Bangalore IT sector in purchase mode but Hyderabad cautious

January 15, 2010

It is mixed sentiments for some players in the real estate industry as IT sector in Bangalore trundles back on purchase mode but Hyderabad displays a cautious sentiment owing to the current political situation.

"The IT customer is back on track", Sunil Mantri, chairman of the Sunil Mantri Group, a leading real estate firm in the IT city, said.

"The IT employee is back to buying properties,” Mantri said while stating that in its to be launched project on Sarjapur road, out of the 100 bookings 90 per cent were IT employees.

"An IT employee who was worried about his job and cuts in salary and had gone slow on purchasing decisions, is now back trying to purchase,” Mantri added.

"The real estate sector is a very sensitive sector. Investments in these sectors are long term and not easy to exit unlike fixed deposits and stocks that can be exited from easily. Hence IT employees, who were worried about losing jobs and rollback of packages, were not in the purchasing mood right from end of 2008 to September 2009," said Mantri.

"But post September the confidence has returned,” Mantri claimed.

"The last four months have been good. We have seen a 40 percent increase in purchase in the last four months. Out of which 50 percent would be from the IT sector,” said Swaroop, senior vice president, Prestige.

However, while the IT city of Bangalore has given the sector reasons to smile, Hyderabad was a cause for worry.

"We are going slow in Hyderabad on our projects", Sunil Mantri said as buyers were cautious and the mood not too upbeat. The group has four projets with 5000 units planned till 2014-15 has decided to roll out these projects "in phases".

"We are cautious in Hyderabad," said Mantri. Hyderabad which was one of the hottest markets till last year had gone on a slowdown track after the Telangana issue.

"We are looking at a turn around and things looking up from 2010,” said a managing director of Jones Lang La Salle Meghraj, a global real estate service firm.

"IT employees are beginning to look at purchasing and enquiries have been coming and sale taking place in Bangalore,” he said.

However, properties that were exclusively developed for IT/ITES sector like luxury apartments were no longer happening as before.

"In Hyderabad, there had been an oversupply and until these are absorbed, we do not expect any fresh projects,” he said.

Moreover, Hyderabad had been harder hit than Bangalore during the recession as it was more IT/ITES dependant. "IT-ITES was its only USP", but "In Bangalore, IT was not the only market driver for the real estate sector".

Source : www.realtyplusmag.com