Gurgaon initially gained prominence as an outsourcing centre for major international companies that found it cheaper to locate their back-end operations in India due to the availability of high-quality but cost-effective employee resources. GE Capital initiated this trend and was the first multinational company to enter Gurgaon in 1997.
The Fitch Ratings 2011 outlook for the Indian real estate sector seems to contradict itself. While it says the realty market is stable in the year, it also warns of a negative bias. The negative forecast of Fitch Ratings is, however, based more on the sentiments than the emerging market reality.
If 2008 was the year of shock, 2009 the year of discovery & introspection and 2010 the follow-up experiment; the year 2011 promises to be the year of comfort level for the Indian real estate sector. It seems the turmoil of the last couple of years has made everybody come out intelligent–investors, developers, bankers and end users.
Ramesh Nair, former Managing Director of Jones Lang LaSalle India’s Chennai and Hyderabad regions, has assumed overall responsibility for the company’s Western India operations. West India, which encompasses Mumbai and Pune.
Demand for mid-segment residential units in Mumbai is far greater than available and future supply, therefore growth is expected in 2011. In the industrial sector, cities such as Ahmedabad, Vadodara and other port cities in Gujarat are seeing the highest growth.
India has been ranked as the most preferred real estate destination among the Asia Pacific region as foreign investors still consider the country to be extremely viable, according to a report released by ULI-PwC. “India, and particularly Mumbai and New Delhi, are ranked the foremost real estate market destinations as the residential properties have maintain the growth momentum, and foreign investors still consider this market to be extremely viable,” the report titled ‘Emerging trends in Real Estate in Asia Pacific 2011′, said.
The Chennai-based Shriram Group, is expanding its realty business Shriram Properties. As per the plans the Group will invest around Rs 1,500 crore over the next three years in developing various residential projects. The zero-debt company says 60 per cent of this investment, or around Rs 900 crore, would be funded through equity, from existing or new investors.
Considering the amount of negative press they get, it is not immediately apparent that there are also less negative ways of looking at them. For instance, slums represent an extremely high-density model of residential settlement. In this respect, they make the most efficient use of limited land possible.
Global property consultant Jones Lang LaSalle has cautioned that housing prices in Delhi-NCR and Mumbai have reached the peak level of 2008 and any further rise in the rates will adversely affect the demand. It said the prices in the rest of the country may firm up by about 10-15% next year to touch the 2008 level.
After one and a half years of gradual consolidation, real estate in India has fathomed its own comfortable ground, and is poised at the right threshold to take a giant leap in years to come, according to the forecast of the Jones Lang LaSalle, the global real estate services firm.