Driving sustainability: The real estate sector is taking measures to address environmental concerns

The sustainability of India’s real estate sector, particularly in cities like Mumbai, Bengaluru, and Delhi NCR, is a growing cause for concern and scrutiny, especially issues like water scarcity and environmental degradation. Bengaluru’s water crisis is a stark reminder of the consequences of rapid urbanization and ineffective water management practices, prompting a rethinking of development strategies in other major cities. 

In Delhi NCR, a major real estate hub, there are concerns about the sustainability of development practices and their potential impact on water resources. However, leading developments are making noteworthy efforts to address these concerns and transition to more sustainable construction and operation models. 

One example is DLF, India’s largest publicly traded real estate developer, which has been at the forefront of sustainable construction initiatives. DLF has been able to recycle millions of liters of water per day by implementing zero-discharge water systems and sewage treatment plants, putting less strain on local water sources. Furthermore, DLF’s inclusion in prestigious sustainability indices such as the Dow Jones Sustainability Index demonstrates its commitment to environmentally responsible development. 

DLF is a pioneer in sustainable real estate development in India, as evidenced by our notable achievements. DLF, the only Indian real estate company to appear in the Dow Jones Sustainability Index for the past three years, demonstrated its commitment to environmental, social, and governance excellence. DLF’s flagship projects demonstrate its commitment to sustainability. Camellias, India’s first LEED Platinum-certified residential building, establishes the standard for environmentally conscious living. In addition, The Crest is the world’s largest LEED Platinum-certified residential building, demonstrating our commitment to sustainable construction. DLF has also achieved several firsts, including India’s first residential building certified as LEED Platinum by USGBC. 

Aakash Ohri, Jt Managing Director & Chief Business Officer, DLF, shared insights, saying, “Sustainability is deeply embedded in our operations.” Our sewage treatment plants recycle over 14 million liters daily, benefiting horticulture, secondary water usage, and lake replenishment while reducing reliance on groundwater. We prioritize greenery preservation by transplanting mature trees, ensuring that Gurgaon’s green landscape remains intact despite infrastructure development. We strive to set the industry standard for sustainability through innovative practices, community engagement, and responsible development, ensuring that our projects not only meet current needs. Our strategy emphasizes energy efficiency and sustainability throughout the design and management processes. DLF continues to lead the way in sustainable real estate, shaping a greener, more resilient future for future generations.

On the other hand, Bharti Real Estate is attempting to create a green supply chain by implementing a sustainable procurement policy and involving suppliers. The company is also adapting recommendations from the Taskforce on Climate-related Financial Disclosures (TCFD) and assessing its Physical and transition climate risks. 

“Improving sustainability in the real estate industry is critical. The industry has a significant role in increasing energy efficiency, lowering carbon emissions, and conserving natural resources. At Bahrti Real Estate, we have a set of clear and measurable objectives for our ESG Journey and developed a detailed plan to achieve them. We actively contribute to a greener future through responsible practices and innovative solutions. Our structures are designed and developed using sustainable materials, topsoil conservation techniques, energy efficiency maximization, water conservation techniques, waste management practices, and strict air quality monitoring, thus greatly reducing our environmental impact. As we work to bring our Worldmark portfolio assets online and operational, we plan to generate electricity from renewable sources by installing solar panels on the rooftops of our upcoming assets and entering into Power Purchase Agreements with the country’s leading renewable energy companies. We endeavor to ensure that we adopt green energy practices, minimize carbon emissions, and remain aligned with India’s goal of achieving Net Zero. Ravinder Arora, Director and Chief Operating Officer, Bharti Real Estate

Similarly, Signature Global India Limited has made significant strides toward promoting sustainability in the real estate industry. Signature Global has demonstrated a proactive approach to environmental issues by achieving IGBC Gold Ratings on multiple projects and collaborating with organizations such as the Council on Energy, Environment, and Water (CEEW). The collaboration with CEEW on the ‘Cleaner Air and Better Health’ project exemplifies a concerted effort to reduce air pollution from construction activities, highlighting the company’s commitment to sustainable development. 

Lalit Aggarwal, Co-Founder and Vice Chairman of Signature Global (India) Ltd., stated, “Signature Global has always taken a proactive approach to ESG.” Most of our projects are either EDGE-certified or IGBC gold-rated, demonstrating our dedication to the environment. We save approximately 52% of our water usage by implementing various optimum water use practices. These features include low-flow faucets and toilets, rainwater collection systems, and wastewater treatment and reuse facilities. The use of these techniques not only reduces our impact on local water resources but also increases the resilience of urban water systems. Signature Global recognizes the importance of sustainable practices in ensuring the long-term survival of our cities, and we are committed to continuing our efforts to conserve natural resources such as water, the elixir of life. 

The initiatives not only conserve water and reduce environmental impact but also highlight the financial benefits of sustainable practices, such as energy efficiency and cost savings for homeowners. Furthermore, the emphasis on worker self-regulation and behavioral changes demonstrates a comprehensive approach to addressing environmental challenges in the construction industry. 

While challenges persist, proactive measures taken by developers such as DLF and Signature Global are encouraging steps toward ensuring the long-term viability of India’s real estate sector, particularly in Delhi NCR. Continued collaboration among industry stakeholders, government officials, and environmental experts is critical to advancing these efforts and protecting urban communities’ environmental and social well-being. 

10 Things You Should Know About Election’s Impact on the Real Estate Sector

During general elections, the real estate sector tends to slow down; there are fewer launches, and investors prefer a ‘wait and see’ approach. However, end-users may not be directly impacted, as they may decide to purchase a house when they find the right project in the market and the best deal that suits their pocket. 

When uncertainty surrounds election results, real estate investors become cautious and anticipate potential policy changes. According to experts, there are fewer transactions and new launches during elections, and investors’ decisions may be influenced by market sentiment, share market performance, and even the impact of exit polls on markets. 

Elections 2019: The Impact on the Real Estate Market

During its first term (2014), the government accelerated infrastructure development by implementing major policy overhauls such as DeMo, RERA, and GST, amending old Acts such as the Insolvency and Bankruptcy Code and the Benami Transactions (Prohibition) Act, and launching schemes such as 100 Smart Cities, Housing for All by 2022, Make in India, and AMRUT  Cities.  According to experts, the last five years (beginning in 2019) have seen the overall impact of their implementation on the real estate sector.  

Also, during the 2019 elections, the primary and secondary markets slowed, and aspiring buyers and investors chose to wait and see. The momentum increased following the results, and buyers and investors were reassured of the government’s commitment to building new infrastructure. 

It should be noted that India’s residential real estate sector experienced a significant slowdown from 2016 to 2019. The major market shake-up caused by policy reforms between 2016 and 2017 led to the NBFC crisis after the IL&FS issue in 2018. This created significant turmoil in the residential real estate industry. 

According to Anarock Research, enough evidence suggests that housing sales and new launches may peak again in 2024. 

Price trends for the last three elections 

Examining price trends over the last three election years reveals that 2014 was better than 2019. According to ANAROCK data, average prices in the top 7 cities increased by over 6% in 2014, rising from Rs 4,895 per sq. ft. in 2013 to Rs 5,168 per sq. ft.  In 2019, average prices increased by only 1% per year, from Rs 5,551 per sq. ft. in 2018 to Rs 5,588 in 2019. 

Impact on Homebuyers 

While it is true that many prospective homebuyers are waiting for the elections to be over before making a purchase, experts point out that end-users will be unaffected by any such factor and will buy a home as soon as they find the right product on the market. 

Only investors will wait and see. Elections affect market sentiment but have little impact on end users. So, suppose a buyer finds a property that is populated. In that case, infrastructure has already developed, the price is right, and all of the fundamentals are in place, election or no election, he is obligated to buy it,” said experts. 

According to Anuj Puri, Chairman of the ANAROCK Group, elections frequently signal the end of fence-sitting and a confident move to ‘buy’ positions for homebuyers. 

The elections may impact markets where investors are the majority and speculators dominate. 

Investors who intend to make ‘aggressive’ real estate purchases may prefer a ‘wait and watch’ strategy, but homebuyers will continue to buy based on their needs. According to experts, an investor’s decision today may be influenced by market sentiment or the ‘feel good’ factor, capital market performance, and whether the new government’s emphasis on infrastructure development will continue. 

Elections also have an impact on builders. “During elections, the number of new launch announcements is often reduced because approvals may not be received due to the code of conduct. According to an unnamed developer, several projects in multiple categories, including mid-segment, affordable, and luxury, could be launched in the coming quarter. 

How will the election results affect the real estate market? 

A healthy absorption-to-supply ratio of 1.02 in 2022 rose to 1.17 in Q1 2024. According to the data shared by Anarock, controlled launches, and increasing sales, particularly in the high-end and luxury segments, have resulted in a drop in unsold inventory and a rise in prices. 

“The residential real estate segment will probably reach a new high in 2024. This also suggests that home buyers are optimistic about the real estate market’s performance,” Puri explained. 

Will there be an increase in the number of new launches after the 2024 elections? 

In recent quarters, the residential real estate market in the top seven cities has set several benchmarks. Quarterly launches in these cities used to total more than 80,000 units per quarter in 2022. In recent quarters, the residential real estate market in the top seven cities has set several benchmarks. Quarterly launches in these cities used more than 80,000 units per quarter in 2022.  However, it passed the 1 lakh unit mark last year, with launches exceeding 1 lakh in the previous five quarters. According to Anarock Research data, major developers have already acquired land for future development at a rate that is 125% higher than in 2021. 

As of March 2024, unsold inventory had dropped to less than 6 lakh units, with an inventory overhang of only 14 months, down from 21 months a year earlier. 

Will these new launches be in the middle, top, or affordable segments? 

Launches in the mid-segment and higher-end have dominated accounting for more than 55% of the total supply. It is also noticeable that the share of luxury and ultra-luxury segments is increasing, accounting for nearly 25% of the total supply as of Q1 2024. “The new launches will primarily target these segments,” Puri explained.

Signature Global (India) Limited’s founder and chairman, Pradeep Kumar Aggarwal, believes that future launches will span all segments. 

Will future housing prices be stable or increase? 

Reducing unsold inventory, sales exceeding supply, and rising input costs are the key ingredients that will likely drive prices in the future. “We have already seen annual price increases ranging from 10% to 32% in various cities,” Puri said.  

Should homebuyers decide whether to buy now or wait? 

