Sunday 25th November, 2007

 

Flight into the future

 
 
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The big worry in India, as that country seeks to take its place as a leading economy is the evidence that infrastructure is not keeping pace with the building boom. That’s the thought of MIT Graduate Rajiv Singh, vice chair of DLF, India’s largest residential and commercial real estate developer.

That company has completed 25 million square feet of property construction, with another 45 million square feet under way. But the major hurdle is road shortage. Now that import restrictions have been released and anyone can own a car, the roads are “chock a block” to use an English expression.

Many of my friends are considering how to cut out the daily commute from our lives.

If I may proffer an idea, it would be to a build a complex: a dry dock cruise ship, in effect. And like the famous vacation idea, we’ll live and work, eat and party within a few hundred feet, with all our food and all our laundry done on site. We would have cabins, some with balconies, and some with port holes, depending on our needs, and we’d have a walking track on top deck, with a helicopter pad and gym, and we would not have to drive.

Acceptable solution

The motor car business may go bust, but the guy with the land, large enough to build the self-contained cruise ship village is bound to make a mint.

If the paradigms shift away from single household holdings, and adjacent land, to large land parcels for self-contained efficiencies, it may be worth looking for cheap idle land, rather than prime residential property.

In purchasing such land we need to understand the “power of eminent domain.” This is a feature of common law that allows any government to demand your land in exchange for some equivalent cash or alternative land.

So while it is important to title land with a proper deed, you can still lose the land to the higher power of government.

But I’ve taken a flight into the future today, mainly because we cannot continue to want land and property in the way we’ve wanted in the past. We cannot own property the way we’ve done in the past, and still maintain suburbs and city life. It probably reads like a flight of fantasy!

But that’s only because I’m debating for solutions, new ways of doing things, new ways of creating wealth.

Next week—Back to reality real estate!