Visakhapatnam raising in Realestate business.

Sir · Posted: Fri May 16, 2008 11:54 am Post subject: Vizag ahead!

PE players home in on mid-segment housing projects
Knight Frank’s investment arm to start Residential projects at Vizag.

Residential projects in the Rs 30-70 lakh range have caught investors’ fancy

Here’s some respite from scorching property prices for the middle-class home-seeker. Private equity (PE) investors are now looking at investing only in residential projects priced between Rs 30 lakh and Rs 70 lakh.

Mid-segment projects are hard to imagine in Mumbai, where property prices are burning big holes in pockets. However, with PEs looking at investing in this segment, market dynamics may be ready for a change. According to Pranay Vakil, country head of global property consultant Knight Frank, home buyers are no longer interested in taking the risks they were taking earlier. “This is why the land component of the price is being controlled for developing these projects,” he said.

Knight Frank’s investment arm Rutley Capital Partners will invest $300 million in such projects. “We are keeping a tab on who needs the money and this fund will go to them,” Vakil said, adding that the company is looking at projects in Hyderabad, Bangalore, Visakhapatnam and Mumbai suburbs.

In these projects, the land component would account for just 30-35% of the sale price because cost fluctuations are caused more by land prices than by construction and labour charges. “In the Rs 35-70 lakh bracket, you can get a two or three bedroom-hall-kitchen apartment covering 1,200 sq ft in Mumbai suburbs. Here, the price of land would be about Rs 2,000 per sq ft and the end price would be Rs 5,000 a sq ft. This makes the project feasible for both the buyer and the seller,” Vakil said.

Red Fort Capital, an international real estate PE player, has earmarked Rs 3,500 crore for the Indian real estate market. According to the company’s director Kuldip Chawlla, as much as 50% of this would be in the residential space. “We are calling developers to build mid-segment projects on our land bank,” Chawlla said.
_________________
Sir

whatever123 · Telugu Puli Joined: 30 Nov 2006 Posts: 653

The title of this thread should be Vishakapatnam rising not raising unless some pun is intended.