Tag Archives: Commercial Property

Commercial heat map witness to changing housing needs

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Track2Realty Exclusive

News Point: A closer look at changing demand of office spaces indicates future of housing demand.

- india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinhaTo say that commercial property in general and office spaces in particular are the true indicators of the way forward for real estate market would be stating the obvious. It is always the absorption of office spaces that indicate the potential economic activity and job catchment area leading to demand of residential units.

That precisely is the reason why some of the traditional city centres across the major property markets of India are losing to the newly developed locations on the outskirts.

This is because the Central Business Districts (CBDs) of these cities are losing out to the Peripheral Business Districts (PBDs). The businesses are increasingly evaluating the cost of doing business per sq feet in these places. However, this also raises a fundamental question as to whether this trend also indicates that there will be a shift from the top eight cities in terms of the real estate opportunities.

Urban planning experts believe this is a much deeper question because it is not just about the existing urban centres but also about the way urbanisation is eventually going to happen in this country. As per the UN statistics the urban population of 40 crore in India would be 60 crore in less than 20 years of time. It clearly suggests that the existing cities won’t be able to fit in this additional 20 crore population, whether indigenous or migrants.

So, it is going to be a natural progression to urbanisation where new urban centres will have to come up; whether that is artificially created or organically created. 

Naushasd Panjwani, Managing Partner, Mandarus Partners points out that whenever someone comes to them for investing in new offices, the parameters that they are looking for does no longer lead to Delhi or Mumbai. According to him, the businesses want to go where real estate is cheap; they want to go to Ahmedabad or Jaipur, Mangalore or even Kolkata.

“There are many factors that make a city grow as an investment magnet. First and most important criterion is the availability of talent pool; it has nothing to do with real estate. That is the reason why Bangalore or Pune have done so well in IT. It is because these are the education hubs where you have very well educated and English speaking talent pool. You cannot imagine taking IT to Baroda or Rajkot even though these are very fine cities and in the last ten years a lot of development has happened over there. Second thing is the regulatory environment and what is the government view on them. That is why the state governments’ policies are very important,” says Panjwani.

Arvind Nandan, Director – South Asia with Colliers International says that if a heat map of the commercial or the office market areas is done today, it will clearly show where is density of the working class. For example, in Mumbai the greater density has moved from Nariman Point to BKC, Powai or Goregaon etc. These places are very high on heat map. So, naturally for someone who is buying afresh will buy from the hitting distance of these areas because someone who is buying today would not like to travel to three or four hours on a daily basis.

“This is regardless of what CBD was or what SBD or PBD today is. It depends on where he is working today or is most likely to work. Suppose someone has zeroed in on one of these three-four areas, then the second consideration is where will his family conduct the social life smoothly. It may not be the best of socially networked area or infrastructure supplied area,” says Nandan.

There are certain other concerns, like connectivity to domestic and international airports. For example, Ahmedabad airport is very good but for the international travel one still has to come to Delhi or Mumbai. Pune still does not have full-fledged international connectivity. There are other concerns like presence of banking and financial institutions.

Availability of land is critical – in Mumbai for example there is no availability of land and that is why IT is there in Pune or Bangalore. Then comes the issue of social infrastructure. The livability concern unfortunately has not been factored in holistically. If one takes a comparative study of livability index, India would not figure anywhere in the world on a global level where cities in Australia, New Zealand, Europe or Canada figure. 

The commercial heat map nevertheless suggests a paradigm shift is on the cards. The changing preferences for commercial real estate opportunities are going to change the housing demand in future as well.  

By: Ravi Sinha

Nitesh Estates to grow commercial and rental portfolio

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News Point: Bangalore-based real estate developer plans to pan out over 5 million square feet in the next 3 years.

Nitesh Mall, Indiaranagar, Bangalore, Nitesh Estates, Nitesh Developers, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyBangalore-based Nitesh Estates plans to grow its commercial & rental assets to more than 5 million sq. ft. of space in the near future. This includes locations in the central business districts and significant micro markets of Bengaluru. Nitesh Estates will develop and acquire A-Grade commercial & rental assets with an investment of around Rs. 1500- crore across multiple projects.

To spearhead the vertical Nitesh Estates has appointed Mahesh Laxman as its Chief Executive Officer of Commercial and Rental Business.

