Kolkata Real Estate

"We are looking at divesting up to 100 per cent stake in all six properties, comprising 1,000 rooms. We are also talking to a few private equity funds for this, but a deal hasn't been clinched yet," said a top executive at Unitech. The executive also said the company had scaled down its target for hotel business. Instead of 15 hotels with 2,500 rooms as planned earlier, Unitech has decided not to go beyond the 1,000-room capacity.

"We are proceeding with our hotel business as planned earlier. Six of our hotels are under construction. The first will open in January 2009. Unitech is in the business of developing properties and looking at monetising its real estate assets. We are evaluating a divestment of equity at both individual assets as well as a group of assets. Depending on the price, we will be looking at minority or majority or outright sale in these assets," said Sanjay Chandra, MD, Unitech.

Unitech's first hotel project will be the 199-room mid-market property, which will be managed by Marriott and sport the `Courtyard' brand. A person briefed on the matter said that Unitech was seeking a valuation of Rs 250-300 crore for the property, but had been offered a lower Rs 200 crore by a private equity investor. He said the two parties may close the deal soon at the lower end of the band.

Other two hotels of Unitech, for which the company has management tie-ups with Marriott and Carlson hospital chains, will be ready in around two years.

Chandra said that Unitech planned to build 35 hotels, including 15 in the first phase. The company expected to raise $350 million through private equity in the current fiscal for its hotel business. The global financial turmoil, however, has made fund-raising difficult for real estate firms.

Arindam Chokroborty, director of IMRS said, "We are looking at coming up with boutique hotels with 40 rooms in the eastern region with similar facilities that match the four star hotels. We have already started acquiring land in Rajarhat."

The projects have been lined up for West Bengal, Jharkhand and Orissa and the approximate investment incurred will be around Rs 20- 25 crore each, and is expected to be operational by the second quarter of 2009-10. Meanwhile, the planned MoU is expected to provide technological assistance and will be an investor for the projects.

With prices coming down in the real estate sector, the company is also mulling at establishing another boutique hotel in Bangalore, in the offing.

The company is looking at a turnover of Rs 240 crore, up from Rs 200 crore now, with the hospitality business contributing Rs 30 crore.

Sushil Mohta, managing director, Merlin Projects said, "Merlin Group always wanted to extend its expertise in budget segment to the people living in the fringes of the city. We found the Uttarpara-Konnagar region, along the Ganges, to be an attractive development option. Considering the demographics, we had to fit in modern lifestyle facilities while ensuring that the price was affordable. This is quite in line with our growth strategy to identify and develop projects in areas which are demand-driven by actual end users and not investors."

Meanwhile, the group has already lined up similar projects in Barrackpore, Barasat, Sonarpur, Hoogly and Howrah, which would be ready in the next three years. "These projects entail an investment of Rs 250 crore with a target of 20 lakh sq ft for affordable housing segment," Mohta added.

On offer at Merlin Uttara (3,70,000 sq ft) will be 400 apartments with choices ranging between 2BHK, spread over 665-925 sq ft, and 3BHK, spread across 1,045-1,796 sq ft apartments. "The project has been designed after assessing the scope of the project in terms of cost efficiency, architectural design and other relevant factors such as locational advantage, competition, income group, requirements and housing trends, Mohta said.

"Coming up at Konnogar, 25 km off Kolkata, the Merlin Uttara project, designed by Sircar & Associates, promises all modern amenities such as residents club with gym, children's play area, swimming pool, community hall, landscaped gardens, 24-hour power and water supply, security arrangements -- all first time amenities in any suburban area in the state," Mohta claimed.

"There have been talks about taking the burden off cities and spreading them around the fringes. That's how a city expands horizontally. But very little has been done in terms of providing modern amenities and living conditions, so that people prefer living in the suburbs rather than within the city. We thought of taking the plunge," Mohta added.

Forget about cash-rich Mumbai, Delhi or neo-rich Bangalore, overseas property dealers are getting a good response from Kolkata, too. Buoyed by that, they have started setting up offices in the city.

