Friday, February 25, 2005

Real Estate FDI: Land prices will shoot up in City

Land prices will shoot up in City
Deccan Herald

Land prices in Bangalore are likely to shoot up once again in the coming months, realtors said while reacting to the opening up of the construction-development sector, reports DHNS, Bangalore. The City is likely to be the most preferred destination for investors, they felt.

While welcoming foreign investment, as it would increase competition in land development and construction activities, realtors felt that it would have an impact on land prices, which have gone up nearly 50 times in the last one year alone.

CEO of Feroze Estate and Properties Feroze Abdullah noted: “Bangalore would be the favourite. FDI will help in creating jobs and increasing realty activities. And 100 per cent FDI will be a catalyst to increase prices further. How this will help the have-nots is another question.”

Director of Silverline Realty Zaheer Mahmood said foreign companies have already begun scouting for land. “We already have enquiries from two companies, who earlier had problems sourcing land,” he added, refusing to name the clients.

The move will increase quality of construction in infrastructure projects too, said advocate S Selva Kumar who specialises in realty issues.

Multi-national corporate real estate consultants Equis Corporation felt that FDI in construction will also help the ailing construction industry which uses the age-old methods of construction practices. Equis vice-president (Asia-Pacific operations) Shrinivas Rao said the impact of FDI approval may not be immediately felt.

“Foreign firms won’t be allowed own land and will have to depend on Indian developers. Traditionally, Indian developers are used to selling assets as against the international developers’ strategy of leasing assets,” Mr Rao said. “In the long run international firms will bring in an era of ‘intelligent buildings’ that focus on maximisation of usable space.”


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