Property giants bet big on Goa

Property majors DLF, Parsvnath and a host of others are reviving their interest in tourist hotspot Goa, hoping that renewed investor interest will drive their home sales.

The state, which has around 2,000 apartments on sale, recently saw DLF, the country's largest property developer, launching its River Valley Holiday Home project, wherein apartments were priced at Rs 25-55 lakh. The developer is said to have sold almost 140 apartments, out of the 250 on sale.

"We are marketing this project to investors looking for holiday homes across the country. The idea is to give a market for people who want to invest in mid-income houses. We are already getting good response for the project," said Rajeev Talwar, group executive director, DLF Ltd.

Another Delhi-based real estate developer Parsvnath is planning to start three realty projects in the state -- a shopping mall-cum-office project, a hotel and a residential project. While it has got permission for the first two, it is yet to get approval for the housing project. The company expects to launch its projects in the next financial year.

"We see a good potential in Goa, as there are very few large-scale developments and limited parcel of land available to build," said Pradeep Jain, chairman of Parsvnath Developers.

Realtors such as Kumar Gera of Gera Developments said home prices turned attractive due to lower costs of land and construction. Gera is constructing an office and 224-apartment residential project in Goa. "At Rs 3,000 per sq ft, there is good demand for a 2-BHK," said Gera.

Consultants said pricing was a game-changer in this tiny property market, as it was in other parts of the country. "Earlier, we were hearing houses priced at a crore or two in Goa. Since the new developers have priced their homes between Rs 20 lakh and Rs 60 lakh, people are buying them as holiday home or good investment options," said Raminder Grover, chief executive of Home Bay Residential, a unit of property consultants Jones Lang LaSalle Meghraj.

But not everything is hunky-dory in this tiny state. Initially, DLF's River Valley project faced agitation from local villagers and non-government organisations on environment issues. Besides, DLF is yet to construct a mall-cum-office in Goa as it could not obtain the necessary approvals on time. The state government has also scrapped seven special economic zones by companies such as Cipla and Peninsula Land among others, forcing developers to go to the high court. Litigation, regulations and the process of seeking approvals have also discouraged some developers.

"We actively looked at deals in Goa, but we could not pursue them as we felt public interest litigation and coastal regulation zone rules were the biggest problems in implementing any project," said Sunil Mantri of Sunil Mantri Realty.

Grover of Home Bay Residential added: "The amount of permissions required in Goa is the highest compared to other parts of the country. A project can be delayed for any amount of time due to this reason."