Sanjay Buthra (name changed), a steel merchant at Salt Lake, has already contacted overseas property dealers to buy property in the US. An apparel showroom owner from Park Street wants to buy a commercial property in Singapore while Suranjan Chatterjee, a top executive of an IT firm in Salt Lake, wants to buy a luxury villa in Spain.

Then, there are people like Manohardas Agarwal, a Burrabazar jeweller, who does not have a passport yet but wants to buy four flats in Singapore for commercial purposes.

According to overseas property dealers, individuals in the city with a high networth are making a beeline for properties in both exotic as well as business locations in Singapore, Italy, Hungary, Spain, UK and the US. The properties, too, are going cheap. As per the claim of property dealers, a five-room villa with a terrace is now available for Rs 50 lakh on the outskirts of any Spanish city.

Even as DLF Ltd is planning to develop 4,840-unit `Dankuni' township in Kolkata, the Housing Infrastructure Development Corporation (HIDCO) is constructing 9,334-unit `Rajarhat' township in the outskirts of Kolkata.

Emaar Group is planning to develop 520-unit `Boulder Hills' township in Hyderabad. Parsvanath also is planning to develop 2,500-unit township in Chennai. This is according to a recent market overview done by Jones Lang LaSalle Meghraj.

According to the review, Ascendas is planning to set up 5,000-unit township in Chennai. Suncity is also in the process of acquiring land and to develop a 1,500-unit township in Delhi. Uppal Chaddha is acquiring land to construct 2,700-units township in Delhi. Unitech is planning to develop 1,050-unit Unitech township in Chennai. BPTP's 1,200-unit BPTP Parkland township is fully sold out. Hiranandani Gardens by Hiranadani Constructions in Mumbai with 200-unit is already operational.

Kolkata has been known for its rich culture, strong family bonding and a peaceful state.

However, in the last seven to eight years Kolkata has witnessed a radical change in the mood of the young generation.

The mushroom growth of software companies in Sector-V of Salt Lake, which resulted a substantial absorbing of local pool of qualified engineers, as a result there has been a graphic rise in income. Young pass out graduate are more inclined toward private companies rather than public sector as they feel that their aspiration level will be achieved there.

The high disposable income brought a peculiar metamorphosis in the perception of the young generation. The desire to own a flat in a modern complex has become a big necessity and this germinates a great demand for residential complexes.

The private promoters and joint ventures projects has open the doors to welcome these buyers. This leads to the boom of real estate in the city. Area like New Town, South Extension ie EM By pass and Garia has become the most sought after preferred residential area because of better supporting infrastructure and the extension of the proposed Metro station.

"We will go ahead with the project but this may not take place at Dankuni," said Ashok Bhattacharya, Minister for Urban Development.

A meeting was held on Tuesday between the officials of the urban development department and representatives of DLF at Writers' Buildings. "We have decided not to go ahead with the acquisition of the land, we will purchase it. As of now, we have not yet been able to buy even one acre of land," said Bhattacharya.

The project was to come up on 4800 acres with an investment of Rs 33,000 crore.

In February 2007, the Kolkata Metropolitan Development Authority (KMDA) signed an agreement with DLF for building the project Dankuni World Project comprising a township and an industrial hub.

Following the Nandigram episode, the state government had set up a land procurement committee to purchase the land in Dankuni. But till date, the committee could make little headway because of the opposition from a large number of land owners.

The real estate giant has already paid Rs 270 crore to the government for the project.

With the new generation workforce spreading out across the length and breadth of the country cross-city investments in real-estate are fast gaining pace.

According to developers and property experts, the inter-city investments in property have grown over three times in the past three years and account for anything between 10 and 25 per cent of total sales across different projects.

Apart from people looking to return to their home towns in future there is also a class of high net worth individuals among the investors who look to buy property in different cities to make a profit, the experts say.

“The appetite for inter-city property buying comes from a rapidly growing mobile workforce working in organisations having a pan-India network. There is, however, a second category of buyers — the mezzanine investors — looking for capital appreciation over a period of three to five years in other cities where property prices are lower and growth potential is substantial,” according to Mr Rajesh Goenka, Chairman and CEO, Axiom Estates, a London-based international property firm.

