Private equity players and funds such as Blackstone, IndiaReit, HDFC, ICICI Securities, Anand Rathi, Motilal Oswal, Morgan Stanley, Lehman Brother, Xander who have been planning to pump Rs 50,000 crore into the overall real estate sector are eyeing Delhi, Mumbai, Pune, Hyderabad, Chennai to fund new developers for their brownfield real estate projects. Brownfield real estate projects are the realty projects happening in city- centric locations where property sales are high with quick returns.
Sanjay Dutt, chief executive officerbusiness, Jones Lang LaSalle Meghraj (JLLM) told FE, "With the supply of commercial properties set to touch 55 million sq ft by December 2009, there will be an expected demand for 25 million sq ft during the period. Moreover, front office will generate huge demand in comparison to IT parks and SEZ."
The new trend comes at a time when builders are strongly focusing on cluster development of residential projects. Jeetendra Jain, managing director and CEO, Neev Group of Companies said, "We are currently in talks with South Mumbai-based developer to enter into JV with them for developing high rise apartments at an investment of Rs 500 crore where both parties own lands, but would jointly develop projects. The project is expected to be launched in the next nine months and will be ready for possession in the next two years."
Cluster development is an eminently suitable model for the Indian milieu, since it permits developers to optimize the available resource where there is a need for land conservation. Apart from having greater potential for increased environmental sustainability, cluster developments also result in a reduction of costs related to construction and location-related infrastructure. According to Pawan Swamy, managing director (West India) from JLLM, "Property buyers also benefit by the retention of a maximum possible amount of open space, preservation of community and enhanced security. In a congested city like Mumbai, these factors are significant."
After selling ready possession residential properties at Goregaon East in North Mumbai at Rs 3,999 per sq ft, Royal Palms India is now planning to offer ready possesson office and mall space on ownership basis at Rs 3,999 per sq ft at the same location.