Foreign retailers likely to postpone India Entry, JLL

Asia Pacific Property Digest, the quarterly report of JLL India, states that the foreign retailers may postpone their India Entry by one or two years.

With the foreign direct investment policy of the central government, the realty developers were expecting foreign retailers to set up their outlets and stores in India. Developers thought they could find some takers for their vacant spaces in their shopping mall projects. Continue reading

Real Estate Sector Hopes To Thrive In 2013

The year 2013 is expected to be a boom year for economy as a whole. This is more expected in the real estate sector. Real estate sector expects to thrive in 2013.
Real Estate Sector Hopes To Thrive In 2013

Real Estate Sector: ready to thrive in 2013

Real estate sector went through a tough time in the year 2012. The year was noted for its slow pace and declined market. Lower sales and higher construction costs affected the real estate developers adversely. In short the year 2012 was a very difficult one for the real estate developers of India. They faced a tough economic condition as sales stooped down.

Lalit Kumar Jain, National head of CREDAI (Confederation of Real Estate Developers’ Associations of India) expressed his hopes of revival in the year 2013. He said that the year 2012 was a year of loss especially because no corrective step was taken. He moaned that the 2012 remain as a lost opportunity.

Real estate consultancy firm Jones Lang LaSalle India’s Chairman & Country Head, Anuj Puri appeared more confident over the real estate renovation. According to him real estate boom will be more in the final-half of 2013.

The RBI (Reserve Bank of India) has, in recent times, allowed reputable real estate developers to raise funds up to $1 billion. The RBI also has permitted established housing finance companies to raise an equivalent fund. With this new rule the real estate builders and finance companies can raise funds through external commercial borrowings. Continue reading

Retail FDI Will Cover Up Vacant Space; Hope Mall Owners

Indian government’s decision to allow more retail FDI (Foreign Direct Investment) was passed in the Lok Sabha. New retail FDI bill gives some rays of hope to troubling mall owners.

The approval of more Foreign Direct Investment (FDI) in retail policy by the Lok Sabha (LS) fills some hopes to the mall owners. They expect to reduce the vacant space as the foreigners will have permission to run shops in India.

With the shopping-mall development boom there has been excess of retail space in all major cities of India. This was comparatively higher in New Delhi and Mumbai. The situation left the mall owners to struggle with the excess of retail space which remain vacant. Continue reading

FDI in Retail Policy Seeks Parliament Houses’ Approval

UPA government is ready to present its new FDI in retail policy in Lok Sabha for its approval. However the government seems worried over gaining approval from the Rajya Sabha.

UPA government is confident of receiving approval for its new FDI in retail policy from the lower house. But the approval of the upper house is a concern for the Congress led UPA government.

The policy of allowing more FDI- Foreign Direct Investment– in retail is said to boost the real estate sector. However the government’s decision aroused mixed opinion across the country. BSP in West Bengal and AIADMK in Tamil Nadu opposed the FDI in retail policy highly. Continue reading

Union Govt Decision to Allow More Retail FDI attracts Mixed Reaction

FDI In Retail

India welcomes more retail FDI

The central government’s decision to allow 51 % of retail FDI was received with a mixed feeling. Some opined that this will create unemployment. Yet this decision was welcomed by a group of real estate developers in Odisha. Continue reading

Real Estate Sector in Bangalore may see 25 per cent growth.

The real estate sector in Bangalore has grown to a large extent in the past one year. In the year ahead, the city’s realty is expected to grow by 25 per cent, estimates the Karnataka Chapter of the Consortium of Real Estate Developers’ Associations of India (CREDAI).

“We are expecting the realty to grow by 25 per cent in the coming year. Last year too we have witnessed a similar growth,” said Sushil Mantri, president, CREDAI Karnataka.

As per studies conducted last year, the city is likely to absorb about 7.1 million sq. ft. of office space against a supply of 7 million sq. ft. While demand for office and commercial sales in the city saw a rise, residential sales remained slow.

Experts said that the city witnessed a great strength in high street leasing and rent, and capital value has increased nominally in a few sub-markets. Also, there was a rise in rental value as demand by retailers remained strong.

