What slowdown, ask new realty developers

Unfazed by the slowdown in the property market, companies from assorted sectors are rushing into it. As many as 20 small companies have entered the segment in the past two-three years and many are firming up plans to make an entry soon.

Burman GSC, a venture between Dabur’s promoters and US-based venture capital fund GSC, and Action Group company Microtek Infrastructure are among those planning to try their luck.

While Burman GSC has been tightlipped and could not be contacted for details, Microtek said it was coming up with a luxury residential project in Gurgaon. Other firms that have recently entered the segment include Lotus Greens, K V Developers, M3M and BRYS. Most have announced plans for the national capital region (NCR), with plans for expansion later.

Microtek Director Ajay Aggarwal said the company had 500 acres NCR. It plans to launch eight or nine projects in the ultra-luxury/luxury residential and commercial segments. The initial investment in the next one to two years would be Rs 500 crore.

For the last 25 years, an Action Group subsidiary has been converting agricultural properties to licensed ones before selling these to builders.

Even big land owners are now becoming developers, according to an executive of a new realty firm. M3M, Lotus Greens and Microtek had land banks before getting into the development business.

BRYS Group, focusing on luxury real estate, has been floated by Rahul Gaur, after he left another developer Gaursons two years ago. It has announced its first project along the Noida expressway — BRYS BUZZ, where entry would be on invitation and the interiors would be done by Italy’s Tonino Lamborghini CASA. It has also bought land for BRYS BOLD & BRYS BOSS luxury projects, according to its website.

K V Developers (KVD) is the real estate armof the K V group, which is in the mint business. KVD recently announced its first project in Greater Noida. M3M launched its first project, M3M Golf Estate, in Gurgaon in 2011, which is under construction.

Ashutosh Limaye, head, research and real estate intelligence services, Jones Lang LaSalle, said, “The new entrants constitute only a small percentage of the industry. And, the number of units they will launch will be an even smaller part of the the total launches in India. Mostly, they will launch a few projects only, which involve less risk given the residential realty market is not under stress.”

These firms that used to only invest in land are now getting into development as residential projects are safe, because they don’t come with interest cost and loans and in many cases; besides, the younger generation that has taken over at these firms is looking for new avenues of growth, he added.

According to experts, margins in real estate are high despite the slowdown and after the Lok Sabha elections next year, the sector is expected to bounce back. Latest data from the National Housing Bank (NHB)’s RESIDEX indiactes a revival in the realty sector. Residential prices in 12 cities, including Mumbai, Hyderabad and Chennai, rose in July-September from the quarter before it.

Source: Business Standard