Delta Corp. and its partners set up a Rs 765 crore real estate platform for Mumbai redevelopment

Posted on May 16, 2024 by supriya

The platform, with a total investment of Rs 765 crore, will be established in collaboration with Alpha Alternatives Fund Advisors LLP, its affiliates (AA Group), and Peninsula Land Limited.

Delta Corp, a gaming and hospitality company, is establishing a real estate development platform for residential redevelopment in the Mumbai Metropolitan Region (MMR), as well as plotted development in and around MMR, Alibagh, Khopoli, Karjat, and Pune, according to a stock exchange filing on May 8.

The platform, which will cost Rs 765 crore, will be developed in partnership with Alpha Alternatives Fund Advisors LLP, its affiliates (AA group), and Peninsula Land.

The company also stated that the real estate platform will be the only vehicle for such projects, with an investment of Rs 90 crore (11.76) the AA group will invest Rs 450 crore (58.82 percent), and Peninsula Land (PLL) will invest Rs 225 crore.

According to the statement, PLL will be the development manager for the platform entities’ projects.

“This opportunity is part of our ongoing investment in growing and diversifying our business through internal accruals while remaining debt-free.

Our focus remains on our core areas of gaming and allied hospitality, with most of our capex and investments going toward expanding those businesses,” Delta Corp stated.

Chief Financial Officer Anil Malani told Moneycontrol earlier this year that the company intended to invest in its offline business over the next two years to return to a profit margin of at least 38%.

Delta Corp has postponed its online gaming expansion plans after the GST rate was raised to 28%.

A comprehensive analysis of how elections affect Indian real estate

Posted on May 16, 2024 by supriya

Akash Pharande, managing director of Pharande Spaces, discusses past real estate trends during elections and predicts future trends.

The political atmosphere in India, as in other countries, has a major effect on the property market, particularly during general election seasons. Election cycles have had a noticeable impact on the real estate market in the last twelve years. What can end users and investors expect following the upcoming general elections? Let us look at the Indian housing market’s behavior before and after the general election.

Trends before the election

In the past, we have seen that the Indian real estate market slows in the run-up to general elections. Buyers and investors become cautious when there is uncertainty about election results and potential policy changes. Pre-election data usually show a trend of lower transaction volumes and a slower rate of property price increases.

During the 2014 general elections, for example, sales and new product launches dropped significantly. Home sales in India’s top seven cities fell by nearly 30% in the quarters leading up to the elections. Similar patterns emerged in 2019, with both the primary and secondary markets showing as prospective buyers and investors chose to wait and see.

Recovery for the following election

The housing market usually recovers significantly following elections. Clarity in government policy and restored consumer confidence are frequently the driving forces behind this recovery. Following the 2014 elections, which led to the creation of a stable government, the market experienced a substantial rise. According to reports, positive consumer sentiment and increased investment led to a nearly 50% increase in sales in the following months.

These patterns were repeated in the 2019 elections. Again, the guarantee of political stability aided the market’s recovery. Another factor to consider was that people now had confidence in the Real Estate (Regulation and Development) Act or RERA. By the end of 2019, new investments were flooding the market, not only in the residential space but also in commercial real estate.

Current market and future outlook

Despite the tensions surrounding the general elections, the Indian housing market has held up well this year. The current administration has taken several steps to boost housing demand, develop infrastructure, and implement economic reforms. The general belief that this government will remain in power has provided significant protection against the typical pre-election downturn.

Following the election, the Indian housing sector is expected to remain optimistic. The market will undoubtedly rise if the ruling party can maintain policy and economic stability. There are also industry expectations that the GST on building supplies will be moderated with upcoming regulations.

Aside from that, there is hope that financing for the housing sector will improve and that affordable housing will once again become a government priority. All of this will undoubtedly contribute to the housing market’s ongoing improvement.

Investment implications

The post-election period will provide excellent opportunities for buyers and investors in residential real estate. When the government announces additional measures to boost the market and stabilize the economy, real estate will rise and yield significant returns as prices rise and demand rises. Such measures will be very compatible with the growing trend of digitization and transparency in real estate transactions.

Real estate employment skyrockets

Posted on May 16, 2024 by supriya

According to recent findings, Sashi Kumar, Head of Sales at Indeed India, stated, “The construction industry provides enormous opportunities for skilled professionals and semi-skilled labor.

According to Indeed’s recent survey, hiring in the construction and real estate sectors increased by 86% between March 2023 and 2024. This surge in demand has conceded with a 57% increase in job seeker’s interest, with Delhi, Bangalore, and Mumbai leading the way.

According to Indeed data, the top three cities for construction hiring are Delhi (5.05%), Bangalore (4.68%), and Mumbai (4.13%). A strong business environment, a rise in warehousing and industrial needs, increased commercial housing requirements as migration rises, the opening of manufacturing facilities, and other factors could all contribute to this trend.

However, smaller cities like Ernakulum (2%), Kochi (1.50%), Lucknow (1.38%), and Calicut (1.25%) are among the top regions attracting job seekers. This trend could be attributed to low living costs or local job opportunities that allow people to work closer to home. Ernakulum, Calicut, and Kochi are the top Tier 2 and 3 cities for job postings.

Engineers (17.18%), project leads and supervisors (8%), and architects (5%) are the most popular job roles, accounting for the majority of job postings. Engineers (21.31%), project leads and supervisors (9.33%), and architects (4.27%) are also popular among job seekers, which is consistent with the demand. As construction becomes more complex and technical, the industry requires more skilled workers.

The construction industry remains a key driver of economic growth, offering numerous opportunities for skilled professionals and semi-skilled workers. The significant increase in hiring signals promising opportunities for job seekers and employers, while the increase in job seeker interest reflects the industry’s strong momentum.

Formerly a part-time courier, now a luxury real estate mogul: Meet Suraj Morajkar, a pioneer of innovation in India’s luxury

Posted on May 16, 2024 by supriya

Growing up in Goa, he witnessed the influx of tourists seeking luxurious accommodations amidst the pristine landscapes and saw an opportunity to combine luxury with Goan heritage.

Suraj Morajkar, the visionary behind Sun Estates Developers, set out to redefine luxury housing development through a deep passion for architectural elegance and an unwavering commitment to excellence. Discover his inspirational journey from humble beginnings to pioneering luxury real estate professionals.

Venture into Luxury Housing Development

Suraj Morajkar’s move into luxury housing development was a natural progression, motivated by a deep appreciation for architectural elegance and a desire to redefine luxury living. Growing up in Goa, he witnessed the influx of tourists seeking luxurious accommodations amidst the pristine landscapes and saw an opportunity to combine luxury with Goan heritage. Establishing himself as a pioneer in this segment necessitated meticulous attention to detail, an unwavering pursuit of excellence, and a dedication to providing unforgettable experiences. Suraj became known not only in Goa, but throughout India, for infusing each project with innovative design concepts, superior craftsmanship, and a keen understanding of client preferences.

Designing for High-Profile Clients

Building luxury homes for affluent individuals necessitates a highly collaborative approach centered on understanding their distinct tastes, preferences, and lifestyle requirements. Suraj starts by encouraging open communication channels to learn more about their vision for their dream home. Using his extensive experience and expertise, he meticulously curates every aspect of the design process, from concept to execution, ensuring that each element reflects its uniqueness and goals.

Preserving Goan History

Suraj’s commitment to preserving Goan heritage permeates all aspects of Sun Estates Develeper’s luxury housing projects, forming the foundation of their design philosophy. They approach integration with reverence, drawing inspiration from Goa’s rich tapestry of culture, architecture, and traditions. Whether incorporating Goan motifs, using indigenous materials, or embracing vernacular architectural styles, they strive to create harmonious spaces that honor their heritage while offering a modern take on luxury living.

The Vision of Sun Estates Developers

Suraj envisions Sun Estates Developers focusing on innovation, sustainability, and long-term growth over the next two years. They are preparing to launch an ambitious expansion strategy, leveraging emerging trends and market opportunities to diversify their portfolio and achieve new milestones. With several exciting projects underway, including luxury residential developments and boutique hospitality ventures, they hope to redefine luxury living experiences while adhering to their core value of integrity, excellence, and customer service.

Influence of Previous Experiences

Suraj’s experiences with part-time jobs and cricket taught him invaluable lessons that continue to shape his approach to entrepreneurship and leadership at Sun Estates Developers. From the discipline and perseverance he learned on the cricket pitch to the humility and work ethic he developed through humble beginnings, these formative experiences instilled in him a strong sense of resilience, adaptability, and tenacity.

Advice to Aspiring Entrepreneurs

Suraj advises aspiring real estate entrepreneurs, particularly those interested in luxury housing development, on the following: Stay true to your vision, view challenges as opportunities for growth, and prioritize integrity and excellence in everything you do. To stay ahead of the competition, you must constantly educate yourself, stay current on market trends, and innovate.

Outstanding legacy

Suraj’s ultimate goal for Sun Estates Developers is to redefine luxury living experiences while contributing to the community and industry. He hopes to set new standards for excellence in the real estate industry by delivering iconic projects that transcend mere structures and become timeless symbols of elegance and sophistication. Their dedication to social responsibility, environmental stewardship, and community development is just as important. They hope to leave a lasting legacy that enriches lives, lifts communities, and inspires positive change for years to come by empowering future generations, preserving cultural heritage, and promoting sustainable practices.