Mahesh Laxman says, “Nitesh Estates will diversify the portfolio mix with a well balanced commercial & rental asset class. Our plans in Bangalore to build 5 million sq ft of A grade office space will also set the pace to establish a footprint in a number of cities within the next 3 to 5 years.”

Nitesh Estates has forged a strong partnership with Goldman Sachs to acquire ready-made commercial assets on a pan India footprint. In this endeavor cities like Pune, Chennai, Hyderabad and Mumbai have been identified for such acquisitions.

Its first buy under this partnership was an impressive purchase of 1-million sq.ft. shopping mall – Nitesh HUB in Koregaon Park, Pune. Nitesh Estates aims to deliver upscale projects in both, the commercial and retail asset classes.

Bharti Realty unveils its commercial space at Pavilion Mall, Ludhiana

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The announcement was made during the 2nd quarter meeting of the Tricity Leasing Association held at Chandigarh 

Bharti Realty Pavilion Mall, Ludhiana, Commercial property, India real estate news, India property market, NRI invest in property, Track2RealtyBharti Realty Limited has unveiled its premium commercial space at its Pavilion Mall, . Pavilion Mall is located at Fountain Chowk, which is considered as the heart of Ludhiana and is among the best destination for shopping and entertainment needs in the city.

The premium commercial space was launched to commemorate the second anniversary of Pavilion mall. It comprises of four floors with gross leasable area (GLA) of approximate 50,000 sq ft and would be an ideal place for gymnasium, spa, banquet hall, kitty party hall, wedding destination, F&B hub and leading sports anchors.

The USP of the commercial space is that one can have panoramic view of the city from any corner of the building similar to the London Eye.

This commercial space has close proximity with satellite towns like Phagwara, Jalandhar and Philaur and it is located near the railway station at Ludhiana.

The announcement of launching of premium commercial space was made during the 2nd quarter meeting of the Tricity Leasing Association, which is a consortium of real estate advisors in the three cities namely – Chandigarh, Panchkula and Mohali.

Speaking on the occasion of mall’s 2nd anniversary, S K Sayal, Managing Director & CEO, Bharti Realty Limited said “We thank the Tricity Leasing Association to support the leasing of premium commercial space at Pavilion. This space at Pavilion has been designed and developed keeping in mind the city’s requirement and expected to become one of the hottest commercial space in Ludhiana in the coming quarters as the tenants continue to progressively take over the space. The business space will match the international standards of service and quality, which is akin to the core delivery commitment of Bharti Realty”

Artistically designed, the project offers world-class facilities like separate entry, exclusive lifts, 24×7 power backup & security, 24hr video surveillance and ample space for parking.

IKEA will build a 400,000 sq. ft. store in Mumbai

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News Point: IKEA has bought land in Navi Mumbai; one IKEA Store will create over 500 equal job opportunities.

IKEA, the Swedish home furnishings company has announced the purchase of its first land parcel in Mumbai and second one in India after Hyderabad. The 23 acres site is strategically located in Navi Mumbai on Thane Belapur Road.

The IKEA store in Mumbai is planned to be around 400.000 square feet and is expected to have more than 5 million visitors per year. To be easily accessible for many people the store site has good access to public transport and next to an existing sub- urban railway station, “Turbhe”, located on the Thane Belapur road.

This step is yet another confirmation of IKEA’s large expansion plans in India. The company in parallelis evaluating suitable sites in the cities of Bangalore, Mumbai and Delhi & NCR and plans to open 25 stores in India by 2025.

Speaking on the occasion, Principle Secretary Industry Maharashtra, Apurva Chandra, said “We are very happy that we will soon see an IKEA store in Mumbai. IKEA will bring best business practices, many employment opportunities, infrastructure development and contribute to the growth of the retail sector in the state. We believe that IKEA will work as a catalyst in our development plans. The government is committed to provide the necessary support to IKEA forits future expansion plans in the state.” 

