NEW DELHI: The unlimited Floor Space Index(FSI) model in Hyderabad could be touted as the best in the country with developers across metros pushing for a similar law in their respective cities to not just increase vertical growth but also expand 'lung' spaces. But despite its merits, the builder-friendly policy seems to be doing little to attract investors to the city- currently caught in the midst of a serious political turmoil.
In fact, speaking to TOI on the sidelines of a national conclave organised by the Confederation of Real Estate Developers Association of India(CREDAI) in New Delhi, recently, high-profile developers from Mumbai, Delhi, Chennai and Bangalore said that Hyderabad was completely off their radar at present. Taking its place, they said, were cities such as Pune and Ahmedabad, which at one time were way behind the Andhra Pradesh capital in the realty race.
"There was a time when any developer from Mumbai or Delhi, planning to expand outside the city, was looking at Hyderabad to start shop. That's not the case any longer. More people are today going to Gujarat instead," said Darshan Hiranandani, MD of the Mumbai-based major real estate player, Hiranandani Group of Companies that had, about two years ago, come to the city with plans of setting up an upscale SEZ on the outskirts. The project, however, failed to take off after the land was found embroiled in litigations.
"This is one huge drawback that Hyderabad suffers from. If land bought through government auctions do not have a clear title (the Hiranandani group had bought it through an auction) then what is the guarantee that land bought from private parties will have one," said Sunil Mantri, chairman, Sunil Mantri Realty Ltd that has operations across Mumbai, Delhi, Bangalore, Pune and so on. In Hyderabad too the firm has three huge tracts of land, bought when real estate was at its peak here about three-four years ago. The recession and Telangana turmoil erupted thereafter, and the plots have been lying idle since then. "Litigations apart, the market in Hyderabad now is not too conducive for new developments. So we are just sitting on our properties at the moment. There is no plan to start work at any of the sites- Sainikpuri, Miyapur and Hi-Tec City- anytime soon," Mantri said.
And while the uncertain political situation prevailing in the city could be the main reason for developers to shy away from Hyderabad, some feel that it's also the indifferent attitude of the Andhra Pradesh government that is holding them back from setting foot here. "Such is the situation that initially when a developer from outside approaches the state government for permission to set shop in Hyderabad, it is very supportive. But the moment you start work there, the government turns its back on you. This is unacceptable and a crucial reason why builders have grown wary of the city," said Pradeep Jain, chairman of both CREDAI and Parasvnath Developers Ltd- a leading Delhi-based real estate group that had, around 2009, picked up land in the Kukatpally area to develop a high-end commercial property. And while Jain refused to comment on the fate of the project, sources claim that the company is now in two minds about going ahead with it. The current uncertainties in Hyderabad coupled with the lack of government support could possibly be the reasons, they say.
But while such cases signal the death of real estate in Hyderabad, all hope isn't lost just yet, assure some. Bangalore's most sought after developer - Mantri Developers Pvt Ltd- for instance confirmed that it is indeed scouting for properties in the city to take up developmental work. "We have been very successful in the city so far and believe that it has huge potential. We are looking for land there and will soon announce some other promising projects," said Sushil Mantri, chairman and managing director of the company.
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