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Sobha Plotted Development in North Bengaluru

Facts:

​1- Location - North Bengaluru (Near Airport)

2- Area - 22 Acres

3- Plot Sizes - 30x40, 30x50, 30x60x40x60

4- Price - Approx 7000 psft

5- Launch - March-April 2025

 

My Analysis:

1- Brand Matters: Purchase projects from tier 1 builder (mostly NSE Listed)

2- Entry point gives maximum benefit: Purchase during pre-launch

3- Location is key: Population is going up. Land will always remain a finite asset.

 

Note for NRI:

1- Real estate is illiquid type of asset class.

2- Plot is an asset to invest with 10+ years horizon.
3- If you are selling, buyer will cut 20% TDS. Best time to sell is During Jan-March.

4- If you are selling, some buyers hesitate as they may not have 20% upfront to be deposited as TDS.

5- Buy from reputed builders. Brands generate value. Remember, buying is easy, selling is tough. ​
6- Buy near IT Parks or near airports etc. major infrastructure projects.

7- Accessibility/Proximity to Metro/Airport are key if you are looking for passive investment.

8- Plotted development comes with low maintenance cost. Please account for these extras.

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Note for Investors:

1- Please treat this as an asset class that does not give you monthly rental yield.

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Note for End-users:

1- Please keep the commute distance/time from your workplace.

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Profitable proposal?

Let us analyze for 30X50 site

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Initial Investment Breakdown

  • Land Cost: ₹7,000/sqft × 1,500 sqft = ₹1,05,00,000 (₹1.05 crore).

  • Plot Size: 30 ft. × 50 ft. = 1,500 sqft

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Projected Land Value in 5 Years

  • Assumption: Land value doubles in 5 years.

  • Future Land Value: ₹1.05 crore × 2 = ₹2.1 crore (2.5 it optimistic implying a slightly higher growth rate).

  • Annual Growth Rate: To double from ₹1.05 crore to ₹2.1 crore in 5 years requires a compound annual growth rate (CAGR) of ~15%. For ₹2.5 crore, it is ~19% CAGR which is ambitious. Traditionally it is around 15%.

 

Construction Cost

  • Villa Construction: ₹1.2-1.5 crore.

    • For a 1,500 sqft. plot, assuming a Floor Space Index (FSI) of 1.5–2 (common in Bangalore), you could legally build 2,250–3,000 sqft.

  • Cost per SqFt.: ₹4,000/sqft., which aligns with luxury villa

  • For a 1,500 sq.ft. plot, assuming a Floor Space Index (FSI) of 1.5–2 (it is very common in Bangalore), you could legally build villas with additional floors or garden space, so 5,000 sq.ft. is feasible with a G+2 or G+3 structure (ground + 2/3 floors).

 

Total Investment After 5 Years

 

  • Land Value: ₹2.5 crore (assuming your higher projection).

  • Construction Cost: ₹1.5 crore

  • Total Cost: ₹2.5 crore + ₹1.5 crore = ₹4 crore.

 

Market Value of the Villa

  • Selling Price: You estimate ₹4.5 crore after construction.

  • Price per SqFt.: For a 5,000 sq.ft. villa, ₹4,50,00,000 ÷ 5,000 sqft. = ₹9,000/sqft.

    • If built-up area is smaller (e.g., 3,000 sqft.), it’s ₹15,000/sq.ft., which is closer to luxury villa rates in North Bangalore.

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Comparison to Current Market (March 2025)

  • Luxury Villas in North Bangalore:

    • Devanahalli: ₹10,000–₹15,000/sqft. (e.g., Embassy Verde).

 

  • Your Villa at ₹9,000/sqft.: This seems low for a luxury one in 2030, assuming market growth continues.

 

  • Projected Market Growth: If property values rise 5-12% annually (as per current trends), luxury villa rates could hit ₹15,000–₹20,000/sq.ft. by 2030 in prime North Bangalore areas. A 5,000 sq.ft. villa could then fetch ₹7.5 crore–₹10 crore.

 

Does ₹4.5 Crore Seem High?

  • As an Investment Cost:

    • ₹4.5 crore (₹2.5 crore land + ₹2 crore construction) reflects your total spend, not market value.

    • Construction at ₹4,000/sqft. is realistic today but may rise to ₹5,000–₹6,000/sqft. by 2030 due to inflation, pushing your actual cost closer to ₹5 crore+.

    • If land value hits ₹2.5 crore in 5 years, your initial ₹7,000/sqft. purchase is a solid deal compared to current rates (e.g., ₹8,151/sqft. in Devanahalli).

 

  • As a Selling Price:

    • ₹4.5 crore (₹9,000/sq.ft.) for a 5,000 sq.ft. villa in 2030 seems undervalued if built in a high-growth area. Comparable luxury villas could command ₹7 crore–₹10 crore, offering you a profit margin.

    • However, if the villa is smaller (e.g., 3,000 sq.ft.), ₹4.5 crore (₹15,000/sq.ft.) aligns with luxury rates today and may still be competitive in 5 years.

 

  • Risk Factors:

    • Location: Today a semi-developed area. Too far from IT hubs or metro lines, doubling may not happen.

    • Construction Quality: ₹2 crore must deliver a premium villa to justify a high resale value.

    • Market Volatility: A slowdown in IT growth could cap appreciation.

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Effects of Road location with respect to direction:


•    When plot or building has road running at east or north it ensures overall prosperity

•    When plot or building has road running at south, it is not considered good

•    When plot or building has road running at west, it is considered to have average effect, not so good not so bad


When two roads surround a premise:


•    Roads at North and East –ensures good Prosperity

•    Roads at East and south road - good for females

•    Roads at South and west - average

•    Roads at West and north - good

•    Roads at North and south – average

•    Plot having four side road- best plot

•    Plot located at dead end of road- highly dangerous

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