Mumbai’s real estate players predict robust growth within MMR

Posted on May 16, 2024 by supriya

According to a report released by property consultants Knight and Frank, Mumbai recorded 11,504 property registrations in April 2024.

With property registrations increasing by 16% in revenue to the exchequer and the state government maintaining the status quo on ready reckoner rates, real estate developers in the Mumbai Metropolitan Region (MMR) predict strong growth in the sector. They are optimistic about larger purchases in areas where connectivity has been resolved through the implementation of infrastructure projects such as the expansion of Mumbai Metro, Mumbai Trans Harbour Link (MTHL), Coastal Road, and others.

Prashant Sharma, President of the National Real Estate Development Council (NAREDCO) Maharashtra, stated, “We are optimistic about the future of the real estate sector in MMR.” Our projections show a strong growth trajectory, driven by several key factors. First, the rising demand for residential properties, particularly in the affordable and mid-segment markets, is a good sign. We also see a resurgence in commercial real estate, fueled by the expanding IT and finance industries.”

“Moreover, government initiatives such as the relaxation of FDI regulations and the emphasis on infrastructure development, including the expansion of the Mumbai Metro, Coastal Road, and several other projects, making real estate investments even more appealing. We are also aware of the challenges, which include regulatory hurdles and the need for faster project approvals. However, with the state government’s commitment to improving the ease of doing business and our collaborative efforts to advocate for policy reforms, we are confident that MMR will remain a vibrant and dynamic market for real estate investment,” Sharma concluded.

Manju Yagnik, Vice Chairperson of the Nahar Group and Senior Vice President of NAREDCO, Maharashtra, stated, “The residential real estate segment has demonstrated resilience, making it an appealing investment option for those with medium to low-risk tolerance. Despite numerous challenges, this industry has remained, emerging as an excellent choice for many investors. The higher initial cost of commercial properties frequently attracts investors to the residential segment. The higher initial cost of commercial properties frequently attracts investors to the residential segment. For people with limited funds and maintenance skills, residential real estate is a more accessible and practical option.

Nitin Singhal, the co-founder of PropFina, stated, “With most micro markets experiencing higher supply than ever before, there will be corrections by highly leveraged players.” Those who have financially engineered their project portfolios and maintain control over their brand will have the least impact. Corrections can range from 10-15% and will be specific to micromarket dynamics. There could be higher offtake in areas where connectivity issues are being resolved.

Commercial and warehousing sectors are on the rise as real estate trends.

Singhal said that affordable housing will largely remain the same, and “When it comes to the commercial segment, which includes retail and office spaces, lease rates are going up and vacancies are going down. Introducing small and medium real estate investment trusts (SM REITs) creates a significant secondary market absorption opportunity. “This segment may experience a northwards moment,” he said.

“Similarly, major warehousing players are quickly acquiring the land parcels, some of which are backed by sovereign funds seeking safe havens with higher-than-inflation returns.” Clear title land parcels ranging from 50 to 100 acres will see a rise in pricing, particularly along Samruddhi Mahamag exits, DMIC Virar-Alibag Multi-Modal Corridor (VAMMC), and so on. Singhal concluded that there will be a new segment of multi-level last-mile connectivity warehousing.

April 2024 Trends and Consumer Preferences

According to a report released by property consultants Knight and Frank, Mumbai recorded 11,504 property registrations in April 2024, contributing more than INR 1,043 crore to the state exchequer. According to the Maharashtra Department of Stamps and Registrations, in April 2024, there was an increase in registration of apartments measuring up to 500 square feet, accounting for 45% of all registrations. Of all the properties registered, nearly 86% of the Western suburb buyers and 92% of Central suburb consumers choose to buy within their micro market. This decision is influenced by the familiarity of the area and the availability of products that match their pricing and feature preferences.

Real estate in Kashmir faces a gloomy downturn amid declining demand

Posted on May 16, 2024 by supriya

Kashmir’s real estate sector is in turmoil, with demand failing dramatically. Brokers and property developers face a concern: an increasing number of sellers but a shrinking pool of buyers.

According to real estate firms, the percentage of property buyers in Kashmir is steadily declining, which they attribute to the stress in other sectors. “Kashmir’s real estate market is currently down. People do not have sufficient funds to invest in real estate. Imran Bhat, a property dealer at Zakura, said that very few people are coming to buy plots of land these days.

He highlighted the unusual situation in which firms have far more sellers than buyers. “Let me give you an example: I received up to ten queries today, six of which were from sellers. People are now selling their properties, but only a small proportion of the buyers are willing to buy,” Bhat added. Sluggish demand in the real estate sector has put downward pressure on property prices across all segments. “Property prices have fallen. For example, if a seller has a property worth Rs 1 crore, they will only receive offers of Rs Rs 70 lakh. “Purchasing power has decreased significantly in the last few months,” Bhat explained.

Another real estate agent, Javid Ahmad, claimed that the market has declined by more than 30 percent. “Several economic factors have influenced the current state of Kashmir’s real estate market. Potential buyers, deterred by economic uncertainties and a cautious approach to investments, are waiting and seeing, resulting in a supply and demand mismatch,” he said.

However, property developers remain optimistic about the sector’s revival. “Since it is election season, we hope for a revival of the sector; rates and demand are likely to rise with the start shortly,” Ahmad said optimistically.

As the Kashmir real estate market faces challenges from dwindling demand and economic uncertainty, industry stakeholders are waiting for a turnaround. The sector’s fortunes are inextricably linked to the broader economic landscape, and recovery depends on restoring consumer confidence and addressing the root causes of the current slump.

TCG Real Estate receives funding of Rs 714 crore from SBI for the World Trade Center project in Gurgaon

Posted on May 16, 2024 by supriya

TCG Real Estate has secured funding of Rs 714 crore from the State Bank of India to develop the World Trade Center project in Gurgaon. The project has a leasable area of about 1 million square feet, according to documents obtained by CRE Matrix, a real estate data analytics firm.

According to the documents, Energetic Construction Pvt. Ltd, promoted by TCG Urban Infrastructure Holding Pvt. Ltd, has secured funding from SBI.

According to the documents, the funding was secured through a 72-month loan with a 9.6% annual interest rate.

The hypothecation deed was registered on March 28, 2024. Energetic Construction Private Limited signed this document in favor of SBICAP Trustee Company.

Over the years, TCG and its subsidiary acquired 7.94 acres of land in Gurgaon. “The borrower now purposes to undertake the project with mixed-use development comprising office space and high street retail in the name of World Trade Center, Gurgaon located on NH8,” according to the documents.

The property is off NH8 on Sohna Road in Gurgaon.

According to the documents, the project will consist of four towers: two office towers covering 9.4 lakh sq ft and two retail towers covering 72, 407 sq ft each.

According to documents, the project has an estimated cost of 1211.86 crore.

According to the documents, the company requested financial assistance from SBI to fund the project in part. The lender agreed to provide a rupee term loan with a maximum principal amount of Rs 714 crore based on the borrower’s representations and warranties.

Emails have been sent to both TCG Real Estate and SBI.

The rise of offbeat destinations is a paradigm shift in residential real estate

Posted on May 16, 2024 by supriya

Offbeat real estate destinations are becoming increasingly popular, reflecting a broader trend toward a balanced and enriching lifestyle.

Over the last few years, the Indian real estate sector has experienced a significant shift, with homebuyers increasingly seeking serene and offbeat destinations far from the hustle and bustle of major cities. Sonipat, Bhiwadi, Panchkula, and Meerut have emerged as top residential investment destinations, offering a combination of natural beauty, cultural richness, and a thriving economy. This transition reflects a desire for a higher quality of life, where serenity and modern amenities coexist in a relaxed setting.

Neoliv’s founder and CEO, Mohit Malhotra, says, “We envision that new-age cities will become the crucible of future economic dynamism. Their appeal stems from a harmonious combination of affordability, accessibility, and lifestyle amenities, creating new relaxed places to call home. Furthermore, the extended NCR is seeing significant infrastructure improvements, thanks to government initiatives to promote sustainable development. With the emergence of large global-scale industries such as the upcoming Maruti Suzuki plant in the Sonipat belt, these areas are poised to drive demand for mid-income housing projects and plotted developments, transforming into vibrant residential neighborhoods.”

Offbeat destinations are gaining popularity, indicating a broader trend toward a more balanced and enriching lifestyle. For example, Bhiwadi, once an obscure industrial town in the National Capital Region (NCR), is quickly establishing itself as a new real estate development, with parallels to Sohna Road’s highly sought-after micro-market. Bhiwadi with its strategic location, robust infrastructure, and emerging commercial and residential ventures, is on track for exponential growth, similar to Sohna Road in Gurugram.

Anil Gupta, President of CREDAI NCR Bhiwai Neemrana, says, “Bhiwadi has enormous growth and investment potential due to its strategic location, robust infrastructure, and burgeoning commercial and residential developments. When the region is connected to the Delhi-Mumbai Expressway, its potential for growth and prosperity increases. As stakeholders in Bhiwadi’s development, we are confident in the town’s potential to become a key destination in the NCR, providing unparalleled opportunities for growth and prosperity.

