New townships in Kolkata to add 250 mn sq ft in five years

A boom in real estate sector across the country has not left Kolkata behind as a number of upcoming townships in city suburbs are attracting investors and mass housing complexes to some hitherto uptapped suburbs.

According to estimates by the Confederation of Real Estate Developers of India, in the next five years 250 million sq feet will be added to greater Kolkata, requiring an investment Rs 37,500 crore.

Rajarhat in the north-east, Dankuni in north-west, Howrah in the west, Diamond Harbour road beyond Joka and Batanagar in the south-west and the Garia-Narendrapur stretch in south-east are areas which will see more than 50 per cent price rise in the next one year, said real estate sector sources.

Two years back, property prices in Rajarhat were not more than Rs 1,200 sq feet.

Prevailing prices are not less than 2,800 per sq feet.

Unitech, which is developing a 150-acre township in the area, is selling at around Rs 3,000 square feet. By the next year, Unitech expects to sell at not less than Rs 4,000 sq feet, says Ranjan Arora, assistant manager (sales), Bengal Unitech Universal.

In Dankuni, a mega township by the DLF group along with a couple of infrastructure projects are pushing up property prices.

The second Vivekananda Setu (across the Hooghly River) and the Belghoria Expressway, which are under construction, will further boost the prices here as Dum Dum airport will only be 20 minutes from Dankuni once the construction is over.

According to Jitendra Khaitan of Pioneer Properties, property prices in Dankuni have escalated by 40 percent over the last year, and about 50-60 percent rise is expected the next one year.

"It is only after two-three months that the exact price rise in the Dunlop area can be anticipated, but the area will see a substantial price rise after the DLF brand," says Himon Sanyal, head, corporate services(east), TrammellCrow Meghraj Property Consultants.

In the west, Howrah is another developing area as it has emerged as a suitable destination for middle-income group housing and small businesses based in Kolkata, says Khaitan.

Along with high-end township, a number of shopping malls and other public-utility service centres, which are coming up in the area are expected to jack up the prices.

The Kolkata West project, a mega township project, is attracting a number of NRI investors in the area. In the south-west, the proposed township on the surplus factory of Bata India at Batanagar is pushing up the prices.

The selling price per square feet area in the township is expected to be around Rs 2,000, whereas the ruling prices in the area is around Rs 900 per square feet.

"It is wrong to say townships are pushing up the prices in a particular area, the he construction cost over the last year has gone up so much, that it is impossible to built houses at less than Rs 1,000 square feet," claims Sumit Dabriwal, managing director of Riverbank Holdings Pvt Ltd, which is executing the Batanagar township project.

In the south-west, Diamond Harbour road stretch also witnessed moderate price rise over the last year, mainly due to the government's proposal to develop a township in Baruipur.

Alongside, Raichak-Kukrahati bridge is expected to drastically cut travel time to Haldia.

Both the projects are scheduled to be built by Indonesian company Salim. However, the fate of the projects appear uncertain as of now because of local opposition to the presence of Salim as an infrastructure developer. In consequence, real estate analysts do not predict substantial price rise in the area over the next year.

"The are has a lot of untapped potential, but at present not much price rise is expected as infrastructure is a problem here," says Sanyal. Garia and Narendrapur in the south are other areas attracting investors and occupiers, as metro rail extension till Garia will ensure easy connectivity to the rest of the city.

The prevailing prices in Narendrapur is around Rs 1,500 square feet. A moderate 15-20 percent rise in price is expected in the coming year. Areas like Patuli, Baishnabghat, Barrackpore, Sonarpur and Barasat are some other upcoming areas drawing the attention of small investors and MIG and LIG occupiers.

Following industrial development in smaller West Bengal towns like Durgapur and Haldia, a number of housing projects are driving real estate sector development in the areas.

As Kolkata appears to be poised for rapid information technology sector led growth in the coming years, many property consultants feel the time is just right to invest in Kolkata.

"It is the right time to invest in property in Kolkata, as at least 50 -60 percent price rise is assured in the some of the developing areas in Kolkata," says Sanyal.

"Suburban locations are witnessing some pressure as increasing interest rates have magnified the outflow for genuine purchasers. While Kolkata market has traditionally been know to be less volatile compared to Mumbai and Delhi, and hence, any investor who is comfortable with the city and moderate long-term returns, can consider this is as a reasonably safe destination." says Kaustuv Roy, analyst at Cushman Wakefield.

Kolkata continues to be a tier-II location in terms of property and land valuation, and most experts think the city will take quite some time to catch up with developed markets like NCR and Mumbai.

"Kolkata is referred to as a Tier II City for commercial growth and as of now does not compare to the real estate prices witnessed by more established markets like Mumbai and NCR, despite Kolkata's recent emergence (or relatively newer emergence) as an IT/ ITES. Furthermore, there is still hesitation amongst new entrants for Kolkata as a destination; hence the demand will be a factor which will act as a deterrent to growth," says Roy Price appreciation has been in the range of 15 per cent to 20 per cent on an average through the past 12–18 months in Kolkata and may remain similar in the next year, he predicts.

Certain areas like New Town Rajarhat where several mass housing projects are nearing completion, the prices may appreciate 5 per cent more than the other areas, he adds.

Similar is the view of Ranjan Arora from Unitech, who says, "The same apartments which we are selling at Rs 3,000 in Kolkata would have fetched around Rs 5,000-6,000 sq feet in Mumbai."
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