Purchase pattern

The highest inter-state transactions have been observed in Delhi, NCR and Mumbai, followed closely by Hyderabad , Pune, Chennai, Bangalore and Kolkata. While the overall sales in housing has slowed down in pockets recently, inter-city transactions by Axiom has grown by 50 per cent during January to July, he says.

Mr Abhijit Das, Regional Director, Jones Lang LaSalle Meghraj, said, “The proportion of high net worth individuals buying across different cities is definitely on the rise.” Currently, nearly 30 per cent of residential units in Kolkata are purchased by people from other cities, he said.

A person residing in one city buying a property in another is looking for a second house in the high income group (HIG) and upper HIG segment, says Mr Satyen Sanghvi, Director, Sales and Marketing, Merlin Group.

The hospital, owned by cardiac surgeon Devi Shetty, is planning to build a 5,000-bed hospital christened Health City each in Kolkata, Jaipur, Ahmedabad, Raipur, Jamshedpur, Bhopal and Delhi in addition to the one in Bangalore.

Narayana Hrudayalaya currently owns three hospitals in Bangalore and Kolkata with a total bed capacity of 2,500. The first Health City is already being built at Bangalore with specialities, including cardiac, cancer, orthopaedics, eye care, neurology, and child- and women care.

The hospital major has started construction of a 1,000-bed heart hospital on a 40-acre plot in Jaipur, and has been offered 37 acres in Ahmedabad by the Gujarat government and 25 acres by a private builder in Delhi.

It is ramping up its Kolkata facility with a new 25-acre campus where it will add 5,000 beds. The Tata Trust in Jamshedpur has offered Narayana Hrudayalaya an existing hospital to build a 5,000-bed Health City.

After the development of the Rajarhat area northeast of the city, where a showpiece satellite township is coming up, the new target of realtors seems to be neighbouring Barasat and Madhyamgram towns in the North 24 Parganas district, and Maheshtala in South 24 Parganas.

While Barasat is 30 km from the city, Madhyamgram is 24 km away, and Maheshtala is much nearer, being 13 km on the south.

The West Bengal Housing Board has taken up a Rs.800-million joint venture housing project in Barasat with developer Bengal Shelter Housing Development, said Barasat Municipality chairman Pradip Chakraborty.

`Our municipality is upgrading the sewerage system and augmenting water supply in a big way,' Chakraborty said.

However, most real estate development is taking place through the private sector.

One such real estate company is Eden, which is constructing several housing projects, all partially funded through foreign investment.

`Since all our projects are financed partially through foreign funds, we have to adhere to some guidelines, which make it imperative for us to look for land that is of significant size,' Eden chairman Indrajit De told IANS.

We will come up with five to six resorts in tourist destinations in the state and also a few city properties in the boutique hotel category," company's Chairman Harsh Neotia said while inaugurating 'Ganga Kutir', the first of the lot here.

"We will expand to other parts of India and abroad after two or three years once the brand is established," he added.

He said all these hotels will have a unique theme based on the place where it comes up and they would all have the second name 'Kutir' with the first name associated with the locality.

The 'Ganga Kutir', a resort and spa has 18 rooms at present and would have another 12 within a year.

Farmers affected by DLF's township project have been offered unattractive packages, which is proving to be a hurdle in the path of the project.

The state government is charging DLF Rs 56 lakh per acre for the Rs 33,000 crore township project. But to the farmers, it has decided to pay a paltry sum of Rs 7 lakh per acre for fallow land, Rs 12 lakh per acre for multi-crop land and Rs 14 lakh per acre for homesteads. Where's the difference going? The government is pocketing it as "development charge".

DLF entered into an agreement with KMDA to build the new township, which, when completed, would become the country's largest public private partnership project. DLF has also assured one job to every displaced family. It bagged the project in February 2007. But till now, the government has got consent to acquire only 20 acres.