Unless homebuyers are looking for a luxury or high-end product in their preferred location, built by a preferred builder, or with a specific layout, view, or orientation, the average homebuyer should carefully evaluate the available options and close the deal by negotiating for the best offer. 

Impact on Commercial Real Estate 

The country’s expected GDP growth of $3.5 trillion to $7 trillion by 2030 can be sustained without significant changes in circumstances. “This sustained economic expansion will increase India’s appeal to global corporations, cementing its position as a prominent hub for establishing Global Capability Centers (GCC) and manufacturing facilities. Knight Frank India Chairman and Managing Director Shishir Baijal said growth significantly impacts the construction sector and improves employability.

Rental housing and affordable housing 

A persistent decline in affordable housing demand is one of Baijal’s hopes for the new government. Keeping interest rates low and other enabling conditions can help achieve this goal. “We hope the government will take a closer look at the policy for affordable housing and provide more incentives to the supply side,” he told HT Digital. 

The Green Revolution is reshaping India’s property market

A significant shift toward sustainability is reshaping the trajectory of Indian real estate. The rise of green construction is more than a fad; it is a strategic move to foster an environmentally responsible and resilient real estate sector. The paradigm shift encompasses a variety of sustainable practices, including utilizing sustainable-friendly building materials and energy-efficient designs. 

Green construction is gaining momentum. 

The Indian real estate sector is undergoing a major shift, driven by rising demand for sustainable and energy-efficient buildings. The Indian Green Building Council (IGBC) reports a remarkable 20% annual increase in the green building footprint, indicating a significant shift toward environmentally conscious construction practices. This growth is driven not only by market demand but also by regulatory initiatives that promote green spaces. 

Economic incentives for green buildings 

Beyond its environmental benefits, green construction has significant economic benefits. According to the World Green Building Council, implementing green practices can result in a 7% reduction in operating costs, a 20% increase in asset value, and a 6% increase in return on investment. These financial incentives promote sustainable practices as both ethical and profitable, making green construction an appealing option for real estate developers.  

Increasing consumer awareness drives change. 

The growing awareness of environmental issues among Indian consumers is a major factor driving the rise of green construction. According to a Nielsen survey, 73% of Indian consumers are willing to pay a higher price for environmentally friendly products and services. This shift in consumer behavior has spread to the real estate industry, with homebuyers actively seeking eco-friendly features such as energy-efficient appliances, rainwater harvesting, and green spaces integrated into residential complexes. 

Regulatory impetus 

Government initiatives have a significant impact on India’s future of green construction. The introduction of certifications such as Leadership in Energy and Environmental Design (LEED) and the enactment of the Energy Conservation Building Code (ECBC) have contributed to advancing sustainable practices. The ECBC requires energy-efficient design and construction in commercial buildings, compelling developers to incorporate green building principles. 

Corporate commitment to sustainability 

Leading real estate developers in India understand the strategic importance of sustainable practices. Beyond mere compliance, businesses are including environmental responsibility in their strategies to attract environmentally conscious investors and tenants. In a ground-breaking move, some of India’s largest real estate developers have pledged to make all their projects carbon-neutral by 2030, setting an inspiring example for the industry. 

Showcasing success: case studies.

Green Building Principles have been applied to several well-known commercial development projects in India. The Infosys Mysore Campus is an excellent example of this. Infosys is a pioneer in implementing green building principles on its campuses. The Mysore campus is an outstanding example, with energy-efficient infrastructure, water conservation systems, and environmentally friendly landscaping. The campus has received several prestigious green certifications, demonstrating Infosys’ commitment to socially responsible corporate development. The Wipro Tech Park in Bangalore is well-known for its commitment to sustainability, and its Electronic City campus exemplifies this dedication. The campus uses energy-efficient technologies, waste management systems, and environmentally friendly building materials. It has received green certifications, demonstrating Wipro’s commitment to creating green responsible corporate spaces. Another example of sustainable green development is the ITC Green Centre in Gurgaon, a flagship commercial development that exemplifies green building techniques. It uses advanced energy management systems, water-saving techniques, and environmentally friendly materials. The project has received several green certifications, highlighting its contribution to sustainable corporate real estate in India.  

On the resident front, the House of Hiranandani in Chennai is a well-known residential development focusing on sustainability. The project includes green spaces, energy-efficient appliances, and water-saving initiatives. Its use of environmentally friendly materials and practices distinguishes it as an example of eco-conscious resident development. Furthermore, the Magicbricks Western Expressway Towers in Mumbai is another prime example of a residential complex with environmentally friendly amenities. This Mumbai residential complex is well-known for its environmentally friendly features and sustainable design. It includes rainwater harvesting systems, energy-efficient lighting, and solar panels. The project aims to reduce environmental impact while providing residents with a comfortable and sustainable living environment. 

Challenges and Opportunities

While the trend toward green construction is encouraging, challenges remain. Many developers are still concerned about the initial costs of implementing eco-friendly technologies and materials. However, the long-term advantages of operational savings and marketability frequently outweigh the initial costs. Furthermore, addressing the shortage of skilled workers trained in sustainable construction practices provides an opportunity for collaboration among government agencies, educational institutions, and industry stakeholders. 

Future Horizons: Creating a Sustainable Landscape. 

Green construction is becoming increasingly popular in India’s real estate industry, demonstrating the sector’s commitment to sustainable and responsible development. With a favorable regulatory environment, economic incentives, and rising consumer awareness, the transition to eco-friendly construction practices is expected to speed up. As the industry embraces green building principles, India is on track to not only meet its environmental goals, and become a global leader in sustainable real estate development. The green construction movement has grown significantly, with the potential to shape the future of Indian construction. The success stories of eco-friendly projects demonstrate that sustainability is more than just an ethical choice; it is also a path to long-term environmental conservation and economic growth. As the green revolution gains traction, Indian real estate developers have an excellent opportunity to incorporate sustainable practices, meeting the growing demand for environmentally conscious real estate and contributing to a greener, more sustainable future. 

Anarock reports a 57% decrease in unsold homes amid the NCR real estate revolution

Homebuyers in the Delhi NCR area are benefiting from the current market upswing, as the region has seen a  57% drop in unsold homes over the last five years, the largest decrease of any city in the country. 

According to a recent Anarock report, the number of unsold homes in NCR has steadily decreased from around 200,000 units at the end of the first quarter of 2018 to approximately 86,420 units by the end of the first quarter of 2024. During the same period, the main southern cities of Bengaluru, Hyderabad, and Chennai saw their unsold housing inventory fall from over 196,000 units in Q1 2018 to more than 176,000 in Q1 2024.  

Gurgaon now leads the list with a total unsold stock of 33,326 units, down 37% over the last five years, followed by Greater Noida, which had up to 18,668 units at the end of the first quarter. 

According to Pradeep Aggarwal, founder, and chairman of Signature Global (India), Delhi-NCR’s unsold inventory has decreased by 57%, from approximately 200,000 units at the end of Q1 2018 to approximately 86,420 units by the end of Q1 2024, with Gurugram playing a significant role in this positive trend. This will boost the NCR real estate market by instilling buyer confidence and improving market stability. Key contributors to this decrease include extensive economic growth, which increases purchasing power, and significant infrastructure development, particularly the expansion of metro lines and expressways such as the Dwarka Expressways, Southern Peripheral Road Sohna Elevated Road, Delhi-Mumbai Industrial Corridor, and upcoming metro lines. Proactive government policies and regulatory reforms, such as RERA, improve transparency in the real estate sector. Improved connectivity via expanded transportation networks makes distant areas more appealing, lowering unsold inventory stocks. This positive outlook is expected to encourage the creation of new premium and mid-range residential projects for discerning buyers and inventors.” 

However, Greater Noida’s supplies have decreased by a much higher percentage of 70% since Q1 2018. 

Overall unsold housing inventory in Ghaziabad fell to 11,011 units in Q1 2024, down from 37,005 in Q1 2018, representing a 70% reduction in five-year inventory. 

Noida had  7,451 unsold units at the end of the first quarter of 2024, down 71% from the same quarter in 2018 when there were 25,669 units. 

S.K. Narvar, chairman of Trident Realty, says, “The Delhi-NCR real estate market has undergone a tremendous transformation, with a 57% decrease in unsold homes over the last five years. This decline reflects a positive change in the local real estate landscape, indicating improved market stability and a more stable supply-demand situation. The city’s strategic approach to new supply additions has played a significant role in this transformation, resulting in restored buyer confidence and a healthier market environment. The determination of developers to manage new supply additions, combined with regulatory actions such as RERA and GST, have contributed to this optimistic trend. The decrease in unsold inventory indicates  strong demand, modern living preferences, and a bright future for the real estate sector in Delhi NCR.”  

Overall, the top three Southern cities of Bengaluru, Hyderabad, and Chennai trailed by 11% in unabsorbed stock. Unsold inventories have decreased by 8% in MMR and Pune in the region to the west. During the period under review, Kolkata, on the East Coast, experienced a significant decline in unsold inventory, which dropped by 41%. 

Ashish Sharma, AVP of Operations at Brahma Group, stated, “The real estate market in Delhi NCR has evolved significantly, resulting in a remarkable decline of approximately 57% of unsold residential properties in the last five years, highlighting the sector’s dynamism. Furthermore, NCR’s unsold stock fell from about 2 lakh units at the end of the first quarter of 2018 to 86,420 units by the end of Q1 2024. Additionally, regulations like RERA and GST have reduced the new supply developers offer in bringing buyers back into the market.  Furthermore, this positive trend will drive residential launches, including luxury projects, as the NCR’s demand for modern, luxurious, and integrated habitation spaces grows. It reflects the industry’s ability to adapt to changing market dynamics while meeting the rising expectations of discerning investors and buyers considering NCRR’s transformation process.” 

One of the reasons South India has been able to report a relatively low decline in unsold inventory is that supply has arrived at a rapid pace, particularly in Hyderabad, where new supply has been exceptionally high over the last two years. 

Finally, the NCR real estate market has undergone a significant shift, with a 57% decrease in collectively accumulated unsold housing inventory over the last five fiscal years. These reasons suggest that the development of the city’s economic growth, infrastructure, and government policies are among the key factors contributing to this significant decrease. As a result, Gurugram has emerged as a key market in India’s real estate market, attracting investors and end users. 

Why is residential real estate considered one of India’s safest investments?

