Opportunities for realtors in land bank use

Opportunities for realtors in land bank use
The Hindu Business Line, July 4, 2009, Page 2

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Adarsh stations
50 railway stations would be developed as world-class stations with international level facilities

Over 300 ‘Adarsh stations’ would be developed with basic facilities

Construction of multi-functional complexes in station premises thru PPP model proposed
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Our Bureau, New Delhi

Real estate developers see a strong business opportunity emerging from Railways’ plans to develop 50 world class stations, 375 ‘Adarsh stations’ as well as its intention of putting land banks to commercial use.

However, players feel that much would depend on the actual terms of development and the speed of implementation of projects. In the past, by the Railway Minister, Ms Mamata Banerjee’s own admission, plans for commercial usage of rail land did not take-off in a big way.

Large opportunity

Parsvnath Developers – which has the mandate to develop 13 Delhi metro stations – termed the Friday announcements as a “large opportunity” for real estate sector.

“But there are some concerns – how many players can leverage their strength to develop such projects properly, how many of them have the deep pockets to do so considering the liquidity crunch, the actual mechanism for such projects and the support provided to developers,” Parsvnath, Chairman, Mr Pradeep Jain, told Business Line.

Global facilities

As many as 50 railway stations would be developed as world-class stations with international level facilities. These would be developed through an innovative financing and PPP model. In her speech, the Railway Minister also said that over 300 ‘Adarsh stations’ would be developed with basic facilities.

She also proposed construction of multi-functional complexes in station premises and developing “new innovative ideas for land and air space utilisation for commercial purposes through the PPP model.”

Implementation

According to the DLF Group Executive Director, Mr Rajeev Talwar, the utilisation of land by Railways would release a large amount of supply into the market and also have an influence on prices.

“These are good intentions but we have to see how well and fast it is implemented,” he pointed out.

Speaking to newspersons after the Rail Budget was presented in Parliament, Member (Engineering), Indian Railways, Mr Rakesh Chopra, said that Railways had anticipated raising Rs 3,400 crore from commercial utilisation of land like Bandra (Mumbai).

However, it has now been pared down to Rs 100 crore following withdrawal of bidders from the projects on the back of the slowdown in the real estate market.

Another large real estate company, while admitting that Railways had an attractive land bank at prime locations, said that it was too early to comment on the business prospects as a lot depended on the final structure.

“We have heard about some of these ideas and concepts even in the past. What we now need to see is concrete action,” the company official said.