Now, DLF is getting restless, as the delay will affect the project's viability. It is putting more pressure on the government to complete taking over the land.

Experts feel that like other projects in Bengal, DLF's township plans are getting delayed because of the state government's policy of acquiring land instead of allowing companies to enter the fray. If the government allows developers to directly approach farmers, land can be taken over smoothly, a senior builder said.

According to Avrajit Kar, vice president marketing, South City Projects, "The number of investors in Kolkata and its suburbs is expected to increase from 20% to 30% within a year as the realty prices in Kolkata are more economical compared to that of other metros, including Mumbai. For instance, an apartment in Baliganj area in Kolkata is priced at Rs 4,000 to Rs 6,000 per sq ft as compared to Rs 10,000 to Rs 15,000 per sq ft in posh Bandra/ Mumbai." As a result of an increasing number of people investing in real estate in Kolkata, Kar added that Kona Expressway area, Bantala area and Rajarhat are going to be the new satellite cities of Kolkata. Besides, Gurgaon, National Capital Region of Delhi, Pune, Hyderabad, Chennai, Bangalore, Goa, Chandigarh are considered growing markets for investors. Mumbai-based K Raheja Property is planning to enter eastern part of India, especially, Kolkata to set up high rise apartments apart from other Tier II and III cities. DLF and Unitech are planning to set up high rise apartments near Kona Expressway, Bantala area and Rajarhat.

Meanwhile, Merlin Group in Kolkata is planning joint ventures, tie-ups for developing properties in Chennai. Besides, Diamond Group, Fort Group in Kolkata too are planning high rise apartments in Kolkata and Chennai. Not only that, Emami Realty is also planning to develop properties down South. Says Ravi Ramu, director, Puravankara Projects, "Due to inflationary trends, we are now looking at speeding up development of high rise apartments in the South. With a land bank of over 125 million sq, the group has over 20 mn sq ft residential and commercial space currently under construction. Included in this are on-going residential projects amounting to 18.30 mn sq ft with a total of 11,010 homes." According to industry experts, developers across the country are selling apartments with a `by invitation' tag, offering super-premium apartments only to ensure that the complex developed by them.

The real estate giant has threatened to pull out of the Rs 33,000-crore project since no progress has been made in the case for months and the company is yet to get possession of the land. State urban development minister Asok Bhattacharya confirmed on Sunday that DLF had increased pressure on the government.

"The project is not making any headway and DLF is telling us that they'll pull out if the situation continues," he said, pointing out that with the entire district administration in Hooghly focusing on Singur, hardly any other work is getting done.

"There's also opposition to the Dankuni project at the local level. It would have generated huge employment in the state. We are still trying to convince DLF," the minister said. The Dankuni township is one of the largest real estate projects in the country covering over 4,840 acres to be built through public-private-partnership over 10 years. It is also the largest PPP project in the country.

The company has already paid Rs 270 crore in advance to the government, which is supposed to hand over the land after procuring it.

The amended Land Acquisition Act, 1894, pending before a parliamentary committee, will in all likelihood see the light of day whenever the monsoon session of Parliament is called.

At a meeting of the standing committee on rural development today, it was decided that the last hurdle, the report on the Bill, would be finalised by September 3-5.

The committee, according to its member, CPI(M) MP Hannan Mollah, may decide to make the provisions for compensation to the displaced more liberal.

For example, the definition of affected persons eligible for compensation will extend to all those who derive sustenance from the land, directly or indirectly. Ownership will not be the only criteria.

Also, the time ceiling for eligibility may be liberalised from the current five years to three years' association with the land in question.

Sources said the bar for project size for mandatory social impact analysis might also be lowered. At present, the proposed lower limit in the plains is 400 affected people while it is up to 200 people in hills and tribal areas.

THE NEW LAW'S HIGHLIGHTS...

• The Land Acquisition Act, 1894, is being amended to more strictly define the term "public interest" to exclude any land acquisition for private parties.

• In instances where land has to be acquired by the government for contiguity purposes, the private parties will have to acquire 70 per cent of the land themselves.

