Exclusive VenturesBeyond Boundaries 13.01.2007 SHAMSHABAD January 2007 HOT AND COLD ZONES FOR INVESTMENT By PRAMOD KIRON www.exclventures.com www.exclventures.com 1 Email: [email protected] due to the rapidly expanding electronic industry. TI. Even if 25% of it materializes. MP3 Players. in the form of Mobile Phones. the Semiconductor Policy was cleared by the Cabinet on 11.2007 • Introduction As you are very much aware. in India. in the coming few years. The projected employment generation by 2016. is a staggering 40 Lakh jobs. Several companies including Intel. Semindia announced appointment of former STPI director Mr. On 13.07. the country is either forced to import finished goods or components like chips. the Indian Real Estate. The Project is situated 4KM from the International Airport entrance. This Report looks generally at where we should look for investment and where we should not. the 10Km stretch from Airport along the highway is seeing large scale investments in Hardware. Several Special Economic Zones. Within the next few days. Obviously. and a host of other devices. with consumption expected to grow to $363 billion by 2015. the impact of the concessions. All these would follow Fabcity grounding which should now happen immediately after the Budget Session. Integrated Residential Townships etc are waiting to take off. Construction and Hospitality Industries have been keenly watching the unfolding action.07. India is the fastest growing market for electronic products in the world.com .Exclusive Ventures Beyond Boundaries 13. on Srisailam Highway. The Fabcity will have several large Fabrication Units with Semindia being the Anchor Customer. it would give phenomenal boost to economic development. No Govt.01. The fiscal and tax concession package (expected to be around 25%) is expected to be firmed up soon.com 2 Email: mail@exclventures. According to a recent study by Frost and Sullivan reported in the Media.exclventures. Obviously things have strted rolling. BV Naidu as the MD of Fabcity Project. a follow up Report is expected to be released which would compare projects and prices and narrow down investment options. IT Parks. near Fabcity. Its now clear that the Union Budget would take into consideration.01.01. from $28 billion in 2005 . And this is the time to make careful evaluation for investment. are projected to create large number of new jobs over the next 10 to 15 years. Star Hotels. Qualcom. fructify into gigantic construction activities which the city of Hyderabad has not otherwise seen. While India is the fastest growing market for these devices. In addition to Fabcity. for manufacturing. by the industry. www. Flextronics etc have been waiting for the Fab Policy to be cleared for considering investments. The clearance of the Semi Conductor Policy had become top priority issue for the Govt. which will. could have overlooked the semi conductor industry ! The Proposed Projects along Srisailam Highway. IT/Software Development. Obviously. the total land available for development around Shamshabad is staggering!.com 3 Email: mail@exclventures. Since buyers would have hundreds of options nearby. after the year 2000. claiming that the price would go up.exclventures. from the grounding of Fabcity.com . churning out thousands of layouts many of them inaccessible. on Bangalore Highway. The proposed roads may take 5 years or more to get built. Most of the inner areas do not have proper access. the demand and hence price-rise will be restricted to about 10 to 12 Km from Airport Entrance at Srisailam Highway and 2 to 3 Km on either side of the Highway and also up to Shamshabad town. Unfortunately in AP. due to Fabcity /Hardware Park.01. could definitely not see more than 25. this shortage had caused price increase near Hitec City. which was seen in the IT corridor of Madhapur / Hitec City / Guchibowli. residential demand WILL BE RESTRICTED to localities close to place of work (Fabcity/Harware Park/SEZ). roads follow economic development and not precede it! Off course they would be built over the time but if buyers had invested with the aim of making profit early. • Comparison with Hitec City Though Hitec City has been in construction since the year 1999. price of land only in areas close-by had increased rapidly from the year 2003. pale in comparison.2007 The upcoming developments would make the recent rapid construction growth. Developers are selling Layouts even up to 25Km away along Bangalore Highway. within 10Km from Hitec City.000 people coming into Srisailam Highway area. Till then the prices would remain in slumps. In addition to layouts along Highway. by selling. Pulimamidi and beyond. In fact. the developers had turned into interior areas. This price increase near Hitec was contributed by very low availability of land for development. which drive into eternity! Roads gets built when there is actual economic development happening.Exclusive Ventures Beyond Boundaries 13. only handful of Plot Layouts has come-up. wide drive-ways seen in Brochures published by Developers. they may have to wait for 10 to 15 years or more. www. like Mansnapalli. even in localities pretty close to Hitec. The first 3 to 4 years. with fine access. They would be faced with layouts spread over 25 KMs with innumerable options! Obviously. very few would look to interior areas. for price to increase reasonably. is foolish to build the shining. Unlike Hitec City area. in inner areas. • Demand for Properties during First 5 Years in Shamshabad In the first five years. No Govt. It took four to five years from the commencement of construction activities. This has resulted in unrestricted conversion of land into Plot Layouts by Real Estate Developers. 