Tuesday, October 27, 2020

Hyd’s IT corridor costliest in south India; land deals on pause

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Hyderabad: The city’s IT corridor is now the most expensive in south India, beating Bengaluru and Chennai – the two other IT destinations, due to escalating land prices. Land rates in the city’s Madhapur-Financial District-Gachibowli stretch rose to almost Rs.45-50 crore per acre.

This has resulted in zero land deals with all leading developers putting brakes on their investments.

“In Hi-Tec City, some land owners are demanding as much as Rs.60 crore per acre. This bubble has to burst for smooth flow of investments,” said Mahesh Khaitan, director, Salarpuria Sattva Group a leading real estate group in south India to Times of India.

Reasons for rise in land rates

The Floor Space Index (FSI) norms are a contributing factor in rise of land rates. The FSI allow the developers to build as much as they want on a piece of land, fixing prices accordingly. As against Bengaluru where you can build only 1.2 lakh square feet (approx) on an acre, people can even build 3 lakh sft in the city. This translates into sellers demanding higher prices.

Other reasons include cash-rich landowners unwilling to sell for current prices, in anticipation of higher prices. Furthermore, there is no growth outside the western IT corridor. We need better infrastructure and attractive incentives in the east, north etc. to break this monopoly and revise this artificially created price rise,” a city-based developer said.

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