More and more families are relocating to these areas, drawn by the prospect of a better lifestyle and excellent investment opportunities. Panchkula, for example, has grown significantly. DLF’s luxurious residential project, The Valley, which debuted in 2010, has seen property values rise from Rs 2,000 per sq ft to an impressive Rs 8,000. This remarkable ascent highlights the tranquil town’s untapped potential, with DLF leading the charge. Their projects, which include The Valley, The Valley Gardens, and their most recent offering, The Valley Orchard, have paved the way for increased demand for homes in these areas. The Valley Gardens spans 34 acres (13.76 hectares) and offers breathtaking views of the Morni Hills and Shivalik Range. DLF unveiled its sample apartment, allowing potential buyers to experience luxury living firsthand.

These tier-2 cities are expanding rapidly, thanks to improved infrastructure such as better roads, public transportation, and vibrant commercial districts. Most importantly, it provides a peaceful yet connected lifestyle, which tier-1 cities struggle with due to overcrowding and rising property prices. This development includes physical, cultural, and economic growth, creating new opportunities to revitalize local economies.

Rahul Singla, Director of Mapsko Group, says, “In recent years, tier-2 cities like Sonipat have seen the emergence of the organized real estate market, which has provided unprecedented growth and development opportunities for the developing city. Sonipat offers an enticing combination of affordability and quality of life in an ever-changing landscape, as remote work options gain popularity. Homebuyers prefer spacious homes against a backdrop of lush greenery, which provides a respite from densely populated urban areas. Sonipat’s appeal extends beyond its economic prospects, with buyers prioritizing wellness and sustainability in their investment decisions.

This seismic change in style signals a fundamental reimagining of the Indian residential landscape. It demonstrates a growing desire for a lifestyle that transcends the mundane, promising a future of limitless innovation and steady growth. Indeed, the road ahead in residential real estate is paved with unique destinations where tranquility and modernity meet, beckoning those looking to invest in a lifestyle rather than just bricks and mortar.

Luxury villas in the sky: Mumbai residents are now upgrading to duplex and triplex apartments

Posted on May 16, 2024 by supriya

Move over, Jodi Apartments: Duplex and triplex homes are the most popular trend in Mumbai. Experiencing ‘villas in the sky’ rather than combining two apartments into a ‘Jodi unit’ is the new norm, particularly among luxury homebuyers looking to upgrade to larger properties.

Advertisements promoting ‘the lavish lifestyle with cost-effective duplex flats in Mumbai’ or a beautifully designed 4 BHK duplex apartment with a private terrace for sale in Bandra.’ It is appropriate for a large family, so do not be surprised. Vertical instead of horizontal spread is the trend, and Mumbai residents are going all out to get a piece of this luxury living.

Jodi apartments, balconies, and duplex housing units

If the Jodi apartment concept, or the trend of balconies, gained traction in Mumbai earlier, it is time for duplex and triplex apartments. Jodi apartments combine two or more housing units into one. Jodi apartments and the duplex/triplex units provide more space and privacy for large families living under one roof. Buyers willing to pay a premium are now looking to improve their lifestyle by moving into duplex or triplex apartments.

Suraj Estate Developers is selling the 42-story Ocean Star Tower built by Prabhadevi.

“We are now offering separate floors for the 50-story project ‘Suraj The Palette’ in Dadar (W). However, we can always change the plan if there is a high demand for duplex units on our upper floors,” said Rahul Thomas, Suraj Estate Developers’ Wholetime Director.

Ocean Star, Tranquil Bay, and Mangrish are the company’s projects, which offer duplex apartments ranging in size from 2600 to 5000 square feet.

“The trend among Mumbai buyers to own duplex and triplex apartments reflects a shift in their tastes. Most high-net-worth individuals value spacious living over price,” he told HT Digital.

Sky bungalows have double-height living spaces.

“We have identified an inclination towards duplex apartments, with individuals desiring ‘sky bungalows’ that feature double height living spaces with a ceiling height of 24 feet in the living room- a feature typically only in villas,” he adds.

HNIs in Mumbai are considering upgrading their lifestyle to duplex and triplex apartments. According to Parth K Mehta, CMD of Paradigm Realty, these homes are investments and lifestyle statements. Prices range between Rs 12.5 crore and Rs 100 crore.

Redevelopment projects meeting the demand for duplex and triplex units

According to Ritiesh Mehta, Senior Director and Head (North and West), of residential services and developer initiative, JJL India, the trend for duplexes and triplexes is becoming more prevalent in Mumbai, particularly as redevelopment activity increases in the city.

“Many of these redevelopment plots are small land parcels, and there is little room to turn a 1000 sq ft into 3000 sq ft apartment horizontally. Rather than Jodi apartments, demand has shifted to vertical units with greater height and larger floor plans,” he said.

“Prices for sea-facing duplex and triplex luxury housing units typically range between 10% and 15% higher,” he said.

Architects believe that Mumbaikars’ design preferences have changed since the pandemic. Many buyers today prefer vertically distributed housing units over horizontally distributed ones. They are currently looking for more floor height.

“Even if you combine two apartments into one Jodi, the ceiling height remains constant. People want more volume in terms of height; they want double height homes with more space and high ceilings, which may not be possible on a single floor,” said architect Hardik Pandit, director of APICES Studio Pvt Ltd, to HT Digital.

The number of duplex and triplex units in a building depends on its number of stories and location. “We initially plan for two to three of these units in a building, but we may decide to increase the number on the upper floors based on demand.”

These units are typically found on the higher floors of a sea-facing building and command a premium in terms of price,” he said.

Will the duplex replace the Jodi apartment concept?

When asked if this concept is expected to replace the ‘Jodi trend in Mumbai, he stated that the demand for ‘Jodi apartments’ will continue because it is age-related. “If a family consists of young children, they may prefer to go in for a duplex or triplex for that bungalow experience within an apartment; however, if the buyers are elderly, they may want to go in for a large ‘Jodi apartment.”

It is also worth noting that duplex and triplex apartments are usually only available in certain areas. “If you have quite a few of these units, sales may slow down due to their high cost.” Furthermore, these will only thrive in certain environments, particularly sea-facing buildings. “Many of these units have design features like viewing decks and terraces,” he says.

NCR luxury real estate: Capital appreciation takes center stage as wealthy Indians and NRIs increase their investments

Posted on May 16, 2024 by supriya

Luxury and super-luxury residences at DLF Golf Links, DLF 5 in Gurgaon, including The Camellias, The Magnolia, and The Aralias, have seen a price increase of approximately 125 percent between 2021 and 2024.

Luxury real estate was once only desirable for opulent living spaces, but it has now become a popular investment vehicle for affluent Indians looking to make significant capital gains.

According to real estate experts, the rising demand for luxury living in the National Capital Region, particularly in Gurgaon, has led to significant growth in the market capitalization.

They stated that luxury and super-luxury residences at DLF Golf Links, DLF 5 in Gurgaon, such as The Camellias, The Magnolia, and The Aralias, experienced a 125 percent price increase between 2021 and 2024.

Demand for high-end luxury properties has increased significantly over the past decade due to homebuyers’ growing desire to invest in a place to live and a high-quality asset with good returns.

Aakash Ohri, Joint Managing Director and Chief Business Officer at DLF, stated the rise in wealth creation has expanded the luxury real estate market, driven by economic resilience among the affluent segments, who see real estate as not only an appreciating asset but also one with tangible and intrinsic value.

“Moreover, the interest of the Indian diaspora in investing back into the country, fueled by emotional ties, favorable currency exchange rates, and simplified investment processes, has further bolstered the demand for luxury properties,” Ohri stated.

Where do HNIs buy?

In January 2024, Smiti Agarwal, wife of Hemant Agarwal, CMD of retail giant V-Bazaar, paid Rs 95 crore for a 10,813 square-foot unit at DLF The Camellias in Gurgaon.

Similarly, in October 2023, an 11,000-square-foot apartment at The Camellias sold for Rs 114 crore. The Camellias on upscale Golf Course Road has become a popular residential development for corporate executives and start-up entrepreneurs. According to sources, the founders of at least a dozen startups have purchased luxury residencies at The Camellias.

Deep Kalra, the founder of MakeMyTrip, Sameer Manchanda of Den Networks, Aman Sharma of Boat, and entrepreneur Ashish Gurnani have all purchased super-luxury flats at DLF The Camellias.

Vasudha Rohatgi, wife of former Indian Attorney General Mukul Rohatgi, paid Rs 160 crore for an 18,900-square-foot bungalow in Tony Golf Links in February 2023.

Bhanu Chopra, the founder of RateGain, paid Rs 127.5 crore for a bungalow in Golf Links that month.

According to Shashank Vashishtha, Executive Director of Exp Realty India, the market has seen significant capital appreciation due to the growing demand for luxury living in the NCR. Golf Course Road, DLF 5, and Golf Links are the top choices for HNIs and NRIs seeking luxury and ultra-luxury residencies.”

