News: Mumbai developer mulls Calcutta foray

(TT 20/09/2006) Mumbai - The alluring Gangetic plains have caught the fancy of another big developer in Mumbai.

K Raheja Universal, a 50-year-old company, is looking at its first foray into the Calcutta market. According to industry sources, the company could be looking at residential developments near the Eastern Metropolitan Bypass. K Raheja Universal belongs to Suresh L. Raheja and his sons Rahul and Ashish.

“The urban land ceiling rules in the eastern market prevents the availability of quality land to the potential developers. Scarcity of good quality land is one of the biggest problems some prominent groups face,” said an industry insider.

The company officials, however, said although they are looking at the Eastern regions, especially Calcutta , nothing has been officially finalised yet.

The group has over 2,000 residential, commercial and educational buildings to its credit.

While developers from Delhi have already entered Calcutta, those from Mumbai have not been able to do so.

A lot of Mumbai developers such as the Hiranandanis and the Runwal group have expressed interest in the market, but nothing has fructified yet.

“A lot of Mumbai developers are interested in Calcutta. But Mumbai developers are more used to smaller projects with higher profits model. Calcutta is more of a high volume market. Developers from Mumbai are not accustomed with high volumes. To profit in Calcutta, the project size has to be big to ensure higher volumes. Rates in Calcutta are also not as high as in Mumbai. These are reasons for Mumbai developers taking so long to go there,” said Joygopal Sanyal, head (west India-land agency) of Trammell CrowMeghraj.

He said developers from Delhi have been more active in the eastern region, adding that Unitech and DLF have already entered the Calcutta market with Bengal Unitech and Bengal DLF.

Property prices in Mumbai are one of the highest in the country. “It is, therefore, very difficult to get the same rates anywhere else in the country. If the developers do not play the volume game, their profits suffer,” said an industry analyst.

“More and more developers in Mumbai are feeling the need to de-risk their business and spread across the country. They realise they have to increase their strength and depth. This is one of the reasons behind this interest in the Eastern Region,” Sanyal added.