Monday, April 12, 2010

A tryst with the Nawabs!

In the heart of ‘babudom’, the city of nawabs is still being built by the government, while private players remain on the periphery, says avinash mishra

In this ‘City of Babus’, commercial plots have never managed to catch the fancy of the masses, or elites for that matter. The real estate sector of capital Lucknow, has witnessed manifold increase in prices of the housing plots. Nevertheless, going against the trend, a number of real estate players invested heavily in commercial properties and launched several malls, multiplexes and commercial complexes prior to the recession. Despite these efforts, they invariably failed to create any buzz in the market or incite any curiosity. And then came the meltdown. Whatever little demand it had been able to elicit got buried altogether.

Nonetheless what proved to be a loss for commercial plots’ proved out to be a gaining ground for housing plots’. In fact, it appears that the city is on a shopping spree for housing plots’. It is almost bordering frenzy; so much so that government housing organizations such as Lucknow Development Authority and Housing Development Board have run out of housing plots altogether. They are trying to utilize whatever space is left by constructing flats and auctioning it. This scarcity of plots has led to a sudden spurt in the price of plots owned by the Authority and Housing Development Board. For instance, in the prestigious Gomati Nagar Project, the Authority is selling plots at the rate of Rs 7,500 per square meters, up from Rs 4,000 per square meters last year. The same plots are going for Rs 25,000 per square meters, up from Rs 15000 per square meters in the resell.

Talking to B&E, Authority’s vice president Mukesh Meshram said, “We have close to hundred fifty thousand properties across the cityand we are developing them in a phased manner. Currently, we are in the process of developing 3,000 flats in Gomati Nagar, 5,000 flats under Sulabh Awas Yojna, 5,000 flats under Golden Installment scheme and 1,000 flats under Shristi scheme.” He further added that under the Kanpur Road project, 5000 flats are being developed in Mansarovar area under Sunrise Apartment scheme. Also, demand estimation has been called for in Gahru Village, Basant Kunj and Para areas which will have low-rise apartments mostly of ground plus four set up.

Given the bad reputation of the private builders , people in Lucknow prefer buying poperty from the Authority. Companies like Omaxe, Parsvnath et al have failed to complete their respective projects in Vibhutikhand area. The flats that were to be ready for possession in 2009 are nowhere near completion and those who made the mistake of booking their flats are often seen running from pillar to post, all in vain. Talking to B&E, Jaikesh Tripathi , Director, Pragati Colonizers, said, “The real estate market in Lucknow is Authority and Housing Board based. That’s why people are more inclined towards their properties. Private builders are still to establish confidence among buyers. They are involved in various irregularities and flaunt standards at will. Also, they use sub-standard material and set premium prices.” Consider the case of Ashiana Colony by Ansal Group. There are no sewer lines laid nor have roads been constructed. Everyday, residents take out agitation marches but nobody gives two hoots about it. However, given the ‘Babudom’ culture, flats are not that popular here. Having said that, really, it’s got to start sometime, somewhere!

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2009

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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