With commercial office space developers offering favourable options, predictions for 2012 are that several IT companies in the city will look at pre-leasing office space.

However, analysts opine that office space supply will outweigh demand.

“FDI in multibrand real estate is expected to catalyse a lot of demand from international retailers. International luxury brands will restrict their growth plans to Mumbai, Delhi and Bangalore,” states a projected report by Jones Lang LaSalle India, Realty Intelligence firm.

The report states that the mid-end and affordable housing segments will record healthy appreciation in capital value in short term from a low base.

 

Home Loan Rate Should Be Restructured.

With speculations about the Union Budget 2012-13 already doing the rounds, city’s real estate industry too has voiced its expectations. Mainly revolving around increased subsidy on interest rate for loans towards affordable housing and industry status for taxation and construction and relaxation of FDI up to 51 per cent into multi-branding, the industry is hopeful of a favourable budget.

Sushil Mantri, president of CREDAI, Bangalore, says that “The Indian real estate industry was riding through highs and lows in 2011. Last year, one per cent interest rate subsidy was offered for loans towards affordable housing. If the subsidy can be broadened, home buyers especially in mid and lower income groups will benefit.”

“Indian real estate, especially housing needs the government’s support for further growth. The government should consider restructuring interest rates on home loans to attract larger base of lower and middle income group to benefit. For loan amounts lesser than Rs 25 lakh, the interest rate should be lower and should scale up as the loan amount goes higher,” said Sankey Prasad, chairman and MD of Synergy Property Developments Services.

Further the Experts demanded that the glaring concerns of the real estate industry be addressed.

“The real estate industry will be looking forward to RBI’s intervention to control inflation which has adversely affected the industry. If FDI is relaxed up to 51 per cent in multi-branding, this will boost the growth path for the Indian retail industry,” Sushil Mantri added.

Indian Realty has Bright Future

The Future is Bright
The future of Indian Realty market seems to be brighter than ever. Following are the major reasons for the growth of Indian Realty:

  • The policies made by government for the Foreign Direct Investment have brought quite a large number of foreign investors into the Indian real estate market. India now ranks second in the list of most preferred location for real estate investment. In fiscal 2005-06, the FDI turned thrice to that in 2004-05, i.e., it turned from 2.38 billion USD to 7.96 USD.
  • Another reason for the growth of Indian realty sector is the positive reform implemented by the government. The growth of this sector is also evident by the fact that this sector is the largest sector after agriculture providing employment.
  • The education system also has impact on the realty sector. It is estimated that in next 2 or 3 years, there will be around 2 million graduates who would create a demand for 100 million sq ft of industrial space and office.
  • Lastly, the existence of world renowned Fortune 500 companies also other large companies to start operations in India, which in turn would generate huge demand for corporate hubs.

India’s FDI increases

India’s FDI inflows reached to 41.5 billion dollars last year, constituting 9.6% of its gross fixed capital formation, against just 1.9% annual average in 90s.
India attracted 41.5 billion dollars in FDI last year, its outward flows or overseas investments amounted to 17.7 billion dollars, roughly 4.1% of its gross fixed capital formation. This is in sharp contrast to its meager annual average overseas investments of 110 million dollars for last decade, when such outward investments comprised 0.1% of its gross capital formation.
The FDI stocks of India, which were just 1.6 billion dollars in 1990, zoomed to 123.3 billion dollar in 2008, constituting 9.9% of GDP, against a paltry 0.5% of GDP in 1990. In the case of China, such FDI flows, which were 20.7 billion dollars in 1990, leapt to a whopping 378 billion dollars last year.
In the case of cross-border mergers and acquisitions, Indian companies’ net sales surged from an annual average of 282 million dollars during 90s to 4.4 billion dollars in 2007 and to 9.5 billion dollars in 2008. Against this, Indian companies’ purchases of overseas firms which averaged 104 million dollars annually between 90s rose to a peak of 29 billion dollars in 2007 and came down to 11.6 billion dollars last year in the wake of the onset of the global economic and financial crisis.
Two Indian companies, Tata Steel and ONGC, found a place among the top hundred non-financial transnational companies from developing countries, ranked by foreign assets in 2007.