The recovery in the realty sector nationwide is leading to an upward trend in urban rental values. For almost a year, the economic slowdown had a negative impact on the growth prospects of commercial spaces.
Today, for instance in Kozhikode, the scene is vibrant with more commercial buildings coming up even on the outskirts of the city. The shortage of commercial spaces has forced builders to set up projects in new areas, such as the mini bypass and the n ew Ramanattukara-Malaparamba bypass. Some have already drawn up plans to establish hotels and business-related ventures on the upcoming stretch from Malaparamba to Vengalam.
Property developers say the Vengalam-Ramanattukara bypass will witness a big growth in terms of commercial and residential projects. The availability of space will give the stretch a boost to real estate business. Besides, the place will be free from traffic chaos.
Builders say that land is not available in the centre of the city for constructing shopping malls. So, they are forced to develop new commercial sites on the bypass. A multitude of projects ranging from star hotels, showrooms and supermarkets are coming up from Thondayad to the Malaparamba junction. This is a strategic location and has good connectivity.
The ‘hi-lite’ group is coming up with ‘hi-lite’ Hills, a commercial and residential project. The ‘hi-lite’ Plaza will have office spaces in two towers with over 10-lakh sq ft of built-up space. The towers, each of eight storeys, will be equipped with all amenities and a corporate ambience suited for all kinds of commercial enterprises. Among the advantages is a peaceful working environment.
It will have 100-plus office spaces with areas starting from 750 sq ft. The first tower will be completed in July 2011. The selling rate is Rs.4,500 a sq ft.
The company hopes that the area will accommodate information technology parks, multi-specialty hospitals and star hotels. One of the reasons for such expectations is that Kozhikode accounts for a large volume of remittances from Non-Resident Indians. Further, the city is known for its strong trading class.
Back to investing
People who have made a fortune in West Asia have forayed into new ventures here. Many have started investing in businesses in new regions. The recession in Dubai and Kuwait has made many invest in shopping complexes here. Business enterprises are not so risky in the State. Moreover, it offers a steady income. Banks are also willing to finance new projects, they say.
The slowdown has forced many multinational companies and retail giants to stop business in the city almost a year ago. But now they are retuning to reinvent their businesses. The businesses run by local companies might have had gone through a rough patch but they have emerged stronger.
Today, the rental rate quoted at shopping malls in the heart of the city ranges from Rs.200 to Rs.300 a sq.ft. This is high even in comparison with the rates prevailing in the market during the real estate boom in 2007.
However, commercial spaces are available at nominal rates in the range of Rs.15 to Rs.50 a sq ft in areas such as Malaparamba, Nadakkavu, Karaparamba and West Hill. The rental rate at prime locations such as Mavoor Road is above Rs.100 a sq.ft. It is also high near Malabar Christian College Road, Arayadathupalam, YMCA Cross Road, Railway Station Link Road, Eranhipalam and Annie Hall Road.
The rates are soft in residential areas such as Chinthavalappu, Chalappuram, Karikkamkulam, Bilathikulam, Mankavu and East Hill. Warehouses are available at cheaper rates in areas adjoining the main junctions on Beach Road or at West Hill.
A year ago, many private banks, financial institutions, insurance companies and telecom players have started looking for commercial spaces away from the din of the city. Most did not want to remit high floor rates. Others wanted locations close to residential areas. Today, they believe their strategy has worked. House owners having plots adjacent to National Highways, especially on Kannur Road (National Highway no.17), try to sell their land to developers or construct office spaces. The trend is seen in other parts of the city as well. They hope that the positive outlook will spur growth and end the shortage of commercial space.
News Published Under: The Hindu