Juvencio Maeztu, Chief Executive Officer, IKEA India, said, “Maharashtra is one of the most important market for IKEA. Along with setting up retail stores, we will expand our supplier landscape and grow local sourcing as much as possible. Each IKEA store will employ 500-700 coworkers directly and another 1500 indirectly, engaged in providing services. We are committed to having 50% women in our organization at all levels and giving equal opportunities to all. We will bring a unique shopping experience through our inspiring stores offering affordable home furnishing products for the many people in Mumbai.”

IKEA has been sourcing from India for the last 30 years and it plans to double its sourcing volumes by 2020. Through it 50 suppliers, IKEA today employs 45,000 people directly and about 400,000 in the extended supply chain. It has recently organized three “Make More in India” campaigns, including one in Mumbai to look for new suppliers.

Regulator needs to regulate all stake holders

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Track2Realty Roundtable-VII

Venue—India Habitat Centre

Moderator—Ravi Sinha, CEO & Managing Editor, Track2Realty

Panelists—Sachin Sandhir, MD, South Asia, RICS

                        Achal Agarwal, ED, Investments, Fire Capital

                        Sunil Dahiya, MD, Vigneshwara Developers

                        J C Khera, GM, Finance, Supertech

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinhaSunil Dahiya: When the meltdown of 2008 and the aftereffects of 2009 rolled in, see the amount of letters sent by developers to the customers and the customer calling back and telling that ‘sorry boss, I am on the verge of losing my job, I don’t have the money’. Not a single developer went to any court or had any power in this judicial system to recover any payment from the consumer, there is no law. But when you have progressed the project to 50-60 per cent and you have 40 per cent consumers defaulting on payments, even forfeiting that 10 per cent deposit holds no value to you. The consumer will go to court and get a stay on the cancelation because he has the law in place for that.

All I am saying is that there is gap in policy framework that regulation needs to be on both sides.

Ravi Sinha: Do you mean to suggest that a single regulator and a single window clearance is the answer to this?

Sunil Dahiya: I think a regulator along with an ombudsman system has provided better services to the consumer. There should be an ombudsman for the consumer. Let the industry be regulated by an ombudsman and if that fails, then there is recourse to courts because we need to crush out the litigation period.

Ravi Sinha: You are inviting a Lokpal for real estate.

Sachin Sandhir: That is exactly the model in UK. There is a central act which is the consumer redressal act. It is something that the Government here is also thinking about. There has been talks going on over a separate consumer act for real estate which is within the purview of the central act. It basically sets the preamble for consumer redressal mechanism. But under that you need an ombudsman to provide certain services, which is how it should be. All the stakeholders are registered with the ombudsman or the central act and almost 90 per cent of the cases are handled at that level of the ombudsman. Very little goes to court for litigation.

Ravi Sinha: It implies that since there is no single defined regulator in realty, everyone from the local police to the CCI wants to regulate you.

Sunil Dahiya: Everyone wants to become our mai-baap, not regulator. If you go through the 40 NOCs which we get, every NOC has the end right not withstanding their ‘No’. Not withstanding their ‘No’ means they can withdraw it any time. Suppose some other act is imposed which is in contradiction with one of the NOCs, there will be no argument to counter that cancelation. It is only our interpretation that we have the permission. But there is no permission, it is just an NOC.

..…to be continued

Real estate boom to help develop facilities management services market in India

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2Realty, ravi sinha Netscribes, a knowledge consulting solutions company, announces the launch of its report Facilities Management Services Market in India 2012. Facilities management services market in India has been growing steadily over the years and is set to witness rapid growth over the next five years. It is a highly fragmented industry with few organized players and mostly unorganized small operators. The market is poised for strong growth owing to the booming real estate sector in India.The report begins with an introduction to facilities management services, including hard services and soft services. Facility management services imply the use of third-party service providers to maintain part of the building facility or outsourcing the management to an organization that executes this service professionally. This section also throws light on the various applications of facility management services such as retail and shopping malls, hotels, hospitals, banks, corporate houses, IT and ITES companies, manufacturing firms and others.

This is followed by the market overview section that gives an insight into the facilities management services market in India, its market size and growth, along with the split between organized and unorganized market. Low organized penetration of facilities management services in India leaves huge potential for players to develop this market. Geographic distribution and region wise market split of facilities management services has been provided. The organised market is mostly concentrated in and around metros and big cities while the unorganized market covers the facilities management requirements in tier I and tier II cities. The section also includes the facility management services supply chain consisting of different types of suppliers with varied service offerings. Additionally, an analysis of Porter’s Five Forces provides an insight into the competitive intensity and attractiveness of the market.

