Ansal Properties & Infrastructure Ltd, India’s third-largest listed developer, said it has received preliminary government approval to more than double the size of its planned golfing and hi-tech city in Lucknow to 5,000 acres, making it one of the country’s largest township projects.
Other large townships include DLF Ltd’s 5,000-acre township Dankuni, near Kolkata, and rival Emaar MGF’s 3,000-acre township in Mohali, on the outskirts of Chandigarh.
The Ansal township, which would house 3,50,000 people, will require an investment of about Rs22,500 crore, said P.N. Misra, Ansal’s executive director, business development. Ansal’s share would be Rs6,500 crore—the rest will come from the public sector and private investors, Misra said. Ansal will fund the project through a combination of equity, debt and the sale of land.
The company said it has already purchased 1,500 acres directly from farmers and has had strong demand for the project’s houses and plots. The township, to be built in phases, will feature a championship golf course, three 5-star hotels, a medicity, a university, a Mahesh Bhupathi Tennis Academy centre, and 120 acres devouted to office buildings for information technology and biotech companies. Construction on the project began about two months ago.
Misra said Ansal wants to expand the size of the project, in part to take advantage of economies of scale; the cost of building a power plant, for example, can be spread out over a larger set of users.
Ansal is one of many developers putting up vast self-contained townships and special economic zones in smaller cities where land is cheaper and companies are looking to set up manufacturing plants and information technology offices.
The company also said it has planned a 5,000-acre township for the Greater Noida area. Misra said it would be the “Venice of the east” with canals and lakes and electric trams to shuttle residents around. The company has not yet started to acquire land for the development.
Misra said he’s not concerned about the recent slowdown in the housing market because the township will be built over a period of about seven years.
But Rishi Sahai, board director for IndusView Advisors Pvt. Ltd, a Delhi-based real-estate investment bank, said the timing for such a large project is bad. The Reserve Bank of India has made it tougher for real-estate companies to borrow money for projects and a recent slump in real-estate shares makes it more difficult for companies to raise money through the stock market, he added.