Hyderabad realty offers huge growth potential

Dream Valley founder Santosh Reddy says his group will focus on gated community projects with in-built golf courses

How do you rate Hyderabad realty market?

Real estate sector in Hyderabad evolved in phases. It was a different market till 1994-95. Thereafter, it gained traction which continued till 2004.

But it took off in 2004 as IT sector took strong roots in the city during that period and started generating demand for residential properties. It is the IT (information technology) sector thathas a dominating influence on the sector in the last decade and a half.

But land rates around Hyderabad went up sharply in the last few years. Will such a steep appreciation be sustainable, or will this sector see another bubble bust?

I don't see any abnormal rise in rates this time on the lines of 2005 boom when prices went up by five to six times in Hyderabad. That boom went bust and the sector took seven years to correct itself.

To be frank, we are seeing this current growth after a gap of 15 years.The sector recovered some of ground it lost when the market stagnated. I strongly feel that there will be 30-35 per cent appreciation in land value annually over next five years. That is achievable. And it's a healthy growth indeed.

There is also a talk that land rates zoomed along the route of proposed Regional Ring Road (RRR) which is coming up outside Outer Ring Road (ORR). How far is this true?

It is a mere speculation. As of now, the State government is yet to finalise the route of this mega ring road. It was said RRR would go along the existing road between Shabad and Sadashivapet while new road would take shape in the remaining part.

As result, land rates jumped up by three to four times along this route. Others will strike gold if the proposed route changes. Furthermore, land rates appreciated across the State. Even cost of agriculture lands went up by two to three times.

It is being said that land prices went up due to demonetisation. Is this correct?

To some extent, yes. The other main reason is the Financial Resolution and Deposit Insurance (FRDI) Bill which created impression among depositors that they would not get bank deposits back in the event of their bank going bust.

Consequently, people started investing on lands instead of depositing in banks. People also withdrew existing bank deposits and put the money on lands.

People invariably compare Hyderabad with Bengaluru. How long will it for Hyderabad realty to reach the level of Bengaluru?

Mumbai is a saturated city now. That leaves Bengaluru, Delhi, Pune and Hyderabad. Property prices in Hyderabad are at 20 per cent of what they are in Delhi, at 40 per cent of prevailing prices in Pune and at 50 per cent of Bengaluru prices.

Young people migrating from one place to another prefer to buy properties in Hyderabad because of cost factor. It is very difficult get a proper property in Bengaluru if one has a couple of crores of rupee in surplus.

But he or she can buy a good property in the city limits in Hyderabad with the same money. Therefore, real estate growth potential is huge in Hyderabad now. This trend will continue for next 10 years.

What projects did Dream Valley group execute so far?

Today, we are a full-fledged real estate company. But that was not the case when we started our entrepreneurial journey in 1993. Initially, we were in hospitality sector and established the first resort in Hyderabad.

We launched our first big residential real estate venture in 1996. Till then, we executed small and need-based projects following requests from our customers. Frankly speaking, customers showed us the potential of this sector.

Our major real estate projects include Peacock Homes in 120 acres in Gandipet, Chilkur Eternity and Dollar Homes at Puppalguda. We had these ventures till 2005. Thereafter, we took a break and re-started our real estate business in 2011. So far, we completed six realty projects.

Dream Valley group seems to be focusing on the development of golf courses in its projects. How did it begin?

We first started working on a golf course way back in 1999. But we were too early as golf as sport was alien to Hyderabad in those days. Therefore, we stopped it in 2005 as there was no clientele.

In those days, I was the only one here who used to talk about golf. However, things started improving after HGA (Hyderabad Golf Association) was formed and (Dubai-based) EMAAR developed golf course here. They contributed to the development of golf ecosystem in the city.

So, were-started our efforts to develop world class golf course and started scouting for suitable land since 2011. We zeroed in on 196 acres of land at Manneguda village near Vikarabad, where we developed a golf course in 102 acres. This Vooty Golf County project is a golf gated community, comprising an 18-hole, 102-acre championship golf course, golf academy, premium housing plots, and a 5-star resort.

Just 10 km from Anantagiri hills and 60 km from Hyderabad, the project will have a school and other ecosystem for healthy and hassle-free living. At present, we are taking up phase 1 of real estate development in this project, with open plots priced at Rs 12,000 per yard. My goal is to provide middle class people an affordable access to golf courses.

Does Dream Valley group plan to develop more projects of similar nature and with golf courses?

We are also planning another gated community with golf course at Toopran in Medak district. Nearly 50 km away from Secunderabad, this project will come up in 250 acres and will have all the facilities that we are offering at Vooty Golf County.

To be ready by the year 2022, it will have 110-acre golf course, 10-acre resort while open plots will be developed in 140 acres. We are developing resorts in both the projects with an investment of Rs 100 crore each.

We expect people to treat their properties in these projects as weekend homes for next five to six years. By 2025, they will live there. Our plan is to build four golf courses and sell 5,000 open plots and residential units in our gated community projects in next six years.

Tells us about Dream Valley resorts…

We established our first resort on 10 acres in Gandipet in 1993. Subsequently, we shifted it to Bakaram village and expanded it by 10 times. Now, we have 100-room resort there, with five banquet halls and a world-class water park.

We wanted our customers to enjoy privacy and so launched a membership programme with Rs 5,000 as fee in 1993. We got 500 members on the first day itself. Those members availed benefits for 20 years.

But may resorts have mushroomed around the city now. How do you plan to face the competition?

Yeah, there is a competition now. But our concept stands out. We offer homely environment.

Most of our staff at resort know our customers as they have been working withus since inception. We have 250 people working at our resort.

What are your expansion plans in this space? Will you develop more resorts?

We entered into an agreement with the AP government to develop a luxury beach resort at Yarada in Visakhapatnam. AP Tourism allotted five acres of land there. It will be ready by 2020.

We will invest Rs 12 crore on this project. We are also looking at developing a beach resort in Goa. We are into wildlife resorts as well. Our goal is to have 16 resorts with 700 rooms. Currently, we are getting Rs 20 crore revenue from the resort division. We want to take this to Rs 300 crore by 2025.

Will you take up any projects in Amaravati, the new capital of Andhra Pradesh?

We signed an MoU with AP Government for developing a golf course in Amaravati. However, we have no plans to take realty projects there as we are very happy here.