An analysis of the drivers and challenges explains the factors leading to the growth of the market including boom in real estate, rise in infrastructural development, growth in retail sector, growth of hospitality sector and improving healthcare scenario. The key challenges identified are shortage of manpower and large unorganized segment.

Key trends in the market have also been analysed which includes evolving project management and general contracting services, development of facilities management training and education, and investments and M&A activity in the facilities management sector.

The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. A bubble chart for the private players, depicting their relative positions in the market with respect to their total income, net profit/loss and total assets is included. This section also includes a list of products and services, key people, financial snapshot, key ratios and key recent developments for all companies, along with key business segments and key geographic segments for public companies. The report concludes with a section on strategic recommendations which comprises of an analysis of the growth strategies of the facilities management services market in India.

Hyderabad real estate update Q1 2012

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Sandip Patnaik, Managing Director – Hyderabad, Jones Lang LaSalle India

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Residential property buyer sentiments in Hyderabad have improved considerably over the last three quarters. There has been a gradual but certain increase in residential demand and absorption. That said, the market is still a long way from touching the 2007- 2008 levels.

There has been a marked increase in activity by developers scouting for suitable land parcels for residential development. More than anything else, this is a convincing indication that they want to proceed with their expansion plans and not hold on to their land, which had more or less been the trend since 2008-2009.

We definitely expect an increase in PE investments into residential real estate projects in Hyderabad in 2012. Until now, institutional capital flows had been slow in Hyderabad when compared to some of the other cities. The reasons for this were specific to the period:

  • In 2007-2008, the main reason was high valuations
  • In 2008- 2010, the global financial crisis was clearly the culprit
  • In 2010- 2011, the state-level political scenario depressed institutional investment sentiments

At this point in time, the real estate valuations are once again making sense, and developers as well as end users are once again in action mode. There is every reason to believe that the political scenario will take a turn for the favourable for PE investment in 2012-2013.

On the more sombre side, it also looks like residential supply is likely to outstrip demand in the foreseeable future. There is clearly a supply–demand mismatch, and unsold inventory is quite high. This fact will definitely have an impact on residential property pricing in the mid-term. That said, there are also going to be selective price rises for projects in high-demand locations having good amenities.

Commercial Real Estate

The commercial real estate sector in Hyderabad has reacted very differently from the residential sector over the past few years. In 2008-2009, the Grade A office space absorption in the city stood at approximately 2.2 million square feet. Thereafter, in 2010 and 2011, Hyderabad saw absorption of 4.4 to 5.0 million square feet year on year. This clearly indicates that corporate client did not let the political scenario upset their expansion plans in Hyderabad. In fact, all our large corporate clients such as Cognizant & Accenture have expanded their office bases over last 2 to 3 years.

What is worrisome is the fact that very few new companies have set up their base in Hyderabad over last couple of years. Notable exceptions would be JP Morgan and Facebook, along with a handful of others. Almost 90–95% of the city’s commercial real estate absorption has been via expansion of existing companies.

In 2012, the lack of SEZ supply will result in city absorption being lower than in 2010 and 2011. There is a huge supply of STPI/Commercial space available for corporates amounting to approximately 4.5–5.0 million square feet, but as 50-60% of the absorption is in SEZs, landlords and developers owning STPI/Commercial spaces might feel the pressure of unsold and un-leased inventory.

Consim Info to expand footprint in online property market

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Economic Survey, Real estate survey, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyConsim Info Pvt. Ltd with online brands such as BharatMatrimony.com, IndiaProperty.com, EliteMatrimony.com and PrivilegeMatrimony.com has announced plans to expand its footprint in the online property business. The company said it will increase market focus in the Western and Northern regions and expand Indiaproperty’s current market leader position across all four southern states to these markets, as a part of its growth strategy.

Consim Info has also repositioned Indiaproperty.com  and announced marketing spends of  20 crores for the current financial year to support its expansion plans and unveiled its new look portal with advanced first time ever features such as video interviews with builders and developers, virtual property tours and online fairs and its new advertisement, kick starting the new marketing campaign.