• Land rights will be extended to tenant farmers, artisans and those indirectly drawing sustenance from the land in question.

• Compensation could take the shape of jobs and shares in the company setting up the plant.

• Part of the land acquired has to be handed over after development to the displaced to build homes.

The developer, whose Ascendas Real Estate Investment Trust is Singapore's second-biggest listed property trust, said in a statement the project's first phase would start next January, with completion expected in early 2007.

A company spokeswoman in Singapore said the investment in the city was separate from a Rs 10-billion technology parks fund it announced in June.

India's $17.2-billion software and business service industry is driving growing demand for office space. Ascendas already has business parks in Hyderabad and Bangalore.

The project would be executed in three phases.

It could generate 250MW of solar power annually.

In the first phase the complex will produce solar cells and panels by importing polysilicon.

Net investment in the first phase was around Rs350 crore and it was scheduled to be executed by October 2009.

Around 2500 tons per annum (tpa) of polysilicon would be produced from the second phase scheduled to be commissioned in 2010, with capacity to be subsequently scaled up to 5000tpa in the third phase by 2011.

The complex would start production of 180 millimetre thick solar wafers then. Investments in second and third phases would be Rs2500 crore and Rs1100 crore respectively. The remaining outlay would be spent in the fourth phase when the complex would could start producing semiconductor chips. Planning for that would start from 2011. It had 200 acres in possession and hoped to get remaining 600 acre in phases within the next one year, Jyoti Poddar, director, EETSL, claimed.

The Rs250 crore EETSL floated a special purpose vehicle called Bhaskar Silicon Ltd (BSL), in which promoters would have a 25-30 per cent equity stake.

With the announcement of a number of transport and road infrastructure projects, property prices are shooting up in the suburbs.

The construction of Barasat-Raichak Expressway to be undertaken by the Salim Group has sent property prices rocketting in the Barasat-Madhyamgram area in North 24 Parganas.

A year ago, the cost of flats constructed by Bengal Shelter at Shishirkunj near Rajarhat hovered between Rs 1,300 to Rs 1,400 per square feet. The prices for the same properties have now gone up to Rs 1,800 per square feet. "There were practically no big real estate projects in the area even a year ago. Now, at least two giant corporate houses like a venture of Vedic Realty-Diamond Group and Fortune Group is underway. There are more in the offing," said Swarajit Dutta Gupta, senior marketing executive of Pioneer Property Management Ltd.

Developers affiliated with the Bengal chapter of Confederation of Real Estate Association of India (Credai-Bengal) said if raw material prices held firm, apartment prices would rise by Rs 100 to Rs 500 a square feet. But if steel producers decide to raise prices to international level this month-end, the revision could be as steep as Rs 600 to Rs 1,000 a sq ft.

"There is no alternative but to raise prices. The price at which flats were sold a year ago have now become the construction cost. On an average, project cost has gone up by 43%. Some developers are on the verge of shutting shop," Credai-Bengal president Pradeep Sureka said on Wednesday.

If the cost escalation does take place, it will be a double whammy for buyers as firming of interest rates on home loans has reduced borrowing capacity and forced many to postpone their purchase plans. Home loan offtake is down by 20-30%. Pawan Agarwal, director of NK Realtors, confirmed the slowdown.

Realty firms seem to have lost their appetite for properties in Kolkata, where developers such as Emaar MGF Land Ltd and DLF Ltd were fighting to secure plots for building luxury hotels.

For the first time, a tender to lease out a prime 10-acre plot on the western fringes of the city is being scrapped because there was only one bidder. The Kolkata Metropolitan Development Authority (KMDA) had invited bids for two more properties, but the response to each was poor.

KMDA officials had claimed that developers such as Emaar MGF and DLF had enquired about the properties, but none of them bid even for the 10-acre plot, which was to be leased for building a five-star hotel.

Less than a year ago, Life Insurance Corporation of India (LIC) had set a new benchmark by buying a five-acre property on the eastern fringes of Kolkata for Rs276.20 crore, or Rs55.24 crore an acre. LIC has since announced it would build 50-storey towers on the plot.

