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Banking On Land


Banking On Land

Last updated: June 25 2007
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  • Banking On Land

    Neha Dewan, June 24, 2007
    The Economic Times

    Have you heard the story of the Ant and the Grasshopper? The famous fable attributed to Aesop, talks about the Ant who works hard in the heat all summer long, building his house and stocking up supplies for the winter. The Grasshopper thinks he's a fool and laughs and dances and plays the summer away.

    Come winter, the Ant is warm and well fed. The Grasshopper has no food or shelter so he begs and receives charity from the ant who he had teased before. In the real world today, the Ant seems to have inspired major players in the real estate industry such as DLF, Unitech, and Parsvanath Developers.

    Big real estate players have, in fact, amassed huge land reserves. Emaar-MGF has reserves to the tune of 10,000 acre; DLF has 10,255 acres while Unitech’s holdings stand at 10,700 acres, according to estimates. Other real estate players such as Vipul and Uppal Housing also have land banks amounting to 1,500 acre and 1,000 acre respectively.

    Moreover, it is not just real estate players who are buying big time. Even the realty wings of big corporate houses such as Tata Housing Development Company (THDC) and Godrej Properties are gearing up to accumulate land for the future.

    With an acute supply constraint gripping the market, these land banks have become the need of the hour as they can offer more choices to consumers. Sample this-According to Cushman and Wakefield, 215 million sq ft is expected more in office space, 90 million sq ft more in retail space and 1,800 million sq ft of additional residential space is expected across India by 2010.

    Delhi-based developer DLF that recently concluded its IPO has a massive 10,255 acres in land reserves across India. Most of these are in the NCR region and rest are tucked away in Kolkata, Indore, Chandigarh, and Goa. Ramesh Sanka, Group CFO, DLF says, "Our current land reserves are sufficient for our planned developments over the next ten years and provide us with a major competitive edge as well as protection against inflation."
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