An MoU has been signed to develop 5.5 acre land located within the club. Xander is yet to offer an upfront payment as the deal is in initial stages, a source said. Members of the club have been approached to inform them on the deal and get the requisite permission, the source said. Residential units could fetch around R15,000 per square feet, according to a Mumbai-based real estate consultant.
There have been a series of club members meetings where they were informed that the club will receive the amount over a period of five years. Xander will be responsible for financing and construction of the project. The PE firm has committed $1.8 billion of equity capital to India since 2005 across private, public and credit investments. Founded in 1829, the club is the oldest golf club outside the British Isles.
Mails and calls sent to Xander Group did not yield any response. Man Mohan Singh, CEO, Royal Calcutta Golf Club, confirmed the development. The deal is awaiting clearance from the chief ministers office.
People with knowledge of clubs in West Bengal say that dwindling membership has led many of them using excess land for development of properties. The Bengal Club had developed offices on its land 30 years ago.
Experts are not very positive on residential development in West Bengal. There are a lot of hurdles for investors there in terms of perception, government push and business sentiment, an investment banker, who has worked for developers in the region, said. Whenever we have looked at real estate, commercial interest has not been great, he added. Also, many of these clubs do not have the flexibility of ownership of the entire land.
However, over the last few years, the change in demographics of the city is aiding the growth of premium and high-end residential real estate. Kolkata has potential to explore high-end residential properties as the movement in sales is not bad, said Samantak Das, national head (research), Knight Frank India. The proportion of more affluent people has gone up in the last couple of years. Also, there is a change in the peoples preferences who want more quality construction and better amenities.
Overall, the residential market in Kolkata is performing better than other markets like Mumbai, Delhi and NCR, according to consultants. There is an absorption rate of 12% in Kolkata and is stable at those levels compared with cities like Mumbai, said Ashutosh Limaye, head (research and Real Estate Intelligence Service), Jones Lang LaSalle India.
The city sees an average launch of 1,000 units in a quarter and the capital values in the city have also surged between 2 and 4%. As for the premium segment, of the total 40,000 to 45,000 of residential units launched in Kolkata across 200-odd projects till March 2012, 14-15% (6,000-7,000 units) are above R1 crore category, said Das. indicating more demand for luxury homes, Das said, Average vacancy (unsold units as a percentage of launched units) in the premium residential segment is 22-24%, which is much lower than the overall average vacancy in the city of 31-35%.