Tag Archives: Era Landmarks Ltd

Mechanisation needed for project management to reduce labour shortage

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Sumit Bharana, Era Landmarks Ltd, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyBy: Sumit Bharana, Director, Era Landmarks

The Indian realty sector is facing an acute scarcity of labour as on today. The fast emerging problem will soon drive the realty sector to take to large scale mechanization and what is often referred to as project management. The propensity can be clearly understood based on the premise that the shortage of labour is projected to rise to about 65% mark by the next decade.

Additionally more work-force nowadays is willingly shifting from the traditional brick and mortar industry to fetch more lucrative opportunities offered by IT, ITes, banking, and Telecom industry.

In order to meet the challenges of cost, quality and time, the future of the sector will predominantly be contingent on project management, mechanization and pre-cast or prefabricated technology. The sector has perpetually witnessed an age old struggle to manage cost, quality and time in various construction projects.

With the factor input cost of raw material expected to double in the near future, the sector is not left with much of a choice than to adopt and blend in the best of globally acceptable practices. For the same reason, it wouldn’t be wrong to say that in order to sustain in the due course of long run, the sector might just have to strongly consider a large scale ‘mechanization’ on one hand, while ‘outsourcing of project management services’ on the contrary.

At the same time, it has also been found out that the currently prevalent rate of mechanization at about 20% in India is relatively low as compared to that of the developed nations where it currently ranges somewhere between 60-70% mark. With India precisely placed at the brink of rapid large scale urbanization and development, an ever-increasing demand for commercial and residential space has been correspondingly been observed. Given the currently prevalent dynamics, such needs could only be met only by taking to mechanization and project management practices.

As for the compulsions and circumstances that resulted in the present stage of crossroads for the sector, the perspectives of much of the analysts, builders, developers have been multi-faceted nonetheless. The shortage anticipated in the next few years that could be attributed to the rapid pace of development, particularly in the Tier II & Tier III cities. In such a scenario, it is the project management services that will offer all consumers a one-stop solution. The same will enable well-integrated and supervised implementation of projects right from day one of design until the stage of final delivery.

It is also imperative to take into a strong account, a pertinently ideal project management practice depending on the nature of the project including aspects such as design, construction-related activities, and management of work schedules, which could often lead to time overrun for the delivery of the project. Sadly, this is likely to spur the overall cost of construction as well. All put together, the realtors sooner or later might just have to consider, mechanisation of labour as an all new alternative to overcome the potential crises and take the increase in their cost of construction as  nothing short of a pinch of salt, so to speak.

Scope of real estate in Delhi-NCR

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By: Sumit Bharana, Director, Era Landmarks Ltd.

Sumit Bharana, Era Landmarks Ltd, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Most of the development in the NCR has occurred in the vicinity of the commercial hubs. In the Gurgaon micro market, developers have shifted their focus to the Dwarka Expressway, also called the Northern Peripheral Road. The forthcoming expressway will provide a convenient alternative link between Delhi and Gurgaon.

A wide range of projects have been launched in the region as a result of which a wide array of construction activities can be noticed in this region. Prices have gone up many a fold in the other residential micro markets of Gurgaon, making them out of reach of home buyers.

Dwarka Expressway is the only affordable option in the categorization of mid segment housing. Residential micro markets along Golf Course Extension and Sohna Road have seen limited launches in the first half of 2012-13.

Noida is another prominent hub for the real estate development in the region and has seen immense traction in April-September 2012 as well. Much of the projects launched here are dominated by the mid-segment housing categorization. Locations like Noida-Greater Noida Expressway have gained a lot of importance due to the planned commercial development along the expressway.

Greater Noida is also emerging as an important residential location in the region. With a good number of affordable projects it has been able to attract a humungous demographic of buyers. Residential development has come up along the Yamuna Expressway and other locations like Sector Alpha, Gamma, Beta, Chi, Phi and Delta. The proposed Metro link in all certainty will further advance the connectivity of this location, not only with Noida, but also with Delhi.

