MC Explains: How soon will Mysuru catch up with Bengaluru as a real estate hub?
Real estate and land prices in Mysuru have shot up in the last few months as the government looks to develop more land parcels and several industrial growth plans, including a semiconductor hub, offer a promise of future development
Bengaluru has been the top real estate driving engine in Karnataka but several Tier II cities like Mysuru are catching up across residential and commercial segments.
After staying flat for years, prices of residential units and plots in Mysuru have shot up in the last few months as the government looks to develop more land parcels, travel time between Bengaluru and Mysuru is cut to three hours and the promise of a semiconductor hub takes shape.
Moneycontrol spoke to several experts to understand what is turning the city of old-world charms into a bustling realty hub.
How is the residential market scene in Mysuru?
A Mysuuru realtor Amar Kumar R.S. said the residential demand in the city has picked up over the last three months. "For the past couple of years, the residential market in Mysuru has been consistently flat. However, in the past few months, we have been getting calls from homebuyers across southern India. The local development authority plans to develop 10-12 residential layouts inside the city, he said.
Amar Kumar said Vijaynagar, one of the prime layouts in the district, was selling at Rs 5,000 per sq ft but has now jumped to Rs 6,000 per sq ft or more. "The commercial rates have jumped over 20 percent in the city. Today, several outskirts of the city see demand and pricing at par with certain areas in Bengaluru like Kanakapura Road, he said.
Another realtor, Benaka agreed the city is seeing surprising growth in the last few months. "The ongoing rate for land parcels is about Rs 7,000 - Rs 8,000 per sq ft. in prime locations next to the Mysuru palace. Rents have almost doubled, and today, a fully furnished 1BHK in the heart of the city will go up to Rs 18,000 per sq ft -- almost at par with the prime locations in Bengaluru like Koramangala or JP Nagar," he added.
What is the government doing for real estate development in Mysuru?
NC Arjun Kumar, superintendent engineer, Karnataka Housing Board (KHB) told Moneycontrol, "The state department has developed over 1,000 acres in Mysuru till date. At present, the residential sector is growing at a rate of 15 percent or 20 percent. Additionally, we plan to develop 500 acres more over the next two years." The new developments are taking place across Ilwala, KRS Layout and Chamrajnagar, among several other places.
Arjun Kumar said, among the 500 acres, about 150 corner sites (an area of land consisting of one or more adjacent lots, where at least one lot is located at the intersection of two public roadways), are vacant and up for auction.
"Every month we get up to 10 bids for the corner sites at e-auctions that start from Rs 25 crore and even rise up to Rs 50 crore. In the intermediate sites, some litigations are going on. While some of them have been allotted already, we are hoping to put them up for auction in about three years," he added.
Arjun Kumar said most of the residential development in Mysuru KHB plans will be done through joint development with respective landowners and not through land acquisition. "We will construct the building, and give 50 per cent of the site (about 10-11 units of 2300 sq ft of the total area) to the land owners and the rest of the inventories will be auctioned by our department," he added.
The apartments will be priced between Rs 30 lakh to Rs 50 lakh for 1 BHK and 2 BHK.
Vittal BR, an advocate at Karnataka High Court mentioned, under the new Land Acquisition Act 2013 the department has to pay less compensation to landowners, which is economically favourable.
Are realtors bullish on the city?
Ashish Narain Agarwal, Founder & CEO of PropertyPistol.com, said plotted development is growing rapidly in Mysuru. Many big developers are eyeing the city for launching plotted developments due to growing demand.
Bengaluru-based real estate developer Brigade Group, who has already developed 20 residential projects sprawling across 22 lakh sq ft in Mysuru, is currently developing a land parcel inside the city through plotted development.
Viswa Prathap Desu, spokesperson, for Brigade Residential said, "In the last couple of years, the rental return has been rising across the city. Mysuru's real estate sector remains a good market for investment and returns."
What is the status of commercial and industrial development?
