Business Standard: How is the real estate scenario in Calcutta?
S M Shroff : It is currently in a dull phase, owing to lack of demand. This spell began about two years ago. The approximate decline (in the value of property) during this period is anything between 25 and 40 per cent. The slump is felt more in the commercial complex segment than in residential sites.
BS: What are the bottlenecks affecting the business?
SMS: The biggest deterrent is the high tax which a realtor has to pay to the Calcutta Municipal Corporation.
The CMC charges 60 per cent of rent earned as tax including on services such as air-conditioning, security.
In contrast to this, in Mumbai, even at prime locations such as Nariman Point, the Brihanmumbai Municipal Corporation levies only a flat rate of Rs 15 per square metre.
Moreover, inordinate delays in plan sanction by the municipal authorities, which may extend between 10 and 13 months, leads to bad business.
I would suggest that the responsibility for plan sanctions should be handed over to licensed architects and structural engineers who are much more qualified than the sanctioning authorities.
BS: How would you compare real estate prices in Calcutta and Mumbai?
SMS: Mumbai prices are around five times the Calcutta rates. For example, property in the prime areas of Calcutta such as Park Street, Camac Street and Theatre Road is valued around Rs 4,000 per square feet. In contrast, plum sites at Nariman Point in Mumbai can cost anything between Rs 15,000 and Rs 20,000 per square feet. Real estate prices in Calcutta are the lowest compared with Mumbai, New Delhi, Chennai and even Bangalore.
BS: How do you foresee the scenario in Calcutta in five years?
SMS: I feel Calcutta will experience a real estate boom in the next five years, owing to improving infrastructure and industrial resurgence in the state. The scope here is better than in Mumbai because it (Mumbai) has severe constraints vis-a-vis land availability.
Calcutta has enough land for developing projects. What the city needs is a master plan.
The government authorities should specifically earmark areas where they would like to develop residential quarters and commercial complexes.
BS: What is the potential in semi-urban districts of West Bengal such as Haldia, Asansol and Jalpaiguri?
SMS: Theres no scope for business in these places owing to poor purchasing power of the people. There will be not be adequate demand.
BS: Who are the leading real estate promoters in the city?
SMS: Here, we have no developers which are in the league of the Rahejas and Mittals in Mumbai or the Ansals and DLF in New Delhi.
Most of the projects here are executed by a consortium of promoters in various permutations and combinations.
However, besides us, other players in the field include K N Fatehpuria of Martin Burn, Harsh Neotia of the Gujarat Ambuja group and Sanjay Jhunjhunwala of Teage Ltd.