A KMDA official, who didn't want to be named, confirmed that the tender for the 10-acre plot would be cancelled, but he wasn't sure what would be done with the bids for the other two plots-- one measuring five acres and the other 2.7 acres. "The bids aren't attractive, but we haven't decided yet," he added.

The Godrej Genesis project is an IT Park located in the heart of Kolkata's Salt Lake Sector V, situated between the international airport and the city center.

The project, which will be developed over a span of three years, expects to generate sales of over Rs 750 crore.

Red Fort Capital manages three active funds under its aegis including an offshore and a domestic fund for Indian real estate market, as well as a hedge fund for listed Indian entities. The company is already in talks with some of its existing investors for floating a new fund, which would invest in infrastructure projects in the country.

Two of the hotels would be in Darjeeling district - at Makaibari in Kurseong and Siliguri - while the third would be near Gorumara forest in Jalpaiguri district, company chairman Harshavardhan Neotia said in an exclusive interview to IANS.

The company has already acquired land for these hotels, and the project details are being worked out, he said.

"These will be luxury hotels with 30-40 rooms to begin with," Neotia said.

The projects would be funded through both debt and equity.

The company has not been able to start the construction work yet due to the political turmoil in Darjeeling and the adjoining areas in the recent past, he said.

"The hotel in Makaibari will be located in the middle of tea gardens and enhance tea tourism in Darjeeling," he said.

Kolkata Metropolitan Development Authority (KMDA) is inviting bids for setting up a five-star hotel and a chain of other commercial establishments on 18 acres near the Kolkata logistics hub off Kona expressway.

KMDA officials said they have already started receiving applications. “There are three separate plots, covering about 10 acres, five acres and three acres respectively. The 10-acre plot is for setting up the five-star hotel. The other two plots are “free use” lands, open for different kinds of commercial establishments, like hotels and resorts,” said a senior KMDA official.

Officials said nearly 100 companies have bought the pre-bid documents. “They would now be asked to furnish details of
their expertise and finally, some of the firms would be selected for taking part in the bids. The bidding would take place on July 31,” said a senior official.

Rahul Varma, director of Bengal Shristi Infrastructure Development, a public-private joint venture developing integrated townships in tier-II south Bengal towns like Asansol, Durgapur and Ranigunj, said Real estate prices had gone from Rs 1100 per square feet to Rs 2700 per square feet in Durgapur in the last two years and looked likely to touch Rs 3000 per square feet next year.

Despite this trend, developers were targeting actual users as a target category as this was the more sustainable demand category in the long run, said Sumit Dabriwala, managing director of Calcutta Metropolitan Group.

As far as occupancy rates in residential complexes in tier-II cities was concerned, around 70 per cent were actual users, while 30 per cent were possibly investors. Dabriwala admitted that the proportion of investors in a particular project varied according to the marketing strategy of the developer.

The companies embarked on major projects in Kolkata in the last couple of months but none is able to expedite them, albeit for different reasons.

Construction at Uniworld City (Unitech's project on EM Bypass Road) has stopped because there are no funds. "The company is now seeking joint venture partners and private equity money," a source familiar with the development said.

The project was to be executed in five phases but even the first one hasn't been completed.

Unitech paid thrice the existing rate to buy land for the project Rs 33 crore per acre.

A Unitech spokesperson, however, denied the development saying construction was on and bookings have begun.

No. 1 realtor DLF isn't much better off, either. It won a global tender for developing Bengal's largest public private partnership (PPP) venture in Dankuni.

But due to inordinate delays in land allocation, the project has been put on ice, sources said.

These two projects, with 400-500 units, involve an investment of around Rs.10 billion each.

'We have received proposals from the DLF group as well as the Siddha group for setting up clusters of such units at Rajarhat in Kolkata,' WBREDA director S.P. Gon Chaudhuri said.

'We have agreed in principle for the DLF proposal but are yet to weigh Siddha group's proposal,' he said.