The Indian real estate market experienced an unprecedented surge in 2023, outperforming all expectations and setting new records. Buyers are increasingly prioritizing homeownership over rental arrangements. 

As we navigate recent times, the Indian residential real estate market has emerged as a beacon of security for investors, allowing the housing market to shine for those seeking stability and growth. In 2023, the Indian real estate market experienced an unprecedented surge, far exceeding expectations and setting new records. Buyers are increasingly prioritizing homeownership over rental arrangements. 

It is expected to have a  promising 2024 as the month progresses, and in India’s ever-changing investment landscape, residential real estate stands out as a pillar of strength and dependability. What is the situation in 2024? As we navigate through recent times, the Indian residential real estate market is emerging as a beacon of security for investors, making the housing market shine for those seeking stability and growth. The Indian real estate market witnessed an unprecedented surge in 2023, surpassing all expectations and setting new records. Buyers are now placing a greater emphasis on owning a home rather than opting for rental arrangements.

It is expected to have a promising 2024 as the months go by, and in the ever-evolving landscape of investment opportunities, residential real estate in India stands tall as a pillar of strength and reliability. What is the situation in 2024? All factors indicate that it is a safe investment compared to other asset classes. 

Residential real estate is resilient 

Despite the challenges posed by the global financial crisis in recent years, India’s residential real estate sector has proven remarkably resilient. Early indications suggest that 2024 will be a promising year for the industry, with increased demand, particularly in urban areas with high development and infrastructure trends. India is positioned at the forefront, and this growth has been attributed to strong economic indicators and consistent demand, creating a positive sentiment among key contributors. 

Affordability and Availability of Luxury Homes 

Indian homebuyers have become more aspirational, seeking to live a luxurious lifestyle. According to a study, residential real estate will remain affordable while increasing threefold by 2024. The real estate sector has grown steadily due to continued urbanization, rental market expansion, and price appreciation. The repo rate cut is expected to be within the normal range, allowing home prices to remain affordable for buyers for an extended period. Metro cities like Bangalore would see affordable luxury, while people could purchase homes regularly. 

Urbanization and increased affordability. 

The Indian real estate sector is undergoing significant transformation, owing largely to the explosive growth of the country’s middle class and rapid urbanization, which is driving demand for affordable luxury housing in tier-1 cities. This segment is the foundation of India’s real estate market and is expected to grow further. The rise in incomes and demand for housing in urban areas has resulted in a massive urbanization process, which is the primary cause of urban India’s growth. 

Breakthrough performance 

The real estate market has been the primary driver of India’s growth story. Not only was the country’s economy the fastest growing, but real estate indicators were also at record highs. In retrospect, 2023 began with global inflation that threatened a full-fledged recession. Despite rising inflation, the real estate market performed well this year. A strong finish was seen across the cities, with Bengaluru leading the pack. The figures were unimaginable in the past, indicating strong expansion-driven growth. 

A thriving outlook. 

As the market prepares for a significant leap this year, there is an increase in demand for residential properties. It has become clear that property markets in India have grown significantly, with an increase in new launches and property sales. Fueled by overwhelmingly high sales and a thriving luxury segment, this instills confidence in developers, driving a supply pipeline and establishing major metropolitan cities as rapid real estate consumers. This promotes economic growth, stable interest rates, and a shift in public perception of property ownership, resulting in property ownership serving as a financial safety net. 

The Indian real estate sector, which is central to the economy and supports a variety of industries, is poised for continued growth. A strong economy, urbanization, rising incomes, government initiatives, and increased demand for various properties indicate a bright future. With a promising outlook, it remains one of the most secure assets for investors to hold in the future. 

Goa’s transition from tourist destination to luxury real estate haven

Goa, once known for its sandy beaches, vibrant nightlife, and as a popular tourist destination, is undergoing a remarkable transformation. This coastal paradise is now an appealing option for wealthy Indians investing in luxury real estate, transforming it from a vacation destination to a prestigious investment haven. 

The Change in Investment Motivations 

Lifestyle upgrades have traditionally fueled real estate investments in Goa. Buyers were primarily drawn to the region’s picturesque landscapes, laid-back lifestyle, and distinct cultural blend. However, recent trends point to a significant shift in investor motivation. Capital appreciation has now surpassed lifestyle and distinct cultural blend. However, recent trends point to a change in investor motivation. Capital appreciation has now surpassed lifestyle as the primary driver of real estate investment in Goa. This shift represents a broader return of investors to the market, fueled by the prospect of high returns on investment. 

Why go to Goa? 

Several factors contribute to Goa’s growing importance as a real estate hotspot. 

  1. There is a strong intrinsic appeal to Goa, despite capital appreciation. The picturesque coastline, lush greenery, and serene environment continue to attract buyers seeking a peaceful and luxurious lifestyle. 
  2. Economic Growth and Infrastructure Development: Goa’s economy has been steadily growing, supported by improvements in infrastructure. Enhanced connectivity through new highways, and bridges, and the development of a second international airport in Mopa have made Goa more accessible, further boosting its real estate market. 
  3. Regulatory Support: The state government’s pro-investment policies have helped to attract high-end real estate investors. Investment in Goa has become more accessible thanks to streamlined processes and developer incentives. 
  4. High Returns on Investment: Goa has significant capital appreciation potential. Properties in prime locations have appreciated significantly over the years, making them an attractive option for investors seeking high returns. 

The Boom in Luxury Real Estate 

The luxury segment of Goa’s real estate market has grown particularly well. High-net-worth individuals and celebrities are increasingly investing in luxury properties. Luxury real estate in Goa is in high demand, and choices vary from opulent villas with beachfront views to high-end apartments in gated communities. 

Developers are capitalizing on this trend by launching exclusive projects tailored to the tastes of the elite. These properties frequently feature cutting-edge amenities such as private pools, landscaped gardens, advanced security systems, and personalized services, which comply with global luxury living standards. 

Long-term Investment 

 Property in Goa is not only luxurious; it also represents a long-term investment. Three strict environmental regulations balance economic development with environmental preservation in the region. As a result, Goa’s natural beauty is protected and its property values are raised in the long run. 

Goa’s transformation from a tourist destination to a luxury real estate haven is a testament to its enduring allure and evolving market dynamics. As capital appreciation becomes the mainstay of investment motivations, Goa continues to attract the country’s wealthy promising both lifestyle upgrades and high returns on investment. 

A premier destination where natural beauty meets modern luxury, Goa stands out as an unbeatable investment choice in this evolving landscape. 

Mumbai Real Estate Deal: 360 One founder purchases two luxury apartments for over Rs 170 crore

Karan Bhagat, founder and CEO of 360 One (formerly IIFL Wealth & Asset Management), has purchased two sea-view properties in Oberoi Realty’s Three Sixty West project in Mumbai’s posh area Worli for over Rs 170 crore, according to documents accessed by Zapkey. 

The two apartments measure 12,896 square feet and are located on the 45th and 46th floors of the Three Sixty West project. 

Bhagat bought an apartment on the 45th floor for Rs 85.03 crore. The apartment has an area of 6448 square feet and four car parking spaces. The documents state the transaction was registered on May 22, 2024. 

The second apartment, on the 46th floor, is 6448 square feet and includes four parking spaces. Bhagat paid Rs 85.03 crore for the property, as per the documents. 

The documents show Bhagat paid over Rs6.44 crore in stamp duty to register the two luxury units. 

Bhagat purchased the apartments directly from Oberoi Realty, who sold them within three years of acquiring them from joint venture partner Sahana Group. Bhagat’s apartments are among the more than 60 units acquired by Oberoi Realty from project developer Oasis Realty. 

Emails were sent to Bhagat and Oberoi Realty. 

Oberoi Realty paid Rs 230.55 crore for a luxury penthouse at Three Sixty West in Mumbai’s posh Worli area on February 12, 2023. The company has reportedly acquired approximately 30,000 square feet through its affiliate RS Developers, making it one of the largest single deals in India. 

According to a regulatory filing, Oberoi Realty’s shareholders approved the acquisition of Oasis Reality’s Three Sixty West residential premises for up to Rs 4,000 crore in December 2022. Stamp duty and other expenses totaled Rs 204 crores. Oasis Reality has discharged  Rs 605 crore of its income tax liabilities. 

Kiran Gems promoters paid Rs 97.4 crore for a 16,000 sq ft sea-facing apartment at Oberoi 360 West in Mumbai, according to documents accessed by Zapkey.

 According to documents, the apartment measured 14,911 square feet (Rera carpet) and included 884 square feet of additional space.

In 2023, Welspun Group chairman BK Goenka purchased a penthouse in the same luxury project at Worli for Rs 230 crore, making it the second-biggest transaction in the city last year. The penthouse is located on Tower B’s 63rd floor and has a carpet area of 29,885 square feet. 

Madhav Prasad Agarwal of Sajjan India Group and IGE (India) Pvt Ltd bought two apartments in the Oberoi Realty luxury project in 2022 for Rs 151 crore and Rs 153 crore, respectively. The deal was among the top 10 real estate deals of the year. 

In 2023, Mumbai experienced an increase in high-end transactions after the finance minister removed the capital gain tax benefit for property sales above Rs 10 crore. 

In 2023, Sumir Chadha, co-founder and managing director of the private equity firm WestBridge Capital, purchased a luxury apartment on the 60th floor of the Oberoi Three Sixty West project in Worli for Rs 96.12.  

Last year, Everest Masala Group founder Vadilal Shah’s family purchased two apartments in Mumbai’s Oberoi Three-Sixty West project for Rs 143.50 crore. One apartment cost Rs 73.50 crore and the other Rs 70 crore. These luxury apartments include multiple parking spaces. 

In October 2023, Asha Mukul Agarwal, director at Param Capital Research Pvt Ltd, a leading capital market trading and investment firm, purchased three apartments in Lodha Group’s luxury project Lodha Malabar in South Mumbai for Rs 263 crore. 

D Mart owner Radhakishan Damani’s immediate family and close associate purchased 28 apartments in Three Sixty West’s Tower B FOR rS 1,238 CRORE IN 2023.  

Oberoi Realty’s Three Sixty West project consists of two towers: Tower A, with 66  floors and apartments, and Tower B, with 90 floors and 256 units, including 4BHK, 5BHK, and duplex configurations. It also includes two penthouses of 11,036 square feet each. 

