Affordable housing complexes from NBCC stable

Atanu Kumar Das / New Delhi February 19, 2010, 13:47 IST

State-owned National Buildings Construction Corporation Ltd (NBCC) is coming up with affordable housing complexes in Uttar Pradesh, Gurgaon, Kolkata, Kochi and Patna.

The Mini Ratna PSU under the urban development ministry plans to build 7,000 houses each in Delhi-Saharanpur Highway, UP and Gurgaon. While the minimum price of a two-bedroom house will be Rs 7 lakh, the maximum can go up to Rs 14 to Rs 15 lakh.

NBCC has allotted 448 affordable houses in Rajarhat, Kolkata, where the price of a two-bedroom flat is Rs 14 lakh and a three-bedroom flat costs Rs 18 lakh. It will allot another 352 houses in the next phase of the project.

While the projects in Kochi and Patna are likely to be started in the next six months, the Gurgaon and UP projects are expected to be completed in the next two years.

“Affordable housing is the need of the day and the prices at which we are providing houses are very lucrative. We have sold apartments in Kolkata at Rs 1,325 per sqft and that is half the current rates of the market,” said Arup Roy Choudhury, Chairman and Managing Director, NBCC.

The company hopes to grow its turnover to Rs 3,000 crore this fiscal, compared to Rs 2044 crore in the previous financial year.

Apart from building residential projects, NBCC is also working on numerous power projects of BHEL, NTPC and others. “We do a lot of power projects, which account for 15-to-20 per cent of our revenue. Our primary profitability comes from these projects,” said Choudhury.

The company is also constructing 500 ministerial bunglows in New Moti Bagh, Delhi, with an area comprising of 123 acres of land. Source: Business Standard

Residential market to lead realty recovery in 2010: CRISIL Research

A recent 10-city CRISIL Research report on the real estate market indicates that demand in the residential market is expected to turn positive in 2010 owing to improvement in affordability, steady economic growth and greater liquidity. However a decline in the currently over-priced capital values of all the three real estate segments - residential, commercial and retail - will persist through 2009. Further the commercial and retail markets will continue to witness erosion in lease rentals through the next two years.

The CRISIL Research City Real(i)ty Report provides comprehensive information and analysis of more than 400 areas across 88 micro markets in 10 cities - Ahmedabad, Bengaluru, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Mumbai-MMR, NCR and Pune.

Mr. Sudhir Nair, Head, CRISIL Research says, “Accelerated growth of Indian economy, recovery of global
economy, improved liquidity and expected fall in interest rates are key factors that will signal demand revival in the residential segment. This segment is likely to see a much faster revival due to strong underlying demand for housing and supply coming at attractive price points.”

Sudhir further adds, “Demand in the commercial and retail segment is likely to remain under stress for the next two years owing to excess supply and weak offtake.” The CRISIL Research City Real(i)ty report indicates that capital values for residential sector and lease rentals for commercial and retail properties have substantially corrected till March 2009 due to a slowdown in both the domestic and global economies, and also due to real estate becoming unaffordable. Cities such as Kochi, Chandigarh and Pune, which have greater investor presence as against end-users, witnessed a greater fall in capital values compared to other cities.

The situation is expected to continue through 2009 and 2010, particularly so for the commercial and retail segments. However CRISIL Research believes that demand for houses will improve in 2010, backed by lower home loan interest rates as well as better job security owing to higher growth in the economy. Hence, capital values are likely to stabilise in the first half of 2010, and increase during the second half of the year.
CRISIL Research feels that the pace of economic recovery and confidence revival will have an impact on
sentiments across all the real estate categories and will be an important variable to watch out for.