The units would have solar panels on the terrace to generate power for residential use; excess power, if any, would be sold to the state grid.

'They proposed to build 400-500 houses spread across 70 acres. Apart from solar power, the projects would also have rainwater harvesting capabilities as well as equipment to convert waste into energy,' Gon Chaudhuri said.

These units would be built with green materials, which are made by consuming lesser amounts of energy in comparison to traditional building materials.

The two proposals come close on the heels of WBREDA's Rabi Rashmi Abasan project, India's first commercial solar housing scheme.

Luxe Hotels Worldwide, USA, has struck a partnership with Calcutta-based Vedic Village Spa Resort to internationally market a 200-key luxury resort hotel on the Vedic premises in Rajarhat.

"Vedic Village reflects the beauty and tranquillity of the Indian countryside with the benefits of comprehensive rejuvenation and therapeutic techniques. Their selection of Luxe is confirmation of our global reputation for marketing expertise in the hospitality industry," says Efrem Harkham, the president & CEO of Luxe Worldwide.

The tie-up will provide Vedic Village with access to a wide range of tailored services to fulfil the diverse needs of resorts and hotels worldwide. Luxe will help Vedic Resorts connect with major multinational corporate travel planners, group organisers, consortia and mega agencies.

It will offer its extensive global database for Vedic Village promotional campaigns, identify and address potential markets critical to Vedic and represent the city property at international trade shows, including the World Travel Market in London.

"The Batanagar project will be completed by 2013. We are in the process of signing on an international 5-star hotel chain in the township. We are also in the process of signing on a hospital, retail chains, schools and fast food joints," Sinha said.

"We will not have any management control with any of the companies setting up shop in the township. We are not selling the land, we are developing a township," Sinha added.

The company is developing around 262 acres leased to it in Batanagar. The estimated total investment in the project is around Rs 1,300 crore.

Sinha said, Bata's equity in the project is in the form of land. The project cost excludes the cost of land, school, hospital and hotel construction.

Shivam Asthana, vice-president of Ruchi Realty, said many IT Companies are interested in the SEZ project. "We see no dearth in demand," he said.

Ruchi Realty has attracted around Rs 200 crore from a US-based private equity firm, Sun Apollo. The money will be utilised in building the SEZ project, said Asthana.

Besides the US private equity investment, promoters of Ruchi Group of Industries, and loan from financial institutions have contributed another Rs 200 crore.

Ruchi also announced its first housing project on 16.5 acres off EM Bypass in Kolkata with a total investment of Rs 450 crore.

The project, Active Acres, will have a built-up area of 2 million square feet.

Ruchi Realty Vice-President Shivam Asthana said no Tuesday that the project would have the first Sports-based residential condominium here and other unique facilities in six towers on 17 acre on the E M Bypass.

The project's initial work had started and was expected to be completed by December, 2010.

The maximum price of an apartment has been priced at rupees one crore, he said.

Asthana said that other real estate projects undertaken by the company were integrated townships in Bhopal and Indore, besides residential apartments in Mumbai and business hotels in Bhubaneswar, Jamshedpur and Indore.

The Ruchi group's activities include edible oil, soya products, dairy products, de-oiled cakes, steel, import-export infrastructure and Infotech.

"Prices in Kolkata, especially south Kolkata, are rising very fast. Just six months back, most of the projects in the Bhowanipore area were priced at about Rs 2,200 per square foot. Now properties in the same area are commanding a price of about Rs 3,000 per square foot," said Basab Mitra, a senior empanelled architect.

According to market watchers, the areas which have seen an unprecedented price rise are Ballygunge, Prince Anwar Shah Road and Elgin Road of south Kolkata. The factors behind such rise in these areas, according to market experts , are limited availability of real estate options, new successful commercial projects (mostly retail and entertainment ), improved roads and connectivity and an aspirational quotient. Also, riding high on the aspirational value and demand, developers are also quoting a premium on the price front. Even there has been a price appreciation in areas of north Kolkata, too, which until recently was stagnant in the price front.