Plans Rs 500cr residential, commercial projects. | |
| Bangalore-based Mantri Developers Private Limited has announced plans to invest Rs 500 crore in residential and commercial projects in Hyderabad this year, as part of its strategy to grow as a strong South Indian player. |
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| The company is looking at spending an equal amount on similar projects in Chennai during the same period. |
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| Speaking to Business Standard here, Sushil Mantri, chairman and managing director of the privately-held company, said the building plans for two projects, which were proposed with a built-up space of 5 million square feet at an investment of Rs 150 crore, had already been submitted for necessary approvals. The work is likely to begin in May this year. |
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| The location of both the projects is in the close vicinity of Wipro campus in Hitec City, the software hub. The company is planning to develop one million square feet of office space for IT companies and the rest for residential purposes with a plan to construct 1,200 apartments, mainly targeting IT professionals, according to Mantri. |
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| These apartments come with a price tag ranging from Rs 35 lakh to Rs 1.5 crore. Meanwhile, the projects with a likely investment of Rs 350 crore for the city were in the pipeline, he said. |
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| The company, which is currently developing 12 million square feet of office and residential space in Bangalore, is aiming at offering 6,000 houses a year from the new financial year. |
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| The company, which also offers a whole range of after sale services, including rental, resale, house furnishing, has tie ups with big IT companies like Infosys, Wipro, Oracle and IBM, as its principal target group comprises IT professionals. Morgan Stanley invested Rs 300 crore in the company last year. |
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| Hyderabad, with growing cosmopolitisation offers more growth opportunities for developers of residential projects after Bangalore than any other city in the south, he said, while giving reasons for the company's first major foray into the city outside its home turf. |
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| According to him, the demand-supply gap in housing in the city is huge, which is also leading to speculative rise in the cost of houses in Hyderabad. |
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| "With 5 million square feet of new office space built last year, the IT sector in the city offered new jobs to 50,000 professionals, of which at least 25,000 would be looking forward to owning homes. There is an equal demand coming from other families too. But the total supply has not exceeded 30,000 units leaving a huge gap," he said. |
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| The mindset of people in the city is also shifting in favour of owning apartments from having independent villas for the advantages the former offer in terms of security, proximity to work place, common facilities among other things, he said. |
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| On the huge jump in land prices in the city, he said the situation would be stabilised within a couple of years when the supply side grows. |
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| "Apartment prices have increased on speculation in recent times. This would not be the case if more houses are made available. Coming to land prices, a correction has to take place in future because beyond a point the viability of projects, which depends on the affordability factor, becomes uncertain," he said, adding that in Chennai the rentals of commercial space has already come down to Rs 40 per square feet from Rs 50-Rs 60 previously. |
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| Though 80 per cent of the Mantri Developers' operations is currently confined to residential projects, the company proposes to reduce the share of apartment construction to 65 per cent with 20 per cent of the projects locating in retail space and another 15 per cent in IT infrastructure in the next three years as it progressively expands operations in the south. |
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| On the growing costs in the construction industry, he said the labour force had also become an important factor in cost escalation with demand for construction growing 3-4 times in recent past resulting in a huge shortage of manpower. |
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| "This has made us to shift to mechanisation in Bangalore. Similar course would be followed in other places in times to come," he said. |
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