Low on re­turns, high on ex­pec­ta­tions

The in­dus­trial plot seg­ment in Am­rit­sar has so far failed to de­liver at­trac­tive re­sults for the realty in­vestor, but, in the last one month, there is re­newed op­ti­mism for its re­vival

Hindustan Times (Chandigarh) - Estates - - ESTATES - Mu­niesh­wer A Sa­gar mu­niesh­wer.sa­gar@hin­dus­tan­times.com

In­dus­trial plot seg­ment is strug­gling for rel­e­vance in the Am­rit­sar real es­tate mar­ket. De­mand levels are low and price stag­nancy is the norm in the seg­ment. But, the pes­simism about fu­ture prospects is giv­ing way to height­ened op­ti­mism for a turn­around after for­ma­tion of the new state govern­ment.

In terms of in­vest­ment yields, the seg­ment has lagged behind other realty seg­ments, in­clud­ing com­mer­cial and res­i­den­tial.

Though all the realty seg­ments are strug­gling to yield in­vest­ment re­turns to the in­vestor, but, for the in­dus­trial plot seg­ment the sit­u­a­tion is the worst. The supply is way more than the de­mand and this is caus­ing a glut in the mar­ket, keep­ing prices stag­nant, say lo­cal realty ex­perts.

NOT MANY TAK­ERS FOR IN­DUS­TRIAL PLOTS

There are not many tak­ers for the in­dus­trial plots. Both the end-user and the in­vestor have de­serted the seg­ment. For the end-user, the in­dus­trial growth in the state was not en­cour­ag­ing enough to buy in­dus­trial plots for ei­ther ex­pan­sion or start­ing new projects

“For the in­vestor, the re­turns from the seg­ment are the low­est in the realty sec­tor,” says Rishi Khanna, 40, a lo­cal real es­tate con­sul­tant. The key to growth in the seg­ment rests on the in­dus­trial growth. “But, for the last many years, there has been a sharp dip in in­dus­trial growth in the city and this has neg­a­tively im­pacted the de­mand for in­dus­trial plots. In most of the ar­eas, due to low de­mand, price has re­mained stag­nant. The price cor­rec­tions weren’t sharp be­cause the prices in the in­dus­trial belts have al­ready hit the bot­tom and there is not much scope for fur­ther price re­duc­tions,” says Khanna.

AVAIL­ABIL­ITY AND PRICES

“In­dus­trial plots are pri­mar­ily avail­able in govern­ment-built in­dus­trial fo­cal points, and Model In­dus­trial Park (MIP) in the pri­vate sec­tor. The avail­able plot sizes vary be­tween 250 sq yard and 5,000 sq yard. Plot prices range from Rs 5,000 sq yard to Rs 15,000 per sq yard de­pend­ing on the lo­ca­tion,” says Nitin Mehra, 31, a lo­cal real es­tate con­sul­tant. A buyer look­ing to ex­plore the seg­ment should not face any prob­lems re­gard­ing the avail­abil­ity of plots. Most of the plots in the city’s in­dus­trial zones are ly­ing va­cant. “The va­cancy rates in the seg­ment are rel­a­tively high. In the older and more de­vel­oped fo­cal point, the oc­cu­pancy is around 80%. In the new fo­cal point, nearly 60% plots are ly­ing va­cant,” says Mehra.

HOPE AND EX­PEC­TA­TIONS

The seg­ment for­tunes aren’t ex­pected to change in the near fu­ture, but, lo­cal realty ex­perts, say, bet­ter prospects are ex­pected in the medium and long-term. Ro­hit Sharma, 31, a city-based de­vel­oper says

THE SEG­MENT FOR­TUNES AREN’T EX­PECTED TO CHANGE IN THE NEAR FU­TURE. HOW­EVER, LO­CAL REALTY EX­PERTS SAY BET­TER PROSPECTS ARE EX­PECTED IN MEDIUM AND LONG TERM.

“There is a re­newed op­ti­mism in the city with a new and sta­ble govern­ment tak­ing over. All the in­di­ca­tions com­ing from the state govern­ment, so far, are pos­i­tive for both the in­dus­try as well as the realty sec­tor. A new in­dus­trial pol­icy for the state is ex­pected to be an­nounced in the near fu­ture. This has given a flip to the lo­cal ex­pec­ta­tions re­gard­ing the re­vival in the realty sec­tor. Though the ac­tual im­pact will be seen when the new govern­ment starts im­ple­ment­ing their so far stated in­ten­tions.”

Other realty ex­perts ad­vise against be­ing too op­ti­mistic about the seg­ment. “For the realty in­vestor, the city’s in­dus­trial plot seg­ment sel­dom gets a pri­or­ity. If and when the sec­tor’s re­vival starts, the realty in­vestor will pre­fer other seg­ments rather than the in­dus­trial plots. Also, the de­mand-supply fun­da­men­tals of the seg­ment aren’t ex­pected any­time soon. The en­duser de­mand can only make mar­ginal im­pact on the seg­ment’s for­tunes un­less the in­dus­trial growth in­creases sharply. For the realty in­vestor, the best op­tion is to wait and watch ” says Khanna

GUR­PREET SINGH/HT

Most of the in­dus­trial plots in Am­rit­sar are ly­ing va­cant

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.