Slug­gish de­mand, sta­ble prices

In Lud­hi­ana, the in­dus­trial plot seg­ment is marked by a sit­u­a­tion of low de­mand and more sup­ply

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

Sta­bil­ity de­fines the in­dus­trial plot seg­ment in Lud­hi­ana, the in­dus­trial and busi­ness cap­i­tal of the state. Even though de­mand in the sec­tor has de­clined in the last few years, yet, prices are rel­a­tively sta­ble. Also, a sit­u­a­tion of over-sup­ply pre­vails.

SUP­PLY BASE

The in­dus­trial plot sup­ply is avail­able in both the pri­vate and public sec­tor. While in the public sec­tor, it is mainly in the sec­ondary mar­ket, in the pri­vate sec­tor, buy­ers can find prop­er­ties both in the pri­mary and sec­ondary mar­kets.

Deepak Badyal, 48, pres­i­dent of the Lud­hi­ana Real­tors As­so­ci­a­tion, says ,“Lud­hi­ana be­ing a hub of in­dus­try, there are sev­eral lo­ca­tions in the city and the pe­riph­eral ar­eas where the small and medium in­dus­try have large foot­print. In the or­gan­ised seg­ment, there are In­dus­trial Ar­eas A and B, and there smaller fo­cal points. There are also sev­eral older lo­cal­i­ties with a mix of in­dus­trial and res­i­den­tial ar­eas. Then there are in­dus­trial es­tates, in­dus­trial parks and some cater to spe­cific in­dus­tries in the Greater Lud­hi­ana area.”

IN­DUS­TRY HEALTH AND REALTY SEG­MENT

The seg­ment’s for­tunes are closely tied up with the lo­cal in­dus­try health. The de­mand in the seg­ment, both end-user and in­vestor, comes from the in­dus­trial sec­tor.

Atul Monga ,38, a gar­ment and fab­ric man­u­fac­turer based in the city, says, “The cur­rent mar­ket sit­u­a­tion has its roots, firstly, in the slow­down in the in­dus­trial sec­tor it­self and se­condly, the fail­ure of the realty mar­ket to de­liver re­sults for both the end-user and the in­vestor. In the in­dus­trial sec­tor, over­all in the coun­try, there is slug­gish­ness, and sim­i­lar ef­fect is be­ing felt in the lo­cal in­dus­try. The in­dus­try no longer gen­er­ates enough sur­plus es for the in­dus­tri­al­ists to in­vest in the in­dus­trial plots ei­ther for ex­pan­sion pur­pose or for in­vest­ment. It is only when the in­dus­try makes prof­its that we see in­vest­ments in­creas­ing in the realty sec­tor also, both from the end-user and the in­vestor. As for the sec­ond rea­son for the low de­mand for in­dus­trial plots, the realty sec­tor it­self is to be blamed. Price cor­rec­tions and even price sta­bil­ity dis­suades the in­vestor from en­ter­ing the realty seg­ment. For the last sev­eral years, the realty mar­ket, in­clud­ing the in­dus­trial plot seg­ment failed to gen­er­ate at­trac­tive re­turns for the in­vestor. As a re­sult, the in­flow of money to the seg­ment fur­ther de­te­ri­o­rated.”

Dif­fi­cult to exit in­dus­trial plots also dis­cour­ages po­ten­tial in­vestors to en­ter the seg­ment.

“The av­er­a­ge­size of an in­dus­trial plot is sig­nif­i­cantly larger than in other realty seg­ments, in­clud­ing the com­mer­cial seg­ment. So, the start­ing in­vest­ment in the seg­ment is also rel­a­tively larger than the res­i­den­tial and com­mer­cial seg­ments. An in­vestor stands to lose more in the seg­ment than in other realty seg­ments if he can’ t exit at the time of his choos­ing. At present, the seg­ment does not al­low for an easy exit or an exit at one’ s choos­ing ,” says Pr aka sh Ag garw al ,43, a city-based real es­tate con­sul­tant.

BET­TER PLACED

The lo­cal realty mar­ket is plagued by slow­down and price cor­rec­tions de­fine most realty seg­ments. But thei ndus­trial plot

IN­DUS­TRIAL PLOT SUP­PLY IS AVAIL­ABLE IN BOTH PRI­VATE AND PUBLIC SEC­TOR. WHILE IN PUBLIC SEC­TOR, IT IS MAINLY IN SEC­ONDARY MAR­KET, IN PRI­VATE SEC­TOR, BUY­ERS CAN FIND PROP­ER­TIES BOTH IN PRI­MARY AND SEC­ONDARY MAR­KETS

seg­ment is bet­ter placed.

Atul Dhin­gra, 37, a Lud­hi­an­abased real­tor, says, “While most other realty seg­ments in the city are marked by price cor­rec­tions, the in­dus­trial plot seg­ment on other hand, has regis­tered rel­a­tively sta­ble price sit­u­a­tion. In Lud­hi­ana, the rea­son for this is the seg­ment is di­rectly re­lated to the liveli­hood of the peo­ple. Though, in the re­cent past, there were some set­backs to the lo­cal in­dus­try, yet, most of the city pop­u­la­tion is en­gaged in the sec­tor. So, the de­mand, even though dipped, yet is enough to keep the prices rel­a­tively sta­ble in the seg­ment.”

Va­cancy rates in the seg­ment de­pend on the lo­cal­ity.

“In older ar­eas like In­dus­trial A and B, which are also closer to the city, in fact, are now part of the city, va­cancy rates are very low. In place of the in­dus­tries that were closed, peo­ple have opened up stor­age spa­ces like godowns. In the other ar­eas, though, the va­cancy rates are more, for in­stance, in the fo­cal points nearly 30% of the plots are va­cant. In other pe­riph­eral and up­com­ing ar­eas, the va­cancy rates are still higher,” says Badyal.

Prices of the in­dus­trial plots in the city vary widely de­pend­ing on the lo­ca­tion of the plot.

“The av­er­age price range for plots gen­er­ally varies be­tween ₹6,000 per sq yard to ₹50,000 per sq yard. In the In­dus­trial Ar­eas A and B, the av­er­age price gen­er­ally is around ₹25,000 per sq yard. In fo­cal points, the av­er­age price hov­ers around ₹13,000 per sq yard. Prices in­crease in these ar­eas de­pend­ing on the lo­ca­tion, size and the con­di­tion of the prop­erty ,” says Dh in­gra.

HT PHOTO

Prices of the in­dus­trial plots in Lud­hi­ana vary widely de­pend­ing on the lo­ca­tion of the plot.

HT PHO­TOS

There is slow­down in the in­dus­trial plot seg­ment in Lud­hi­ana.

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