Fabcity - Recap of Last One Year and the Investment Prospects. Do not lose track and pick up waste-land, packaged as bits of gold!

Fabcity -Recap

The Project was formally awarded to Semindia in Feb 06. Since then, the Financial Closure of the US $ 3 billion project was affected due to lack of a bankable financial and tax structure.

India did not have any history in Semi Conductor Fabrication. Obviously the Country had no policy/plan to support development of Fab Industry. After lot of dithering, union govt. put in place a high powered committee, to draw up the policy and fiscal concession package. The draft was approved by Union Cabinet in Jan 2007. The exact numbers forming part of the concession package in now expected be released before Feb end.

The potential of the industry in generating large amount of jobs along few kilometer stretch of road at Srisailam high-way, had caused Real Estate developers to go berserk. Their over-drive resulted in delivery of thousands of sub-standard layouts scattered over 40 km !

By August 20006, the frenzy started wearing off but by that time developers had managed to hoodwink people to invest, in remote areas by painting rosy location maps !

Very few people have been able to make good investments, at the right locations.
Fabcity - Today

One year since the formal launch, the project has suddenly come to firm ground.

• Union Govt. has cleared the Semi Conductor Policy in Jan 07.
• The Fiscal Concession Package would be unveiled before Feb end.
• Environmental Clearance has been accorded to the Fabcity.
• Semindia has appointed Mr. BV Naidu former Director of STPI as its CMD for Fabcity.
• Former president of AMD India, Mr. Ajay Marathe has joined as Chief Operating Officer for Fabcity.
• The Fabcity site has been provided with excellent approach road, internal roads, water and power connections, already.
• Together with Fabcity, Mr. Jun Min’s Nanotech Park, also would start site operations expectedly in March 07.
• The Concession Package to be released before Feb end, is expected to be over and above the SEZ concessions as confirmed by Union MOS at the Vision Summit by ISA (Indian Semi Conductor Association) on 6th Feb, at Hyderabad.
• The consumption of electronic products in India is expected to grow to $363 billion by 2015, from $28 billion in 2005.
• The projected employment generation by 2016, is a staggering 40 Lakh jobs, by the industry.
• The industry has projected 10 Lakhs jobs to be created, in Hyderabad alone, by 2015!
• Semindia chief Mr.Vinod Agarwal and Nano Tech chief Mr. Jun Min are now discussing only finer points like bridging the gap in equity funding, if Govt. support is limited to 25% or lower, from expected levels of 30%.

Investment Opportunity With the looming prospect of huge employment generation on Srisailam Highway, there is obviously, MONEY TO BE MADE.

The Realtors have to do their job! They would buy wherever land is available cheap, package it by glossy brochures and incredible location maps! The period of Feb 06 to Aug 07 has seen NRIs falling for this in a big way. Throwing hard earned money into unproductive investments. Their sweat now supports business of thousands of developers! Even large developers on the back of their reputation had jumped-in, drawn by prospect of quick money. They have sold lakhs of square yards at unbelievable prices, at totally useless localities. Its unfortunate that people have fallen prey, to such designs.

Its important not to lose track and pick up waste-land packaged as bits of gold. This time round, lets evaluate locations with respect to real potential and expected time required to see actual resale. Its time to evaluate and invest, in the right location, without getting fooled by fancy location maps of developers!

Remember, a resale buyer would be more cautious than you! He is going to be very choosy! And he will have the entire menu spread out, to pick the most luscious bite!
Price Projection: Applicable only to recommended projects.

Location Hot Zone Facing SrisailamHighway
Month     Price
Feb 07     5700 to 6000/sqd
May 07   6500 to 7000/sqd
Jan 08    10000 to 12000/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.

Location: Within 3Km of Highway with Fine Access
Month    Price
Feb 07    3700 to 4000/sqd
May 07   4500 to 5000/sqd
Jan 08    5500 to 6500/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.

Location: HADA Projects near Srisailam Highway
Month     Price
Feb 07     9500 to10,000/sqd
May 07    12500 to 18000/sqd
Jan 08     18000 to 20000/sqd
Note: The Jan08 price is subject to ORR work commencing by at least by Oct 07. The ORR, ICB is opening on 8th Feb 07. As per HUDA work will commence in May by the selected Contractors.
Reasons- A new City is Evolving:

We need to first absorb the fact that the stretch of about 15Km from Airport Gate on Srisailam Highway would transform into a highly commercialized , buzzing city of its own, in the next few years. Apart from Fabcity/Nanotechpark/Hardware Park, several large SEZs are coming up in this City, capable of pulling in lakhs of highly paid workers from India and abroad. The City has fantastic access to Airport. Just 30 Km away would be its cousin (Hitec /Guchibowli) connected with one of the world’s best Freeways. The city would have residential complexes, highrise towers, multiplexes and malls! You find these evolving soon!

Price in this city and the rules of price- rise will be written by the magnitude and intensity of job creation there. The pricing CANNOT be compared to the prevailing prices in the center of Hyderabad, Hitec or Guchibowli.

Never get into the trap of saying “Oh! This can not be so high”…by comparing to price in some other place. Its fine to compare price in Kottur-Thimmappur and reject those areas out-right. Under no imagination should those areas have high prices. You have to reject, plot layouts asking for more than 2500/sqd, in those areas. It would take ages to see resale there.

But the rules of the game would be entirely different, on Srisailam Highway! Think of Tellapur /Nallagdla belt. Why has price risen to 15000 to 20000/sqd there? It’s the impact of upcoming employment generation at Guchibowli, which rewrote the pricing from 3000/sqd 2 years back to stunning levels now.

The same arithmetic would apply to Srisailam highway. Those who own plots in the best layouts, as close to highway, as possible, at the earliest, can enjoy the fruits of their wise decision! But if you invest foolishly in Panchayat Layouts, Bio-zone and all along Bangalore Highway beyond the ORR Junction, you would only end up gaping at friends, who make real money in the Hot Zone!

-ExclVentures