Capital Appreciation

Real estate brokers reported that super luxury residencies at DLF Golf Links, such as DLF The Aralias, have increased in price from Rs 12.5 crore in 2021 to Rs 27 crore as of JANUARY 2024. Prices in DLF The Magnilias have risen from Rs 16 crore in 2021 to Rs 35.5 crore in 2024. Similarly, prices for apartments in DLF The Camellias have skyrocketed from Rs 33-35 crore in 2021 to Rs 75 crore in 2024.

They claim that the story has been similar to other ultra-luxury properties in capital appreciation, making luxury real estate an attractive investment option for HNIs. TARC Tripundra, located opposite Pushpanjali Farms in New Delhi, has seen a 70% increase in the last 18 months, with current rates reaching 26,000 per square foot.

Siddharth S Sharma, GM of Sales at Elitepro Infra, a real estate consultancy, stated that prices in the luxury segment have skyrocketed in Gurgaon’s prime locations such as Golf Course Road, Golf Course Extension, and Southern Peripheral Road. DLF sold out a luxury housing project in 72 hours, demonstrating the high demand for such residencies.

“Properties in other micro markets, such as M3M’s Trump Towers, have seen capital appreciation from an initial 10,500 PSF at launch to 30,500 PSF today. Another example is DLF’s The Crest, whose value has risen from 13,000 PSF to between 38,000 and 40,000 PSF today. These figures demonstrate that investing in luxury real estate is still viable,” he said.

Why do HNIs and NRIs invest in luxury real estate?

Sankey Prasad, Chairman, MD, India, and CMD Middle East Project Leaders at Collier’s, stated that while the US dollar’s strength against the Indian rupee attracts NRIs, capital appreciation drives HNIs to invest in the luxury residential real estate sector.

“Approximately 44 percent of high-net-worth individuals are interested in investing in luxury real estate for capital appreciation. This is significant because it encourages them to accumulate assets for future generations and use their luxury properties to generate revenue. Wealthy homebuyers are unconcerned about the 40% increase in luxury home prices over the last two ears because they believe the Reserve Bank of India (RBI) will lower interest rates in 2024, making it more affordable for them to purchase such properties.”

Who is investing in Indian real estate, and where? Check this report.

Posted on May 16, 2024 by supriya

According to a Cushman & Wakefield report, the Indian real estate sector received USD 1.1 billion in investments in Q1 2024, with the residential real estate sector outperforming other asset classes and attracting investments of nearly $693 million.

In recent quarters, the residential sector has been on an upward trend, driven by strong housing demand and resurgent supply. It has also attracted a great deal of capital from investors in Q1 2024, who are banking on the segment’s bull run, which accounted for more than 63% of total realty investments in the quarter.

In absolute terms, the Q1 2024 investment inflow into the residential market is twice the quarterly average over the previous eight quarters.

Furthermore, nearly 48% of investment in the residential sector was concentrated in the early stages of development across the top eight cities, indicating increased investor interest, a steady rise in residential capital values across cities, and a growing share of high-end luxury launches.

Who is investing the most?

According to the report, domestic investors maintained a strong investment momentum, accounting for 57% of total quarterly investments. Foreign investors and collaborative (or mixed) deals accounted for 43% of the inflows in Q1 2024. This is consistent with the trend observed in 2023 when domestic investors participated in Indian real estate.

In terms of city-specific split, Bangalore led the way, accounting for 25.6% of total investments in Q1 2024, with more than half of the share going to the city’s office sector. Pune ranked second in terms of investment volume, accounting for 14%.

Investment in equity

Equity investments in the real estate sector stood at 58% in Q1 2024, while debt investments increased to double the quarterly average level of the previous eight quarters, with almost all of that going to the residential sector.

The office sector remained the preferred sector among equity investors, accounting for 43%, closely followed by residential investments (38%). Despite a slowdown from the previous quarter, early-stage deals remained consistent with the average in-flows over the last eight quarters.

In addition, corporate transaction volumes increased by 65% year on year, reaching INR 12.78 billion (USD 0.15 million). Mumbai continued to drive transaction value, accounting for 57% of the total, followed by Pune at 33%.

According to Somy Thomas, MD of valuation & advisory and capital markets at Cushman & Wakefield, “Q1 2024 saw another strong quarter of capital inflow into the Indian real estate sector, with residential dominating due to renewed customer and investor confidence. This strong performance has piqued investors’ interest, prompting them to invest in a market that is expected to grow even more.

“Domestic investors increased their investment in the quarter, providing additional protection against potential global headwinds while strengthening India’s domestic market and investor interests. As we start the new fiscal year, we expect this momentum to continue, with potentially more diverse investments in the future.

Hiring in real estate and construction surges by 86%; Delhi, Bengaluru, and Mumbai lead: report

Posted on May 16, 2024 by supriya

A strong business environment, an increase in warehousing and industrial needs, commercial housing requirements as migration grows, the opening of manufacturing facilities, and other factors may all contribute to this trend.

Between March 2023 and March 2024, the number of construction and real estate employees increased by 86%. According to Indeed, the surge in demand has been accompanied by a 57% increase in job seekers’ interest, with Delhi, Bengaluru, and Mumbai leading the way.

According to Indeed Data, Delhi had the highest construction hiring rate, at 5.05 percent, followed by Bengaluru (4.68 percent) and Mumbai (4.13 percent). A strong business environment, an upsurge in warehousing and industrial needs, increased commercial housing requirements as migration rises, the opening of manufacturing facilities, and other factors could all contribute to this trend.

“Smaller cities such as Ernakulum (2%), Kochi (1.50%), Lucknow (1.38%), and Calicut (1.25%) are among the top regions attracting job seekers’ attention. This trend could be attributed to low living costs or local job opportunities that allow people to work closer to home. Indeed lists Ernakulum, Calicut, and Kochi as Tier 2 and 3 cities with the most job postings.

Engineers (17.18 percent), project leads and supervisors (8 percent), and architects (5 percent) are the most popular job roles, according to job postings. In line with demand, job seekers are interested in engineers (21.31 percent), project leads and supervisors (9.33 percent), and architects (4.27 percent). As construction becomes more complex and technical, the industry requires more skilled workers.

According to the findings, Sashi Kumar, head of sales at Indeed India, stated, “The construction industry continues to be a key driver of economic growth, providing enormous opportunities for skilled professionals and semi-skilled labor. The significant increase in hiring points to promising prospects for job seekers and employers, while the increase in job seeker interest reflects the industry’s strong momentum.”

Global investors are shifting to alternative assets; institutional investments in Indian real estate are up 16% since 2021

Posted on May 6, 2024 by supriya

The COVID019 pandemic, as well as interest rate fluctuations, have had a significant impact on the Asia-Pacific real estate sector. While COVID-19 is no longer considered a global health emergency, interest rate changes continue to play a role in the market’s direction.

Global volatility has made the real estate market unpredictable. Owners and investors now value consistent yields over capital gains. Furthermore, investors and occupiers are increasingly aware of their ESG credentials. Quantifying the positive impact of green practices on property values requires collaboration among industry stakeholders. In an uncertain world, regular valuation reviews can help manage portfolio risk.

India’s real estate investments have increased by 16% since 2021, thanks in part to central banks enforcing stricter monetary policies, slowing commercial real estate (CRE) growth in developed countries, and global investors shifting their focus to alternative investments.

Bengaluru, India’s largest commercial real estate (CRE) market, has seen an increase in foreign and domestic investment. However, no significant cap rate compression has been detected. This lack of compression can be attributed to macroeconomic factors such as inflation, credit conditions, and interest rate policies, which affect asset valuations.

Bengaluru’s commercial real estate (CRE) sector is expected to expand rapidly in the coming year, with rents rising modestly. These positive trends are influenced by macroeconomic factors, which keep cap rates relatively stable. While retail consumption growth is expected to slow, this will result in more consistent net operating income (NOI) growth and potentially fewer transactions in the retail asset market. Meanwhile, industrial cap rates may be slightly lower due to increased capital exposure and demand.

Looking at the Mumbai region, there was a noticeable increase in consumption demand following the pandemic. This growth was most visible in average trade densities, which resulted in higher in-place rents for organized retail assets. These retail properties used a model that combined minimum rent with revenue sharing, resulting in higher Net Operating incomes (NOIs) and thus higher valuations.

This hyper-growth was primarily limited to the luxury and premium market segments, with little benefit to the overall retail market, including high streets. Yields stabilized, maintenance capital expenditures increased, and gross rents remained flat, causing retail capitalization rates to remain range-bound in recent years. Cap rates for retail and commercial real estate (CRE) assets are expected to remain stable, as capital allocations and trades show no significant improvement from an institutional standpoint.

Continued growth in private consumption, business demand, and supportive policy measures led to significant investments in industrial assets, particularly warehousing and data centers. As a result, asset valuations improved as cap rates fell 150-200 basis points below 2020 levels. Industrial cap rates are expected to decline slightly due to increased capital exposure, strong demand, and supportive incentive programs to encourage investment in this sector.

Understanding Property Types and Investment Opportunities in Real Estate

Posted on May 6, 2024 by supriya

Despite a spike in home loan interest rates, the residential real estate market performed well, indicating a positive industry sentiment.

Investing in the stock market is a game-changer for those who can monitor it regularly, as it requires investors’ full attention from 8:30 a.m. to market close. Because of its volatility, equity is no longer the best investment. People are now turning to real estate because it offers long-term benefits. It is regarded as the correct move, particularly when the sector is at its highest level.

