Tag Archives: Bangalore property market

Focus on end users driving Bangalore: JC Sharma, Sobha Ltd

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News Point: JC Sharma, Vice Chairman and Managing Director, Sobha Ltd, in an exclusive interview with Ravi Sinha.

JC Sharma, MD & VC, Sobha Limited, Bangalore real estate news, Bangalore property market, Track2Media Research, Track2Realty, Best builders of India, Most reputed buildersJC Sharma has been witness to the emergence of Bangalore as the ‘Destination Indian Realty’. He feels it is not just the business potential of the city that makes it an investment magnet. Rather, there are real estate related catalytic factors, like the developers’ focus on end-users, innovation with the product and adoption of advanced technology that makes Bangalore numero uno of Indian real estate.

Often referred as the best CEO in the business, his assessment of the sector is that sentiments may be affecting the grwoth of the business, Indian property market is not heading to correction. Excerpts of the interview:

Ravi Sinha: What makes Bangalore the best performing property market in India?

JC Sharma: Bangalore has remained the most happening city as far as the real estate sentiment is concerned for the last few years. The positive growth of IT/ITeS sector, resulting in large workforce requirement has created a big demand for housing needs in the city.

According to NASSCOM, the revenues from IT/ITeS sector is expected to reach US$ 300 billion by 2020, while the number of employees in the sector is expected to increase by 2.4 million to reach 5.1 million by 2022. A major part of this growth will emanate from Bangalore as in the past, which will further boost the real estate requirement in Bangalore. Keeping this in mind, many big players are entering the city with their large projects. Also, despite the slowdown, the demand for real estate in Bangalore has witnessed a steady pace.

Additionally, given its climatic attraction, high capital appreciation, decent infrastructure and connectivity, the market attracts more NRIs who are opting to settle in the city.

Ravi Sinha: Have developers in the city done something differently or the financial activities and liveability index are organically driving the city property market?

JC Sharma: The developers in Bangalore are focussed on end users. Emphasis is on providing ample useable space with regard to the built up area vis-a-vis the total saleable area. Moreover, the developers in Bangalore are experimenting with newer trends and  are bringing in innovations and advanced techniques in making their projects more compact, affordably priced with lots of amenities and yet trendy and comfortable. The development in the city is complementary with closer access to schools and hospitals and is more synergetic in nature. SOBHA has a good delivery track record and has thus built immense credibility amongst homebuyers through its international quality products, high precision work and eye for detail.

Ravi Sinha: But stress is quite visible in Bangalore market as well. Do you think the city property market will sustain the slowdown blues?

JC Sharma: The Indian realty market is connected with the overall market sentiment. For example, look at the impact of Chinese economy on the global markets.  Likewise, sentiments do play an important role in the minds of the homebuyers. When they see negative sentiments in other cities, they also start taking more time in decision making. However, we believe that the sentiments will start improving and Bangalore is expected to do well.

Ravi Sinha: Would you agree with the price correction expectations across the housing market?

JC Sharma: No, I do not agree to this. There may be some stray examples of some developers adjusting their prices at lower levels. However, the developers do not have the required margins/cushion to go for price correction across the housing markets.

Ravi Sinha:  A lot of developers have liquidity concerns and operating cash flows have taken a hit. Don’t you feel that lack of funding options will force the developers to cut prices?

JC Sharma: You may be right. Developers today are definitely having liquidity concerns.  But I am of the firm opinion that the real estate prices generally reflect the true value of different cities. The selling of products by reducing the prices cannot be a long term solution as it will be difficult for such developers to generate required liquidity to replace their existing inventory.

Ravi Sinha: Bangalore for the first time has more than one lakh unsold inventory. Will it force the developers to reduce prices, especially when the secondary market transactions are indicating some correction?

JC Sharma: The inventory is not a big concern for most developers. Recently, SOBHA has launched the largest residential project of approximately 7000 units in Bangalore. This is a fast moving product and at the same time such projects theoretically carry a larger inventory. We, therefore, need to look at inventory from the perspective of those projects which are completed but still remain unsold. In my view, most developers do not carry large inventory in completed projects.

Ravi Sinha: When and how do you think the sector will come out of present crisis of confidence in the housing market?

JC Sharma: The macro environment has been improving. Interest rates are coming down. India will be a big beneficiary of the falling commodity prices especially in case of crude and steel. I am of strong belief that markets will start improving from next year onwards.

