The Hyderabad real estate market continues to consolidate after entering the new year, with prices still at three-year lows. Builders across segments, luxury housing, middle-income and affordable housing, believe that the market sentiment shows that it is still a buyer’s market.
ROBUST GROWTH

The General Manager of Ramky Estates, Mr Patnaik D. R., told Business Line that demand has shot up in most major cities of the State, barring Hyderabad. Visakhapatnam, for instance, has shown a robust growth and prices too have firmed up there. The situation continues to be stable in Hyderabad.

Several developers have announced new projects in the past few weeks, showing a good sentiment spilling onto 2012. PEBL, a venture that is developing a large project with L&T as construction partner, has announced a project close to the IT hub; Mahindra Lifespaces, one of the top real estate developers, announced a new project, and a few others are close to firming up new ventures.

Many of the developers are also looking at the affordable housing segment, where there is relative demand-supply mismatch.
Mr P. V. Ravindra Kumar, Chief Executive Officer of Vasathi Housing Ltd, said that the company is looking at not only expanding their new venture Vasathi Housing project, but also setting up projects in Bangalore and Chennai. There is good business environment in real estate lately. “Any project that is strategically positioned, with right price offering, will be successful,” he said.

The Managing Director and CEO of Mahindra Lifespace Developers Ltd, Ms Anita Arjundas, earlier during the month, announced their entry into Hyderabad, with a one million square-foot, Rs 250-crore housing project. She said “for a corporate entity focussing on the real estate market in several States of the country, we continue to invest in new projects unmindful of the slowdown, factoring the business cycle of ups and downs.”

“In fact, we continue to study the market keenly and are close to finalising plans for affordable housing ventures, where there is demand. This is a promising area, and the company hopes to enter this by next year, beginning with a focus on markets such as Maharashtra,” she said.

BUOYANT MARKET

During a meet hosted by the Confederation of Real Estate Developers Association of India (CREDAI) here recently, Mr G. Yoganand, Managing Director of Manjeera Constructions, said the real estate market in Hyderabad is on course again, particularly in the core city areas. The shortage of housing units in the core city areas is resulting in increasing demand in peripheral areas, which are well-connected.
Mr Yoganand, who is the President of CREDAI, AP, quoted consulting firms Jones Lang Lasalle and Knight Frank and their reports to suggest that the real estate prices will go up during the year.

Mr Prem Kumar, President of Andhra Pradesh Real Estate Developers Association (APREDA), said the realty market continues to look buoyant from November last. The agitation-related issues have settled down, the Partnership Summit ended on a very good note and the number of enquiries is going up.

The prices are also likely to firm up as input costs have gone up. The GO No 45 continues to be a matter of concern, as it has stalled some of the large projects. The GO seeks to provide for housing for weaker sections, as mandated by the Government, through the order. In the current form, builders are opposed to this move, the builders association felt.

The real estate developers have appealed to the State Government, requesting it to rework the order and make it more practical. Any delay in resolving this would hold back some of the projects on the verge of being launched, Mr Prem Kumar said.

Mr Patnaik felt that several projects are close to being announced by not only Ramky Estates, but also some other developers in Hyderabad and other major cities of the state including Visakhapatnam, which has seen good momentum lately, due to the announcement of infrastructure projects coming up.

Mr Prem Kumar, quoting recent property shows and the growing number of enquiries for new projects, says that the end-user is hunting for property once again and this will translate into good numbers.

Elaborating on the subject, he claimed that the NHAI had invited bids for a total length of 4,653 km road projects of which 3,051 km have already been awarded to date. Most importantly, the government is stressing on speeding up the road building process in the Left wing-infected areas and also in the North Eastern region currently confronting insurgency-related problems. In the ongoing process, the government has already invited bids for 1,236 km of road projects and work on the execution of 524 km-long road projects has already been started in these areas. In this connection, the government has launched a Special Accelerated Road Development Program for building road network in the North East where bids have already been invited for 1,305 km highway projects and road building work has already been started on 353 km of roads in the region.