The name for the sea-view project is most likely derived from its 360-meter height and the fact that all apartments face west. It is a ready-to-move-in ultra-luxury housing project. 

According to the MahaRERA portal, the Three Sixty West project is registered in the name of Oasis Reality as a promoter, with four promoters: SkyLark Buildcon Pvt ltd, Shree Vrunda Enterprises, part of Sudhakar Shetty’s Sahana Group, Oberoi Constructions Ltd and Astir Realty LLP, both promoted by Vikas Oberoi. 

Luxury residential housing sales increased by 151% in the January-March quarter of 2023, with Mumbai growing by 44% year on year and Delhi-NCR rising by 216%, according to the ‘India Market Monitor Q1 2023’ report released by CBRE South Asia Pvt ltd, a leading real estate consulting firm. 

In April 2024, 11,504 units were registered in Mumbai, a 9% increase from the previous year and contributing over Rs 1,043 crore to the state exchequer. According to data from the Maharashtra government’s Department of Registrations and Stamps (IGR), revenue from property registrations rose by 16% year on year (YoY) compared to the same period last year. 

Real estate is as safe as houses for FDI

Foreign Direct Investment (FDI) is a major driver of economic growth and a significant contributor to the expenditure that fuels the country’s development goals. The real estate industry is a cornerstone of the economy, employing the second-largest number of people after agriculture and having a multiplier effect on 270 other sectors. Forecasts for growth predict that it will reach USD 1 trillion by 2030. 

Foreign investment has increased significantly as the industry transforms. Certain sectors are currently barred from receiving foreign direct investment via automatic or government-approved channels. The real estate industry is one such sector. A real estate business is any entity that engages or intends to engage in real estate business, farmhouse construction, or trading in transferable development rights. FDI is not permitted in such organizations. 

However, the real estate business excludes the development of townships, building homes and commercial buildings, roads, bridges, and real estate investment trusts (REITs) governed by the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations 2014. FDI is thus not permitted in businesses that deal in land or immovable property solely for profit.

However, township development, construction of residential and commercial buildings, roads and bridges, educational institutions, hospitals, resorts, hotels, recreational facilities, city and regional-level infrastructure, townships, real estate broking services, and the earning of rent or income on leases of property that do not amount to transfer are not considered real estate business, and FDI is not prohibited. 

Where permitted, FDI is permitted up to 100% via the automatic route. Non-residents can invest in equity shares through compulsory and mandatory convertible debentures through FDI. Foreign direct investment (FDI) can be made in an Indian company’s fully compulsory and mandatory convertible preference shares via the automatic route, which requires no government approval. However, depending on the investment vehicle and industry in which the Indian company operates, both investors and the company may be required to report under the Foreign Exchange Management Act of 1999. They must also follow all relevant laws, regulations, and rules. 

FDI in construction development projects by automatic means is subject to certain conditions. A foreign investor may withdraw and repatriate their investment before the completion of a project or after the development of critical infrastructure such as roads, water supply, street lighting, drainage, and sewerage (trunk infrastructure), provided that a three-year lock-in period has expired. This lock-in does not apply to specific projects such as hotels, tourist resorts, hospitals, special economic zones, educational institutions, old-age homes, and non-resident Indian investments. All projects must adhere to applicable regulations, including land use requirements and community amenities, as laid out by the appropriate agency. The Indian company must obtain all necessary approvals from the relevant authorities and can only sell developed plots with pre-existing trunk infrastructure. 

According to the Department for Promotion of Industry and Internal Trade, real estate-related activities attracted USD 4.026 billion in foreign direct investment from April to December 2023. USD 185 million came from building townships, housing, infrastructure, and other construction projects. Real estate activities attracted USD 60.07 billion in FDI from April 2000 to December 2023, accounting for 9% of total FDI. FDI in the real estate sector has increased due to policy easing, significant growth in the property technology sector, strong demand for high-quality office space, and the emergence of alternative investment vehicles such as REITs.

The real estate market has grown significantly over time. The ever-increasing urban population has driven up demand for residential and commercial development. International investors have contributed capital and implemented global best practices. These have raised the quality of planning, construction, and design. There is a strong and resilient real estate market that attracts both domestic and international investors. It continues to draw domestic and international investors due to its strength and resilience. 

Boney Kapoor’s consortium outbids Akshay Kumar to build a 230-acre film city in Noida with a cinema museum and university

After months of delays, a consortium led by filmmaker Boney Kapoor won the bid to build the 230-acre Noida film city. 

A consortium led by film producer Boney Kapoor has outbid others led by actor Akshay Kumar and producer Bhushan Kumar to build Noida Film City, which will span 230 acres along the Yamuna Expressway. According to a Times of India report, the film city will include a firm university, a cinema museum, and a helipad, among other facilities. It is just  6 kilometers from the upcoming Noida International Airport. 

The final four bidders 

The greenfield project was presented to Uttar Pradesh government officials in June by Super Cassettes Industries Private Limited (T-Series), Supersonic Technobuild Private Limited (Dinesh Vijan’s Maddock Films, Akshay Kumar’s Cape of Good Films LLP, and others), Bayview Projects LLP (backed by Boney Kapoor, real estate company Bhutani Group, and Noida Cyber Park), and 4 Lions Films Private Limited (backed by filmmaker KC Bokadia and others).

The project is being developed using a public-private partnership (PPP) model. Bayview Projects LLB emerged as the company with the highest revenue share to the state government and thus was chosen as the greenfield project developer. The project’s bid was released on September 30, 2023, with a closing date of January 5, 2024. The bid for the development of Film City was floated for the third time in June, following two previous attempts that failed to attract investors. 

Bayview  Projects LLP will sign a concession agreement with the Yamuna Expressway Industrial Development Authority in June to take possession of the land. It will have six months from the signing of the contract to start construction. 

Noida Film City 

The Noida Fim City, a pet project of Uttar Pradesh Chief Minister Yogi Adityanath, is planned as an international project spanning over 1,000 acres (230 acres in the first phase) along the Yamuna Expressway. The project is located in Sector 21 of the Yamuna Expressway Authority, 6 km from the Noida International Airport. 

Of the 230 acres, 155 are reserved for the core film industry, and 75 acres are set aside for commercial development. The Film City will feature amenities such as a cinema museum, a film university, and a helipad, among others. 

Colliers report that foreign investors invest more than $4 billion in Indian real estate each year

Foreign inflows rebounded in 2023, rising 20% over the previous year to $ 3.6 billion. These investments went beyond traditional channels, expanding into alternative asset classes and supporting the strong growth in the domestic office, residential, and industrial segments. 

A favorable investment environment and rapid urbanization have established India as an attractive investment hub in the Asia-Pacific area because of its robust economy. 

As a result, numerous new funds are actively considering the market, while established global and sovereign funds such as Mubadala, Mitsubishi Fudson, PAG Credit & Markets, Cadillac Fairview, Korea Investment Corp, and PNB Malaysia are either increasing their investments or forming new collaborations to capitalize on the Indian market’s burgeoning opportunities. 

“2024 is expected to be a more dynamic year for both the Asia Pacific real estate markets and capital in the region, which will remain the dominant investor in global real estate. “The ability to act quickly, dig deeply into markets and sectors to identify value, and form productive partnerships will be critical to capitalizing on the region’s diversity and increased opportunity,” said Chris Pilgrim, Collier’s Managing Director of Global Capital Markets, APAC. 

Strong economic resilience, a favorable investment environment, and rapid urbanization have made India a highly desirable investment destination for international funds. 

With the International Monetary Fund (IMF) forecasting 5.7% GDP growth by 2024, India remains one of the world’s fastest-growing economies and a top choice among emerging Asia-Pacific (APAC) nations. Its appeal stems from attractive pricing, superior valuations, and promising yields for investors looking for profitable opportunities. 

Foreign inflows rebounded in 2023, rising 20% from last year to $3.6 billion. These investments went beyond traditional changes, expanding into alternative asset classes and bolstering the strong growth in the domestic office, residential, and industrial segments. 

New funds are expected to enter the Indian market shortly, maintaining investor interest. The residential, industrial, and alternative sectors expect renewed interest and income-generating office properties. 

“Investments in Indian real estate have been consistent in recent years, and they are likely to grow further as demand for capital changes structurally. Global investors have always been at the forefront, investing an average of $4 billion annually for the last five years, demonstrating their continued commitment and confidence in the sector. With an increase in performance credit, special situations, portfolio acquisitions, asset reconstruction, and related structures, the sector is expected to attract even more investment in the coming years,” said Piyush Gupta, Managing Director, Capital Markets & Investment Services at Colliers India. 

APAC countries show increased interest in Indian real estate. 

While the United States and Canada remain primary sources of capital, prominent APAC countries such as Singapore, Hong Kong, South Korea, and Japan are increasingly focusing on India’s burgeoning real estate sector. In 2023, investment inflows from the APAC region increased by 57% annually to $ 1.8 billion, with office assets accounting for 70%. 

Aside from office properties, APAC countries have shown interest in residential, industrial, and warehousing assets. The volume of investments has nearly doubled since 2019, indicating a significant increase in investor enthusiasm and confidence in India’s real estate sector. 

Looking ahead to 2024, investors are likely to become more involved in India’s real estate sector. This urge is driven by the country’s strong economic growth, favorable business conditions, and rising demand in numerous industries. The expectation of increased activity indicates confidence in the policy landscape, a narrowing gap between buyers and sellers, and investors’ eagerness to allocate more capital across various real estate asset classes. 

“In 2023, foreign investors accounted for 90% of all investment inflows into India’s office sector, demonstrating the strength of the underlying asset class. The industry is currently transforming. Furthermore, as sustainability becomes more important in investment decisions, the real estate sector, including India’s office market, is poised to align seamlessly with global Environmental, Social, and Governance (ESG) standards,” said Vimal Nadar, Senior Director and Head of Research at Colliers India. 

The rising number of high-rises in Delhi

The skyline of Delhi is changing dramatically as the number of high-rise buildings grows. Luxury high-rise living was once only associated with cities like Mumbai, Bangalore, Hyderabad, or Gurgaon, also known as the “millennium cities,” while Delhi was primarily a low-density landscape. While the city continues to offer low-rise developments, times and building regulations have changed. Over the last 13 years, there has been an increase in luxury high-rise residential apartments throughout the capital. Continue reading as this article delves into the various factors driving the surge in high-rise construction in Delhi. 

