Bangalore/ Kochi: Opposite the ashram of yoga exponent Baba Ramdev in Haridwar, some 30,000 flats are taking shape. It’s not a Ramdev-inspired boom though. The main attraction is Haridwar itself, one of India’s holiest places for Hindus.
In the two months since its launch, Arun Dev Builders, the developer of the project, has already received bookings for 10,000 of these flats at prices ranging from Rs4.4 lakh to Rs7.5 lakh per unit.
In a heady mix of a rise in real estate prices for three straight years and religious fervour, a realty boom isunderway in temple towns across India’s hinterland. In northern India, Rishikesh and Haridwar, two of India’s most prominent Hindu pilgrim centres, are now the hub of frenetic real estate construction. In south India, in Guruvayoor, a small town in the Thrissur district of Kerala famous for its Sri Krishna temple, realty prices have leapt from Rs700 per sq. ft in the mid-1990s to over Rs2,500 per sq. ft currently, even as the supply of new residential units seems unending.
And cashing in on the trend, developers are creating a variety of units from studio apartments and two-bedroom houses to independent villas with built-up areas of up to 1000sq. ft.
Realty consultants estimate that 40% of the demand for new properties in Madurai, Tamil Nadu’s oldest city, is from people who are keen to retire to the temple town, that is best known for the Meenakshi Sundareswara temple dedicated to Lord Shiva and his consort Parvathi, which has a history going back 2,500 years.
Visvas Promoters Pvt. Ltd, a leading Madurai-based developer, is planning three new realty projects in the city in the coming year—after having sold as many as 1,400 apartments and independent houses at prices ranging from Rs10 lakh for a single bedroom apartment to Rs60 lakh for an independent house with a built-up area of 2,500sq. ft in the past year.
“Often, these apartments and villas in pilgrim centres serve as second homes for many people, including non-resident Indians and high net worth individuals,” saysSanjeev J. Aeren, managing director, AEZ Group of companies. His firm has built a residential project, Aloha Rishikesh, on the banks of the Ganga river, in the hill state of Uttaranchal. The project includes 178 furnished apartments, some of which come with their own terrace gardens. So far, 130 apartments have been sold at Rs24.8-81.85 lakh, said Aeren.
In Bangalore, P. Janardhanan and his wife Vasanthi are already planning their relocation to their home state of Kerala in the next two years when Janardhanan is set to retire. The couple has invested in an independent villa in a realty project, Krishna Gardens, close to the Sri Krishna temple in Guruvayoor. “We can go to the temple every day for a darshan,” says Vasanthi.
Religious fervour is a prime influencer in property offtake in these temple towns but realty consultants say this trend is also being impacted by a growing wave of real estate development in India’s smaller cities. As demand grows for integrated townships with schools, hospitals and retail infrastructure outside the metropolitan areas, developers are looking for affordable parcels of land in smaller towns.
A one-acre plot of land in small towns is available at Rs50 lakh compared withRs2.5-3 crore in suburban Bangalore. “A selling price of Rs1,000 per sq. ft in a small town realty project still leaves the builder with a nifty profit of Rs400 per sq. ft for a basic one-bedroom apartment”, says Ambar Maheshwari, director of investments at Debenham Tie Leung, a real estate consultancy. For more premium offerings such as villas and terraced apartments, the profit margins can rise up to Rs1,500 per sq. ft in small town realty projects, making these an attractive option for developers.
Home buyers are also attracted by the return on investment that properties in temple towns can offer. The primary attraction may be the temples themselves, but those looking to occupy these units after retirement are also aware that rentals in these towns offer a nifty income in the interim years. “It is not just for pilgrimage purposes that customers buy property in Madurai; they know they can earn additional income by renting it to other fellow pilgrims,” says G. Gunasekaran, a developer who runs Visvas Promoters in the city. In Tamil Nadu, two other pilgrim hot spots, Rameswaram on the state’s southernmost coastal tip and Palani, famous for its Murugan temple and at the foothills of the touristy hill station Kodaikanal are also emerging as magnets for realty development.
This is a stark contrast to the trend in the 1990s when developers actually offered clients incentives to buy property in towns such as Guruvayoor.“Today, most buyers are non-resident Keralites from West Asia and residents from cities such as Mumbai and Delhi,” says Anil Menon, director of Maya Realtors in Thrissur. Apart from a residential projects, his firm is all set to build two new serviced apartments in Guruvayoor that will cater to the floating population of pilgrims who may stay for a couple of days in the city. Menon’s firm is also receiving enquiries for residential units from Tamilians based in Singapore and Malaysia, who are keen to establish a second home base in this coastal temple town.
Also in the serviced apartments space in Guruvayoor is the Kochi-based developer Shantimadhom Builders. This firm will soon begin work on apartment blocks that will be rented out to pilgrims on a daily rent basis. The flat owners will receive a share of the rent while the realty firm will manage the property.
“As a concept, serviced apartments for pilgrims is a very niche idea, we can see it happening in centres with heavy pilgrim traffic such as Brindavan and Haridwar where people go throughout the year,” says Sunil Bajaj, a Mumbai-based independent real estate consultant. Typically, local builders sell flats to investors who in turn ask the builders to lease out the flats on short-term leases to pilgrims and travellers. It will take at least a few more years, for the serviced apartment concept to touch large numbers, says Bajaj.
Those buyers who are looking at rental income as an incentive to buy real estate in pilgrim towns need to factor in the cyclical nature of such investments. “The flow of pilgrims may be high for an entire year and low in some other years, this can impact the flow of rental income”, says Srikanth Bhagavat, a wealth management consultant in Bangalore, who is also a frequent visitor to Puttaparthi, a town in the southern state of Andhra Pradesh that is home to the Sathya Sai Baba organization.
This global order, made up of devotees of the octogenarian religious leader Sathya Sai Baba, witnessed a decade-long realty boom that lasted well into 2001-02. Since then, the decreasing number of public appearances by Sai Baba has impacted the flow of devotees into the town that is located about 250km from Bangalore.
“Prema Hill Resorts, a luxury villa project that I am associated with, has been able to build and sell just 12 of the 99 villas planned on a 20-acre plot close to the ashram,” says Sai Krishna, promoter of local realty firm Sai Leela Developers.
“Investing in real estate in a pilgrim town is a good option for a spiritually inclined person, who aims to live in or spend a considerable amount of time there, but I would not recommend it as a pure investment option,” says Bhagavat.
However, as urban angst increases in India’s rapidly expanding cities, the lure of a home in a pilgrim town that offers spiritual solace and creature comforts may well become a necessity.
Gayatri Ramanathan in Mumbai, John Samuel D. Raja in Chennai and Shabana Hussain in Delhi contributed tothis story.