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The story of property price increase in the quiet, sleepy, villages of Nallagadla/ Tellapur is unbelievable, but true! 20 times in last 6 years! Many keep asking….. "Why of all this place?. So remote from the city! So remote from the city! Its all unoccupied open land without any civic amenities and a few HUDA / private layouts. Is it all hype and just a bubble?" Well the story has been written. If there were thousands of non- believers there were also few believers, who put in their hard earned money into the sleepy villages. And they are laughing all the way to the bank…
Till last year, the only human beings that you could bump into, while exploring these villages would have been occasional milkmen, dhobis and local land agents. Today, its still early days but you see gleaming cars going in and out of the area, once in a while. The intelligent had already made early investments in plots, upcoming Villas and High-end Apartments.
Where is this Little Rich Pocket?
Located to the West of Guchibowli, Nallagadla / Tellpur are bound by Outer Ring Road and also Railway Trunk Line. On Southern and Western sides are also rung by Villages which fall under GO111, related to Conservation Zone of Gandipet Lake.
What really drove prices up here? And what would be the future? Is there a lesson to be learned? How do we apply the lesson to other areas?
In simple terms, the graph shows that an investment of 4Lakhs made in the year 2000 for a 500 SQD plot in the wilderness of Tellapur, is worth 90Lakhs today. Many people might have dropped decision to invest since they could not get Rs.50/sqd as discount, in the year 2000! (Note: In places and projects of potential, never look for measly discounts. The real gains would be so huge that the discount you seek would be insignificant and immaterial)
What Really Drove Prices up Here?
As you would have observed, till 2003, the price rise was steady. The end of 2003 saw the first signs of surge. The Price rise has been sudden and drastic since then. Climbing 10 times in 3 years.
Nallagadla/Tellapur lies 6 to 9 KM on the west of Guchibowli. The development activities started in Guchibowli around the year 2000. Few had the advanced knowledge of what is going to hit Guchibowli. It took 3 years, Stadium, IVRCL towers, ISB, and commencement of construction of Microsoft and Infosys for people to comprehend that something interesting was cooking here! Till then everyone thought that Madhapur was the end of IT Road.
Informed purchases, especially by NRIs started in 2003, for plots in HUDA Approved Layouts in Nallagdla/Tellapur. Its was a discreet affair with plots changing hands slowly and prices started to climb up. Prices were around Rs.5250 in 2005. The Auction by HUDA in early 2006 saw explosive action. By this time Guchibowli had taken shape. More than two thousand people were already working in Guchibowli. New buildings were being built furiously.
The 2006 February HUDA auction, saw prices range from 8000 to 12000/sqd. More than 1400 bids were placed and majority of them were informed NRIs and Techies who could now judge where the place is headed to.
Then in July 06, HUDA came up with the follow up auction which broke all barriers taking price to Rs.17,500/sqd level! As of March 2007, prime plots in Nallagadla are quoting above Rs.20,000/sqd.
Key Price Drivers
- Expectation of Huge Migration of Employed into nearby Guchibowli area, due Offshore Outsourcing by US Companies
- Requirement to house thousands that would work in Guchibowli
- Large number of super rich returned NRIs, PIOs and Expatriates in Guchibowli
- Consistent reports of interest by Fortune 500 US Firms in Guchibowli
- Proposals for US Consulate, Multiplexes and Commercial Centers
- Connectivity to New Airport through Express Highway
- Nallagadla / Tellapur is the only open/unoccupied residential land after Guchibowli
- The Railway Line severely restricts land availability on North
- GO111 Restricts availability in South and West
- On the East you have Guchibowli with very little land for public use!
- Ideal flat, clean land with almost nil local population
- There would be larger percentage of people earning above 40,000 per Month here than in Banjara Hilla or Srinagar Colony. So why should price be lower than those places?
Close look at the Most Important Factor- Employment Creation
Here is the REAL REASON right in front of you! Now you know why the place got suddenly heated up! Its all matter of economics! The more the number of people working nearby, the higher would be the demand and the value of land and properties should go up. And that is what is happening and it would continue till prices reach the peak levels that we see in any PRIME RICH POCKET of Bangalore or Mumbai.
Incidentally after a while, we may not be able to compare prices with Banjara Hills, since price here should breach those.
This is the first time, that an effort has been made to bring these numbers together so that you get a bird's eye view of the happenings at Nallagadla-Tellapur. As you would observe, the number of jobs would leap from 23500 to close to 2 Lakhs by 2012-15, in Guchibowli alone.
Add another 1 Lakh jobs around Lanco/Poppalguda/GoldenMile/Narsingi and you know why land prices would increase. This also shows requirement of more than a Lakh of residential units in nearby areas!
So Remote From City?!
Unfortunately for many of you who read this report, dreams of making it big were trashed early, by uninformed relatives who measure potential of a location with respect to Secunderabad Railway Station.
The potential for price increase should always be measured with respect to availability of land and expected employment generation, nearby. Its local demand that drive prices, not proximity to ones family home or Secunderabad Railway Station!
And What Would be the Future?
The future is already established. Based on our study of potential job generation in Guchibowli, Kokapet, Puppalguda, Manikonda and the emergence of new connecting roads, its obvious that Nallagadla Tellapur would emerge as one of the finest residential locality in Hyderabad. It would be extremely rich, with posh Villa Layouts towering Apartment Complexes, wide access roads, communication and civic infrastructure.
All indicators point to the locality screaming up to catch up with rates at Banjara Hills. We just need to wait for commercial establishments to emerge.
The script is already written with ICICI/Tishman Speyer Venture on 400 Acres which would create an open access city, in the midst of Tellapur. This would have world class commercial, business and entertainment establishments and would feed the requirements of the emerging residential communities in Nallagadla / Tellapur. In addition to this commercial establishments are already under construction at Guchibowli.
As commercial establishments open-up for public use, there will be nothing that can hold property price rise. The wait for the day when plot and apartment rates equals that in Banjara Hills, would not be long! Expect price to rise by 2 to 2.5 times, in 4 to 5 years time.
In effect, there is nothing wrong in investing at current levels.
Is there a lesson to be learned? How do we apply the lesson to other areas?
Off course! First stop calling everything Hype/Maya. Why does Infosys Quote at PE of 30? When market perceives bright future development, prices would rise whether its for property or stocks. Rather than brushing facts away, try to gather information, analyze and you would be struck by the TRUTH!
Invest in locations which would be positively impacted by upcoming employment generation in nearby areas. Never get driven by what developer's tell you or their location maps. Make informed decisions. Take professional advice.
www.exclventures.com Clarifications and Queries: mail@exclventures.com
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