Top reasons for the growth of high-rise buildings in Delhi 

Let us take a look at the factors that have contributed to the growth of high-rise structures in Delhi: 

New housing projects by renowned developers 

Renowned developers are building high-rise residential complexes in Delhi at a rapid pace. These projects provide modern amenities, cutting-edge facilities, and luxurious living spaces that cater to changing tastes. These new housing projects attract buyers due to their innovative architectural designs and sustainable construction practices. 

M2K Group, a developer in North Delhi, is capitalizing on this trend with projects like M2K Victoria Gardens on Ring Road. This upscale residential complex offers three-, four-, and five-bedroom apartments and luxurious penthouses with private terraces, a double-height lobby, and a private lap pool. The project spans over 4.54 acres and includes 338 units in six towers. M2K Victoria Gardens, which sits next to 5.36 acres of DDA-maintained greenery, stands out for its amenities. 

Increased demand for modern lifestyle amenities 

With changing lifestyles and rising disposable incomes, Delhi’s urban residents increasingly want modern amenities and luxury living spaces. This premium project includes everything from landscaped gardens to solar water heaters, and a treated drinking water supply. M2K Victoria Gardens, managed by BVG India Ltd, provides exclusive amenities such as mechanized parking, concierge services, a laundromat, and an automated car wash. 

However, the project’s focal point remains Club Victoria, an elite multi-purpose clubhouse that provides M2K Victoria Gardens residents with a world of leisure and recreation. Imagine having a luxurious spa and salon day within the walls of your housing society. Imagine working out in the cutting-edge fitness center or relaxing by the Jacuzzi or swimming pool while your children are safe in the creche. That is not all! Club Victoria is a world apart, with a home theatre, sports and fitness center, creche steam room,  multi-purpose event hall, and party terrace. 

M2K Victoria Gardens residents may also use additional amenities like virtual golf. The project includes a multi-activity area with landscaped gardens, an art gallery, a board game zone, a bonsai court, a shared book library, a pottery zone, and an arts and crafts zone. Besides, it also has a children’s playcourt and toddlers’ zone. 

According to Dr Vishesh Rawat, Vice President & Head of Sales, Marketing, and CRM at M2K Group, “As the demand for luxury grows, penthouses are the ultimate choice for those seeking grander and more spacious layouts. We at M2K Group are at the forefront of the trend with ready-to-move penthouses in our project, M2K Victoria Gardens on Ring Road in North Delhi.”

Increasing population density in urban areas 

The rapid urbanization of Delhi has resulted in a significant increase in population density over the last decade. As more people move to the city in search of better opportunities, demand for housing has increased. High-rise buildings emerge as a practical solution for meeting the housing needs of an expanding urban population while using up limited urban space.

As the city becomes more congested, living 30-40 meters above ground level reduces noise and air pollution, thus improving quality of life. Furthermore, given the scarcity of land for horizontal expansion, vertical development provides a viable option for optimizing land use and accommodating a greater number of residential units in a smaller space. Aside from preserving green spaces, vertical growth ensures the city’s long-term development, essential in the modern urban setting.  

Higher restrictions 

As Delhi struggles with overcrowding and a lack of land, both the Delhi Development Authority (DDA) and the central government acknowledged the need for change to adapt to the city’s changing landscape. The city’s master plan was modified in 2013, and height restrictions were relaxed. As a result, developers can now build high-rises on land parcels of 3,000 square meters or larger. Furthermore, in 2014, the FAR (Floor Area Ratio) for plots measuring 750 sq m to 1,000 sq m was increased from 150 percent to 200 percent, while the FAR for plots measuring 1,000 sq m or more was increased from 120 percent to 200 percent. 

Similarly, ground coverage was increased from 40% to 50% for plots measuring 1,000 sq m or more, and remained at 50% for plots measuring 750-1,000 sq m, ensuring optimal land utilization. This move cleared the way for developers to launch ambitious high-rise residential projects across Delhi. By embracing vertical growth, developers hope to maximize land utilization while meeting the city’s rising housing demand. 

Rising  disposable income

Delhi’s strong economic growth and rising affluence have created a growing demand for more upscale housing options. In contrast to low-rise developments, high-rise developments cater to the aspirational lifestyle of affluent homebuyers who value exclusivity, sophistication, and luxury in their living spaces. With rising disposable income, more people prefer high-rises for investment purposes. 

To summarize, the growth of high-rises in Delhi is driven by several factors, including new housing projects by eminent developers, increasing population density, limited land availability, demand for modern amenities, and economic growth, which fuels demand for upscale housing options. As the city grows and urbanizes, high-rise buildings will play an increasingly important role in shaping its skyline and meeting the housing needs of its residents. 

Indian REITs are expanding rapidly as office demand surges

With a market capitalization of $8 billion, three office REITs collectively own approximately 100 MSF of space, or about 12.5% of the total office stock. 

All metrics of office demand in India are showing positive momentum, and real estate investment trusts are rapidly expanding their portfolios through acquisitions. 

When Embassy Office Parks REIT was launched in 2019, it had slightly more than 24 million square feet. In five years, it has increased its completed area by 47%, adding 12 million to 12 million square feet through acquisitions. It now has over 45 million square feet of gross leasable area. 

The three office REITs- Embassy REIT, Brookfield India Real Estate Trust, and Mindspace Business Parks REIT– collectively own approximately 100 million square feet of office space, accounting for 12.5% of India’s total office stock, with a market capitalization of $8 billion.  

India’s office sector demand is growing by double digits. The monthly rental square foot is approaching the Rs 100 mark. Occupancies have risen to the mid-80s. Most significantly, globally capability centers have focused on India, with approximately 800 GCCs expected to be added over the next 6-7 years, increasing demand for offices. 

Acquisitions 

Embassy REIT acquisitions have primarily come from its sponsor, the Embassy group, based in Bengaluru, and all of its assets are concentrated in India’s IT capital. Last month, it arrived in Chennai with another acquisition from its sponsor, a 5 MSF business park that will take its total portfolio above 50 MSF. It also has a future development area of 2 MSF.

Brookfield REIT increased its operating area by 47% last year, primarily through acquisitions, and another 16% increase is expected following an acquisition announced last week.  

In FY24, it acquired 6.5 million square feet of space in the National Capital Region and Mumbai, and it plans to add another 3.3 million square feet by purchasing Bharti Enterprises’ 50% stake in a joint venture with its parent entity Brookfield. The REIT has the first right to offer the remaining stake, while other properties developed by Bharti Realty in Delhi are potential acquisition targets.  

Its parent, Brookefield, owns 54 million square feet of office space in India, which serves as an opportunity pipeline for the REIT. 

Last year, Mindspace REIT made two small acquisitions in Chennai and Pune, while also developing a mixed-use asset for its sponsor in Mumbai. It also has the right to first offer on other assets that its sponsor owns. Its sponsor, K Raheja Corp, has approximately 15 million square feet of pipeline in the form of completed or in-development assets. This presents a potential growth opportunity for the REIT since it’s also looking into third-party assets. 

According to a recent CREDAI-CRE Matrix report, office demand will exceed 70 million square feet by 2024, due to the government’s emphasis on manufacturing expansion and investing in digital and physical infrastructure. Each of these is expected to boost office absorption and create new opportunities for REITs. 

Fractional ownership is driving a paradigm shift in real estate investment

Fractional Ownership is an investment model aimed at retail investors who can gain access to the high-value commercial segment. 

With the real estate sector expanding across key markets, driven by demand sales, investors are increasingly looking for ways to capitalize on the bullish run. The real estate sector has matured due to regulatory changes, which has sparked investor interest. What truly democratized the industry was the introduction of investment concepts such as Fractional ownership, which allows individual or retail investors to invest in high-value properties while earning fixed returns on rent-generating assets. 

While alternative investment options such as AIFs and REITs are gaining popularity in India as profitable and effective investment vehicles, they are primarily geared toward institutional and high-net-worth investors. On the other hand, investment models such as Fractional Ownership are aimed at retail investors, who can access the high-value commercial segment through this model. The good news is that this model provides new avenues for retail investors yet allows developers to consider various funding options.  

According to a report by a leading real estate consultant, the market for fractional ownership in India was USD 5.4 billion in 2020 and is expected to reach USD 8.9 billion by 2025, growing at a 10.5%  CAGR. This is an unambiguous sign of fractional ownership’s rapid growth as a viable investment opportunity. 

Fractional Ownership became more popular among investors after SEBI proposed various Fractional Ownership Platforms (FOPs) to register with SEBI MSM REITs and made it mandatory to follow some specific registration procedures. According to the proposal published by a leading real estate firm, MSM REITs should include separate and distinct entities serving as trustees, sponsors, and investment managers. SEBI also proposes that MSM REIT be established as a Trust under the Indian Trusts Act, with the ability to create separate schemes for owning real estate assets. This would be accomplished through SPVs (Special Purpose Vehicles) established as companies under the Companies Act of 2013. MSM REIT Scheme shall have complete control and 100% equity share capital in all SPVs. 

These regulatory changes benefited investors because they can now leverage benefits such as fair pricing, transparent transactions, and the flexibility and opportunity to exit or liquidate their investment at any point. 

With the digitization and technological advancement of the real estate industry, investors can also benefit from easy tracking via web-based FOPs, making it easier for them to make data-driven decisions. It also provides visibility previously unavailable when proper real estate investment space was not in place. 

Diversification is another important factor that has redirected investors to fractional ownership, particularly since the pandemic, when the stock and commodity markets have become volatile. The uncertainties caused by global economic headwinds necessitated the exploration of more promising avenues and markets. In contrast, India’s real estate market has continued to show promise, with the commercial segment breaking records for leasing and demand. According to a report, the Indian Commercial Real Estate Market is expected to grow at a CAGR of 21.1% between now and 2028, from USD 33.62 billion to USD 87.57 billion. 

As India’s ease of doing business index ranking improves in the coming years, more global corporations will establish their headquarters here. Global occupiers in sectors IT, manufacturing, BFSI, startups, and the booming service industry will require high-quality workspaces for their employees. These will result in more Global Occupier Centers (GCCs) operating from India’s key cities, thus increasing and accelerating demand for Grade-A office assets. In this scenario, fractional ownership will benefit both developers and investors. As the sector grows, fractional ownership will continue to open up new opportunities for investors in the coming years. 

