New Delhi: Even as the real estate market slows, developer Ansal Properties and Infrastructure Ltd (Ansal API), has launched an ambitious 2,500-acre township project adjoining Greater Noida, in Uttar Pradesh.

The company plans to invest Rs26,800 crore over the next five years in developing this project.

The township, branded The Megapolis, is extendable to around 9,000 acres, which means that the company has an option of increasing the size of the township to that size.

Still bullish : A file photo of a residential complex in Gurgaon. Although brokers say property sales have slowed by 30% in Delhi’s suburbs, Ansal says it has already sold 200 plots in the proposed township. (Photo: Rajeev Dabral/Mint)

Other large proposed Indian townships include Ansal’s own 5,000-acre township in Lucknow, DLF’s 5,000-acre township in Dankuni near Kolkata and Emaar MGF’s 3,000-acre township in Mohali, on the outskirts of Chandigarh.

Most large townships are coming up in smaller citiesbecause land is relatively cheaper there and companies are looking to set up manufacturing plants and offices tocut costs, thus providing potential residents.

The Megapolis, which has been approved by the Uttar Pradesh government, is about 3km from Greater Noida. Land for the project will be acquired directly from the farmers and the government. Ansal will have to acquire 75% of the land directly from farmers, while the rest would be acquired for them by the government.

The company has already bought around 300 acres of land, paying around Rs35-40 lakh for an acre.

“Once we acquire 60% of the land for the project, the government will approve the site plan of the project," P.N. Mishra, executive director, business development, Ansal, said, adding, “we plan to develop the township on 2,500 acres of land for now, but eventually we will expand up to 9,000 acres."

Ansal plans to fund the project through internal accruals, customer advances and by partnering with financial institutions. It has already partnered with HDFC Bank Ltd, which has picked up a 8% stake in the project.

HDFC has so far invested Rs500 crore in the project though Ansal didn’t give the total value of the bank’s stake.

“We have an arrangement with them (HDFC) according to which HDFC will be our equity partner throughout the project," Mishra said.

“The investment that has come in now is mostly for funding land acquisition costs."

Ansal is starting on the township at a time when property sales, according to real estate brokers, have slowed by as much as 30% in Delhi’s suburbs of Noida, Greater Noida and Gurgaon. Speculators, who would buy property and sell it within a short period of time to make quick profits, have exited the market and as a consequence, Delhi’s suburbs are seeing slower sales.

Ansal says it is not worried about the slowdown. “Our customers are actual users and not speculative investors," Mishra said. The company says it has already sold 200 individual plots in the township.

According to Mishra, the township will have five natural lakes, a canal, sports facilities and an 18-hole golf course which would be designed by international golfer Nick Faldo. The township will haveindividual plots, villas, bungalows, multi-storeyed condominiums and group housingcomplexes. The size of houses will range from 1,800 sq. ft to 4,446 sq. ft.

While the company has not fixed a price for the built-up houses yet, the individual plots in the township have been priced at around Rs1,300 per sq. ft.

Around 900 acres of the project has been set aside for residential development.

The Megapolis will also be an employment-oriented township with space for hi-tech industries, information technology and biotech firms. The township will also have convention centres, hotels, schools and colleges.

Ansal’s other township in Lucknow, Sushant Golf City was launched a year ago and much of the infrastructure for the project, such as roads,water and power supply, is ready and construction of the houses has started, the company said.