The Hindu Business Line : 2007 – a year to remember for the real estate sector

Mumbai, Jan. 1 It was a record-breaking year for the Indian real estate and all talk of the realty bubble being pricked came to nothing as record highs painted the realty canvas.

A 7,107 sq metre plot at the Bandra Kurla Complex belonging to the Mumbai Metropolitan Region Development Authority (MMRDA) fetched Rs 5.04 lakh per sqm, the highest bid for land anywhere in the country.

An apartment at Nariman Point attracting a Rs 97,842 per sq ft bid from a UK-based NRI proved to be an all-time high of sorts, besides reinforcing the popular sentiment that Mumbai holds the beacon on the real estate front.

The 9,178-acre township project ‘New Bangalore City’ at Bidadi, which realty major DLF bagged in consortium with the Dubai-based Limitless, turned out to be the highest and the single largest realty investment in the country so far.

The project is expected to generate over Rs 50,000-crore value.

IPO record

The realty score in the capital market was also on a roll with the initial public offering of DLF raking in a record Rs 9,625 crore.

A stupendous number of township projects (totalling 210) were announced during the year, though some analysts say acreage was given the go by in the estimation.

IT drive

A uniform view was that the IT sector was a prime driver of the realty wheel with large volumes generated in IT office space. The residential segment too was closely IT-driven and reported robust growth. Non-IT commercial space too kept pace, more in line with the overall economic growth.

“Office space and residential rentals had gone up as also in retail,” said Mr Anuj Puri, Chairman and Country Head of Jones Lang LaSalle Meghraj.

Market trends

Mr Puri said that unlike the price conscious trend seen in 1995 consumers today have become quality conscious, which in turn demanded that the industry meets higher standards.

Seeing possible price correction in select pockets such as Jaipur, he felt rental markets were in for a drop ahead.

Correction in the price line was reported in Bangalore and Gurgaon, but the former appears to have bounced back with Whitefield back in reckoning. Property prices that had hit a plateau in the second half of the year would continue to maintain that trend.

The year also saw a rising demand for quality manpower, and the salaries of civil engineers soared as also the need for their services.

Developers were on a roll, announcing plans to build in the next few years what they had been planning to build since their inception.

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