The survey reveals strong post-COVID growth in the Indian real estate market

According to a recent survey by Shree Katariya & Associates (SKAA), the Indian real estate sector has demonstrated remarkable resilience and growth following the outbreak of the COVID-19 pandemic. The survey, titled “Consumer Outlook on Indian Real Estate Market- Post Covid-19 Growth Analysis,” sought to understand home buyers’ evolving preferences and sentiments in the aftermath of pandemic-induced changes. 

Positive Growth Trends 

Despite global economic uncertainties, the Indian real estate market is expected to reach an all-time high in 2023, with over 2.82 lakh units sold. Forecasts predict that sales will exceed 3,00,000 units by 2024, with annual growth of 10-15%. 

Several factors contribute to this resilience, including government initiatives, consistent economic indicators, and infrastructure projects such as the Smart City initiative. Low unemployment, inflation, and significant wage increases contribute to a positive market outlook. 

Changing Consumer Preferences. 

The survey reveals significant shifts in buyer preferences and budget allocations since COVID-19. The growing demand for larger homes and dedicated office spaces reflects the changing dynamics of remote work culture. Homeownership is increasingly recognized as a tangible asset in investment portfolios. 

Investment Preferences 

Real estate is the preferred asset class for investment in 2024, with 58% of respondents indicating a preference for property. This sentiment stems from the perceived importance of homeownership and the potential for high returns on investment. While stocks and mutual funds receive 26% of the votes, gold and fixed deposits receive only 4% and 12%, respectively. 

Optimistic market outlook 

The vast majority of respondents (71%), see the current period as an ideal opportunity to buy property, citing the importance of homeownership during the pandemic and the promise of higher returns on investment. Only 2% hesitate due to rising property prices and personal circumstances. 

Property Price Expectations

The survey shows widespread optimism about property prices, with 87% expecting further growth. Sixty-nine percent expect a steady increase, while 18% believe they will rise, but not as quickly after COVID-19. 

Ideal property types and budgets. 

Residential plots are the top choice for 41% of respondents, followed by villas/row houses (27%), and flats/apartments (24%). 78% of property seekers prefer properties under Rs 50 lakhs, making affordability a top priority. 

End users vs. Investors 

While 53% of respondents buy property for personal use, 47% are investors, indicating a balanced market dynamic. Surprisingly, 67% of investors are salaried, showing a shift in investment behavior toward long-term property ownership. 

Prefer ready-to-move properties. 

More than 42% of respondents prefer ready-to-move-in properties to avoid delays and ensure immediate occupancy. However, as the pandemic fades, Millennials and Generation X are turning towards properties in their early stages, indicating a shift from end-users to investors. 

Challenges ad Opportunities 

Lack of funds, a limited understanding of financing options, exploring other options, and personal circumstances are all major roadblocks to deciding on a product. However, there is some hope because 37% of respondents are willing to buy if they find the right deal. 

Summary 

Anil Katariya, Founder & CEO of Shree Katariya & Associates, emphasizes the importance of SKAA’s survey, which provides valuable insights into the changing landscape of the Indian real estate market. Despite challenges, the sector is growing due to changing consumer preferences, positive market sentiment, and attractive investment opportunities.  With this information, stakeholders can make more informed decisions about the best way to handle the market’s fluctuations. 

5 Things You Should Know About India’s Ghost Shopping Malls and the Challenges of Repurposing Them

While the number  of Grade A malls has  increased across the country, there has also been a 59% year-on-year increase in low-performing shopping malls, with approximately 13.3 million square feet of retail space classified as “ghost shopping centers.” Here’s a look at why  Indian shoppers are leaving Grade C malls and how some of these assets are used to monetize land parcels. 

As of 2023, Grade A shopping center stock with enviable occupancy, strong tenant mix, good positioning, and active mall management accounted for 47% of total shopping center space, totaling 58.2 million square feet across the country.  

Grade B shopping center stock, with a decent occupancy and tenant mix, contributed  31% with 39.7 million square feet. Grade C stock, on the other hand, with high vacancy rates, inferior tenant mix, and poor mall management, contributed the least (22%), as these assets contain 27.2 million square feet of leasable space, according to a new Knight Frank India survey.  

What are ghost malls? 

Ghost shopping malls are underperforming malls with a vacancy rate of more than 40%. The number of such malls increased to 64% last year, up from 57% in 2022, across eight major cities. There was a significant in low-performing retail assets in eight major Tier 1 cities. 

In 2023, 64  shopping malls with approximately 13.3 million square feet of gross leasable area will be classified as ‘Ghost Shopping Centers’. This has grown by nearly  59% from 8.4 million square feet in 2022.

According to the Knight Frank Survey, underperforming malls were either demolished for residential or commercial projects (including co-working spaces), closed permanently, or auctioned off. 

Why do Indian shoppers prefer Grade A over Grade C malls? 

The rise of online shopping has been the primary cause of this shift in consumer behavior. 

Poor design, unappealing brands, ineffective management, a lack of maintenance, uninviting exteriors, insufficient infrastructure surrounding the mall, and fierce competition from Grade A malls all contribute to a drop in consumer foot traffic. 

Grade C shopping centers in NCR, Mumbai, and Pune were demolished to make way for the construction of housing inventory. 

According to Knight Frank India report titled ‘Think India Think Retail 2024: Shopping Centre and High Street Dynamics Across 29 cities,’ in 2023, some Grade  C shopping center assets in Tier 1  cities such as the NCR, Mumbai, and Pune were demolished to make way for the construction of residential inventory to monetize the land parcels, as demand for residential units has been strong since the pandemic. 

Many of these ghost malls nationwide have been prime targets for brownfield activity, which involves repurposing them for new uses. “Such ghost malls are repurposed primarily due to shifting consumer preferences, changes in retail dynamics, and economic factors that render their original purpose unsustainable,” Vivek Rathi, National Director of Research at Knight Frank India, told HT Digital.  

The cities with the most ghost malls are  

According to the Knight Frank survey, 64 abandoned malls in eight cities account for 75% of the total 125.1 million square feet of gross leasable area. According to the study, Delhi-NCR has the highest concentration with 21 ghost shopping centers (5.3 million sq ft), followed by Bengaluru with 12 (2 million sq ft), Mumbai with 10 (2.1 million sq ft), Kolkata with 6 (1.1 million sq ft), Hyderabad with 5 (0.9 million sq ft), Ahmedabad with 4 (1.1 million sq ft), and Chennai and Pune with 3  (0.4 million sq ft). 

Repurposing ghost malls is challenging due to zoning restrictions and strata ownership. 

Challenging repurposing into alternative types is frequently caused by regulatory barriers such as zoning restrictions and permit conversions, or, more specifically, strata ownership with multiple owners, which makes it difficult to reach a common ground for repurposing or selling out, explains Rathi. 

Furthermore, structural issues may arise, necessitating extensive renovations to convert spaces originally designed for retail into residential, office, or educational uses. 

Financial constraints can also be an issue, as repurposing projects often require large investments. He explained that once a decision is made to proceed, market demand for specific alternative uses is carefully evaluated to ensure viability and maximize returns. 

Noida directs real estate developers to pay dues and get registry permission

On May 9, the Noida authority directed real estate developers to pay their debts and obtain permission to register apartments in the name of thousands of homebuyers suffering for years. 

The direction came from the authority during an evening meeting with realtors at the Sector 6 office. The developers assured the authorities to pay the land costs fees and obtain permission for the registries. 

On December 21, 2023, the Uttar Pradesh government approved a policy to address stalled legacy housing projects. According to the policy, a realtor had to receive interest waivers for two years during Covid 19, pay 25% of the land cost dues in 60 days, and the remaining 75% in one to three years. 

Few realtors have utilized this scheme, negatively impacting homebuyers’ interests and wrestling in a revenue loss of approximately Rs 14,000 crore for the authority. 

“We have directed the realtors to use the scheme and pay the dues as soon as possible; otherwise, 5he authority will take appropriate action under the rules. According to Lokesh M.,  only  16 realtors have paid the Rs 115 crore dues and obtained a registry for approximately  1,400 apartments. 

Only 525 registries have occurred so far. 

“So far, only  525 registrations have taken place. We have directed the realtors to use the scheme. At least 42 out of 57 realtors had agreed to use the scheme. “We have asked the rest to use the scheme. “We have asked the rest to use the scheme,” he said. 

“We will send a report about today’s meeting to the state government, which requested it,” the CEO stated. 

Among 96  realtors who were held up and delayed, Greater Noida Authority recovered 276 crore. 

“We completed 2,637 apartment registries after realtors paid the dues as per state government policy. Ravikumar NG, CEO of Greater Noida Authority, stated that 40 projects will generate approximately Rs 1,200 crore in dues. 

During a meeting with realtors on Wednesday at Greater Noida’s Knowledge Park-IV office, the authority stated that if they do not use the scheme and pay the dues, the property will be attached and the housing project’s allotment will be canceled. 

This is all about the stalled legacy housing project policy. 

According to officials, Yogi Adityanath approved an interest and penalty waiver for a “stalled legacy housing project” on December 21, 2023. 

The policy was intended to assist millions of homebuyers in the Noida, Greater Noida, and Yamuna expressway areas, where an estimated 240,000 to 350,000 housing units are currently stalled reasons. 

The Confederation of Real Estate Developers Association of India (CREDAI), a lobbying group for realtors, was present at both meetings in Greater Noida on May 8 and May 9. 

“The realtors are using the scheme and getting registry permission. We are pursuing more and more realtors to use the scheme and help buyers get registry done,” said secretary (CREDAI) Dinesh Gupta.   

DLF to enter Mumbai and Goa this year with luxury homes; more information here

DLF, a real estate developer, plans to enter the Mumbai residential market in the second half of the current fiscal year (2024-25), with flats priced between Rs 6 and 8 crore, according to Akash Ohri, its joint managing director and chief business officer, who spoke with Business Standard on Wednesday. 

The Gurgaon-based realtor will be in his second inning in Mumbai. About 11 years ago, the firm exited the financial capital market. 

In an exclusive interview, Ohri revealed that the developer will also launch 62 villas in Goa, priced between Rs 40-50 crore, in the second or third quarter of FY25. 

“We plan to visit Goa next quarter,” Ohri said. 

Earlier this week, DLF reported a 62% increase in its consolidated net profit to Rs 920.71 crore for the quarter ended March 31, compared to Rs 570.01 crore in the same period last year. 