For example, despite the local water crisis, Gurugram has set all-time highs in property prices. Because of the proximity of offices in the surrounding areas, Delhi/NCR has become the preferred destination for IT professionals. As demand in Noida, Greater Noida West, and New Noida grows, many large projects have relocated there.

Why do prices increase?

As the government has announced numerous infrastructure projects in Uttar Pradesh, it is clear that NCR will be a new residential and rental income source for many people. At the E&Y Infrastructure Roundtable, Ajit Krishnan, EY India Partner International Tax and Transaction Services, stated, “Investments in renewable energy and roads drive India’s infrastructure growth, paving the way for sustainable development.”

On February 8, 2024, Uttar Pradesh Chief Minister Yogi Adityanath announced infrastructure projects and public welfare schemes, including plans for 21 new airports in the city. Tourism in Ayodhya had already peaked with the opening of the Ram Mandir, with 1.12 crore visitors arriving before the temple was open to the public.

This is not the only factor influencing the current state of the real estate market. The geopolitical landscape has exerted significant pressure on the sector. According to Anarock Capital’s Flux report for the first nine months of FY24, PE investments declined by approximately 26%. During this time, foreign and domestic investors saw a decline in activity.

Despite the presence of many bankrupt builders, Noida and Greater Noida West have attracted several large projects. It demonstrates that the real sector has the potential for regular income and significant lump sum gains. Gurugram has become a dream for those earning between Rs 15 lakh and Rs 20 lakh as property prices skyrocket. To match and reduce the huge price gap within Delhi/NCR, Uttar Pradesh has increased infrastructural development with basic amenities in the region to attract more buyers.

To better understand this investment opportunity, consider Uttar Pradesh. The fluctuations in property values over the last few years demonstrate how dynamic real estate investing can be, with both growth and risk involved.

Profitable investments.

Although single-room sets are no longer as affordable as five years ago, they remain a sound investment.

Rental income is also at an all-time high in 2024. In 2020, two three-bedroom flats generated rental incomes ranging from Rs 10,000 to 12,000. However, they have risen to Rs 19,000 -25,000.

As an adjacent city to Delhi, people are migrating to make a living and require a place to call home. Purchasing or renting a home in Delhi has become costly, paving the way for the NCR region.

Consider the following scenario to comprehend the investment and income: Assume someone invests Rs 10-12 lakh to create a one-bedroom kitchen set. In just seven months, this newly built one-bedroom apartment will begin to generate an average monthly rental income of Rs 15,000-16,000. With an initial investment of Rs 10-12 lakh, the average return on investment (ROI) is 15-18%.

This example demonstrates the potential profit from investing in single-family homes. Even with modest investments, rental income can generate significant returns, making it an appealing option for real estate investors looking for consistent cash flow and long-term appreciation.

Residential Property:

During unprecedented times, the real estate sector encountered significant challenges. However, the post-COVID scenario revealed a very different landscape. With many businesses returning to in-office work environments and discontinuing work-from-home arrangements, the residential real estate sector experienced a significant resurgence.

Despite rising home loan interest rates, the residential market performed well. Recent studies have shown that escalating rental values are one of the key drivers of this demand surge. Investing in ready-to-move projects is becoming increasingly appealing to buyers.

A ready-to-move property presents a win-win situation based on past experiences. In contrast to new projects with uncertain possession timelines, ready-to-move projects offer immediate gratification and peace of mind.

Several examples of this point can be found along the Gurugram-Dwarka Expressway and Greater Noida West, which serve as valuable case studies for investors.

In 2023, 4.77 lakh residencies were sold in new projects. In pre-pandemic 2019, the share of freshly launched supply sales was substantially smaller, accounting for only 26% of the approximately 2.61 lakh dwellings sold that year.

According to Anarock real estate research, NCR has the lowest absorption of newly launched homes among the top seven cities, with only 27 percent of the 65,625 units sold in 2023 being launched during the year. The remaining units were sold in projects that opened before 2023. Interestingly, Gurugram outpaced other markets in the NCR region, with at least 35% of the 36,970 units sold in Millennium City in 2023 being freshly launched.

Godrej camps cannot compete for six years, except in the real estate industry

Posted on May 6, 2024 by supriya

Mumbai: Following a split in the 27-year-old locks-to-land development group, the Godrej family has agreed not to compete for six years, except in real estate. After the non-compete period, they can enter each other’s domains, but not under the Godrej name.

As part of the family settlement agreement, Adi Godrej and his younger brother Nadir will be granted exclusive rights to use the Godrej brand in FMCG (cosmetics, cleaning supplies, toiletries, foods, beverages), financial services, pharmaceuticals, diagnostics, and chemicals businesses.

Their cousin Jamshyd and his sister Smita Crishna will have exclusive rights to use the Godrej brand in the defense, consumer durables, medical devices, construction materials, interior design, electric mobility, software services, and security product industries.

However, both groups may use the brand name in the real estate development and marketing industries. Jamshyd and Smita have real estate interests through the unlisted Godrej & Boyce, while Adi and Nadir own the listed Godrej Properties.

None of the Godrej group companies will have to pay royalties on the brand. The non-compete clause went into effect on April 30. The agreement states that after six years, “a family group can enter into the exclusive business of the other family group, without the use of the Godrej brand including in their corporate names.”

Both groups, however, can venture into areas where neither has a presence, leveraging the Godrej brand with group-level differentiators, as these have been designated as shared business spaces.

For example, medical services, hospitals, hospitality and education.

Non-compete covenants are common in family settlement agreements.

In March, the TVS family agreed to avoid competition for a set period.

From promoters to public shareholders.

Once the ownership realignment in the Godrej group’s listed entities is completed siblings Jamshyd and Smita Crishna will become public shareholders.

They are currently part of the promoter group for listed Godrej entities. According to Sebi regulations, if a promoter wishes to be classified as a public shareholder, they cannot own more than 15% of a listed entity. According to the family settlement arrangement, Janshyd and Smita, classified as promoters once the realignment is completed, will apply for it.

This expert believes that the power of real estate is at the heart of India’s transformation

Posted on May 6, 2024 by supriya

According to Ankur Gupta of Brookfield Asset Management, local businesses are upgrading office spaces. Indians are looking for higher-quality homes, hotels, restaurants, and vacations, reflecting significant lifestyle changes over the last few decades.

According to Ankur Gupta, Managing Partner and Head of APAC and ME Real Estate at Brookfield Asset Management, the sector contributes significantly to the economy directly and indirectly and thus is at the heart of India’s recent transformation.

“Real estate provides that house, that backbone, not only by directly contributing to GDP but also by increasing productivity. A good quality real estate establishment, whether a manufacturing hub, logistics infrastructure, offices, high-quality homes, or hospitality, is the foundation for various industries. Gupta cited steel, cement, paints, and tourism as examples of direct users or secondary contributors to hotels.

He cited the fact that local businesses are increasingly looking to transform their office spaces, and Indians want to live in higher-quality homes, visit higher-quality hotels and restaurants, and take vacations that were less desirable several decades ago.

Brookfield, he says, is very interested in these shifts in demand, and the next major motivator would be to support the growth of the country’s manufacturing system and the development of logistics and industrial hubs.

These transformations will necessitate massive amounts of capital, a collaborative approach with the government and various state bodies, and the cooperation of organizations such as Brookfield.

India’s unique combination of services and manufacturing will propel it to global leadership. It makes no difference if it is second or third. He believes that it is currently the best market in the world to invest in.

In Jan-March 2024, luxury homes priced above Rs 4 crore saw a 10% year-year increase across the top seven cities

Posted on May 6, 2024 by supriya

From January to March 2024, sales of luxury housing units priced at Rs 4 crore or higher increased by 10% yearly in even major cities. According to CBRE South Asia’s India Market Monitor Q1 2024 report, the luxury segment accounted for approximately 5% of total residential unit sales.

According to the data, total sales in this price category were 4,140 units across seven major cities in January-March this year, up from 3,780 units the previous year.

Between January and March 2024, there was a nearly 64% increase in new luxury segment unit launches yearly.

Mumbai saw a 15% year-on-year increase in luxury housing unit sales worth Rs 4 crore or more in the most recent quarter. Sales in Delhi-NCR fell from 1,880 to 1,150 units during the review period.

Sales in Bengaluru fell from 70 to 10 units. Kolkata’s population fell from 110 to 70 units. Sales in Pune increased dramatically, from 150 to 700 units. In Hyderabad, sales increased from 380 to 800 units.

45% of the luxury housing stock was injected in the last five years.

The resurgence of India’s luxury residential real estate has fueled rapid growth, accounting for approximately 45% of total luxury stock injections in the last five years. Since 2019, the segment has grown at a CAGR of more than 9% in gateway cities.

In addition, Mumbai dominates the luxury segment, accounting for more than 40% of the country’s total luxury inventory from January to March 2024. The city is a well-known and highly desirable market, attracting many HNIs and UHNIs, including top executives and Bollywood celebrities.