NRI professionals still bullish on Bangalore

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Bottom Line: There are certain inherent magnetic forces that attract NRI professionals to Bangalore property market.

Bangalore City, Bangalore real estate market, India real estate news, Indian property market, NRI investment in Bangalore, Housing demand in silicon valley, Track2RealtyStatistics only tell half the truth when not corroborated with the overall reality. This is all the more true with the investment trends of the property market. Some of the recent NRI investment into the Indian property market justifies this theory. For example:

  • NRIs investment is shifting to Coimbatore and Kochi from Bangalore
  • Lower ticket size of Coimbatore and Kochi makes it more attractive destination than Bangalore 

However, this trend neither is just Bangalore specific; nor does it tell the comprehensive story. For example, in Delhi-NCR also, the NRI investment is shifting from luxury destination of Gurgaon to Noida. In the West, the NRI investment is shifting from Mumbai to Pune.

Does it mean that the leading cities like Bangalore are losing out to the emerging destination like Coimbatore and Kochi? “Not really,” maintains Nikhil Hawelia, Managing Director of Hawelia Group. According to him, this is not a Bangalore-specific trend but needs to be looked at the pan-India level which could answer as to why Bangalore is giving the impression of losing out in public perception.

“Among the NRIs we need to classify the difference between the retiring NRIs coming back to India and the professional NRIs who are shifting their bases back to the country of origin. Majority of the NRIs home-buyers today are professionals and they are still bullish on the traditional business destinations like Bangalore, Gurgaon or Mumbai. But the retiring NRIs are opting for Coimbatore, Noida or Pune for lower ticket size, cost of living, better climatic conditions or nostalgia of home towns,” explains Hawelia.

Manju Yagnik, Vice Chairperson, Nahar Group agrees that Bangalore is still top choice for the NRIs despite infrastructure bottlenecks. The major factor that attracts NRIs to invest in Bangalore is the booming IT sector, which is considered to be having the largest concentration of leading IT and ITeS companies.

“The infrastructure development in Karnataka including Bengaluru and other cities has 44 new projects in urban development worth Rs. 90,000 crores. Flyover and underpass projects including elevated roadways for Bengaluru will be worth Rs. 20,000 crores. The growing number of such IT/ITeS companies in Bangalore provide good job opportunities to NRIs who plan to settle down in India. Moreover, exponential growth in infrastructure and real estate sector also contributes positively towards influencing NRIs to invest in the property market,” says Yagnik.

Kaizad Hateria, Brand Custodian & Chief Customer Delight Officer, Rustomjee Group maintains that Bangalore has been the fastest-growing city of India since the past few decades. IT has been the major growth driver and is responsible for aggressive real estate development in the city. Being the IT hub of India, Bangalore has a multi-cultural population with good social infrastructure, excellent educational institutes and constantly upgrading physical infrastructure.

Bangalore has become a hub for NRIs & HNIs. Bangalore has a large base of expatriates who live in the city and working abroad, families of these residents are well travelled, cultured and have sophisticated tastes. Growth in the IT Industry and a rapidly increasing number of High Net-Worth Individuals and movement of expatriates has brought Bangalore real estate in to prime focus for NRIs,” says Hateria. 

Advantage Bangalore

Bangalore Number One choice of NRIs

NRI professionals still bullish over Bangalore for shifting into India

IT/ITeS professionals major chunk of NRIs settling in Bangalore

Only retiring NRIs opting for alternate locations

It is true that the majority of the NRIs are IT professionals who want the kind of professionalism and transparency that they are used to in the developed countries. That is also the reason why the demand for office space is in Bangalore for exceeds the national average.

Another critical factor in favour of Bangalore attracting the NRI buyers is the cost of housing. Decent houses in the Bangalore property market is today selling at 6,000 rupees per square feet, which would cost no less than 17,000 to 18,000 thousand rupees per square feet in other traditional business destinations for NRIs, like Mumbai or Gurgaon.

A high number of NRIs techies who are abroad currently are attracted to Bangalore, as they are sure to find a job on their return to India. Of late, State Cabinet has cleared 7300 crores action plan to be implemented over the next two years. The Karnataka Government has proposed infrastructure improvements at various locations like Peripheral Ring Road, Metro Rail, Signal Free ORR, High Speed Rail Link, Mono Rail, and Elevated Expressway.

