Sunday, September 26, 2010

‘Mini' skyscrapers for Coimbatore

Though the real-estate market in Coimbatore is set to see nearly twice the number of apartment units entering the housing segment in the city next year, the industry remains unfazed about it causing any glut or demand stagnation. The residents of Coimbatore are also likely to see the skylines of the city being dotted with (mini) skyscrapers as almost 10-12 apartment projects of 8-14 floors in each block are likely to come up in the city next year which, however, is not likely to cause any easing of rates due to factors such as the need for more open spaces and increased construction cost.

Mr Rajesh B. Lund, Vice-President of the Tamil Nadu unit of the Confederation of Real Estate Developers' Associations of India (CREDAI) and Managing Director of Srivari Property Developers, Coimbatore, said the Coimbatore market annually absorbed about 2,000-3,000 units of two- and three-bedroom apartments. His expectation was that next year, 4,000-6,000 units would come into the market with majority of them catering to the ‘mid-segment' with up to 1,500 sq.ft in area and consisting of two- and three-bedrooms. The rates could be between Rs 2,700/sq.ft and Rs 4,000/sq.ft depending on the location but excluding prized areas such as Race Course, R. S. Puram and Saibaba Colony where the land price is much higher and space is scarce.

Coimbatore already has apartment complexes of up to 8-10 floors. But they will become more pronounced, thanks to the changes in the Development Control Rules (DCR) a few months ago and would come up chiefly off the arterial Avinashi road, Tiruchi road, Sathyamangalam road and Mettupalayam road. Most of the apartment complexes here would have 8-12 floors. The number of units would depend on the extent of land but builders would require a large area for such projects as they would require more open areas.

Mr Lund said his company had two projects on the drawing board — one in Vilankurichi having 10 floors, off Avinashi road, and the other on the Mettupalayam road having 12 floors. Mr Lund said the new DCR, which came into force in June this year, has allowed the builders to go for higher floors subject to certain norms, such as road width being more than 60 ft. This would allow for more open space and ‘breathing space' and more recreation area for the residents. In Coimbatore, a large number of apartment complexes are of G+3 floor type that cover nearly 60 per cent of the plot area.

But he ruled out cost of apartments in such skyscrapers coming down — citing factors such as higher construction cost due to the need to lay a stronger foundation, cost of conveying material, labour cost and the longer duration of construction that pushes up the financial cost of projects etc, apart from increasing land cost. While there may not be any price reduction due to higher floors being allowed, the builders may tweak the size of the apartments so that the overall purchase cost could be affordable. There were good contractors in the city capable of executing such large projects but the city has not yet reached the level of building genuine skyscrapers of 20 to 30 floors as in Mumbai.

He estimated that the high-rises being planned here would have an average built-up area of 50,000 sq.ft to 2 lakh sq.ft each and their USP was they would provide a better quality of life as living space would be more and at higher floors one may not need air-conditioners.

As done in Mumbai, would he charge extra for each higher floor beyond a level in his forthcoming project? Mr Lund said, “ideally we would like to charge (as in Mumbai) but we will address it at the time of bookings.”

No correction likely

Mr V.Mohan, Managing Director, Mayflower Enterprises Pvt Ltd, Coimbatore, who is also planning to enter this high-rise segment, said a lot of such projects are under approval in the city and next year would see many of them being launched. But as there are not many roads that are 60 ft wide, the places where these could come up would be fewer. He said the large number of launches next year is not expected to have an unsettling impact on the realty market. Any realtor, including a market biggie from Bangalore planning to enter the city, will phase out their execution and “definitely correction will not happen” since compared with land price the apartments are ‘realistically priced' in Coimbatore.

Mr V.Subramanian, Executive Director, Ramani Realtors Pvt Ltd, Coimbatore, said the major advantage of Coimbatore was that even in prime areas such as R.S.Puram or Ram Nagar, flats could be bought for Rs 4,500-5,000 per sq.ft, a luxury not available in many other cities. What was of concern to the builders was the high cost of land. The demand was for flats in the Rs 35-Rs 50 lakh price band but as buyers in this segment are price-sensitive, developers have to tread cautiously.

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