Investment Opportunities

In the rest of the country, real estate in Madhya Pradesh is growing proportionately with economic development. Madhya Pradesh – centrally located and rich in mineral and agricultural wealth, is on a growth trajectory that equals the pace set by other states which had started their industrialization process much earlier, and Bhopal being the capital city has seen growth leaps and bounds. One of its most intriguing features off late has been the way its realty sector has defied the trend prevailing in the rest of the country. At a time when real estate is reeling under the impact of a series of body blows – interest rates climbing higher and higher, scarce capital, a volatile Sensex, all of which are scaring away buyers – Bhopal seems entirely unaffected.

Records at the district registrar’s office reveal that in the last few years, there has been a substantial growth in the number of title deeds registered, Revenue from housing deals through stamp duty and registration charges has risen more than 70 per cent in the same period. There is a boom in Bhopal’s properties scenario land and prices have gone up manifold. Another advantage is, although the prices of real estate are rising – at around 15 to 20 per cent per annum, it has in no way dampened demand of the same. As the prices of real estate is 7 times higher in metros, that in Bhopal is definitely lucrative. The reason for such contrarian behavior lies in the surge of development that has come to Bhopal in recent years. Industry is growing rapidly. Apart from the sprawling plants of the state owned Bharat Heavy Electricals Ltd, or BHEL, and the Bhilwara Group owned HEG, both of which were set up decades ago, the industrial cluster of Mandideep, 20 km south of Bhopal, houses the factories of, among others, Crompton Greaves, Lupin, Procter & Gamble, Parle Agro, and the Vardhaman Group. Lupin has one of the country’s biggest pharmaceutical facilities at Mandideep spread over 65 acres. The company selected the area for its operations in 1997 because of its infrastructural strengths. “That, coupled with the availability of skilled manpower makes it an ideal location,” says Ramesh Swaminathan, President, Finance and Planning.

The government is also trying hard to develop Bhopal into an educational hub. The city already has 74 engineering colleges and five medical colleges. The All India Institute of Medical Sciences has set up a branch here, as has the National Institute of Fashion Technology. There is more to come, the state government has earmarked 400 acres of land for educational institutions. All this activity is bringing thousands of newcomers to Bhopal – all of whom need homes.

No doubt there is a key difference between the real estate market of Bhopal and those of the metros: the prices are not in the same league. It is still possible to buy a well constructed, semi-detached house in Bhopal at the rate of Rs 2,000 to Rs 2,500 per sq. ft (Rs 22,000 to 28,000 per sq. m), or an apartment for between Rs 1,750 and Rs 2,250 per sq. ft. Even in high-end projects, the market rate is around Rs 2,600 per sq. ft. In comparison, the circle rate for residential properties is Delhi’s expensive areas – which is well below the market rate – is Rs 7,740 per sq. ft. land in Bhopal costs about one tenth of what it does in the metros, and overall profit margins too are far more modest.