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Investors dominate realty market in Mangalore
In a market predominantly driven by investors, sustaining for any developer in Mangalore is limited beyond a particular extent. However, with the influx of BPOs and other companies entering the city, more end users are entering the market now. There has been a 20 per cent price rise in property values across all micro-markets.
The overall market has slowed down of late but there continues to be demand for quality projects and the customers are highly demanding in terms of seeking product quality and amenities in the project, say property developers.
“Real estate market always sets up a benchmark for any economy, and a minor correction is currently happening in the market which of course will turn positive over a period of time”, feels Dharmaraj, a leading architectural and structural consultant in Mangalore. With the considerable improvement in infrastructure, there are better days ahead for the property market, he added.
A disquieting feature is the soaring land values in the city today which is considered as a major deterrent to undertake housing development by developers. The prices range from Rs 20 lakh per cent which is beyond the capacity of any developer to undertake housing development. With the result, developers are keen to forge strategic alliance with land owners through joint development in today’s scenario. At the same time, a significant development is the thrust on quality of real estate development that is sought by homebuyers before investing in any project.
It is said that home buyers are highly demanding in getting the best quality possible in the market today, according to industry sources. This is one reason for the surge in residential property prices as developers wish to go for high-end specification with the willing consumers prepared to dole out the premium. As NRIs, with their exposure to global standards abroad, constitute a substantial portion of the home buyers, they expect a similar package while investing in residential property in the city.
Leading developers say that the quality of the projects offered in the city is good in terms of design, specification, and amenities. The high-rise structures are common in a land starved city with a population of 6 lakh. It ranges from 8 to 15 levels which commands premium in the market.
According to industry sources, an estimated 20 leading developers focus on residential and commercial development in and around the city including pan India players like Raheja and Godrej Properties. Villas are in demand but supply is limited due to exorbitant price of land and lack of adequate land to undertake development.
With the entry of more developers supply level is inching high over demand and the developers are continuously innovating to sustain in the market. Residential property prices range from Rs 2,100 to Rs 7,000 per sq ft depending on the location, developer, specification and amenities offered in the project. Prices for villas range from Rs 3,800 to 4,200 per sq ft which again varies depending on a combination of factors.
On the commercial front, the IT corridor from Mangalore University is showing signs of improvement. However, none of the blue chip companies are making an entry except those with back-end operations. As commercial development involves substantial initial investment, leading developers are going slow in view of the high land price and the presence of smaller IT companies that do not need much space.
According to realtors, office space movement is currently sluggish and investors are evincing keen interest for leased properties that yield competitive return on investment.
Retailing is gaining momentum as there are three malls that are operational now and three more are in the pipeline. Prestige Group is said to be building a state-of-the-art mall, which is considered to be one of the largest malls in Asia.
V Nagarajan, Property Consultant