Its total sales bookings fell by 2% to Rs 14,778 crore from a record Rs  15,058 crore last year. It plans to increase sales bookings by  15% to Rs 17,000 crore in fiscal year 25. 

DLF is the country’s largest real estate company by market capitalization. 

On Wednesday, Ohri said that non-resident Indians (NRIs) contributed 22-23% of total sales bookings in FY24. 

The NRI contribution to the recently launched Rs 5,590 crore project Privana West, which sold in three days, was 27%. 

For FY25, DLF  intends to maintain an NRI contribution of 22-25  percent. 

“We will not do more than that this year; we have a lot of domestic users, so we set quotas,” he said. 

Furthermore, DLF hopes to generate Rs 3,500-5,000 crore in total sales bookings from super luxury apartments out of Rs 17,000 crore. 

Apart from Goa and Mumbai, Ohri stated that DLF would launch luxury housing projects at DLF Phase-5 in Gurgaon. It would be revealed following the launch of villas in Goa. 

The upcoming DLF phase 5 project in Gurgaon is expected to outperform its ultra-luxury housing project The Camellias, where an apartment recently sold for Rs 100 crore on the secondary market.

What is luxury real estate, and why is it booming in India? Here’s Everything you should know about the investment!

India’s real estate market is undergoing a seismic shift, with the luxury housing segment experiencing unprecedented demand growth. Rising incomes, growing aspirations for upscale living, and a preference for modern amenities have fueled this transformation, increasing luxury home sales nationwide. 

In a recent development that exemplifies this trend, DLF, India’s largest developer, sold out 795 apartments worth Rs 5,590 crore three days after launching its latest luxury housing project in Gurugram. This builds on the success of previous projects, including ‘The Arbour,’ which saw pre-launch sales of Rs 8,000 crore in a similar timeframe. 

Non-resident Indians (NRIs) have played a significant role in driving the luxury housing market. NRIs have emerged as key contributors, accounting for nearly 25% of total residential sales at major developers. The allure of luxury properties, combined with the promise of exclusivity and modern amenities, has captivated both domestic and international buyers. 

According to property consultant Anarock Group, the share of luxury homes sold in India has tripled over the last five years, with luxury properties accounting for 21% of all residential units sold across the top seven Indian cities in the first quarter of 2024, up from 7% in 2019. 

Ashish Kukreja, Founder and CEO of Homesfy.in emphasized the underlying reasons for the underlying reasons for the rise in luxury home sales. Luxury real estate investments are attractive in India due to economic growth and the projected doubling of affluent individuals within three years. 

Kukreja stressed that investing in luxury real estate provides not only luxurious living spaces, but also long-term value and profit potential. The concentration of wealth among high-net-worth individuals has boosted demand for exclusive properties, particularly in prime locations such as  Delhi-NCR, Mumbai, Pune, Hyderabad, and Bangalore. 

Furthermore, luxury properties have historically shown lower volatility and served as a hedge against inflation, making them an appealing asset class for sophisticated investors seeking prestige and profit. 

Kukreja stated, “Industry analysis bodes well for the future of luxury real estate in India, projecting an 8-10% increase in property prices across key cities over the next two years, solidifying its long-term investment potential.” This projection is consistent with the prevailing sentiment among affluent investors, as evidenced by a recent survey in which 56% of high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) expect the Reserve Bank of  India to lower interest rates in 2024. This optimism is fueled by anticipated rate decreases and other factors such as  limited inventory and the fear of missing out (FOMO), which collectively influence purchasing  behaviors, reinforcing the appeal of luxury real estate as a compelling investment avenue for discerning investors.” 

The current trend of premiumization is a significant contributor to this surge. With India experiencing rapid wealth creation and pent-up demand from the COVID-19 pandemic, consumers are increasingly drawn to luxury products and experiences. This trend has spread to the real estate market, where wealthy individuals build their portfolios by investing in luxury properties. 

According to India Sotheby’s International Realty’s annual Luxury Outlook Survey 2023, ultra-high-net-worth individuals are bullish on real estate, with 75% expecting the sector to thrive in the coming years. Notably, 61% think about costly homes, indicating a growing demand for high-end residential properties. Key cities such as Delhi-NCR, Mumbai, Goa, and Bengaluru are becoming popular locations for luxury real estate investments. 

Another factor driving the luxury housing boom is a scarcity of high-end apartments in desirable locations. Due to a shortage of luxury housing options in cities like Gurgaon, wealthy buyers are in search of exclusive properties with modern amenities and sophisticated designs. The shift from traditional bungalows to posh apartments reflects changing preferences among high-net-worth individuals, who prioritize security, convenience, and exclusivity. 

The influx of NRI investments is driving up demand for luxury housing in India. NRIs now account for nearly a quarter of total residential sales at major developers, up significantly from pre-pandemic levels. 

Meanwhile, the increase in luxury home sales has changed the trends in the property market, with the affordable housing segment losing market share. Affordable housing, which once dominated the market with a 37% share, has now dropped to around 18%, highlighting homebuyers’ changing preferences in the current climate. 

Among the top seven Indian cities driving demand for luxury homes, the National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR) are key hubs. In the National Capital Region, luxury homes accounted for 39% of all residential units sold in the first quarter of 2024, a significant shift from the affordable segment’s dominance in 2019. Similarly, the MMR has emerged as a luxury housing hotspot, attracting buyers looking for high-end properties with world-class amenities. 

Other cities, including Hyderabad, Bangalore, Pune, Chennai, and Kolkata, have distinct market dynamics, with strong demand for mid to high-end properties. Bengaluru, Chennai, Pune, and Hyderabad saw the highest sales in the mid-range and premium housing segments in the first quarter of 2024, reflecting homebuyers’ diverse preferences across regions. 

CBRE decodes real estate through the spiritual tourism lens

The report highlights the strategic move by retail chains to leverage the increase in spiritual tourism in 14 key cities in India. 

Bengaluru: CBRE’s ‘Decoding Real Estate through the Spiritual Tourism Lens’ report highlights retail chains’ strategic move to capitalize on the surge in spiritual tourism across 14 key Indian cities. 

This report examines some of the key real estate categories and trends influencing these destinations, which include Amritsar, Ajmer, Varanasi, Katra, Somnath, Shirdi, Ayodhya, Puri, Tirupati, Mathura, Dwarka, Bodh Gaya, Guruvayur, and Madurai. 

Furthermore, the report provides a comprehensive overview of India’s tourism landscape, including information on government policies that promote community-based tourism. It also includes an extensive case study of Ayodhya, highlighting its future growth prospects and opportunities. 

Key findings of the report include: 

  • The increase in spiritual tourism can be attributed to improved infrastructure, such as well-connected roads, airports, and public transportation, along with the development of various lodging such as hotels, guesthouses, and wellness centers. 
  • Younger generations seeking cultural immersion and spiritual growth are driving the trend toward experiential travel.  
  • Wellness centers and hospitality brands are forming partnerships in response to changing spiritual tourist preferences, with hotel chains such as Marriott, Taj, and Hyatt adapting their offerings to capitalize on this trend. 

According to the CREDAI-CRE Matrix report, India’s demand for Grade-A office space will exceed 70 million square feet by 2024.

Market rentals across Grade A spaces increased by 8.7 percent QoQ in Q1CY24.   

According to a CREDAI-CRE Matrix report, Grade A office space leasing demand in India will exceed 70 million square feet (MSF) by 2024. 

According to the report, Grade A office demand in India increased by 12 percent quarter-on-quarter (QoQ) and 14 percent year-on-year (YoY) in the first quarter of the calendar year 2024, reaching 16.7 million square feet. 

Bengaluru, MMR (Mumbai Metropolitan Region), and Delhi-NCR (National Capital Region) were the primary drivers of the increase in demand, accounting for nearly two-thirds of total office demand. According to the report, the top three cities experienced a 23% increase over the previous year. 

Market rentals in Grade A spaces increased by 8.7 percent QoQ in Q1CY24 nationwide. 

The report also highlighted the size of larger deals (more than 1 lakh sqft) driving office demand. In the first quarter of CY 2024, occupiers leasing more than 1 lakh sqft accounted for  56% of the total up from 36% in the fourth quarter of CY 2023 and 33% in the first quarter of CY 2023. Bengaluru, Hyderabad, and Noida accounted for 66% of these deals over one lakh square feet. 

CREDAI President Boman Irani stated that Grade A spaces have seen a significant increase in demand over the last 4-5 years, primarily from GCCs and the IT sector. 

“Our forecast for pan-India grade A office demand will be 70 million square feet by 2024 due to strong economic fundamentals and significant investment in physical and digital infrastructure.” This forecast demonstrates not only the commercial real estate sector’s resilience, but also the vast opportunities that developers, corporations, and investors face,” Irani said. 

In the resurgence of office space use, the IT/ITeS sector emerged as the dominant force in leasing demand, accounting for approximately 28% of office space requirements. Meanwhile, the BFSI sector’s share of leasing demand grew from 16 percent in the first quarter of fiscal year 2023, and 13 percent in the fourth quarter of the same year to 20 percent in the first quarter of fiscal year 2024. 

According to Abhishek Kiran Gupta, CEO and Co-founder of CRE Matrix and IndexTap, the upcoming quarters will see a rise in office supply completions. With market rentals geared toward landlords in key markets, leasing business volumes will also increase. 

“As rentals rise in prime markets such as NCR, Bengaluru, and  Mumbai, we expect to see larger deals in cities like Pune, Chennai, Hyderabad, and Noida, where occupiers are willing to pay a premium for high-quality space. The new government’s budget is also expected to boost the infrastructure and BFSI sectors, which will likely keep rental rates rising,” he added.

Bengaluru’s rental market: Will zero deposit rentals alleviate tenants’ woes?

The return-to-work mandate has resulted in a significant migration of people back to their work cities, driving up demand for rental properties. As a result, city rentals have skyrocketed, particularly in Bengaluru. The IT city’s rent has increased by nearly 30%, requiring prospective tenants to pay landlords a security deposit of 7 to 10 month’s rent.  

Tenants in Bengaluru have struggled in recent years to keep up with landlords’ ever-changing demands, with some even checking tenants’ LinkedIn profiles. There have also been instances where property brokers have scheduled appointments for tenants for interviews with landlords, prompting many tenants to comment that passing a ‘rental’ interview may be more difficult than passing a job interview. 

