Kolkata playing catch-up

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Kolkata, which had lost out to other metros in the frenzied run for realty, is catching up big time.

This week the Apeejay group, which owns The Park Hotels, bagged a prime 3.35-acre property along Kolkata’s eastern metropolitan bypass for Rs 135.77 crore. The group, which already has a hotel on Park Street in downtown Kolkata, will build a 300-room luxury hotel on the plot. For company, it already has the ITC Sonar Bangla luxury hotel on one side and the proposed DLF-Hilton Hotel on the other. Then, Webel, the government agency to develop IT and electronics services, formed a joint venture with private property player Akash Nirman Ltd to set up a 1,200-acre IT township near Rajarhat on the north-western fringes of the city. The government will parcel out part of the land to Infosys (90 acres) and Wipro (50 acres). The IT majors, which already have a large presence here, had been waiting for fresh land allotments for quite sometime.

Most of the city’s hoardings announce a new township or a hotel or a mall every week. The pace has been dramatic. While office space, home realty, retail and hospitality are growing rapidly, real estate activity is high in the city’s northern, southern and western peripheries. Says Abhijit Das, MD, Kolkata, Jones Lang LaSalle Meghraj, India, “The office space market is currently witnessing a huge upswing in terms of demand, supply and price appreciation.” The residential sector, adds Das, is doing equally well and is witnessing steady growth in consumption and pricing. As for retail, there are eight malls in the city with 12 more slated to come up by 2010.

Pro-investment Left

So, what’s driving the real estate sector in a state run by Marxists?

A pro-infrastructure chief minister, admit all the major players. “The state government is very aggressive on infrastructure,” says Rahul Todi, MD, Shrachi Group. “There’s been a sea change in the last 7-8 years and investments have poured in over the last two years,” he adds. “It’s because of the current hard-sell by the chief minister that West Bengal has attracted one of the largest chunk of investments in 2007, which include the trophy investment by Tata Motors (for the Nano at Singur) and the numerous investments into steel (Jindal Steel Works), alumina and captive power (Vedanta), petroleum and petrochemicals (Haldia, Indian Oil) and so forth,” points out Das.

The IT, non-IT advantage