Speaking at a press briefing held in Mumbai, Murugavel Janakiraman, Founder & CEO, Consim Info Pvt Ltd, said, “Our property portal business has been witnessing significant growth in alignment with the surging demand for new property and we believe the time is right for us to leverage our experience in online businesses and establish our leadership in this area as well.  We recently crossed the 1.5 million mark in registered users with 250,000 unique daily visitors and more than a million page views a day, establishing us as the number one property portal in the country. Our increased business focus in this area and strengthening of the senior management of Indiaproperty, should help us scale new heights this year.”

Detailing the growth plans, Ganesh Vasudevan, Vice-president and Business Head, Indiaproperty.com said, “IndiaProperty has been growing at over 100% over the last year in terms of revenue and number of projects and this growth has been lead by the Western region. The company is exploring strategic partnerships with builders and agents in the state and is in advanced talks to sign exclusive marketing agreements. We expect the Western and Northern markets to contribute to nearly 50 % of our revenues this year and these are key geographies for us in our expansion plans. Our sales and service delivery teams are being strengthened in alignment to our growth plans.”

PE Analytics plans to launch Real Estate Index

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Economic Survey, Real estate survey, Delhi NCR real estate, Bangalore Real Estate, JLLM, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India PropertyNew Delhi-based research firm PE Analytics has drawn up plans to launch Real Estate Price Index in partnership with a leading commodity exchange.

PE Analytics owns and operates PropEquity, an online subscription-based real estate data and analytics portal covering over 27,000 projects of 5,100 developers across 40 cities in India. The data and analytics enable clients to spot market trends and maximise risk-adjusted returns.

“We are launching the First Residential and Commercial Indices based on transaction prices in partnership with the leading commodity exchange shortly after a nod from the Government,” PE Analytics CEO Samir Jasuja told PTI in Mumbai.

These indices will be based on the actual transaction and registration values prevailing in various micro-markets for the residential and commercial asset classes.

PropEquity is collaborating with India’s banking and finance regulatory body and the country’s largest commodity exchange to develop housing starts and realty indices.

The indices will be the barometer for measurement of the real estate sector performance and will also enable trade on the exchange. The company is looking at September 2011 to go live with this product offering, Jasuja said.

PropEquity has created products that are unique in the Indian context, and which have been validated through the market and with marquee customers, he said.

With future plans already underway, Jasuja envisions PropEquity as a pan-Asia product and intends to raise a second round of funding for the company in 2011.

Hiked interest rates – Impact on the real estate sector

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Track2Media, Track2Realty, India Real Estate News, real estate news india, india property news, india property investment news, Jones Lang LaSalle India, India Realty news, realty news india, india property news, property news indiaIt has always been axiomatic that when financial institutions raise their lending rates, there are bound to be ripples on the highly cost-sensitive Indian real estate market. The latest rate hike obviously means that  the cost of construction has gone up for developers, and this move by the RBI certainly does not come at the best of times for them. Banks have already taken a cautious approach to real estate lending and reduced their exposure to the sector, and most developers are now prevailed upon to raise a larger component of their construction costs from the private sector. The fact that such funds come at a higher cost of borrowing has already increased their construction costs significantly.

It would be logical to assume that, hoping to maintain their profit margins under such circumstances, developers would not hesitate to mark the incremental burden to buyers. This would certainly happen if buyer sentiments and resultant market activity were high enough to accommodate such a move.

However, the market for residential real estate is far from effervescent at the moment. In a scenario where staying competitive and selling stock is of utmost essence, developers are unlikely to increase the cost of their units and thereby risk losing more customers. While this will certainly impact their revenues to an extent, most developers do see a sufficient profitability quotient to make a strategic decision on this count.

On the buyer side, the low-to-mid income segments are invariably the most affected by a hike in home loan interest rates. That said, the impact of increased cost of borrowing is not as severe as that of the decreased allowable percentage of borrowing. Where this used to be at a steady 85% of the overall cost of the property, most banks are not extending more than 75% now. The fact that the salaried class now have to supply a higher contribution to the cost of their homes that is having a very tangible impact on demand.

The author, Ashutosh Limaye, is Local Director – Strategic Consulting, Jones Lang LaSalle India

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