Mumbai’s premium locations, including Altamont Road, Nepean Sea Road, Worli, Prabhadevi, Juhu, and Bandra (West), have high capital values, with average ticket sizes ranging from Rs 20 to over 60 crores. Occasionally, apartments priced over Rs 100 crore are also recorded.

Delhi-NCR follows closely, accounting for more than 25% of the country’s luxury inventory between January and March 2024.

The Delhi-NCR luxury market

Luxury properties in Delhi, similar to Mumbai, are concentrated in the southern part of the city, with areas such as Amrita Shergill Marg, Golf Links, and Prithviraj Road commanding average ticket sizes ranging from Rs 40 to Rs 60 crore. Gurgaon has recently emerged as the region’s leading luxury market.

The demand for gated communities increased during the COVID-19 pandemic, enhancing Gurgaon’s reputation as a luxury destination. Average ticket sizes at DLF Phase ½, Golf Course, and Golf Course Extension range from Rs 10 to 20 crore.

Furthermore, Hyderabad, experiencing remarkable growth thanks to a pro-business environment, ranks third with nearly 10% of the country’s luxury inventory. The city has seen an influx of luxury apartments and a surge in demand for this segment. In Jubilee Hills, Banjara Hills, Hitech City, Raidurg, and Neopolis, average ticket sizes range from Rs 20 to over Rs 40 crore.

Homes priced between Rs 45 lakh and Rs 1 crore accounted for 47% of total sales.

Overall residential sales across categories reached nearly 85,000 units from January to March 2024, representing an 8% year-over-year increase. Demand remained strong, prompting development to build 80,000 new housing units in the first quarter of 2024. From January to March 2024, mid-end projects (priced between Rs 45 lakh to Rs 1 crore) accounted for 47% of total sales, followed by high-end (Rs 1 to Rs 2 crore) and affordable (up to Rs 45 lakh).

Pune, Mumbai, and Bengaluru accounted for approximately 65% of total sales. However, from January to March 2024, unit launches in Mumbai, Pune, and Hyderabad account for nearly 69% of the total.

“The Indian luxury real estate sector has strong fundamentals for sustained growth, supported by consistent increases in household income and consumer spending power. These factors are expected to create a segment of discerning buyers who value quality, financial prudence, and a desire for an elevated living experience,” said Anshuman Magazine, CBRE’s chairman and CEO for India, South-East Asia, the Middle East, and Africa.

Get Returns From Real Estate Without Buying Property: Understanding REIT Investment In India

Posted on May 6, 2024 by supriya

REITs must distribute a significant portion of their earnings as dividends to shareholders, making them appealing to income-seeking investors.

A Real Estate Investment Trust (REIT) in India is a business that owns, operates, or finances income-producing real estate in one or more property sectors, REITs enable investors to pool their funds and invest in a diverse portfolio of real estate assets. These assets may include office buildings, shopping malls, residential properties, and hotels.

In India, the Securities and Exchange Board of India (SEBI) introduced REITs in 2014 to allow investors to invest in the Indian real estate market without directly owning the properties.

REITs must distribute a significant portion of their earnings as dividends to shareholders, making them appealing to income-seeking investors.

REITs are organized into three tiers: sponsors, trustees, and managers.

The sponsor initiates the formation of the REIT by transferring their owned properties or real estate to the trust. Typically, real estate developers seeking capital act as REIT sponsors.
The sponsor appoints the trustee who holds the assets for unitholders.
The trustee appoints a manager to oversee REIT assets and make investment decisions. Typically, the manager is a privately held company closely related to the sponsor.

How do real estate investment trusts work in India?

Consider a REIT to be a real estate-specific mutual fund. Here’s a sample breakdown:

Investors like you can contribute funds to the REIT.
The REIT invests this money in income-producing real estate.
The income from rents and other sources is distributed to investors as dividends, typically around 90% of their earnings as mandated by SEBI.

Can you invest in India’s REITs?

Yes, REITs are listed on the stock exchange, allowing you to buy and sell units like stock. This makes it an attractive option for individuals looking to invest in real estate without the hassle of directly purchasing and managing properties. To invest in a REIT in India, you must typically purchase REIT units through a stockbroker, just as you would buy stock in a company. REIT units trade on stock exchanges, providing investors with liquidity. However, it is critical to conduct extensive research and understand the risks of investing in REITs, such as market fluctuations, interest rate changes, and property market conditions.

REITs in India

According to Sebi’s official website, India currently has five registered REITs. These include Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust, and One Real Estate Investment Trust.

Here are some additional points to consider:

REITs are a relatively new instrument in India, with the first launched in 2014.

There are various REITs, each with a specific property (office, retail, etc.).

Additionally, consider consulting with a financial advisor to determine if REITs align with your investment goals and risk tolerance.

Mumbai Real Estate Market Records: Property registrations are up 9% this month.

Posted on May 6, 2024 by supriya

Mumbai real estate update: Real estate buyers in April 2024 were millennials, or people aged 28 to 43, accounting for 37% of the total.

Property registrations in Mumbai’s real estate market increased by approximately 9% to 14, 149 in April 2024, up from 11,514 the previous year.

Stamp duty collections from property registrations increased by 16 percent to Rs 1,043 core in April 2024 from Rs 900 crore the previous year, according to Maharashtra government data.

Every month, there were 14,149 property registrations in March 2024, with stamp duty collections totaling Rs 1,123 crore.

According to Knight Frank India, which analyzed the data, residential units accounted for 80% of the properties registered in the Mumbai real estate market as of April 2024. According to data, properties measuring up to 500 square feet were the most purchased size in April 2024, with 45 percent of registrations in this category.

GenZ and millennials account for the majority of homebuyers.

According to Knight Frank India, property buyers in April 2024 were millennials (aged 28 to 43), accounting for 37% of the total. Individuals from Generation X, aged 44 to 59, followed closely behind, accounting for 36% of all buyers.

Furthermore, 6% of homebuyers were Generation Z under age 28, while 18% were between ages 60 and 78.

“Bountiful market conditions have significantly boosted the state treasury, resulting in its highest-ever revenue collection in April. Property registrations in April increased by 9% over the previous year, highlighting the market’s appeal to prospective buyers,” said Shishir Baijal, chairman and managing director of Knight Frank India.

Highest stamp duty collections.

Over the past 12 years, the Mumbai real estate market has had the second-highest property registrations and the highest stamp duty collections in April.

Knight Frank reports that rising incomes and positive attitudes towards homeownership contribute to this trend.

Central and western suburbs accounted for more than 73% of total property registrations, as these areas are hotbeds for new launches with a range of modern amenities and good connectivity.

India’s Commercial Real Estate Is On Track For Successful Growth This Year

Posted on May 6, 2024 by supriya

India’s real estate shows growth potential for investment opportunities after the pandemic.

Amid global economic challenges, India’s real estate sector is experiencing a significant resurgence, attracting international investors as the economy recovers. Despite challenges in the US real estate market, India’s real estate landscape thrived in 2023, with significant activity across segments. Institutional investment in Indian real estate totaled USD 5.8 billion, with commercial properties accounting for more than half of that amount. This increase in investment following the pandemic reflects growing market confidence, as evidenced by companies encouraging employees to return to physical workspaces and expanding global operations in India.

The success and momentum of 2023, marked by high demand, absorption rates, and emerging trends such as the demand for flexible workspaces and sustainability initiatives, paved the way for the real estate industry’s future. Favorable economic conditions and government policies also contribute to strong market sentiment, indicating the possibility of continued growth and investment opportunities in the commercial real estate sector.

Investment Opportunities

In the case of commercial real estate in India, investors have several options. Office spaces in major markets, data centers, warehouses, and other commercial properties are in high demand. The rise of technology-driven industries has increased the demand for office space and data centers, making them appealing investment targets. India’s commercial real estate sector is a tempting investment opportunity due to market size, government support, and potential return on investment.

Forecast for commercial real estate in 2024:

Commercial real estate is expected to perform well in 2024, thanks to several factors that indicate potential returns for investors. Institutional and foreign direct investments (FDI) boost market confidence and growth. Furthermore, fractional ownership emerges as a compelling investment opportunity, allowing investors to diversify their portfolios while potentially earning high returns. This alternative investment method allows individuals to pool their resources and invest in high-value commercial properties, gaining access to previously unavailable assets. With the potential for high yields and the ability to spread risk across multiple properties, fractional ownership contributes to commercial real estate’s positive outlook in 2024, offering investors appealing opportunities for growth and profitability.

Rise in NRI Interest:

The growing interest of NRIs, particularly those from the Middle East, is reshaping India’s commercial real estate market. These NRIs recognize the potential for profitable investments in Indian real estate, which helps to drive the sector’s growth and dynamism. As a result of their participation, the market is stronger and more resilient, as they are also helping to diversify the investor base. As NRIs continue to express interest in Indian commercial real estate, the sector’s outlook for this year and beyond improves, emphasizing its appeal to domestic and international investors.

Should you consider investing?

High net-worth individuals (HNIs) can use numerous investment strategies tailored to their financial objectives and risk tolerance. Diversification across asset classes helps to mitigate risk and ensure long-term returns. Asset allocation is critical, with HNIs determining the proportion of their portfolio invested in various assets based on risk tolerance and investment horizon. Dynamic rebalancing entails proactively reviewing and adjusting the portfolio in response to market movements and financial objectives, thereby improving risk management and optimizing returns. Seeking professional advice from wealth advisors and financial experts can help HNIs align their investment decisions with their goals and minimize risks while increasing returns.

