Commercial Complexes<br>Mumbai is home to maximum new projects
By Shashikant Hegde
Fresh investment proposals for setting up fully equipped commercial complexes have burgeoned in recent years. The rising demand for business premises equipped with modern amenities, from companies belonging to the new economy sector, led the demand spurt. Further, increasing passenger car population in the big metros called for additional parking facilities close to the business centres within these cities.
These business complexes, parking lots and shopping malls not only required heavy initial investments but also demanded latest construction technology inputs. Hence, only big construction companies ventured into this sector. Sensing the ready demand and handsome returns, large corporates like Larsen & Toubro, ITC, Mahindra & Mahindra, Kirloskars and Piramals etc also diversified into this sector.
According to ProjectsToday.com, around 187 commercial complex and shopping mall projects are currently lined up in the country. The total investment involved in these projects is Rs 12,000 to Rs 15,000 crore.
A city wise analysis of the 187 projects listed in ProjectsToday indicate that among the major cities, Mumbai has attracted the highest number of projects in this category, followed by Bangalore and Delhi. Six business complexes and five large shopping complexes have been planned in Mumbai and its suburbs. The Rs 150-crore corporate park being set up by Landmark Builders and a Rs 125-crore retail outlet project planned by ITC are two of the large projects planned in the city in this sector.
The Rs 400-crore business complex being set up by Kirloskar Systems is the largest project currently being implemented in the Garden City. The complex will have a multiplex, hotel, retail arcade, food courts, club and residential quarters. The National Dairy Development Board plans to set up a Rs 142-crore fruit and vegetable market at Kannamangala in the city. Karunai Granites also plans to locate one of its proposed super markets in Bangalore.
Among the metros, Chennai has the lowest investment plans. Apart from the Rs 230-crore business-cum-financial centre planned by the state-owned Tamil Nadu Corporation for Industrial Infrastructure, the Rs 65-crore shopping mall expansion project of Spencer is the only large commercial complex project.
In Delhi, four large commercial complex-cum-shopping centres are being planned by Nehru Place Hotels, Ansal Properties, IVRCL Infrastructure and MGF Development. The New Delhi Municipal Council plans to set up a Rs 200-crore office complex-cum-parking lot and a wholesale market-cum-auction centre.
Among the other cities, Hyderabad and Gurgaon have attracted impressive investment proposals in this sector. Emaar Properties PJSC, a Dubai-based property development company, has drawn up plans to set up a Rs 720-crore ambitious residential-cum-shopping mall project in the city. Another large project is a Rs 150-crore trade exposition centre being set up by the Hyderabad International Trade Exposition.
Of the Rs 1,132-crore fresh investment planned in the fast growing city, Gurgaon, the Rs 700-crore IT Tower and Shopping Mall of Sahara India Housing is the largest. The construction majors, Unitech, DLF Universals and Ansals, are also investing sizeable amounts in setting up business parks and shopping malls in the city.
Apart from the above-mentioned cities, Ghaziabad, Lucknow, Ludhiana and Pune are also witnessing a spurt in investment in commercial complexes.
As bulk of the investment proposals are of recent origin, the implementation ratio is currently very low. However, this is expected to pick up in the near future. Apart from the high land prices in the metro cities, the other issues bogging the project promoters are high stamp duty, the obsolete Urban Land Ceiling Act and Rent Control Act etc. Quick remedial action from the Centre as well as the state governments will not only see faster implementation of the proposed projects but also fresh investments in this sector.
The Maraimalai Nagar project envisages the development of 2,100 acres of land for accommodating one lakh population. CMDA has so far developed 1,400 acres for residential and industrial purposes at a cost of Rs 49.68 crore up to July 31, 2001. About 2,377 residential plots (with 2,032 built houses being allotted), 40 commercial shops, 75 commercial plots along with an industrial area of 850 acre has been developed.
The government is ensuring that the Ford car factory and the optical fibre factory of Tamil Nadu Telecom are set up at Maraimalai Nagar so as to develop it into a new town.
The remodelling scheme of the state government quarters at Gandhi Nagar will require 2,482 houses under various categories. Of these, Chief Minister Ashok Gehlot inaugurated 264 multi-storeyed flats this month. These quarters have been built after demolishing 34 F type quarters in the first phase of the project at a cost of Rs 2.2 crore. The construction commenced in June 1999.
The Government of Punjab has shelved the proposal to set up the Anandgarh City in Kharar tehsil, encompassing 29 villages, following the demand by residents to discontinue the project on grounds of being dislocated.
The Alappuzha civic body has taken the initiative to implement a housing project to benefit 1.6 lakh people directly, instead of waiting for aid from the state government.
The project involves converting hutments in the municipality into houses. Once the project was under implementation, the government decided to provide the necessary funds, releasing the first tranche early this year. The revenue minister has promised that the second and the third installment of financial aid would be disbursed before the year-end.
The West Bengal Housing Infrastructure Development Corporation is setting up a new town over an area of 1,245 hectares on the eastern fringe of Kolkata. The new town, after completion, will provide homes to about 7.5 lakh people. It is being planned as a major hub for business, trade, industries, institutions and culture. The first phase of the project envisaging the development of 640 hectares between the Bagjola and Krishnapur canals, close to Salt Lake City, will cost Rs 350 crore. About 268 hectares will be developed for residential purposes, 143 h for water bodies and open areas and 53 h for community welfare projects, along with individual plots for freehold houses.
In addition, Bengal Ambuja Housing Development Ltd, a 50:50 joint venture between Gujarat Ambuja Cement Ltd and West Bengal Housing Board, is developing land for housing at Burdwan and Durgapur, over 86.9 and 144.4 acres, respectively. Land at Durgapur has already been acquired and construction work has started. Land at Burdwan is likely to be handed over soon. The cost of the project is estimated at Rs 35.28 crore.
The Haryana State Industrial Development Corporation is going to include commercial complexes in its term-lending activities. The loan under the scheme has been fixed at Rs 10 crore with a promoter's contribution of at least 30 per cent and a debt equity ratio of 1:1. The loan is to be repaid within eight years.
To avail of the loan, the project site should be in the name of the company and it can be mortgaged with the corporation.
Setting trends: The Crossroads shopping mall in Mumbai
The Swabhumi housing complex by Bengal Ambuja Housing Development
Inside the Ford plant at Maraimalai Nagar near Chennai