Kochi Metro Rail Limited is all set to Generate Revenues of Approximately Rs 1,000 Crore through the Sale of Apartments
Text: The Times of India Images: qzprod.files.wordpress.com
If all goes as planned Kochi Metro Rail Ltd (KMRL) will soon enter the city’s realty sector. The Metro agency’s entry into the real estate sector, targeting middle class home buyers is expected to redefine the sector.
In a recent talk delivered by KMRL managing director Elias George, he stated firmly that KMRL is locked and loaded to plunge into the sector. “We are going to step into the real estate business and we are confident that we can give the best possible fittings and flats to our buyers.” he said.
KMRL expects to generate revenue of approximately Rs 1,000 crore through the sale of these apartments.
Kerala government has provided 18 acres of land to KMRL at Kakkanad – where the old NGO quarters are located – is the designated locale for the flats that are to be built. The Metro agency intends to develop 1000-1200 square foot apartments in a European aesthetic and style.These apartments that are to be priced much lesser than what front runners in the sector are presently offering their buyers, he said.
KMRL managing director said there is going to be a huge demand for it. “We are clean dealers and we have got the KMRL brand equity. We can offer, say for example young couples, apartments starting at Rs 30 lakh – which is a fraction of the cost they would pay otherwise – but with a level of sophistication and quality that only the best builders in Kerala can provide,” said George. This indicates that the Metro agency will be able to sell flats at the rate of Rs 2,500 per sq foot.
The representatives of the Confederation of Real Estate Developer’s Associations of India (CREDAI) – the apex body of organized Real Estate Developers Associations – have stated that they will take KMRL’s new venture most positively while also adding that KMRL has quite a few factors that come into play and enable them to sell apartments at lower rates. “As the land is provided by the government the land cost might not be a major factor for KMRL. Moreover, they will be able to get tax exemption, and also there is a possibility of government intervention to facilitate pre-contracted rate system. These factors are expected to help KMRL in offering apartments at lesser rates,“ said a CREDAI representative.
As per the currently market rates, prominent builders offer premium apartments in Kakkanad at a rate of Rs 5,000 per sq feet. The construction cost of these apartments stand between Rs 2,750 to Rs 3,000 per sqfoot while the land cost adds up to around Rs 1,000-Rs 1,250 per sq foot. Then there are other costs involving approvals and funding. This will take the cost to Rs 4,000 per sq feet.According to builders while it is almost impossible to bring down the cost involved in the construction of the structure, there is a possibility to reduce the cost involved in executing works in the final stages like bathroom fittings, flooring, fire and safety and landscaping. “The builders normally charge a margin of 10 % -15 %. When we take into account all these factors mentioned above it will be a real challenge to sell apartments below the rate of Rs 3,750 per sq feet,“ the CREDAI representative said.
According to builders while it is almost impossible to bring down the cost involved in the construction of the structure, there is a possibility to reduce the cost involved in executing works in the final stages like bathroom fittings, flooring, fire and safety and landscaping. “The builders normally charge a margin of 10 % -15 %. When we take into account all these factors mentioned above it will be a real challenge to sell apartments below the rate of Rs 3,750 per sq feet,“ the CREDAI representative said.