Conclusion

To summarize, India’s commercial real estate sector is on track for a bull market in 2024, building on the momentum gained the previous year. However, investors should conduct due diligence and seek professional advice to make informed decisions consistent with their financial goals. Investors can capitalize on the potential of India’s commercial real estate sector in the coming year by carefully evaluating market dynamics and understanding individual risk tolerance.

With knowledge and strategic planning, investors can maximize the potential of India’s commercial real estate market in the coming year.

A study predicts that residential real estate prices in India will increase by 4-6% this year

Posted on May 6, 2024 by supriya

According to a report released on Tuesday, home prices in India are expected to rise by 4-6% this year, with rising per capita income driving demand.

CRISIL Ratings believes that moderate inflation, stable commodity prices, lower fiscal deficit, and a drop in global policy rates will pave the way for interest rate cuts to boost housing demand.

“Range-bound growth in capital values and a likely moderation in interest rates in the second half of this fiscal year will ensure affordability improves after a decline in the previous two fiscal years due to a sharp increase in interest rates and capital values,” it said.

In terms of sales, the market share of India’s 11 listed real estate developers is expected to double to 30-32 percent this year, up from 15% in the pre-pandemic fiscal year 2018-19.

DLF Limited, Brigade Enterprise, Godrej Properties, Kolte-Patil Developers, Microtech Developers, Mahindra Lifespace Developers, Prestige Estates Projects, Puravankara, Sobha, Shriram Properties, and Sunteck Realty have a track record of delivering on time and with quality.

According to CRISIL Ratings, “continuing premiumization,” affordability, and rising per capita income should help large, listed residential developers achieve a 10-12 percent increase in sales volume this year, up from an estimated 14% growth last year.

“Large developers have already strengthened their credit profiles by deleveraging balance sheets through strong sales and collections over the last two years and focusing more on asset-light models, such as joint ventures and joint development,” said Pallavi Singh, associate director at CRISIL Ratings.

Real state supply has shifted towards mid-to-high-end and luxury homes, while launches in the affordable segment are expected to remain muted. According to the report, the share of launches in the mid-to-premium and luxury segments is expected to be 55-60% in 2023-24, up from 30-35% before the pandemic.

India’s ultra-rich are shifting their investment focus to residential real estate

Posted on May 6, 2024 by supriya

The ultra-rich in India devote a sizable portion of their wealth to residential properties, which account for 32% of their investment portfolio.

For some time now, India’s affluent class has been shifting its investment focus to residential real estate, indicating a significant shift in the country’s investment landscape. This transition highlights changing investment preferences and reflects the motivations behind the elite’s decision to invest in residential properties.

According to a recent Knight Frank report, India’s ultra-rich are allocating a significant portion of their wealth to residential assets, with 32% of their investment portfolio devoted to this sector. A growing number of ultra-high-net-worth individuals (UHNWIs) plan to buy a new home by 2024, indicating an increasing appetite for residential real estate investments in India.

Parvinder Singh, CEO of Trident Realty, commented, “This growing interest of elites in the residential real estate sector reflects a shift towards quality living spaces that cater to evolving lifestyle preferences.”

Elites are drawn to high-quality residential projects that provide sustainable and multifunctional living spaces, which satisfy their desire for exclusivity and modern amenities. The residential sector is expected to grow significantly by 2024, driven by urbanization, rising incomes, and a desire to live in harmony with nature. To appeal to affluent buyers, we designed our projects to offer privacy, space, and connection to nature. Our developments provide a distinct blend of luxury, sustainability, and comfort to meet the discerning tastes of elite homebuyers.”

Knight Frank’s flagship report, The Wealth Report 2024, predicts a significant increase in the Indian UHNWIs, rising to 19,908 by 2028 from 13,263 in 2023. This equates to a massive 50.1% increase, the fastest growth rate in the number of UHNWIs in any country over the next five years.

Aman Trehan, Executive Director of Trehan Iris, says, “The surge in residential property investment among India’s elite class represents a remarkable shift in preferences, fueled by a thriving economy and evolving lifestyle choices. According to Knight Frank India’s 2024 Wealth Report, 32% of UHNWIs are considering investing in real estate, with 12% planning to buy new homes in 2024. This report highlights the sector’s unprecedented growth and reveals Delhi’s rise in the real estate sector. With a combination of high demand, favorable mortgage rates, and a strong economy, the allure of luxury properties and alternative assets is likely to persist among high-net-worth individuals and ultra-high-net-worth individuals. This year, 22% of wealthy individuals intend to invest in residential properties and 19% in commercial properties.

Furthermore, the ongoing expansion of infrastructure and connectivity initiatives, particularly in the National Capital Region, is expected to open up new opportunities for elite investors, promising capital appreciation and improved lifestyles. As we look ahead, the trajectory of India’s real estate market is poised for further evolution, implying a promising outlook for the market in the coming years,” he adds.

Furthermore, people exhibit a positive economic sentiment, reflecting the Indian economy’s resilience and potential. This shift in sentiment coincides with a broader recognition of real estate’s enduring value and potential for long-term financial growth. Investors are positioning themselves to accumulate wealth and create multigenerational wealth through real estate investment.

Aman Sharma, Founder & Managing Director of Azrize Group, says, “Seeing India’s super-rich devote 32% of their wealth to housing properties is extremely encouraging. There is a strong belief that real estate is a significant driver of wealth preservation and growth. This data demonstrates our dedication to delivering high-quality projects that appeal to the discerning tastes of affluent buyers. We recognize the importance of providing luxurious yet secure options consistent with this demographic’s investment preferences. Such insights guide our strategic planning, ensuring that we continue to meet the market’s changing demands while maintaining our position as a reliable provider of premium real estate.”

Aside from economic factors, lifestyle changes are spurring demand for luxury and larger homes among India’s upper classes. The ultra-luxury housing sector’s unprecedented growth in 2023 reflects affluent individuals’ strong desire for premium living experiences. This emphasis on enhancing lifestyle offerings is a major reason the wealthy prefer to invest in residential properties, as they seek to improve their living conditions and indulge in luxurious living experiences.

“The surge in luxury housing sales among India’s elite is up 130% Y-O-Y, signaling a seismic shift in the industry,” says Ashish Sharma, AVP operations at Brahma Group. According to Knight Frank’s Wealth Report 2024, they allocate 32% of their wealth to residential properties.

A strategic pivot towards tangible assets both luxury and long-term capital appreciation.

The desire for luxurious urban living, combined with an increasing number of high-net-worth individuals, has prompted wealthy investors to design spaces that embody luxury, comfort, and exclusivity. The decision to invest in luxury real estate has evolved into an important statement of status and intent. Furthermore, in the coming years, the industry can expect to see a rise in participation from India’s elite as it continues to grow.

According to Ashish Sharma, AVP operations at Brahma Group, “the surge in luxury housing sales among India’s elite, up 130% year on year, signals a seismic shift in the real estate landscape.” According to Knight Frank’s Wealth Report 2024, they now invest 32% of their wealth in residential properties, up from 20%. This strategic shift toward tangible assets offers both luxury and long-term capital appreciation. Driven by the allure of upscale urban living and a growing population of high-net-worth individuals, affluent investors tend to invest in environments that exude comfort, exclusivity, and status. Luxury real estate has evolved beyond mere acquisition into a profound statement of status and purpose. Furthermore, the sector is expected to experience a surge from India’s elite, with an upward growth curve in the coming years.”

This trend opens up exciting opportunities for the Indian real estate market. Luxury developers can meet the growing demand for exclusivity, comfort, and long-term value among ultra-high-net-worth individuals seeking prime residential investments. However, stay ahead of the curve by anticipating changing preferences and offering innovative solutions to the elite’s ever-changing needs.

Investing for the future: The rise of co-working spaces in commercial real estate

Posted on May 6, 2024 by supriya

As the commercial real estate market evolves, one key trend that continues to shape the industry is the proliferation of co-working spaces. These shared work environments, which provide flexible lease terms and amenities, have altered how businesses and individuals view workspaces. Incorporating co-working spaces into a real estate investment portfolio can be a strategic move that capitalizes on changing trends while providing financial benefits.

The expansion of coworking spaces

Co-working spaces emerged as a solution for freelancers and small businesses seeking flexible, cost-effective work environments. Over time, these spaces have evolved into innovative hubs that cater to a wide range of clients, from startups to multinational corporations. The rapid expansion of remote and hybrid work arrangements has only fueled this trend, making co-working spaces an essential component of modern office culture.

As companies adopt more flexible work policies, the demand for adaptable and dynamic workspaces increases. Co-working spaces enable businesses to easily scale their operations, whether downsizing or expanding, without being limited by traditional long-term lease agreements.

The financial appeal of coworking spaces

Co-working spaces provide significant benefits to real estate investors. One of the primary advantages is the ability to generate multiple income streams from a wide range of tenants. This diversification helps to spread risk across various industries and business sizes.

