Hyderabad still cheapest among all metros

NCC Urban has been in real estate and infra sectors for the past 15 years. Can you take us through how real estate has evolved in Hyderabad in last few years?

NCC Urban started real estate operations in Hyderabad in 2009. Unfortunately, realty sector in the city went through sluggish phase from 2009 to 2015. There was negligible growth. But market picked up from 2015.

It's good now. We are doing two to three projects. We completed Residency project and handed over the apartments to customers. We also did Gardenia project behind Residency in Gachibowli.

We are in the process of handing over the units there. It has 180 luxury apartments, each costing around Rs 2.5 crore. We have taken up a project in Narsingi in 23 acres. It's a joint development, but we own 10 acres.

We will build 13-14 million sft there. We have handed over four blocks in first phase. The second and third phases are at various stages of development. It's targeted at above mid-segment customers.

How do you see future of this sector in the city over next 10 years?

Prices appreciated in the last two years. Prices have gone up by 10 per cent in the last one year alone. In terms of prices, Hyderabad is still the lowest among all cities. This is more so in affordable housing space.

Sales growth will continue as long as apartments are priced below Rs 60 lakh. However, high-end apartments will take time. Volumes are also less in this segment. But there should not be any problem for affordable units.

I don't think there will be any slowdown for next five to six years as there is demand for commercial space, which will in turn drive the sales of residential units.

Real estate sector is going through sluggish phase across India. But it's boom time in Hyderabad. How do you explain this?

We had a gap of six to seven years when there was some uncertainty. Moreover, many new IT companies have set up operations or expanded existing operations in the city instead of going to Bengaluru.

That's also the reason for high demand for residential units in Hyderabad.

Land rates have skyrocketed in and around Hyderabad in the past couple of years. Will this lead to a bubble as happened way back in 2009?

Land rates have gone up in the city because infrastructure is good here. Demand for commercial space is very high. Furthermore, there is not much land available.

Also, people are buying open plots as an investment. We don't know how many of them will build houses in their plots. Plots are being bought purely for investment. Customers are hoping that prices will go up.

But we are not in that business. We have no plans to develop and sell open plots.

How the luxury real estate sector is doing in Hyderabad? Is growth in this space higher than other segments?

Sales are slow in luxury segment. People are preferring villas in this space. We are not in the villas segment but will enter it soon. We are already doing villas project in Bengaluru.

We have selected a land near Tellapur for villas project in Hyderabad. I don't think Hyderabad city will grow towards East though the Telangana government is making some efforts in that direction.

If Government allocates land at cheaper prices to IT companies and If such companies come there, then real estate sector will develop. But the city will continue to grow towards the West.

What about Amaravati? Will it ever compete with Hyderabad in realty space? Do you have any advice for the new government led by YS Jagan Mohan Reddy in AP?

We completed a project in Guntur. We don't have any new projects there. I don't think Amaravati will ever compete with Hyderabad. There is no such possibility. Construction works for various buildings like Assembly have already started.

They will eventually be completed. But it takes time. For any city to develop, it takes a minimum of 15 to 20 years.

However, real estate sector in Visakhapatnam is developing fast when compared to Amaravati. We have land in Visakhapatnam.

You have presence in Hyderabad, Chennai, Kochi, Bengaluru, Ranchi, etc. Which city do you think is good to have and execute projects at this point of time?

At present, Hyderabad is the best place to invest. Ranchi, the capital of Jharkhand, is also good place for real estate investment. It will be an ideal place for long-term investment.

Jharkhand government has allotted land to us for building infrastructure for National Games and developing real estate projects.

We developed the infrastructure for the games. After the games were over, we developed 1000 apartments and sold them. Apartment prices there are around Rs 3,200 per sft.

Is the Telangana government proactive when it comes to real estate? What more policy initiatives do you want from the government?

The Telangana government has good policies for the real estate sector. It launched good policies when KTR was Minister. But there is not much change after the recent elections. The portfolio is with the Chief Minister now.

He is very busy. So, he can't spare much time for it. The government may come up with new policies if the portfolio gets a minister.

It will be good for the sector if the government announces single window clearance policy for real estate.

Are any new projects on the anvil?

We have lined up two projects in Chennai. But we have not launched them as the market is bad there. We will launch them once market conditions improve.

We may launch them six months down the line.