka, Hebbal and Jakkur attractive to the buyers in terms of pricing. Hence, the demand has increased and residential apartments in Yelahanka which were priced at around Rs1000 per sqft two years ago are currently sold at around Rs 1600 to Rs 2000 per sqft.

The proposed Arkavarthy layout which is in the vicinity has drawn fresh attention to this area. It has some 20,000 residential sites. Though this BDA layout is presently disputed, it is likely that some kind of settlement may be reached, due to the scale and nature of the project. There are other layouts such as the MCECHS layout for the ministry of Telecom employees.

Site Layouts
The micro-market has approximately 10-12 projects of residential plot layouts with an aggregate of approximately 5000 plots. Out of this, 900 plots are presently available for sale in the market. The average absorption rate of these projects is 70 per cent.

Vacant sites lying in the vicinity of the proposed international airport are priced at Rs 650 to Rs 700 for developments having proper statutory permissions from BIAPPA. There are also layouts priced at Rs 300 to Rs 400 and these developments may not be having proper statutory permissions. Prices for vacant plots have touched Rs 900-1100 per sq.ft. recently near Hollywood town and Swiss Town on Bellary road. Residential Property Development

The BIAPPA planning area for Devanahalli has no apartment projects as yet. This is because the area is hardly developed and apartment projects will come up later. It is said that once the airport becomes operational, there will be a rapid urbanisation of Devanahalli area. Commercial campuses of corporates like Infosys, Fidelity are expected to come up as these companies have already purchased land. Wipro and other corporates are said to be scouting for suitable land parcels for future development. Some of the five star hotel chains are also seeking land parcels to locate their hotels in the future, according to a survey by Trammell Crow Meghraj Property Consultants.

The apartment developments at Hebbal and Jakkur on Bellary Road and Yelahanka are barometers to understand the future trends and pricing that can be expected in the neighbourhood.

Apartment rates jumped from Rs 1600 to Rs 2000 per sq.ft. in just two months. All the new projects launched are being quoted at Rs 2000-2500 per sq.ft. In the case of villas, the rates are Rs 2500-3000 per sq.ft.

At present Devanahalli is a lucrative option for realty investors as compared to other areas of the city. This is due to appreciation noticed for investment in land. In the last six months land rates appreciated by 35 to 40 per cent along the NH-7, Bellary road. Due to the proposed acquisition of land by KIADB, availability of limited land parcels in and around the international airport is yet another reason for the spurt in demand for land parcels and the resultant spurt in price.

As per the BIAAPA, there are around 160 projects involving development of over 1000 acres of land. However, it is difficult to identify the present status as these projects are carried out in a phased manner based on the booking criteria but on an average 70 per cent absorption rate is evident in almost all the schemes.