Tag Archives: NAREDCO

Fitch finds India’s real estate outlook negative for H2 ’12

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fitch ratings, india real estate news, real estate news india, india realty news, realty news india, kumari selja, rohtas goel, Kapil Sibal, sonia gandhi, rahul gandhi, manmohan singh, Unitech, DLF, india property news, property news india, naredco, affordable housing, government of india, ndtv.com, ndtv, zeenews, aajtak, times of india, hindustan times, indian real estate forum, indianrealestateforum.com, indianrealtynews.com, cnn-ibn, rajdeep sardesai, sagarika ghose, vinod dua, arnab goswami, barkha dutt, raghav behl, prannoy roy, vikram chandra, ravi sinha, track2media. track2realty, DDA, delhi real estate news, new delhi, K.P. Singh, Rajiv Singh, Sharad Pawar, Jairam Ramesh, CBI, DB Realty, LavasaFitch Ratings says in a new report that the Rating Outlook for the Indian real estate sector continues to be Negative for H212, due to persistent sluggish demand, high construction costs and liquidity pressures.

Given Reserve Bank of India’s caution on interest rate cuts, high equated monthly instalments (EMIs) will continue to be a deterrent for potential home buyers. This, together with high property prices and elevated inflation will keep demand sluggish.

However, y-o-y growth of home loans by banks – which had been slowing for the 12 months to April 2012 – picked up markedly in May and June 2012, and if continued may help spur the sector.

Slowdown in the economy and subdued job growth in the IT sector, which was at its lowest quarterly level in Q212, will hold back demand for commercial and retail properties.

Real estate companies will continue to face margin compression from high construction costs for both building materials and labour. From December 2011 to April 2012 the price of steel increased 13% and that of cement by 12%. Notwithstanding the trend of deleveraging since Q311, slowing demand, high costs and thus declining profits will keep leverage high for most real estate companies.

Reliance of real estate companies on operating cash flow will assume significance in the near term as available funding options remain limited. Growth of bank lending to the commercial real estate sector was low at 1.5% y-o-y in June 2012. Except for some pick-up in private equity, other funding options are restricted. As a result, companies that derive significant revenue from lease rentals will have a more stable credit profile compared with their counterparts whose business model is based on outright sale.

SME has its own brand value to attract realtors

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By: Manu Sharma 

3rd of the series

Track2Realty Exclusive

- 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 In commercial real estate there is a general marketing strategy to showcase brands that book the space. Will SMEs cluster give the developer that cutting edge? Realtors believe most Indian mid-sized companies have already emerged as recognizable brands. Companies such as Gati, Angel Broking, Samsonite, Tarz Lifestyle, Donear and other such companies are well-known; hence it is the facilities that the developer offers take precedence. They are looking for the best value for money; hence there is a pressure on keeping the prices competitive and facilities as attractive as possible.

The question is whether focus on SMEs reflects a negative outlook on the commercial real estate where market has got saturated for the developers. Mayur Shah, Chief-Sales and Marketing, Ackruti City outrightly rejects this theory. According to him the focus is now on every segment of the market, which is holistic and allows a developer to offer a choice of options. Market was never saturated. Absorption took a backseat when the economy was hit and expansion plans were put on hold. In fact in some locations commercial realty has done better than the residential markets. People have realized that to keep the economy growing and their own businesses flourishing, they have to expand and the recent reports on absorption is a reflection of this realization.

“Most of the banking and finance companies started small and have grown only in the last six to seven years, which is a revelation in itself. Some well-known IT companies have grown in size only recently. India has more than 5000 mid- sized companies and at least more than half started their businesses in the metro cities. So SMEs being only in tier II and tier III is a myth. The idea is to offer office spaces at the right locations and offer the right mix of floor spaces and amenities,” says Shah.

ASSOCHAM suggests government for REIT & REMF

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By: Jaswinder Singh

india real estate news, real estate news india, india realty news, realty news india, kumari selja, rohtas goel, Kapil Sibal, sonia gandhi, rahul gandhi, manmohan singh, Unitech, DLF, india property news, property news india, naredco, affordable housing, government of india, ndtv.com, ndtv, zeenews, aajtak, times of india, hindustan times, indian real estate forum, indianrealestateforum.com, indianrealtynews.com, cnn-ibn, rajdeep sardesai, sagarika ghose, vinod dua, arnab goswami, barkha dutt, raghav behl, prannoy roy, vikram chandra, ravi sinha, track2media. track2realty, DDA, delhi real estate news, new delhi, K.P. Singh, Rajiv Singh, Sharad Pawar, Jairam Ramesh, CBI, DB Realty, Lavasa, gurgaon real estate, real estate gurgaon, gurgaon property, realty gurgaon, property gurgaon, gurgaon realty, FICCI, CII, NAREDCO, CREDAI, ASSOCHAMThe Associated Chambers of Commerce and Industry of India (ASSOCHAM) has suggested the government to introduce Real Estate Investment Trust and Real Estate Mutual Fund to enable investors to own a diversified portfolio of professionally managed assets in the real estate sector. In a note submitted to the government, the Chamber said that the Indian Real estate sector currently lacks any monetization vehicle for capital intensive verticals such as commercial offices and retail malls. Further, since the funding requirements for real estate projects are significant, broad based portfolio investments by individual investors is not feasible. A possible solution could be created in the form of REIT and REMF.

These vehicles are primarily characterized by their investment in real estate assets as well as limited liability for unit holders and they generally engage in professional real estate management as well. REITs have enabled small investors in most developed economies to hold a diversified portfolio of real estate assets which would otherwise not have been feasible. USA, Australia, Japan and Singapore are the amongst the more developed REIT / REMF markets, with the necessary regulatory framework in place and significant representation of such listed instruments on their respective stock markets.

ASSOCHAM has also suggested the government to make it mandatory for developers to provide Home Information Packs to their customers. These packs carry copies of documents related to clearances, deals, valuations, development plans, implementation milestones, and impediments, if any. Such initiatives can also act as confidence building measures, especially in India where real estate transactions are enshrouded by various surprises, controversies, disputes, and a subsequent loss of satisfaction and trust.

The Chamber said considering the magnitude of socio-economic value the real estate industry creates for the country, India’s vision for 2020 needs to be closely linked with our vision for this industry. A more prosperous India in 2020 will be characterized by a better-organised real estate industry which is transparent, efficient yet well-regulated and focused on sustainable development.

The prudent fiscal measures taken by the Reserve Bank of India the strength of our domestic demand and the restructuring measures taken by the real estate development community helped the industry reposition its focus and ride through a period of unprecedented turbulence. However, the fruits of growth have to also reach the common man in semi-urban and rural areas, and not just be restricted to a few big cities. As a country, our needs are changing. Looking at the demographic changes, it is a challenge to handle the escalating pressure on our current infrastructure and build new infrastructure to keep pace with our urbanization and population growth.

Setting up of a regulatory authority and an appellate tribunal will help organizing the industry, but only if they are efficient and enablers for the industry’s progress. In the developed economies, government regulations promote planned development without acting as hindrance. A real estate regulatory body (called real estate commission in some countries) licenses developers, agents and price evaluators, on the basis of their competence gauged through common qualifying exams.