Friday, May 27, 2005

Lack of strategy hampers developers

Lack of strategy hampers developers
The Times of India

Bangalore: Other than courting controversy — including Arkavathy and the Bangalore-Mysore expressway — the Dharam Singh government had little to offer the land and property sector in its first year.
Sure, the sector’s been on a roll, offering good returns to whoever has chosen to invest in it. Bangalore was No. 1 in India in total comm e rc i a l (grade A) space taken up in 2004, accounting for nearly a third of the pan-India figure. The performance has continued this year too and is also now spilling over into secondary cities like Mysore.

But it will be hard to find someone who is willing to credit any of this to the Congress-JD(S) regime.
“The sector is running on its own momentum. The Karnataka government has made no special efforts for it,” says Manisha Grover, associate director in property consultancy Jones Lang LaSalle India (JLL).
Irfan Razack, chairman and MD of Prestige Estates Projects, says the real estate sector needs the government to focus strongly on infrastructure. “We hear the right sounds from the government on this, but do not see any visible action.”

There have been some positives. Many, like J.C. Sharma, managing director of Sobha Developers, have welcomed measures like the ‘transferable development right’ (TDR) — that compensates those whose land have been acquired through additional floor area ratio (FAR) instead of through governmental funds — and the recent ban on registration of property developed on agricultural land that has not been converted officially to non-agricultural land.

Ankur Srivastava, managing director of property consultancy DTZ Debenham Tie Leung, finds the government’s plans for the IT corridor helpful.

But the story on the whole is one of inaction and a lackadaisical attitude. The longterm sustenance of growth in the property sector requires the government to address Bangalore’s infrastructural problems. But here, the government is found to be severely wanting. “It should encourage more public-private partnerships to address these issues,” says Srivastava.

The delay in finalising the new comprehensive development plan (CDP) for Bangalore has also created uncertainty. Developers can articulate strategies only when they are clear what the government intends for the city. “Which areas will be earmarked for industrial, commercial and residential uses in the new CDP? What will be the new FARs? We can plan only when we know the answers to such questions,” says Sharma.

The property market and business has been very good in the last one year. But that’s in spite of the government. There’s a huge thing going for this city, but we are missing out on a good part of the potential because of government inaction, especially on infrastructure. The government must have a vision, a direction. A lot of things are in the pipeline, but there needs to be a sense of urgency.
— Irfan Razack, chairman and MD of Prestige Estates Projects:


Post a Comment

<< Home