Experts say Mysuru has enough land parcels to develop a sustainable and integrated industrial sector. The state government's initiative "Beyond Bengaluru" to create technology clusters in emerging tech clusters across the state has helped to bring more focus to Mysuru. Speaking at Invest Karnataka: Global Investors' Meet 2022, Chief Minister Basavaraj Bommai said on November 3 that global investors are keen on Tier II cities such as Mysuru and the city will have an electronics park soon.
Previously Dr C N Ashwath Narayan, Minister for IT & BT, Entrepreneurship & Livelihood, Government of Karnataka had said in a press statement, "Mysuru cluster has garnered investor interest of Rs 1,400 crore to develop Electronics Manufacturing Clusters. This is also expected to generate more than 12,000 jobs."
Mysuru will be declared the Semicon Valley of India while ensuring a conducive environment for semiconductor manufacturing along with its own international airport.
"Currently, Mysore town alone has five SEZs, six industrial estates and eight industrial areas with a few IT majors having or planning their centres here. Growth over the past few years has been static on both residential and commercial fronts thanks to the pandemic. However, with the corridor almost fully operational, hectic activity has been witnessed in the past few months," said Ramakrishna Bhagavan, chief business officer, IndiaAssetz.
The Bengaluru-Mysuru infrastructure corridor, set to be completed by an updated deadline of December 2022, will cut travel time between the cities to over three hours.
Over the past 20 years, Mysuru has seen less than $1 billion of real estate investments via FDI and organised real estate players but several large players eventually moved out, Amit Goenka, managing director, and chief executive officer at Nisus Finance said.
"Pune’s GDP, fuelled by IT, education and manufacturing, has topped $92 billion. Mysuru stands at about $1.8 billion compared to Bengaluru with a GDP of $240 billion. The operation of the domestic airport will help with increasing growth momentum," he added.
How much investment and time will the development in Mysuru take?
Industry bodies in Mysuru say the city needs proactive involvement from the state government and district bodies to become the next hub in Karnataka. Shivaji Rao, secretary, for the Chamber of Commerce and Industry, Mysuru said, "Mysuru is seeing a positive projection in growth, however, the future investments should be strategic and organised."
Rao said the city has over 1,000 acres of land parcels, which the state government should acquire land immediately and invest at least Rs 15,000 crore to Rs 20,000 crore to see swift growth. "Almost 150 acres of land has been acquired for the semiconductor industry. However, we have so much land left that needs to be developed inside the city," he added.
Industry bodies said the government has come up with several schemes and investments, however, the land acquisition should be fast-paced.
Raksha Ramaiah, Director, MS Ramaiah Developers and Builders (MSRDB), which launched its first residential project of 55 acres in Mysuru in 2008, said, "Mysuru was at its peak between 2010-12 when companies like WIPRO and Infosys announced their large operations in the city. However, with the Hosur sector and Bengaluru-Mumbai highway picking up radically for commercial developments, Mysuru remains as a residential paradise."
Desu said, outside tourism, residential and some commercial developments, industrialisation will happen at its own pace. The organised industrial hub will still be part of Bengaluru, rather than Mysuru, he added.
The Karnataka Economic Survey, 2021-2022, said, "Even the proposed Bengaluru-Mysore Infrastructure Corridor Project (BMIC) that envisaged to construct Expressway integrated with five self-sustained townships, could have decentralised Bengaluru to some extent if it had got implemented! But the delay in project approval has distorted Bengaluru- Mysore Corridor itself."
Ramaiah said recent infrastructure corridors like the Vande Bharat train connecting Bengaluru-Mysuru-Chennai -- to be launched by Prime Minister Narendra Modi on November 11 -- and the Bengaluru-Mysuru expressway will boost the tourism sector across the city.
"It will take some time for the city to catch up as the upcoming hub in Karnataka -- at least a couple of years," Ramiah said. All major developers have entered the city, however, the sizes of projects are small and will remain so for some time, he added.