Tag Archives: real estate

Realtors unhappy with RBI’s move to keep policy rate unchanged

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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 Real estate developers today expressed disappointment over the RBI’s decision to keep key policy rates unchanged and sought a cut in interest rate to boost housing demand.”We are very disappointed at this gesture by the RBI. The economic condition is getting worse day by day. The government and the RBI should understand the need of the hour and reduce cost of funds,” Confederation of Real Estate Developers’ Association of India ( CREDAI) Chairman Pradeep Jain told PTI.

He expected that the RBI would “look back and come out with an interim relief in form of cut in interest rate to reduce cost of funds for both developers and home buyers”.

The Reserve Bank today kept repo rate and reverse repo rate unchanged at 8.5 per cent and 7.5 per cent, respectively as it felt that inflation risks still persist, dashing hopes of many that the central bank would reduce the key policy rates to signal banks to cut lending rates.

The sharp increase in repo and reverse repo rates in the last two years has affected housing demand. Sales and net profit of most of the developers have gone down, while their interest outgo has increased significantly.

In its guidance, RBI has said: “Recent growth-inflation dynamics have prompted the Reserve Bank to indicate that no further tightening is required and that future actions will be towards lowering the rates”.

However, the apex bank said that “notwithstanding the deceleration in growth, inflation risks remain, which will influence both the timing and magnitude of future rate actions”.

Chennai residential real estate market 2012

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Siva Krishnan, Head – Residential Services (Chennai) Jones Lang LaSalle India

DEMAND, SUPPLY AND PRICING

- 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 contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply. Chennai’s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011. The absence of overt speculation has also ensured that developer has move pricing of homes in a stable and gradual manner. Unnatural spiking has therefore been successfully kept at bay.

We expect interest rates to decrease over the course of 2012, and this will result in greater demand for homes in Chennai in 2012.

Increased job security in the city has definitely helped the market to maintain buoyancy and a positive outlook. Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues.

CONFIGURATIONS IN DEMAND

The preferred size for 3BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. Again, the main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT / ITES sector. This is a welcome trend which is enabling architects, planners and developers to come up with better quality dwelling units. Affordable housing units continue to rule the roost in areas where social infrastructure lags and capital values are therefore lower.

We expect overall demand for residential properties in Chennai to increase once the interest rates stabilizes from their current peak. There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure.

Suburban Demand Drivers:

  • Positive market sentiments
  • Possible softening of interest rates
  • Increased job security
  • Unaffordable property rates in the central city

Year 2011 saw residential property pricing in Chennai moving up in a phased and rational manner, which helped in sustaining the momentum. Prices rose by between 8-30% in different areas, but these rises took place in small compartments and in proportion to the actual sales in particular locations and projects. We expect a similar trend to prevail in the year 2012.

Expected Price Movement For 2012:

  • OMR – 15-30%
  • GST – 10-15%
  • City – 20%
  • NH-4 – 5-8%

AREAS TO WATCH

  • Madhya Kailash – Sholinagnallur

This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years. Encouragingly (and in contrast to other parts of OMR) all completed projects here are fully occupied.

  • Velachery

Velachery is seeing consistent growth, because it is one of the few areas which are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram–Thoriapakkam, the 200 FT. MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.

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.

Realty welcomes proposed housing tax exemption but….ye dil maange more-I

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By: Ravi Sinha

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 It seems the euphoria within the realty sector over the proposed income tax exemption limit on housing loans from Rs. 1.5 lakhs to 3 lakhs has faded even before the union Budget 2012-13 is formally presented. Though the sector has welcomed the proposed exemption, it seems it is nowhere near their expectations since the wish list are too long and the pending demands do not seem to be fulfilled even with this years’ budget.

