New Transactions in Whitefield

Source : Times of India

Bangalore based RMZ Corp has bought 28 acres on Sai Baba Ashram road for Rs 133.38 crore, which translates to Rs 4.76 crore an acre. The rate indicates a near doubling of capital values, to Rs 1,100 per sft, on this stretch (which is a little away from the heart of Whitefield) in the last three years.

Raj Menda, MD of the company, declined to comment on the valuation, but said that they are coming up with villas priced at Rs 2.5 crore a unit and measuring Rs 3,200 sft each. “Whitefield has some inventory left on the apartment side. But there are hardly any supply of villas in the sub-Rs 3 crore range,” he said.

Salarpuria Sattva is buying 110 acres in Gunjur village in Whitefield for Rs 275 crore or Rs 2.5 crore an acre, say sources tracking the deal. Bijay Agarwal, CMD of Salarpuria Sattva Group, declined to comment on the valuation, but said he was planning an integrated township on the land parcel. Many developers are looking at Gunjur – about 8 km from ITPB in Whitefield — as land rates are around Rs 600-750 per sft.

Significant commercial leasing activity in Whitefield is creating residential demand. Almost 0.46 million sft of office space was absorbed in Whitefield in the July-September quarter, says a report by real estate consultancy CB Richard Ellis. This is said to be a 20% increase over the same period last year.

“Whitefield is seen as a cost-effective market for office space compared to Outer Ring Road (ORR). Grade A office space rentals are at Rs 26-30 per sft compared to Rs 35-45 along ORR. With many IT companies expanding in the area, residential development will be catalysed,” said Ram Chandnani, deputy MD-South India of CB Richard Ellis.

Shriram Properties has bought 27 acres in Garudacharpalya in Whitefield for Rs 146 crore from Hyderabad-based Indu Projects. That’s about Rs 5.4 crore an acre.The company has entered into a joint development with a local landowner to develop another 19 acres, according to sources privy to the development.M Murali, MD of Shriram Properties, declined to comment on the valuation, but said that they are planning to launch high-end villas and an apartment project in the acquired land.

Indiareit Domestic Fund IV with a fund size of Rs 930 crore has picked up 5 acres in Whitefield for Rs 40 crore. That’s Rs 8 crore an acre or Rs 1,800 per sft. The real estate fund, which has exposures in Bangalore, Mumbai and NCR, is developing a 5-lakh sft premium residential project on this land, said Ramesh Jogani, CEO of Indiareit. “We are looking at apartments with capital values in the range of Rs 4,500 per sft,” he said.

Bangalore-based Total Environment Building Systems has bought 18 acres in Whitefield at Rs 150 crore for a residential project. That’s again a little over Rs 8 crore an acre. The project is an 800-apartment complex, with each flat measuring 2,000-3,000 sft and starting at Rs 1 crore. HDFC Asset Management Company has invested Rs 135 crore in a special purpose vehicle (SPV) floated by Total Environment for this project.

Land values in Whitefield have fallen to Rs 1,800-2,000 per sft compared to Rs 3,000-4,000 per sft that it had reached in 2007-08. “Not many transactions happened at these high price levels. The Whitefield market saw a 30% price correction during the slowdown,” said Farook Mahmood, CMD of property brokerage firm Silverline Realty.

Prashanth Sambargi, partner at Mars Realty, feels BDA’s revised Comprehensive Development Plan could breathe new life into property development in Whitefield since it permits 2.75-3.25 FAR (floor area ratio) depending on the plot size, frontage and abutting road width. Earlier, the FAR was a maximum of 2.

Whitefield and Outer Ring Road remain amongst the most sought after office locations in Bangalore, especially for the IT/ ITeS sector.Whitefield saw 26 transactions during 2010, involving total leased office space of 1.53 mn sft, says a Knight Frank Report.

The increase in leasing activity is expected to positively impact residential development in the area. “IT is, beyond doubt, the sole factor for the development of South Bangalore, Whitefield and ORR. The high-end catchment in South Bangalore – Bannerghatta Road up to the Accenture facility, Koramangala and Outer Ring Road near Silk Board, Varthur Road, Whitefield Main Road and ITPL Road are ideal for premium projects,” said Karun Varma, MD for Bangalore & Kochi in property consultancy Jones Lang La-Salle India.

In some interior areas of Whitefield, like Seegehalli, land is available for Rs 1.5 crore today. “The Whitefield market is still under performing despite good infrastructure and the attractive land values,” Mahmood says. Prestige Estates Projects recently tied up with Prakash Shetty, CMD of GoldFinch Hotels, to develop a 100-acre parcel in Gunjur village in Whitefield. “We are planning villas and row houses, and apartments in the size of 600-1,800 sft,” said Irfan Razack, CMD of Prestige Group. Brigade Enterpises has entered into a joint development with the landlord of an 18-acre land parcel in Whitefield.