Commercial slump
The slowdown has brought down prices of commercial sites considerably in and around Sangrur, writes Shariq Majeed

The slowdown that the realty sector witnessed over the past 12 months has brought down the prices of land used for commercial purposes considerably in and around Sangrur. According to realtors operating in and around the city, even as the prices of land used for residential purpose had remained stable and, in some cases, had even witnessed a marginal increase, the prices of land used for commercial purpose like for shops, business establishment, schools and hotels etc registered a decrease of as huge as 25 per cent over the past 12 months.

A view of a housing colony (Sangrur Valley) coming up on the outskirts of Sangrur city Photo by the writer

Ashok Sharma, who deals in sale and purchase of property in Sangrur says in residential colonies in the city the land price had remained stable since the beginning of 2008, but the rates of land used for commercial purpose, mainly along major roads connecting Sangrur with other towns and cities, had registered a decrease of as much as 25 per cent in the last one year.

“In colonies like J.P. Colony and Agar Nagar, the price of land (and even of built-up houses) range between Rs 15,000 to16,000 per sq yd. These rates are more or less the same as compared to those last year. In colonies like Mubarak Mahal, Friends colony, Maan Colony, the rates per sq yd. range between Rs 6,000 to 10,000 and in Punea Colony, Officer Colony, Ekta Vihar and Karan Singh Nagar the prices have remained unchanged since last year at Rs 4,000 to 6,000 per sq. yd. In Shivam Colony the rates are the lowest and range between Rs 2,000 to 3,000 per sq. yd.”, says Sharma. “Rates of commercial property used for hotels, schools, college, shops, marriage halls, factories and other business establishments along Sangrur-Barnala road, Sangrur-Patiala road, Sangrur-Dhuri road and Sangrur-Patran road range between Rs 1,500 to 2,000 per sq.yd. and have registered of decrease of 25 per cent in some cases in the past 18 months, he adds.

Jasbir Singh Grewal of Grewal Property Dealers and Real Estate, one of the leading firms in real estate business in Sangrur, says that property business had been witnessing a slump for the past few years. “ The mushrooming of unapproved colonies lacking adequate facilities like clean drinking water, electricity and sewerage led to a decrease in the prices of residential property. Because of such unapproved colonies, the supply was more and the demand decreased resulting in a drop in the prices of land”.

“As far as the decrease in the rates of commercial property in Sangrur is concerned, many factors are responsible for it. One of this being the reluctance of buyers to purchase property adjoining the highways because of widening work going on. Second important reason is that no new project is coming up in this area, which doesn’t have much industrial activity. The recession did the rest of the trick for slashing the rates of commercial property”, he adds.

Grewal who has conceptualised two approved colonies — Sangrur Valley on Dhuri road and Dreamland on Patiala road — of the four approved colonies in the area, adds “Since a lot of unapproved colonies are coming up in and around the Sangrur city not many customers are coming in for the approved projects.”

Government’s role

Faulty planning of the government also has a role to play in slump in property business. Before 2006, during Congress regime, the CLU (change of land use) and development fee was less as land limit for approved colonies used to be 10 acres. But this policy was changed after the change of government and the new government not only hiked the fee but also increased the land limit for a colony to 25 acres. In 2009 the government, however, reduced the land limit for approved colonies to 10 acres, but didn’t touch the CLU fee that resulted in mushrooming of unapproved colonies hitting the property business due to simple principle of high supply and less demand.

Another property dealer says “Though the rate per sq yd of land are approved by the government but land is rarely sold as per the government approved rates and property dealers sell the land at much higher rates”.

Stable rentals

The rates of shops and the rents for the commercial establishments have not seen much change in the last 18 months. In the Kaula Park area, the only commercial site in the city, the rate of 1320 sq ft of shop is between Rs 1 to 1.5 crore. In Dhuri Gate, Patiala Gate, Nabha Gate and Sunami Gate, the rates of shops with same specification range between Rs 50-70 lakh. As far as the rent is concerned, the rent (per sq ft) in Nankiana Chowk, Patiala road and Nabha Gate ranges between Rs 7-8 whereas in Dhuri road and Kaula Park area, the rent is as high as Rs 25 per sq. ft.