“Post the festive season, construction activity and consequently cement demand will gain traction, which could lead prices to rise by 1-2 per cent, on a month-on-month basis, in November,2011,” Crisil Research head Ajay D’Souza said.

The average retail price of cement in the country rose by about six per cent month-on-month to Rs 280 per bag in October 2011. “Notable price hike in the Northern region in October, 2011, largely supported the pan-India price increase,” he said, adding that on a yearly basis, the average pan-India retail cement price recorded an increase of almost 15 per cent during the month. D’Souza said the domestic consumption of cement in October remained almost flat resulting in just three per cent increase in demand during the April-October period of the current fiscal. “The subdued pace of construction activity in real estate and infrastructure segment is largely instrumental for this lacklustre demand,” he said.

India’s total consumption of cement in October this year was 18.1 million tonnes, just 0.6 per cent up over the same month last year. It consumed 123 million tonnes of cement during the April-October period of the current fiscal.

In the U.S., retail price of iPhone 4S at the launch in October this year was $199 (around Rs.10,000) for the 16 GB model; $299 (around Rs.15,000) for the 32 GB model; and $399 (around Rs.20,000) for the new 64 GB model. And within three days of its launch, Apple had sold over 40 lakh handsets.The ‘iPhone 4S’ comes with a 3.5-inch, 960 x 640-pixel widescreen multi-touch retina display.

The project has been completed with an outlay of Rs. 250 crore and the entire city is likely to be covered over the next 24 months, according to A.R. Datla, Head, Marketing, Bhagyanagar Gas Ltd.Mr Datla said that the gas is being tapped from the KG D6 Reliance Industries fields supplied and evacuated from the East-West pipeline that passes through the region. The mandate is to provide piped gas for the city areas spread over 1,818 sq. km. “During phase one we have also set up gas storage and supply facilities at three Andhra Pradesh State Road Transport Corporation (APSRTC) depots,” he said.

“The project which seeks to cover whole of the city is expected to be completed over the next 24 months. But significantly, we will start supplies progressively in areas wherever the pipelines are ready for local supplies,” he said over phone.

Thus far, about five CNG terminals are operational in Hyderabad. Four more stations have been readied. According to plans, it is proposed to have 50 stations by December 2012 and 22 stations for APSRTC.

The multi-user LIP is located at Timmapur close to National Highway-7 and is equipped with a railway sliding containing three full-length railway lines and over 250,000 square feet of covered warehousing spread over 50 acres to cater to the needs of domestic as well as export and import trade, Suresh Joseph, managing director and CEO of the company, informed in a press release.

The LIP will handle domestic cargo in railway wagons and provide linkage for container trains to the gateway ports of JNPT (Mumbai), Chennai, Krishnapatnam and Visakhapatnam. CMTL is a joint venture between Continental Warehousing Corporation Limited (CWCL), a part of NDR group, and Kribhko Infrastructure Limited.

“We have already started domestic operations from the LIP and plan to commence export-import business from this month-end. We plan to handle more than 20,000 containers annually,” said a senior official of the company. The park has a bonded area that can handle 4,000 boxes at a time. It will handle container trails as well as conventional railway wagons. The process for notify News ing an inland container depot within the LIP premises is in an advanced stage, the official added.

The project, which is a part of a larger 245-km highway development venture connecting Hyderabad and Solapur in Maharashtra is being awarded on the toll-based module and the infrastructure major is bidding for the project aggressively, NHAI sources said.

The highways building division of the company is the third main arm of GMR Infra, which is engaged in a big way in power generation, airport building, highways and urban infrastructure. Currently the company has over nine projects across the country covering over 730 km of which six projects with a length of 421 km are operational and spread equally between toll and annuity based projects and the remaining three, which are currently under construction two are being built under the toll and third on the basis of the annuity contract. The road building wing of the company has recently made headlines by winning the 555-km-long and country’s largest road project connecting Ahmedabad in Gujarat with Kishangarh in Rajasthan involving an investment of Rs. 7,000 crore.