Rakindo to spend $5 bn to build five townships

Projects to come up in south

MUMBAI: Rakindo Developers will invest $5 billion in five years to launch five high-end township projects in tier II and tier III cities.

A joint venture between UAE-based Rakeen and the Chennai-based Trimex group, Rakindo has also other projects coming up at Coimbatore (to be called Kovai Hills), Chennai (named Ocean Marina), Kumarakom near Kochi in Kerala and Hosur near Bangalore in Karnataka. The corpus for each project is $1-1.5 billion.

Prasad Koneru, managing director, Rakindo, said, “We are building the projects in phases. They will be completed in between 5 and 15 years. We are also building an IT SEZ in the Kochi and Coimbatore projects.”

In all, the company will develop 3,000 acres in the first phase.

Launching townships became a rage last year but some properties are being delayed due to its high risks of execution as construction price and labour waages have shot up nearly by 42%.

Abhishek Kiran Gupta, research head, Jones Lang La Salle Meghraj said, “Today everybody is going for Tier II projects. Developers, who never put money into places like Tirupur, Raipur and Nagpur are finding that there are very rich people ready to invest unlike in the metros where people are fence-sitters.”

To expand business, developers have been increasingly targeting Tier II and Tier III cities.

Last year Ansal Properties and Infratsructure from Delhi invested Rs 4,000 crores for developing Tier II cities.

Kunal Banerjee, president Marketing, Ansal API, said, “We were the first ones to enter the Tier II segment. At present our projects are under construction in Mohali, Karnal, Panipat, Sonepat, Bhatinda and Greater Noida. We have already developed Sushant World City in Lucknow.”

According to Banerjee these cities are required because people have potential to buy and they need not relocate for work. “And we are giving them job opportunities and better living.”

These townships have also brought a new concept of city within city as Gupta adds, “The first township project at Magarpatta in Pune was successful because it is community-based, everything is at a walkable distance and people want projects which give them the same community feeling and good living at reasonable prices.”

Interestingly, golf courses are the main theme for all the five projects being done by Rakindo. Each of the proposed townships will have a golf course spread across 180-200 acres, Koneru said.

“Our properties will be golf-centric, with villas set up around the golf course. We will decide on what to add to the projects after 25-30 years.”

Meanwhile, Lotus Investment Fund has pumped in $1 billion in a hospitality fund set up Rakindo to build high-end budget hotels across India in association with Singapore’s Millennium and Copthorne Hotels.

Two hotels are under construction at Chennai and Bangalore.  “We are also set up hotels at Hyderabad, Coimbatore and Kochi and are looking at the western and southern market aggressively,” Koneru said.

pooja_s@dnaindia.net