01. So unless we buy with extreme clarity of purpose and thorough understanding of ground realities. And new projects would continue to be made. in carefully chosen areas. 5 to 7 years. where prices have increased even before substantial jobs were created. Initially demand for plots would be limited to areas closer to place of work. which is 7KM from Guchibowli. they would stop. till the initial sales falls to around 10% to 15% . there is big opportunity. • THE POSITIVE SIDE When the expectation is of one Lakh people to move–in gradually over.com . Buyers should take care to consider the above and check the location of the project with respect to Fabcity/Hardware Park/SEZ before booking properties. However the Shamshabad story. to make demand meet availability.Exclusive Ventures Beyond Boundaries 13. re-sales will be very low. Once developers are sure that they can’t sell more than 15%. Till then. Tellappur. is quite different!! Already there is a large over supply of plots. The founding of Fabcity in March /April would fire the prime locations while the outlying areas would continue to flounder. for the smart ones! This could be by way of offering residential and commercial developments. due to almost no availability of plots. Hence only investments nearer to Localities where there would be large amount of jobs would see good early appreciation.com 4 Email: [email protected]. most of which are booked to the extent of only. Its time that Villa Projects start along Srisailam Highway so that about 5000 homes (Villas and www. we may spoil the soup! That is for sure! And many would have already unknowingly contributed. With such huge oversupply.2007 • Will there be Demand for Plots After 5 Years? The huge availability of plots require at least 1Lakh new migrants into Srisailam Highway to make some impact up to 5KM on either side. The developers would continue to deliver layouts. 20 to 30%. to spoiled soup. closer to Guchibowli. Obviously price had to go up in Nallagadla/ Tellappur since demand was not met by availability. There will be requirement for Leased accommodation to house expatriates and Senior Management team who come for setting up of the Project. along Srisailam Highway. it might take another 10 to 15 years. • HOT AND COLD ZONES: There is no denying the fact that both premium and middle income housing is required gradually from 2009 March (2 years from the Policy Release). The situation can NOT be compared to price increase of HUDA plots at Nallagadla. The employment generation would be gradual. except in areas close to Srisailam Highway and possibly a little longer distance. The price rise in that area had happened. almost 10KM distance is Conservation Zone where no residential or commercial activity is allowed. Unlike HUDA Area around Hyderabad. Since population is thin. all over the place. But this would ensure increased demand for integrated housing projects near the highway. along Bangalore Highway. In addition to this.Exclusive Ventures Beyond Boundaries 13. in their hurry to make quick money!. or make situation difficult for unauthorized layouts (including Panchayat layouts) to get building permission. Kottur areas would be minimal. The whole purpose of having invested with eye on large gain from this locality. more than 10Km distance on either side of Bangalore Highway. Beyond the EHJ. The residential demand of workers at Airport and Ancillaries. beyond Shamshabad. Instead of keeping land for planned development for the needy. on Bangalore Highway. www. close to highway for Building Residential Projects is not much. if the prices there are very low. Off course there will be some demand. However. Since vast amount of lands are unoccupied by actual construction or dwellings. can easily be met by availability of Plots and Residential Properties between EHJ and Aramgar. falls under Bio Zone where Residential and Commercial activity is prohibited.exclventures. HADA area covers over 458 Square KM.2007 Apartments) are delivered gradually from 2009 March to 2012. These areas will offer lower prices than EHJ-Aramgar belt.01. So look around for good Residential Projects or Plot Layouts within the Identified Zones. compared to buying in areas like Nizampet Road. (View Map With Identified Zones Below) The Problem that could crop up in future.com 5 Email: mail@exclventures. are much more nearer than Thimmappur-Kottur. by large firms. near Kukatpalli. There is a definite HIGHER risk in buying in Panchayat and unauthorized Layouts in HADA area. is in availability of prime land for Construction of Gated Layouts or Integrated Apartment