Zooming Singur Real Estate Prices

West Bengal Real Estate: Realtors Making Hay While The Sun Shines

Amar Ghosh is a real estate broker, who is negotiating a deal with a Mumbai-based company for 65-acres around Singur, 40-km. from Kolkata for Rs. 22.5-lakh (Rs. 2.25-million) per acre. His last deal before work began on the Tata Motors’ small-car project in this fertile potato-growing belt was for Rs. 4, 50,000-per acre.

Ironically, the project has attracted national attention due to the protests that took place over the government’s land acquisition for Ratan Tata’s dream small car project, which has made it the cynosure of local real estate developers, who are hoping to cash in on heightened corporate interest in land deals in the area.

Land prices around the project site have gone up two to three times the per-acre compensation paid by the state government to farmers. Compensation, which itself is as much as a 130% premium to the market prices prevailing then.

Presently, against Rs. 8, 70,000-per acre for single-crop land and Rs. 12,76,000 per acre for multi-cropped land, the land around the Tata Motors’ 997-acre factory and vendor park costs Rs. 22-24 lakh (Rs. 2.2-2.4-million) per acre.

In 2002, when work began on the construction of National Highway No. 2 which passes by Tata Motor’s factory, land prices began to rise in the area. And, that was when prices shot up from Rs. 24,000 – 30,000 an acre to Rs. 150,000 an acre. Subsequently, new industrial units pushed up prices to Rs. 300,000 an acre.

But, market dynamics have changed radically with the controversy over land acquisition for Tata Motors’ project subsiding. So much so, a Kolkata real estate developer has said there are more land speculators at Singur than companies wanting to set up projects.

Many of these speculators made a lot of money selling plots to the government for the Tata project. “They have bought the frontage 3-6 km. away from the Tata Motors project site, without which no company or real estate [http://www.indiarealestateblog.com] developer will be able to set up projects,” a real estate source discloses.

Ironically, these speculators were successful in acquiring land from farmers at low rates ahead of the land-acquisition drive for the Tata Motors’ project, because their activities were low-key and attracted no political interest, unlike those of the state government. Significantly, the state government has said that around 500-private real estate deals were closed in Singur before the Tata Motors project was announced.

However, the speculative rise in land prices may, ultimately, prove self-defeating. Many companies from other parts of India, including Indonesia and West Asia evinced interest in setting up ancillary projects around the Tata Motors’ factory. However, high land prices proved to be a deterrent for their wishes.

The whopping appreciation in real estate prices is not restricted to Singur, alone. It stretches all the way from Dankuni to 12-km. away, where Delhi-based real estate developer DLF is setting up a near-5,000-acre township.

Article Publish by: www.indiarealestateblog.com [http://www.indiarealestateblog.com]

Zooming Singur Real Estate Prices