Thus, while the retiring NRIs might be buying properties in Coimbatore or Kochi for lower ticket size, cost of living, better climatic conditions or simple by merit of the city being the home town, it does not reflect the large-scale trend. As a matter of fact, for the majority of the NRIs in general and the NRI techies in particular, Bangalore still stands as the Number One choice to buy a property and settle in the city.

By: Ravi Sinha

SNN Builders acquires Essar’s Water’s Edge

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News Point: Total transaction value stands at Rs 490 crore; premium residential realty project will see 2 mn sq ft of development.

Essar Water Edge, SNN Builders, Bangalore property market, Bangalore outer ring road property, Merger & Acquisition in Indian real estate, India real estate news, India property market news, NRI Investment, Track2RealtySNN Builders, Bangalore, has completed the purchase of Essar’s upscale 2 million sq feet Water’s Edge residential project in Hebbal, Bangalore, for Rs 490 crore.

With the completion of the transaction, SNN Builders now takes over Essar’s IBROX Real Estate Development Private Ltd, the company that owns the Water’s Edge project, and will take responsibility to complete and deliver the project within a revised schedule. The final transaction price includes customer liabilities.

Ramesh Agarwal, Managing Director of SNN, said, “We are delighted that Essar and SNN have been able to close this deal, and are looking forward to an exciting entry into North Bangalore. We extend a warm welcome to all the existing owners of Water’s Edge. SNN will now relaunch the project and rebrand it in a way that existing customers and future prospects will be able to experience a product that will stand out in the Hebbal micro-market.”

Commenting on the transaction, Sudip Rungta, Executive Director (M&A) of Essar, said, “At Essar, customers are our main focus and we wanted to ensure that we hand over the project to someone with a similar mindset. We are thankful to all our customers and are happy that a builder of the stature of SNN, with a high level of professionalism and customer focus, will be taking this project forward.”

Water’s Edge is located on the Outer Ring Road and overlooks the picturesque Nagawara Lake in Bangalore. The 8-acre project is being built in two phases and will comprise five 40-storey towers, amongst the tallest in Bangalore, and house over 400 plush 3, 4 and 5 BHK apartments.

The project entails construction of 2 million sq ft and is likely to generate revenues of Rs 1,200 crore.  SNN Builders has plans chalked out to enter the North Bangalore market and aims to make its first project in the area a showcase of its capabilities.

Recently, Essar signed another definitive agreement with RMZ Corp to sell its Equinox Business Park in Mumbai, a sprawling commercial property, for Rs 2,400 crore.

Puravankara, Snapdeal & JLL alliance offer residential rental returns scheme

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News Point: Three-way alliance between , Snapdeal and JLL to provide unique leased asset management programme.

Puravankara Projects, Purava Amaiti, Ashish Puravankara, Ravi Puravankara, South Indian real estate market, Bangalore property market, India real estate news, NRI investment, Indian property market, Track2RealtyAt a time when the built environment of Indian real estate is debating how to promote the rental housing, an alliance by  Snapdeal, Puravankara and JLL India have initiated an innovative scheme of Managed Residences Plan for their customers.

The Managed Residences Plan functions as a dedicated long term asset management programme for leased residential real estate, supporting customers with different risk capacities to drive better value from their investment.

The three-way partnership between Snapdeal,  Ltd and JLL India, will enable customers to purchase a ready-to-occupy apartment from Puravankara across Bangalore, Chennai, Coimbatore & Kochi and lease it back to Puravankara for a contracted term of 7 years.

As a part of the contract, Puravankara will secure pre-agreed monthly rentals to the customer and pay the common area maintenance amount to the building association. This ensures that the purchaser enjoys a hassle free, uninterrupted rental returns for 7 years, along with an additional rental appreciation benefit of 8.0% every year.

The buyers, however, have an exclusive option for premature withdrawal from the lease agreement, in case they choose to occupy the apartment or manage the rental process themselves.

Puravankara has appointed JLL as the Lease Manager, to assist it in further sub-leasing the residential apartments to tenants and provide leasing related services.  JLL also offers to provide lease management services to the purchasers beyond the 7 year period, in return for a service fee. 

How managed residences plan works?

