BackProperty developers scramble for piece of Kolkata’s history
Property developers scramble for piece of Kolkata's history
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In the introduction to his book Calcutta: An Artist’s Impression Desmond Doig wrote, “The Calcutta of this book is for the most part a doomed city-within-a-city that shudders to the thump and wheeze and thud of pile drivers while its citizens bemoan the passing of an old order." The book was published almost four decades ago by The Statesman Ltd, which publishes the newspaper of the same name. Today, there is frenetic activity on at Statesman House, listed by the website of West Bengal’s tourism department as a heritage building—the building is likely being converted into a mall by Emaar MGF Land Pvt Ltd.
Developers are buying into history to unlock the value of prime real estate space, said Abhijit Das, regional director of real estate advisory Jones Lang LaSalle Meghraj. Kolkata’s central business district has several heritage buildings, many of them built, like Statesman House, in the Victorian or Edwardian style; several of these have already been snapped up by developers building malls, hotels and offices. A spokesperson for Emaar did not deny the firm’s involvement in the Statesman project, but directed queries to Ravindra Kumar, the editor and managing director of The Statesman. Kumar could not be reached for comment.
Two years ago, in 2005, Bharat Hotels Ltd’s Lalit Suri paid Rs52 crore for one of the country’s largest hotels, The Great Eastern Hotel (built in 1840). The same year, the Apeejay Surendra Group, which runs the Park chain of hotels, acquired Park Mansion, another heritage building in the city, on the arterial Park Street. The Great Eastern will open doors for business later this year as a new hotel, The Grand Great Eastern Kolkata. And Park Mansion is being converted into a heritage hotel and shopping plaza.
The Future Group, through its investment arm Kshitij Investment Advisory & Co. Ltd, is setting up a 450,000 sq. ft mall at the historic Mackinnon Mackenzie building on Strand Road. And Wellside International Pte Ltd of Singapore recently acquired the Lady Ranu Mukherjee House in the heart of the city and plans to turn it into a luxury boutique hotel, in collaboration with Singapore’s largest real estate firm the Far East Organization.
Soaring lease fees
According to Jones Lang LaSalle’s Das, lease rental have doubled in Kolkata’s central business district over the past two years, from Rs70 per sq. ft to Rs150 per sq. ft. That’s a lure for developers, he said.
The city has around 1,400 identified heritage buildings and many of them are for sale. Realty consultants and agents confirm that landmark properties such as those belonging to Standard Chartered and HSBC at Dalhousie Square, the grand Metropolitan building owned by Life Insurance Corporation of India at Dharmatala and Alexandra Court, and other properties along the Chowringhee Road are on the block.
However, current laws that disallow alterations to the buildings, and problems associated with evicting old tenants, make most of these buildings unattractive to buyers, said Pradip Kumar Chopra, director, PS Group, a city-based developer. The Metropolitan Building at Esplanade was sought to be restored with an investment of Rs10 crore in 2005. During the colonial days, the building used to be a premium departmental store called Whiteway Laidlaw Co.
“Most of these buildings still house tenants and are embroiled in protracted court battles," said Aditya Poddar, chairman of Wellside Group, who added that his firm would like to avoid the complications such acquisitions can entail. Paying off the tenants also reduces the financial viability of these buildings, he added.
Issues related to evicting tenants have put Apeejay’s plans for Park Mansion on hold, according to Dulal Mukherjee, a city-based conservation architect associated with the redevelopment.
PS Group’s Chopra blamed the absence of transferable development right for much of these problems. According to him, this right allows owners of heritage buildings to collaborate with developers and redevelop their buildings into malls, hotels, office complexes, or residences while retaining the spirit of the old property. Chopra added that this is usually done with guidance from conservation experts and the local administration. He claimed that Mumbai, Pune, and the state of Gujarat have laws that permit this. Even in the absence of a law protecting heritage buildings, most developers are keen to retain their original form.
Retaining the look
The companies that have acquired heritage firms want to try and keep things as they are, or were. “Most of it (the Lady Ranu Mukherjee’s house), including the interiors with its grand staircase, will be conserved," said Philip Ng Chee Tat, chief executive officer of Far East Organization.
The developers are convinced that ‘heritage’ sells. “We are looking for at least another heritage property in the city," said Poddar of Wellside, which is investing Rs1,100 crore to set up nine hotels in West Bengal in the luxury as well as the budget segments (the budget includes the Lady Ranu Mukherjee house).
Another city-based developer Ambuja Realty Development Ltd is also on a hunt for a heritage property for a luxury hotel. The company plans to invest around Rs1,000 crore in developing hotels over the next four years; it already owns a luxury resort at Raichak, 40km to the south-west of Kolkata. Ambuja Realty is looking to extend its existing partnership with Radisson Hotels and Resorts and also find new partners for its future projects, said Harshvardhan Neotia, chairman, Ambuja Realty. Neotia is also on the board of Kolkata Municipal Corporation’s heritage committee.
Conservation boom
The emphasis on conservation means more business for Mukherjee who is restoring Statesman House. A smaller building behind the main one has already been razed to the ground to make space for a car-park; The Statesman newspaper has relocated to the top-floor and the rest of the building is being redone. Mukherjee said it will probably be used for a mall, but talks are still on between the developer and the owners.
Mukherjee, who runs an eponymous firm, has also been hired by Bharat Hotels for the Great Eastern project. The hotel is being rebuilt by Architects 61, a Singapore headquartered firm. The new hotel will have a swimming pool, enough room for parking, and proper ventilation, said Mukherjee, who added that the old hotel lacked all this.
The Great Eastern, New Delhi’s Imperial Hotel, Rangoon’s The Strand and Singapore’s Raffles were together referred to by the British as The Four Maidens of the East.
Mukherjee’s firm is also involved in the Park Mansion project. The building was built by an Armenian jute merchant in 1910; it used to house the French cultural centre, Alliance Francais, a tea-room called Sky Room and a few retail outlets.
Alliance was ravaged by fire about 12 years ago and Sky Room closed shop. Then the Apeejay Surendra Group acquired it. The Mackinnon Mackenzie building was also gutted by a fire in 1998 and was considered unsafe, according to a report by the engineering department of Jadavpur University, but Kshitij Investment Advisory has hired a British firm (in addition to Mukherjee) to work on the project and make the building safe.
“We are retaining the façade of the building and some heritage elements of the interior to do an integration of the old with the modern retail structuring," said Shishir Baijal, chief executive officer, Kshitij Investment Advisory.
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