Recently, the zero deposit rental scheme was launched in Bengaluru. Under the scheme, the prospective tenant enters into a rental bond with the landlord and the third party who executes it for a small one-time fee. The rental bond serves as a guarantee to landlords, providing financial security in the event of tenant default by covering unpaid rent, utility bills, violation of lock-in periods, and property damage. 

How does the zero-deposit rental scheme work? 

Harish, who works for a business processing outsourcing firm in Bengaluru, had difficulty renting homes and had to pay large rental deposits each time he moved. He recently opted for the zero-deposit rental scheme for an apartment in Sarjapura. The scheme requires him to sign a Rs 3,000 rental bond  (instead of Rs 50,000) and pay a monthly Rs 13,000. 

The zero deposit model requires tenants to pay an upfront yearly premium, typically around  6% of the probable deposit or bond value, equivalent to the minimum return on investment. In addition, tenants pay up to a 10% rent premium for access to zero-deposit properties. Rent increases and credit-verified tenants can entice landlords to increase rents.

For example, if the rent is Rs 10,000 per month, the tenant must pay Rs 10,500, nearly Rs 500 more each month, and a one-time payment of Rs 3600 when signing the rental bond. Landlords will no longer need to collect a 60,000 security deposit from tenants upfront. 

“This financial product aims to bridge the trust gap between landlord and tenant by providing much-needed security to the landlord. Amit Kumar Agarwal, CEO and Co-founder of NoBroker.com explains that the tenant only pays a one-time fee when executing the rental bond. 

The company has launched the rental product in Bengaluru and is testing it in other cities, including Mumbai and Delhi-NCR. 

Rental bonds are also popular in international markets like Brazil. QuintoAndar, a rental property startup, had previously launched a similar product in the country. The business model was based on connecting those looking for apartments with those renting them out. 

“While the problem of high rental deposits faced by tenants in Brazil was similar to that faced by them in Bengaluru, we attempted to localize the product for the Indian market,” said Agarwal. 

“We discovered that nearly 40% of Bengaluru resident’s salary is spent on rent. This often puts a financial strain on anyone moving to a new city for work. There have also been reports of people asking if they can get a personal loan to pay for high rental security deposits,” he said, adding that the rental bond aims to address these issues by requiring the tenant to pay only about 6% of the amount he would have paid upfront as a security deposit.  

The rental bond is valid for six to eleven months, depending on the length of the lease agreement. It has to be renewed every year. 

“The rental sector has seen unusually high inflation, and Bengaluru tenants, already dealing with rental inflation, are now facing exorbitant deposits. A Bengaluru landlord typically requests a deposit of four to ten months’ rent. Agarwal stated that zero deposits are a solution that meets the needs of both landlords and tenants.  

How has the zero-deposit rental scheme performed so far?  

According to a recent NoBroker survey, 35% of Bengaluru tenants are willing to rent with no deposit. The city leases 5% of its rental properties through the rental bond. The product has been available in the market for merely a year. 

However, some real estate believe won’t want to rent a property without a security deposit. No landlord will rent out a property without a security deposit because it is collateral for any wear, tear, or damage the tenant may cause. It also allows the landlord to recover dues if the tenant fails to pay them in any way, and it can be set aside as a fixed deposit for the duration of the tenancy to earn some interest,” said Prashant Thakur, Regional Director & Head- Research, ANAROCK Group. 

Are you considering investing in real estate? Here’s why non-metro cities are your golden ticket!

Tier 2 cities are outpacing traditional metros in their economic growth, thanks to numerous fields like manufacturing, information technology, education, and healthcare. For example, Nagpur is expanding in manufacturing, logistics, and information technology, whereas  Surat is rising in textiles, petrochemicals, and information technology. 

Real estate markets in non-metros or Tier-2 cities continue to grow swiftly, outperforming many metros in terms of investment and demand. Several factors contribute to the massive increase in real estate investment in non-metros. 

According to a recent analysis by Cushman and Wakefield and the Confederation of Real Estate Developers’ Associations of India (CREDAI), approximately 35% of India’s population currently lives in cities, with projections indicating that this figure will rise to 50% by 2050. 

This population growth is putting a strain on Tier 1 cities, where space is becoming more scarce. As a result, there is a greater emphasis on developing alternative urban areas with the potential to become new economic and real estate hubs. These are classified as Tier-2 cities. According to CREDAI, India’s urbanization rate is expected to exceed 50% by 2050, potentially leading to significant population migration to Tier 2 cities. 

Manaki Parulekar, Co-Founder of Claravest Technologies, shared her insights into the factors driving real estate investment growth in Tier 2 cities. 

According to Parulkar, this rise of integrated townships, which provide a mix of residential and commercial spaces, is helping Tier-2 cities grow. “For example, Panvel in Navi Mumbai is rapidly developing, with townships such as Hiranandani and Godrej, aided by projects such as the Navi Mumbai International Airport and the Atal Setu Bridge (MTHL).” 

The rise of commercial Grade A properties, affordable residential property values, and improved connectivity are driving accelerated growth in other cities like Jaipur, Bhubaneswar, Nagpur, Surat, and Kochi. 

These cities and regions have distinct advantages over traditional metro markets, attracting investors with promising opportunities for Parulekar, the following factors contribute to increased real estate investment in non-metros or Tier 2 cities.  

Diverse economic  development: 

Tier 2 cities are outpacing traditional metros in their economic growth, thanks to many industries such as manufacturing, information technology, education, and healthcare. For example, Nagpur is expanding in manufacturing, logistics, and information technology, whereas Surat is rising in textiles, petrochemicals, and information technology. 

Cost advantages: 

Tier-2 cities are significantly less expensive than Tier-1 cities. Low operational costs in these areas contribute to this advantage, making them appealing to businesses and investors.

Improved Quality of Life: 

Tier-2 cities offer a more relaxed lifestyle than larger metropolitan areas, with less traffic congestion, lower pollution levels, and a generally quieter environment. This improved quality of life appeals to businesses seeking a dedicated workforce and individuals seeking a better work-life balance. 

The government’s initiatives include: 

Government investments in transportation networks, airports, highways, and reliable power and communication systems support the growth of Tier-2 cities. 

Real-estate market growth: 

The real estate market in Tier 2 cities is thriving, particularly in the residential segment. Professionals want to live in larger apartments, remote work is becoming more popular, and there is a growing middle class with more purchasing power. Despite rising property prices, they remain less expensive than those in Tier-1 cities, creating appealing investment opportunities. 

Advancements in education and healthcare: 

Tier 2 cities are increasingly home to reputable educational and healthcare facilities, making them more appealing places to live and work. 

To summarize, these factors make non-metro areas attractive real estate investment destinations, often offering more sustainable growth and profitability than traditional metro areas saturated and high-cost environments.  

Akshaya Tritiya: Five important factors to consider when investing in real estate

Akshaya Tritiya, traditionally a festival of prosperity and success, is becoming a day for strategic investments, particularly in real estate. Fractional ownership of commercial properties is becoming increasingly popular, providing investors with accessibility, diversification, and higher returns. 

We, as Indians, value our traditions and cultural beliefs and find meaning in the rituals that shape our lives. The auspicious festival of Akshaya Tritiya, which falls on the third day of the Hindu month of Vaishakha, sends a sacred message of prosperity and success. As a result, buying gold on this day is expected to yield good long-term returns. Traditionally associated with gold purchases, this festival has become a day for foresightful investments. 

Initially, people turned to gold for financial gain, moving from physical holdings to gold ETFs and bonds. Real estate is currently undergoing a similar transformation. Fractional ownership of commercial real estate is increasingly becoming the preferred option, rather than traditional home purchases. This shift heralds a new era of investment strategies, with the advantages of fractional ownership— accessibility, diversification, and the potential for higher returns— attracting increased investor interest.  

As we honor tradition while embracing innovation, Akshaya Tritiya is recognized as a symbol of progress and an auspicious day to invest in a better future. Here are some things to consider when investing in real estate. 

Residential vs. Commercial Properties 

One of the first decisions investors must make is whether to invest in residential or commercial properties. Residential properties appeal to both homeowners and investors seeking rental income. However, residential properties may present difficulties in tenant management and offer lower rental yields than commercial properties. 

According to a recent industry report, housing prices have risen by 13 to 33 percent in seven major cities over the last three years, while commercial real estate markets have seen a 15 percent increase during the same period.  

Commercial properties, such as grade A office spaces, provide good rental yields of 8-9 percent, compared to 2-3 percent for residential properties. This enables investors to benefit from verified tenants while avoiding certain risks associated with residential properties. 

Opportunities for fractional ownership. 

As we know, Akshaya Tritiya is important for long-term real estate investments. This day seems ideal for purchasing valuable items with the expectation that they will bring prosperity and fortune.  Moreover, India’s real estate investment landscape is evolving similarly to a “mutual fund” moment, with regulators supporting fractional ownership. 

SEBI’s regulatory support for REITs, including establishing standards for Small and Medium REITs (SM REITs), marks a watershed momentum for investors, bolstering their confidence even further. These developments make real estate investment more accessible by allowing retail investors to participate in high-value properties through fractional ownership. With a lower minimum investment threshold of INR 10 lakhs, real estate investment becomes more accessible, aligning with the festival’s theme of prosperity and abundance. 

Benefits of investing through fractional ownership. 

Fractional real estate ownership offers investors several benefits, including regular income, asset security, liquidity, tax breaks, and ease of possession. This is an excellent choice for investors seeking both income and capital appreciation. 

Navigating the regulatory and legal frameworks 

Real estate transactions involve intricate regulatory and legal frameworks that differ depending on the location and type of property. Investors must follow all legal requirements and perform due diligence to ensure the authenticity of property titles, approvals, and ownership records. Seeking professional help from legal experts or real estate advisors can help investors navigate these complexities more easily.  

Tracking long-term growth potential

While short-term gains may be appealing, investors should focus on long-term growth potential when investing in real estate. Assessing infrastructure development, urbanization trends, and demand-supply dynamics can shed light on the property’s future appreciation potential. Investing in emerging markets or growth corridors with strong economic fundamentals can generate significant long-term returns. 

In conclusion, investing in real estate during Akshaya Tritiya is an appealing opportunity for those looking to increase their wealth and secure their financial future. Using these measures, investors can make informed decisions and take advantage of the favorable timing of this opportunity to embark on a successful real estate investment journey. 

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

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

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.