Furthermore, co-working spaces tend to have higher occupancy rates than traditional office spaces, maximizing revenue potential per square foot. Moreover, these spaces frequently command high prices due to the extensive amenities and services such as meeting rooms, private offices, and community events.

Development of real estate investment portfolios.

Integrating co-working spaces into a real estate investment portfolio can result in significant long-term returns. By incorporating these spaces, investors can position themselves at the forefront of a rapidly changing market and capitalize on shifting preferences in office environments.

Coworking spaces allow for property appreciation. As the demand for flexible workspaces increases, the value of properties that house co-working operators is expected to rise. This potential for asset appreciation provides additional financial incentives to investors.

Furthermore, investing in co-working spaces enables a more dynamic and resilient portfolio. Co-working operators’ flexibility can help them weather economic downturns and changing market conditions, as these spaces can quickly adapt to new situations.

Navigating risk and challenges

While co-working spaces offer numerous benefits, investors should consider the risks. The success of coworking operators can be influenced by management quality, competition, and market trends. Furthermore, the industry’s rapid growth has resulted in some market saturation in certain areas, potentially affecting the profitability of individual co-working spaces.

Choosing established co-working brands with a proven track record of success can increase stability and reduce the likelihood of failure. Furthermore, understanding local market dynamics and competition is essential for making sound investment decisions.

Summary

Co-working spaces have emerged as a transformative force in the commercial real estate industry, reshaping how businesses and individuals approach workplaces. Co-working spaces can provide significant financial rewards for real estate investors but only if they are mindful of the risks.

As demand for flexible workspaces rises, investors who believe in this trend will be well-positioned for long-term success. Understanding the benefits and challenges of co-working spaces, and selecting the right partners can help investors to capitalize on this dynamic market and secure a profitable future in commercial real estate.

Non-resident Indians from the US dominate real estate sales in Bengaluru: 2BHK and 3BHK housing units are the most popular

Posted on May 4, 2024 by supriya

Bengaluru continues to attract non-resident Indian buyers, who account for nearly 15% of total housing sales in the city. The demand for real estate in the IT capital is primarily by NRIs from the United States, Singapore, the UAE, Australia, and Saudi Arabia, with the majority preferring to invest in 2 and 3BHK units.

Regarding requests and transactions, the United States has far outpaced other countries. According to No Broker data, demand has also increased from NRIs in Singapore, the United Arab Emirates, Australia, and Saudi Arabia.

Preferred Investment Options in Bengaluru

The most popular investment options are 2 and 3 BHK apartments, accounting for 78% of sales.

North Bengaluru was the most popular investment destination for NRIs, accounting for nearly 39.7%, followed by East Bengaluru (37.7%), South Bengaluru (18.1%), West Bengaluru (3.9%), and Central Bengaluru (18.1%).

The North has the highest traction of NRI buyers, accounting for nearly 40% of sales, followed by the East (38%), and the South (18%). According to Saurabh Garg, co-founder and chief business officer at Nobroker, the average ticket size varies by region: Rs 1.1 crore in the North, Rs 1.51 crore in the East, and Rs 1.13 crore in the South.

Sarjapur, Varthpur, Gunjur, and Whitefield are the most popular micro-locations in the East, while the Devanahali and Hebbal micro-markets are in the North.

The most popular investment options are 2 and 3 BHK apartments, accounting for 78% of sales. According to the data, 2 BHK units account for 41%, 3 BHK units for 37%, and plots and 4 BHK/duplex/ villas contribute 9% each.

These buyers are primarily working professionals looking for investment properties with high rental income and potential for future appreciation. NRI buyers prefer projects with no premiums, but they will only invest or buy from reputable Grade A developers.

According to Garg, NRI buyers actively seek other services, such as management and legal assistance, to smooth their property transactions.

NRIs account for 15% of the housing sales in Bengaluru.

Concorde’s chairman, Nesara B S, says NRI buyers account for nearly 15% of, their total sales. “This has risen in the past two years. Previously, this stood at 10%. The highest demand comes from the Gulf countries, followed by the Indian diaspora in Europe, the United States, and Australia. Most of them are three-bedroom apartments and villas,” he said.

While NRIs prefer to invest 2, 3, and 4BHKs. They typically target the higher end of the spectrum. In terms of sales, NRI contributions would be around 15% year on year. “The majority of our bookings are either through our GCC office or through trade expos that take place abroad. We occasionally receive inquiries when they visit Bengaluru on vacation,” said Viswa Prthap Desu, COO of Residential, Brigade Group.

Puravankara’s business is also heavily influenced by NRIs, who prefer larger homes, and gated communities that prioritize amenities, security, and property management services. NRI contributions to our overall business range between 12 and 15%, and we are seeing increased traction in markets such as the GCC, the United States (both East and West Coast), Southeast Asia, and Europe (including the United Kingdom),” said Abhishek Kapoor, Group CEO of Puravankara Ltd.

What’s in your portfolio for fiscal year 2025? Here are five real estate investment options.

Posted on May 4, 2024 by supriya

Real estate in India remains a top investment choice in 2023, owing to economic growth and Indian households’ high asset allocation. The article discusses various investment options, including luxury rentals, second homes, ETFs, REITs, and fractional ownership.

In 2023, the real estate sector demonstrated resilience to various changes in trends. The global economic recovery boosted demand for residential properties in India, thanks to low-interest rates and a preference for smart living and luxurious ownership. With India’s status as one of the world’s fastest-growing economies, fueled by private spending and capital accumulation, the real estate sector remains a popular investment destination.

Typically, Indian households allocate 77% of their assets to real estate because it provides opportunities for high growth, strong returns, and stable income streams. Furthermore, SEBI’s new directives on fractional ownership and small REITs position the sector for significant growth in 2024.

However, newcomers may navigate the real estate market and select the best investment opportunities based on current government regulations and interest rates.

This article examines various real estate investment options, investor profiles, and risk tolerances.

Rental Properties

The traditional approach entails purchasing residential properties to generate rental income. While simple, this method necessitates significant initial investment and ongoing maintenance costs. Before investing, confirm that the property is free of legal issues. Leasing, outright purchase, and loan financing are all viable acquisition options.

Notably, there is an increasing trend of investing in luxury rental properties, particularly in major Indian cities like Mumbai, Delhi, and Bangalore. Industry data show that luxury residential real estate in these cities consistently outperforms other traditional assets, with annual price growth ranging from 4% to 7%.

Vacation homes and house flipping

Affluent buyers are diversifying their property portfolios beyond primary residences, including lucrative second homes. In India, demand for secondary residences has skyrocketed following the pandemic, reaching a staggering $1.394 billion by the end of 2021– an impressive 88.63% increase from pre-COVID levels.

Combined with strategies such as house flipping, in which properties are renovated for increased resale value, Indians are capitalizing on their second homes by converting them into vacation homes, generating significant tourist interest.

REIT and ETF

ETFs and mutual funds offer indirect exposure to real estate by investing in related assets. ETFs focused on real estate stocks, such as publicly-traded builders, or REITs (Real Estate Investment Trusts) are among the options.

Mutual funds and REITs raise money from investors to buy income-generating assets. These assets generate rental income, which is then paid to investors as dividends.

REITs offer many advantages, including immediate liquidity, affordability, regulatory protection, and tax breaks. REITs provide a consistent income stream that is often tax-exempt, with dividends accounting for 90% of profits.

Commercial real estate ownership is in fractions.

This novel approach entails multiple investors pooling their funds to buy commercial real estate together. This reduces individual investment costs and risk exposure while generating shared rental income. Industry experts predict significant growth in this segment, with India’s fractional ownership properties expected to reach $8.9 billion by 2025, growing at a 10.5% annual rate.

Commercial properties typically have higher rental yields than residential options. A 25 lakh investment in fractional ownership could generate Rs 2 lakh in annual rental income (8-12 percent rental yield) and at least Rs 1.25 lakh in capital appreciation, resulting in wealth creation and improved monthly cash flow.

Choosing the correct option

Several factors influence the best investment option, including available capital, liquidity preferences, preferred cash flow frequency, and risk tolerance. Owning, leasing, and flipping properties typically necessitates a significant investment of money and real estate experience.

Although ETFs offer high liquidity and low costs, they don’t pay dividends and must be sold to realize returns.

Despite still being in their infancy, REITs and fractional ownership are giving retail investors access to the lucrative commercial real estate (CRE) sector. Even though CRE offers good returns, it has traditionally required a high level of capital investment.

Fractional ownership is a lucrative opportunity, with potential annual rental yields ranging from 8 to 12 percent and internal rates of return (IRR) ranging from 13 to 17 percent. Prime properties and retail complexes in business hubs such as Gurugram, which have recently emerged as one of the most promising real estate markets, provide consistent rental income and capital growth opportunities.

This suggests that fractional ownership of commercial real estate may produce higher and more consistent returns in the long run than other options, making it an important consideration for those looking to diversify their investment portfolios and build long-term wealth.

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Monthly Archives: May 2024

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India’s ultra-rich are shifting their investment focus to residential real estate

Investing for the future: The rise of co-working spaces in commercial real estate

Non-resident Indians from the US dominate real estate sales in Bengaluru: 2BHK and 3BHK housing units are the most popular

What’s in your portfolio for fiscal year 2025? Here are five real estate investment options.