The sector is divided over the impact of tax exemption and a number of developers that Track2Realty spoke to, rather question the rationale of such a move in metro cities like Mumbai and Delhi where the average cost of a flat is in the range of 70lakh-1crore rupees. Though the proposal of this exemption was put forward by the industry body NAREDCO itself in a memorandum, many of the developers believe the move is a populist one and will help only the housing market in tier-III cities.

Ashwani Prakash, Executive Director of Paramount Group, though disagrees with this assumption and asserts that in terms of housing transactions, it is the metro cities where volume housing demand and supply is taking place. He categorically says that the need is to cure the disease and not the symptoms, and hence if accorded an industry status most of the legitimate demand and needs of the sector will itself be addressed.

“Last year, for real-estate was full of happenings. It has seen lot of ups and downs, during the year 2011 .The growth in the sector has seen steep curves. With this scenario the sector has faced great challenges to provide the products combining affordability, comfort and quality. Indian real-estate had set an example during the recession of 2008 -09, as it recovered in the shortest possible time as compared to the global real-estate sector which is still struggling to come out of the bad patch. However, the sector would require support from the government, which is expected in the coming budget. Industry status to the real estate sector is long awaited. This should be provided in the current budget, which will definitely give a boost to this industry and the benefits/facilities available to the industries at large could be utilized,” he says.

Echoing similar concerns, Anuj Kumar Choudhary, Director, Panchsheel Buildtech says the sector has recovered very well from the recession, which is remarkable. During the year 2011 there were lots of happenings which have some impact on the growth of this sector. But the sector has responded well to the demand of the customers and we have been able to full fill the expectations of the customers.

“We have a long pending demand to give Industry status to the real estate sector. We hope that this should happen in this budget which will definitely give a boost to this sector and it will help both the customers and the builders. It will also bring more transparency in the system which will help everyone at large,” he says.

…..to be continued

 

Hyderabad real estate update Q1 2012

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

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 newsResidential Real Estate

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.

SME doesn’t necessarily mean small; realtors have big plans

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By: Manu Sharma  

1st 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 Small & Medium Enterprises (SMEs) have come a long way from being seen as mere start-ups. Track2Realty finds that in terms of growth rate they are catalyst to the economic activity and a key demand driver of office space absorption.

Anybody who thought SME stands for small and medium enterprises should do a realty check, if not reality check. If their rate of growth and office absorption capacity is any indication, SMEs in India are emerging as the key demand drivers of the commercial real estate. No wonder, realtors have big plans targeted for them. The trend of SMEs occupying more office space than even the large corporate is expected to continue in the year 2012 as well.

Facts speak for themselves. The trends in the office space consumption clearly suggest how the developers have woken up to the reality that they have to deliver where the demand is the most. A research by Regus says that 32% of smaller firms intended to increase spending on property and premises compared to 25% of mid-size firms, and 28% of large firms. The realtors admit they have seen a high demand for commercial offices from the SME segment.

This growing shift of commercial real estate to suburbs can be attributed to the larger office space available at comparatively lower rentals, and superior amenities that the commercial towers in suburbs provide. Also, in the metro cities minimized travel time from place of living and avoiding heavy traffic congestions is an added advantage that a suburban office space offers.

After all, what the SME sector wants in office is an infrastructure ready, on-demand office space that they can use. That way, they can focus their energy on their core offering as opposed to worrying about rentals, furniture, infrastructure etc. The moot point is whether a city like Mumbai which ranks sixth in the list of the world’s most expensive office locations in 2011, as per the global realty consultant Cushman & Wakefield, can be expected to plan holistic office space for the small and medium enterprises.

Marathon Group has introduced small office spaces under the special brand Small Business Spaces (SBS) a couple of years back at ‘Marathon Innova’, in Lower Parel. Mayur Shah, Managing Director, Marathon Group says they have received an encouraging response from the SMEs for this product so far.

SME cluster seems to be a winning proposition in tier-II and III cities where land cost is less. The question is why will a developer get into such project in metro cities where high land cost is a catalytic factor to look for better ROI?

…..to be continued