The stock market is not only showing the investors’ confidence index going up. It is also indicating the way forward for the Indian real estate. After all, investor sentiment on the bourses have often led to the recovery of the real estate market as the investment grows to the next level of confidence for a long term investment. It may be too early for concluding whether the stock recovery is here to stay and lead to revival of the fortunes of the real estate, yet Track2Realty finds the debate has gained ground. While the developers are optimistic about the money sooner than later coming into the sector, the critics have their own reasons to advice wait & watch policy, if not outright denial.
Track2Realty Exclusive: Sales model in commercial office spaces that was only recently seen as an indicator of distress on part of the developers has, of late, turned out to be a smart business model by the MNCs. These multinational companies seem to have confidence in the Indian growth story and with long term plan they are investing into the purchase of these properties. Track2Realty Focus 2015 finds that it is not a distress sale of developers since the capital values and rental yields have both appreciated sharply in the last three years despite of impending slowdown. The shift of these commercial spaces beyond the IT/ITeS is the most significant trend.
Track2Realty: The Indian real estate market is showing signs of confidence and improved industry momentum post the general elections 2014. The last two quarters clocked an uptick in commercial space take up across leading cities in India. Noticeably, Delhi NCR stood as one of the leading occupiers, registering a significant increase of 25% (y-o-y) in take-up figures during 2014. Moving forth, the demand and corresponding vacancy levels would be key determinants for future traction in the commercial segment across this region.
Track2Realty Exclusive: The real estate sector is of strategic economic importance to India, as it is the second largest employment generator after agriculture and contributes about six per cent to India’s GDP. The sector with its backward and forward linkages to 250 ancillary industries has the potential to generate significant employment opportunities and provide a quantum jump to the Indian economy. Accelerating the growth in the sector can help turn-around the sluggish GDP growth witnessed in the last few years.
Track2Realty: International property consultancy JLL India has structured an agreement for the development of a Senior Living project in Chennai between Ashiana Housing Limited and Escapade Real Estate. These two firms will enter in Joint Venture development for this project.
Track2Realty-Agencies: The Central Board of Direct Taxes (CBDT) has ordered an Income Tax department investigation against a number of real estate developers who were recently shown by an investigative portal to be willing to accept alleged black money in property transactions.
Colliers International office property market overview report – October 2014 says strong leasing in Bengaluru, Pune, Chennai and Gurgaon
Track2Realty: India’s economic growth accelerated to 5.7 per cent in the April–June quarter, a figure that is much better than the 4.7 per cent in the same quarter of the previous fiscal year. According to various international agencies like International Monetary Fund (IMF), Asian Development Bank and Moody, 2014 is expected to record an economic growth of 5.2% to 5.6% in 2014.
Track2Realty: Net office uptake in the first three quarters (Jan – Sept) of 2014 has seen a significant rise of 36% as compared to same time last year. Total net absorption of office space has been recorded at approximately 24 million square feet (msf) between January – September in 2014 as against the 17.7 msf in same time in 2013, says Cushman & Wakefield in a report.
Track2Realty Exclusive: At a time when the clouds hovered all around the realty sector ranging from the policy bottlenecks to dried finance and inventory overhang, the depreciating value of rupee vis-à-vis US dollar was seen to be the only silver lining. The sector went euphoric with the increase in NRI enquiries all through the year 2013.
Track2Realty: According to recent CBRE report—How Global is the Business of Retail?—new trends identified in the global retail market saw retailers focusing on larger markets in 2013, with 83% of the survey cities witnessing at least one new entrant in the year (compared to 81% in 2012), while the top target markets saw a 28% rise in new entrants.