| Land prices soar near Gujarat Nano site |
| Maulik Pathak & Ila Parikh / Ahmedabad October 09, 2008, 0:54 IST |
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Real estate prices in and around Chharodi in Ahmedabad district have almost doubled overnight after Tata Motors decided to relocate its prestigious Nano project from Singur in West Bengal to Gujarat even as experts feel that the gain was only 'notional' as no deals have been struck so far.
"In Chharodi, where the Tatas' mother plant will come up, farmers are demanding Rs 8-10 lakh per bigah, almost double from Rs 3-4 lakh per bigah before news of the Nano relocation,'' said Maharaja Jayshivsinh, the erstwhile prince of Sanand and one of the largest landowners in the area.
''However, these prices are unrealistic and investors are ready to offer only Rs 5-6 lakh per bigah. In nearby Sanand area, the prices today are Rs 3,000 per sq yard, up from Rs 2,500 per sq yard earlier. The realistic price rise would be about 40 per cent," he said.
In interior areas like Sachana and Virochandnagar, the price of agri land has crossed Rs 10 lakh per bigha from about Rs 3-5 lakh per bigha, said an investor who wished to remain anonymous.
Many realtors are optimistic that the Tatas entry into Ahmedabad is likely to put a break on the current recession in the realty market here.
Giving the example of Gurgaon near New Delhi, Shrenik Shah, CEO of real estate consultancy Space Management, said prices in the suburban area of the national capital had shot up as it housed mainly IT units, which offers hefty pay packages to employees.
"Tata's entry may also attract those investors again, who earlier stayed away from making new investments in the wake bearish sentiment in the realty market. This will rejuvanate stagnant real estate market in Ahmedabad," said Jaxay Shah, former president of Gujarat Institute of Housing and Estate Developers (GIHED), an Ahmedabad-based body of developers.
Still, prices in these areas have already surged by 50 per cent in two years and 100 per cent in four years, leaving little room for further appreciation.
"Considering the rise over the past four years, land prices are unlikely to witness a substantial rise," Sanjay Dutt, managing director of Cushman & Wakefield, told Business Standard. However, for investors it is a good place to put in their money for a long term view of 4-5 years, he added.
"The bullish sentiments are misplaced as the market is in correction mode and will remain so. The impact of Nano will be marginal,'' said Shah.
However, in about five to ten years of time this project could open lot of opportunities for other industries and in that case the investors would stand to gain, he added.
