Rising property prices across major Indian cities from 2010-beginning is encouraging manufacturers to venture into the property market  The ‘evolving’ realty market is witnessing new entrants, especially from the manufacturing sector. Over the last 3-4 months, around six manufacturers from various segments have either monetised their prime land assets or have entered into joint ventures (JVs) to develop property projects.
“This interest among manufacturing companies to aggressively foray into the property market has been on the back of steady rise in property prices across major Indian cities (Mumbai, Pune, Bengaluru and others) from 2010-beginning,” says New Delhi-based realty analyst Viraj Khanna. Real estate prices witnessed a steep correction of 30-40% in 2009 as the economy plunged and buyers postponed purchases.
Know the entrants
Cable Corporation of India (CCI), a Mumbai-based leading manufacturer of power and control cables, has announced the launch of Rs 1,000-crore real estate project in Borivali, a suburb in West Mumbai. The project is likely to include 700 flats.
Textile major Arvind, in collaboration with B Safal Group, plans to develop 1 million square feet in Ahmedabad. Steel wire manufacturer Usha Martin Group has recently come up with an affordable housing project in Boisar located in Mumbai outskirts. Usha Breco Realty is the group’s real estate arm. The Group further plans to launch similar projects in Bengaluru and Pune by 2010-end.
“There are many manufacturing firms that hold huge land banks in urban centres and selling these plots would earn them significant revenue as property prices have appreciated considerably over the years. So, the firms are either entering into JVs with realty majors or undertaking developments of their own,” says Pranab Datta, vice chairman and managing director of property consulting firm Knight Frank India,in an exclusive telephonic interview to Times Journal of Construction and Design (TJCD).
However, Mr Datta opines that this trend is not likely to catch up in a major way over the coming years as real estate development is complex and requires core competence.
Golden Tobacco and Hindustan Composite are among those manufacturing firms that have sold their land to Sheth Developers and Wadhwa Group, respectively.
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) is likely to soon finalise a Rs 1,000 crore deal with the Wadhwa Group,in lieu of its 2.5 acres plot in Mumbai’s Bandra-Kurla Complex (BKC).
Jeeta Bandopadhyay |
