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Friday 11 July 2014

KEONICS VENTURES INTO REAL ESTATE INVESTMENT



The Kamataka State Electronics Development Corporation Ltd (Keonics) is planning to construct a hotel or a shopping mall and service apartments at Electronics City in Bangalore. A shopping mall or a three-star hotel is slated to come up on the one acre adjacent to the National Highway at Electronic City phase one. The service apartment is being planned on 1.17 acres inside the Electronics City.The Electronics City project of Keonics is a landmark that was developed on 332 acres on Hosur road. It houses over 100 information technology and electronics companies including Wipro, Infosys, HP, Siemens, 3M, Indian Telephone Industries and Motorola. The combined strength of the companies is around 30,000 people.

Currently, malls and other such facilities are lacking in the area. Employees working in and around Electronics City have to travel long distances on Hosur road to find such facilities. Keonics wants to provide these amenities in the region. It is planning to take up the construction work through a public-private partnership. The corporation plans to lease the land to a private partner for 30 years. The project partner is expected to bring the finance for the project, develop a design, build market for the facilities created and operate.

At the end of the lease period, the property will be transferred back to the corporation. According to a senior Keonics official, the lease amount fixed for the commercial complex project is around Rs 3lakh a year. For service apartment project, it is Rs 2lakh a year. The corporation recently has called for bids from project management consultants such as real estate firms, property developers, hotel operators and IT companies. He further said that as the projects are being taken up via public-private partnership through a bidding process, the minimum upfront non-refundable/non-adjustable price for the prospective bidders is Rs 4crore per acre. Bidders have to bid the upfront price for the project over and above the minimum price fixed.

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