Complexes. HADA areas are scarcely populated. The Areas like Nagaram/Nandupalli etc (on the way to Fabcity along ORR) though behind Airport. They have ensured that availability of clean. HADA is in a position to enforce rules. the Real Estate Developers have made plot layouts and sold them partly.com . so far there has not been announcement of any employment generating Projects. And hence should see some demand. new land. PLEASE VIEW: MAP showing these Identified Zones Below. compared to that between EHJ and Aramgar. the scope for demand after the 10KM Conservation Zone in Thimmappur. would be defeated! As you would have noticed. Definitely we can expect bulk bookings of available houses/flats for lease. HADA may notify areas for take over. All Approved Layouts along Srisailam Highway and up to Express Highway Junction (EHJ) on Bangalore Highway would see very good demand and price rise. exclventures.com .2007 Along Srisailam Highway.com 6 Email: mail@exclventures. takes place.Exclusive Ventures Beyond Boundaries 13. Check these areas in MAP below! www. In the next Phase. if the expected huge employment generation. all Residential Projects up to Lemur which is outside HADA should see EARLY Demand.01. buyers could go up to Kandakur along Srisailam Highway. Hence the Govt.htm (Please type in browser) HOT ZONES: (Marked in Pink Boxes in Map Below) -Either side of NH7 (Bangalore Highway) from EHJ (Express Highway Jn) to Aramgar -Lakshmiguda to Airport through Jallapalli . after 3 to 4 years! The Airport and related commercial activity would make the existing Shamshabad Town to modernize.exclventures. Fast Food Outlets and Life Style Stores.BioZones which covers almost 60% Area near Airport (See Bio Zones Marked in Map Below) . There is a narrow existing www.com/shamshabad-zones. at throwaway prices and not buy when the boom starts.Exclusive Ventures Beyond Boundaries 13. This locality would be the prime area for shopping. has finalized 150 feet road from Lakhsmiguda (this place is couple of KM after Aramgar and before Chandrayangutta.01. is a bit far. -Along Srisailam Highway from Airport Gate towards Kandakur. (OFFCOURSE NEED TO BE VERY CLEAR ABOUT FUTURE ROAD WIDENING) It’s a good idea to buy existing old shops which can be demolished later to build swanky commercial space. • INVESTMENT ROAD ALONG THE NEW LAKHSMIGUDA –JALLAPALLI Its known fact. -Along the Peripheral Road on North. -Area around Raviriyal/Adibhatla due to SEZs COLD ZONES: . East and South East of Airport. The aim should be to buy these old shops out.exclventures. All old shops are demolished and converted to Banks. Look for commercial space now and Plan to build Super Markets.2007 IDENTIFIED ZONES THAT WOULD SEE EARLY DEMAND You can view a larger picture of the above Mark up at: www. for all those who stay in the EHJ-Aramgar Belt. That includes Thimmpur /Kottur. we will find large number of Hardware and Building Material shops cropping up which would later give way to Life Style Stores and Restaurants. its high time that buyers pick up prime plots or Commercial space in buildings at Shamshabad Town and Thukkuguda. marked in RED Boxes. Initially these shops / buildings can be leased out. Mamidipalli.Area beyond EHJ along NH7. -Area behind Airport around Mansanapalli and towards Bangalore Highway. Thukkuguda would definitely go for a major plastic Surgery. Restaurants etc with a 4 to 5 year outlook. Just look at Madhapur. Initially. • COMMERCIAL SPACE: Having seen the history of Madhapur and now Guchibowli.com . along the Upcoming 120 Feet road.) to Airport through Jallapalli. Kandakur as such. that the traffic from Srisailam Highway can not be evacuated through Pahadi Shariff –Chandrayangutta Route. This may change later due to large employment at Fabcity.com 7 Email: mail@exclventures. the Elevated Express Corridor from Mehdipatnam will Cross Aramgar Junction and terminate beyond the Railway line. in HADA area (Landing Point is Marked up as EC) This enables development of land on the inner side of Bangalore Railway line and Airport. If you could buy beside this new road. the access to area between Railway Line and Airport would have been limited. it would surely turn winner! In addition to this. Without this.exclventures.2007 road which is being widened .com .com 8 Email: mail@exclventures. Please see Mark -up Plan below: View HADA Map (next Page) www.01.Exclusive Ventures Beyond Boundaries 13. This would become a major drive way allowing Traffic from both East and West entrances to go towards inner ring road. exclventures.2007 Checkout the Large Conservation area along Bangalore Highway in HADA Map below.Exclusive Ventures Beyond Boundaries 13. -Have you bought in Bio Zone? Check Bio-Zone Villages at: View Report: www. With so much land available along Srisailam Highway. would anyone have to cross the Green Zone and buy plots for living purposes? However.com/reports/ GOMS111.com www.exclventures.exclventures.pdf -Construction in Bio Zone? Check Q&A at: www. developers have sold thousands of acres beyond the Green Zone by showing Fabcity/Hardware park next door.com .com 9 Email: mail@exclventures. in colorful Brochures!.01.