City-based construction firm IVRCL Infrastructure and Projects has plans to sell its high-priced pieces of land, including the twenty five acre information technology special economic zone (SEZ) plot in Noida, and purchase low-cost property in the light of the downside in real estate business in the country.
“With the real estate being what it is now, our first priority is selling high-cost land and filling our land bank with low-cost lands. We will also go for low-cost housing,” Chairman and Managing Director of the four thousand two hundred crore rupees company, E Sudhir Reddy said.
IVRCL currently has one hundred twenty acres in Noida, about one thousand acres in Bangalore, four hundred acres in Pune and two hundred acres in Panvel (Navi Mumbai), besides large extent of land in Hyderabad, Nagpur and Visakhapatnam. The market value of these plots was estimated at over four thousand crore rupees.
On a pre-qualification basis, IVRCL has been allotted one hundred twenty acres in Noida a year-and-a-half- ago. This includes twenty five acres meant for setting up an IT SEZ. While the SEZ land was allotted at a rate of Rs 7.5 crore per acre, the remaining ninety five acres were allotted at about twelve crore rupees per acre. As the rules do not allow sale of SEZ land, IVRCL proposes to raise unfinished structures and dispose off the property.
“The cost of the shell construction will be two thousand rupees per square feet. I will transfer this built-up area to the purchaser at the same cost. However, I will get a premium on the land cost,” Reddy said adding that while the company purchased SEZ land for about seventeen thousand rupees per square meter, the minimum upset price fixed by the government for bidding in that area now stood at about twenty five thousand rupees per square metre.
Though the disposal of the SEZ property essentially means sale of constructed area, land cost will be added in the transaction. In view of the rising interest rates and increasing input costs, the company had also decided to go in for low-cost housing.
“We are currently building nine million square feet of low-cost houses spread over three thousand acres in different cities. The highest price we are charging is two thousand two hundred rupees per square feet,” he said.
According to Reddy, IVRCL is also planning to rope in about ten construction firms for setting up cement plants in different parts of the country for captive consumption. The idea is to put in about twenty five crore rupees each to raise about two hundred fifty crore rupees capital and seek funding from banks and private equity (PE) firms for setting up six cement plants.