Sahara entry to heat up Gujarat's realty sector

The Sahara Infrastructure and Housing's projects will result in more interest in realty business, improvement of quality in construction and rationalisation of prices, they said.

The first phase of the project will be kicked off in November. Under the project, Sahara will set up 11 townships in the state at an initial investment of Rs 3,300 crore.

The company hopes to complete the project by 2008. Industry experts said this investment will lead to fierce competition in the real estate market, prompting builders and developers to introduce new schemes to woo buyers.

This is for the first time that a group outside the state is investing in the real estate business in a big way in Gujarat.

Pankaj Agarwal, director, Bakeri Engineers, said, "Sahara's housing projects will evoke a good response as the projects are good and with the interest rates on home loans falling, there are more buyers in the market."

A member of the Gujarat Chamber of Commerce and Industry (GCCI) said, "With the entry of Sahara, builders like Bakeri Engineers will feel the heat. They have been the only players in the premium market segment in the state's real estate industry. Medium-size promoters will have to stress on quality and price their projects attractively. Sahara's entry will definitely improve the market and provide more options to the buyers."

An official of Bakeri Engineers, which is in the industry for the last 40 years, said, "Sahara's entry is not a threat to us. Rather, we are happy to get a strong player in the state. The buyers will now get more quality buildings at attractive prices."

Sahara's projects cover cities such as Ahmedabad, Vadodara and Rajkot. "The township at Bopal, on the outskirts of Ahmedabad, is expected to accommodate more than 3,000 families. The work on this township will be completed in two phases of 18 months each. The township will be ready for possession by 2006 end," said Pankaj Shrivastava, marketing in-charge of the project for Sahara.

"We have already started getting enquiries for booking at Ahmedabad and Vadodara townships. For booking a flat, the customer has to pay five per cent of the cost of the property upfront and the remaining amount is to be paid before taking possession of the property," he said.

Sahara township at Bopal will have single bed-room flats priced below Rs five lakh to duplex priced at Rs 30 lakh.

The township will have all facilities and amenities including hospitals, schools, colleges, petrol pumps, clubs, cinema halls, shopping mall and parks.

However, Sunil Pansali of Swastik Housing feels that customers are reluctant to book flats in advance. "It will take at least three years for people to get possession of their houses after booking. In Ahmedabad market, this is not much feasible as people here are used to buying ready flats or bungalows. It is too early to speculate about the success of Sahara's projects. However, corporate participation will make the competition fierce," Pansali said.

Madhubhai Bagdai, a reputed builder in Rajkot, said, "Sahara has made its entry at the right time when people have started investing in land and buildings in Rajkot. On Kalawad road, Raiya Road and the surrounding areas of western Rajkot, people have started purchasing property. The price of land varies from Rs 5,500 to Rs 7,500 per sq yard and with Sahara's entry, the prices will come down and the quality of construction will improve."