According to a market survey report, the NCR saw the launch of around 31,000 residential units during the first two quarters of 2012-13. This was despite a massive dip of 22% compared to the first half of 2011-12 which can be attributed to lower number of project launches in Ghaziabad, since the focus of developers and buyers has shifted to Noida Extension. Also, demand in the Ghaziabad market is by and large end user driven in nature and confined due to limited economic activities in the under developed suburb.

Noida also had a significant dip in launches in the first half of 2012-13 compared to the same period last year. Gurgaon had the highest number of launches in April-September 2012, taking up about 33% of the total pie. A majority of the project launches in Gurgaon took place on the Dwarka Expressway.

Noida followed as the region with the second highest number of launches. Most project launches in Noida took place along the Noida-Greater Noida Expressway. Greater Noida also saw ample project launches in the first half of 2012-13. Noida Extension and Noida Expressway will also continue to generate interest, as more and more IT-ITeS companies shift their offices to Noida Expressway for its rental affordability when weighed against the rentals in the Cyber City of Gurgaon.

The Expressway will further increase its appeal as a residential hub. Better infrastructure, easy accessibility and availability of affordable options will appeal to investors and end users. Supply in this region will not be an issue, and good levels of absorption, with appreciation in capital values, are a high possibility in 2013.

Real estate and the complexity of FDI market

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By: Sumit Bharana, Director, Era Landmarks Ltd.

Sumit Bharana, Era Landmarks Ltd, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: The real estate clan in the NCR region has come a long way ahead particularly with the housing sector most likely to witness a notable recovery, by the second half of 2013. The rising prices and high interest rates of the RBI have caused a drastic slash in sales. Adverse market dynamics such as high debt, piled up inventory and depressed market conditions took the sector for a rather harsh toll.

There have been situations as complex as realty giants taking to internal accruals for part payments of its market debts, while some developers sold off some of its assets to subsidize their debt situation. At this precarious juncture, a drop in the interest rates could have significantly eased up the debt situation with most of the indebted realty firms and supercharged their stocks as well.

Even though the RBI is unlikely to restructure sector loans, rumors in the market often argue that interest rates are most likely not to witness a significant upsurge.

Rising property prices and high interest rates have deterred genuine buyers from taking decisions. As for the mid-segment housing the options to choose from are limited. This is clear indicator of a disparity between demand and supply.

Additionally, the rising input prices, land prices and borrowing costs has also potentially exerted an enormous pressure on the developers, leading to deferred project deliveries.

Nonetheless, given that the government has ostensibly begun to take proactive measures so as to push the necessary reforms, which is more likely to have a positive impact in the conviction of consumers, a substantial improvement in the buyers’ awaits by mid-2013 with a fair certainty.

Despite the adverse market situation, the region is by and large witnessing a tremendous development. This sort of unaffected market behavior also potentially attributes to the FDI in the Retail Sector. The move will not only help the realty companies ease the vacuum of their inventory, but add more credibility in the eyes of the investors.

Additionally, it will also give a great boost to growth in the commercial and retail sectors. Real estate opportunities in the region have transformed the fate of planned satellite towns of Gurgaon and Noida to high tech dimensions. Both Gurgaon and Noida are now self-sustaining markets constituting to all asset classes: residential, commercial and retail.

Investments pouring in particularly through FDI in retail, opens avenues potentially conducive for an extensive gamut of activities both in the commercial and retail sectors as well.

Residential demand however will continue to prevail strongly, despite being characterized as a speculative market owing to the predominance of investors. Since the circle rates have gone up in the region, official valuation of properties will also rise along with the payable stamp duty. This will further limit the incursion of cash-rich investors into the NCR market, making it less speculative.

The projected infrastructure initiatives will drive the real estate development in the region with unconstrained steadiness.