State Government of Andra Pradesh has taken steps to facilitate land for acquisitions in different areas of the city and outskirts,and is expected to rein in the rising values to a certain extent.

By making land availble the State Government is likely to ensure adequate development of corporate office spaces in the coming months, the latest snapshot of Hyderabad by the consultants believe. At present, lack of speculative development or ready-to-occupy properties is a growing concern for corporates. Most corporates prefer ready to move in incubation space before expanding and moving into a built-to-suit facility.

Rentals firming up

This situation has led to firming up of rental and capital values across micro-markets. In the recent past, some of the corporates which have announced their expansion plans in Hyderabad include Ness, the Israeli IT company, Citigroup, which signed an outsourcing agreement with Satyam in Hyderabad and TCS in Mumbai; Honeywell, which is setting up a new campus within the next year.

The mega project, Fab City, to be set up by SemIndia, has also started taking shape. The State Government is allocating 1,200 acres of land near the upcoming international airport in Shamshabad in addition to providing several incentives, the report added. The other demand drivers, include technology, biotechnology and industrial sector. The better infrastructure and proactive State Policy is expected to bring in commitments from local, national and foreign developers, which in turn would attract global corporates.

Listing the major leased space, the report said Data Monitor has leased 25,000 sq.ft office space in E-Park; Skyworks about 18,500 sq.ft in Pioneer Towers, a fortune 500 ITES company about 95,000 sq.ft in Mindspace; and a large IT major about 180,000 sq.ft , all in Madhapur. The biggest investment/sale has been the ICICI Ventures, Nagarjuna Constructions & Maytas Properties purchase of approximately 5 acres in Jubilee Hills at Rs 23,695 per sq.m.

ISB sets up research chair on real estate

The Indian School of Business (ISB) signed a memorandum of understanding (MoU) with Indu Projects Ltd, a Hyderabad-based real estate company, to establish the first research chair for 'real estate and urban studies'.

This is said to be the first such step taken by any business school in India.

It is also the first research chair being established by the ISB and it will function under its Wadhwani Centre for Entrepreneurial Development (WCED).

This research chair is of great significance to ISB, as it is not only the first research chair to be instituted at the ISB, it is also the first chair in real estate and urban studies in India.

Syam Prasad Reddy, managing director and CEO of Indu Projects, said the study of real estate was

extremely important to the economic development of the state and the nation.

'At Indu we believe in knowledge being a driver of growth but there is a dearth of knowledge in the real estate sector. I found that the ISB is doing a great job in producing a new generation of world-class business leaders in a variety of fields. I want to support the ISB efforts by adding a new dimension of real estate,' said Reddy in one of his interviews to a leading daily.

Indu Projects is a diversified company having core competency in building, developing and promoting IT parks, integrated townships, urban residential complexes, theme parks, and also in the area of building core infrastructure.

Indu Projects will make a grant of $550,000 spread over a period of five years.

'There is a need for systematic planning, objective information and policy formulation to guide real estate players and support urban development in the country today,' said V. Chandrasekhar, executive director of WCED, in his interview with a leading newspaper.

Real Estate

Driven by positive growth in the economy, real estate in India is booming.

The year 2006 started on a promising note when the Government of India opened the construction and development sector in February 2006, and allowed 100 per cent foreign direct investment (FDI) under the 'automatic route' in order to spur investment in the vital infrastructure sector.

The relaxation of the FDI ceiling saw big names like Dubai-based Emmar Properties -- the largest listed real estate developer in the world -- joining hands with the Delhi-based MGF Developments to announce India's largest FDI in the realty sector amounting to over US$ 500 million in projects having capital outlay of US$ 4 billion.

Groups showing interest in India include insurance company American International Group Inc (AIG), High Point Rendel of the UK, Edaw-US, Japan's Kikken Sekkel, Lee Kim Tah Holdings and Cesma International from Singapore.

The development of real estate in India focusses on two primary areas: retail and residential.

The global real-estate consulting group Knight Frank has ranked India 5th in the list of 30 emerging retail markets and predicted an impressive 20 per cent growth rate for the organized retail segment by 2010.

The organized segment is expected to grow from a mere 2 per cent to 20 per cent by the end of the decade, it said.

The boom is also attracting interest from foreign players. Vancouver-based Royal Indian Raj International Corporation (RIRIC) will invest a staggering US$ 2.9 billion in a single real-estate project named Royal Garden City in Bangalore over a period of 10 years. The retail value of the project is estimated at US$ 8.9 billion. Morgan Stanley Real Estate announced that it has invested around US$ 68 million in Mantri Developers Private Ltd, a private Bangalore-based real estate developer.

Key trends of the real estate boom

A report on real estate trends by Merrill Lynch said that the number of malls in Mumbai, Bangalore, New Delhi, Hyderabad and Pune was expected to grow to about 250 by 2010 as against 40 now. In terms of total area, there was 12.40 million square feet (mnsqft) of mall space available in these cities, the report said quoting a survey by Knight Frank India.

As the competition in the market is intense, builders are going out of their way to be different. Specialized malls have become the order of the day. Gurgaon, on the suburbs of New Delhi will soon have an auto mall, while Bangalore is about to get an exclusive furniture mall. Gurgaon is set to get the biggest mall of the world a large US$ 89.78 sq ft sprawling property that is being developed by DLF Universal. It will be known as Mall of India.

Similarly in the home segment, which is driven by the availability of easy home finance, most builders are trying to woo investors with interesting features, each more tempting than the other.

Closed-circuit television and earthquake proofing are expected as standard features in most up market blocks. Evershine Builders, for instance, is providing a range of facilities from modular kitchens to piped gas and Internet connections. Some of its flats are even fully furnished.