  • Customers can  purchase  an apartment from Puravankara & lease it back to them for a contracted term of 7 years
  • Puravankara will secure pre-agreed monthly rentals & common area maintenance ensuring uninterrupted returns for 7 years
  • Additional rental appreciation benefit of 8% every year
  • JLL appointed as Lease Manager, to sublease the apartments
  • Purchasers have an exclusive option of early withdrawal from the rental programme

Speaking about the launch, Snapdeal spokesperson said, “Snapdeal’s real estate category has   received a phenomenal response from customers since its launch witnessing 300% year on year growth. We have forged alliances with some of the most trusted names in the real estate industry to offer a range of housing options for our ever-expanding customer base in a hassle-free and transparent manner. We are confident that the unique Managed Residences Plan will be an exciting proposition for our customers and help them maximise benefits from their home investment.”

, Managing Director, Puravankara Projects said “At Puravankara, we are always striving to meet the evolving needs of home buyers, and the benefits offered under the Managed Residences Plan are in tandem with our Group’s vision. While developers in the past have offered rent assurances for one or two years, it is for the first time a developer has taken a 7 year long term view on rentals. This indicates our bullish view on the long term real estate story in the country”.

Ashwinder Raj Singh, CEO – Residential Services, JLL India said “We at JLL India believe that the Managed Residences Plan is a convincing answer to the challenges investors face with regards to managing their real estate investments efficiently. Buying ready-to-move-in homes rules out uncertainties around quality and possession timelines, as purchasers buy what they see. Simultaneously under this Plan, rental income is guaranteed. We are excited to associate with Puravankara on this one-of-a-kind initiative, and are sure that this offering will appeal to both local and NRI investors.”

Offering 200 ready-to-occupy residential assets in the inaugural phase of its launch across Bangalore, Chennai, Coimbatore and Kochi with investment sizes ranging from Rs 35 lakhs to Rs 3.5 Crores, the bookings for Managed Residences Plan will be open exclusively on Snapdeal for 10 days, starting May 27th and allotment of units will be on a first come first serve basis.

The exclusive launch of the Managed Residences Plan on Snapdeal allows prospective purchasers to place an Expression of Interest online, along with a nominal reservation amount, post which the developer’s representative shall assist them in choosing a unit. Those who book online during this inaugural period shall also be eligible to receive an Rs. 25,000 Snapdeal Purchase Voucher.

View: If the projected plan of Managed Residences work the way it is conceptualised, it will invite more and more developers to adopt this model. The plan has the potential to not only solve the rental housing problems but also encourage the investors of commercial properties to shift into residential segment, as they have already burnt their fingers with assured return schemes in that segment.

Nitesh Fisher Island gets A+ Rating

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Track2Realty Investment Magnet Report 2015 picks up 100 best housing projects across India.

Nitesh Fisher Island, Nitesh Estate, Bangalore property market, India real estate news, HNI investment, NRI investment, Luxury Villa, Goa luxury villa, Track2Realty, Indian property newsLocation: Cavelossim Beach, Goa

Project type: 4 & 6 BHK Villas

Price: Rs. 6.6 Crore-10 Crore

Project execution lifecycle: December 2012-December 2017

Some of the projects hold the potential to by synonymous with luxury and when the location itself is all about luxury & lifestyle the project turns out to be brand driver for the developer.

Nitesh Fisher Island falls into such exclusive zone of luxury living that elevates the excitement of a South Goa escape and redefines luxury with a water front development, located on the serene banks of the River Sal.

On this mystical island, along the serene banks of River Sal, the project offers stylish premium villas with private infinity pool – all ensconced amid lush tropical foliage, overlooking the infinite expanses of the waterfront.

Equipped with a lavish clubhouse, world-class fitness centre and other premium amenities, each villa is provided with a personal concierge service from Quintessentially, the world’s leading global luxury lifestyle group.

International architects CPG and interior design firm Warner Wong have designed the project that is spread across 9.3 acres with 36 luxury villas to give an awe of exclusivity to the residents.

The property is designed to include everything that pampers the soul, mind and body. It is for those jet-setting people who are looking for a resort-like experience. Its proximity to hospitals, reputed schools, colleges, banks, supermarkets and specialty restaurants make it a dream destination.

Track2Realty Rating: A+

  • Location & Aspiration: 9/10
  • Physical Infrastructure: 8/10
  • Social Infrastructure: 8/10
  • Appreciation Potential: 6/10
  • Competitive Advantage: 8/10
  • Rental Potential:5/10
  • Launch2Sales Ratio: 6/10
  • Construction Quality/Timelines: 7/10
  • Livability Index: 9/10
  • ROI Cycle: 5/10