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Why should you invest in Mayur Vihar, Delhi?

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Property in Mayur Vihar Phase 1, Delhi | Real Estate in Mayur Vihar Phase 1, Delhi - Commonfloor.com

Mayur Vihar is one of the posh areas in East Delhi, located on the Delhi-Noida border. The area has always been the homebuyers’ choice due to grand Returns on Investment (ROI), robust connectivity, and mixed residential choice. Propertywala brings the factors why you should invest in Mayur Vihar, Delhi.

Overview of Mayur Vihar, Delhi:

Mayur Vihar is a lavish residential hub, which splits into phases, namely, Phases 1, 2, and 3. The site is close to a sanctuary devoted to peacock conservation in East Delhi. Hence, the name Mayur (peacock) Vihar (dwelling). The development of the area dates back to the late 1970s when the government decided to sell the Delhi Development Authority (DDA) flats to Public Service Units (PSUs) and semi-PSUs such as Bharat Heavy Electricals Limited (BHEL). It was done as an experiment to combine the people of several income groups into one community. Nowadays, different phases in the Mayur Vihar house vary in statistics.

It is also well-connected via public transport and social and civic infrastructure. It has a metro station on the Blue Line of the Delhi Metro. Many government buses also ply. It will be a good decision for residents to invest in minimum price in Mayur Vihar with all the amenities and infrastructure.

The real estate market in Mayur Vihar:

The locality of Mayur Vihar is divided into three phases with different real estate statistics.

Phase 1 ranks at the top: Based on its popularity and is considered the poshest of the three. It is a premium real estate market influenced by 2 BHK residential apartments with average prices. The range of price is between Rs 90 lakh to 1.5 crores. The average price per sq. ft. in the area is over Rs 11,000. A few residential options in Mayur Vihar are builder floors, DDA flats, and cooperative housing societies in Mayur Vihar Phase 1.

Mayur Vihar Phase 2 : It is fairly preferred by investors. It may be helpful for many affordable projects because buyers can get a 2 BHK residential area for as low as Rs 40 lakh up to Rs 1.6 crore.

Mayur Vihar Phase 3: The locality offers enough standalone flats and houses. However, the residential market in phase 3 is slightly less preferred as compared to the other two phases. The locality is majorly famous for its commercial institutions. Get 2 BHKs in this locality between Rs 50 lakh and 1 crore. The per sq. ft. rate of the residential list in Mayur Vihar Phase-3 averages Rs 7,550. Ample flats under the Central and State (DDA) Government’s Housing Schemes are purchasable here.

Inventory share across budget:

Area NameRs 0-50 lakhRs 50 lakh to 1 croreRs 1 – 1.5 croreRs 1.5 to 2 croreMore than Rs 2 crore
Mayur Vihar-113%18%38%18%12%
Mayur Vihar-22%42%33%13%10%
Mayur Vihar-340%48%10%1%0%

Work Area of Mayur Vihar:

Connectivity to work areas is one of the remarkable factors driving the resident and buyer demand in Mayur Vihar. Since the locality borders Noida, the industrial area is around 10 km from Mayur Vihar. Further, the appearance of many technology organizations in Noida, like IBM, TCS, and Genpact, also remains a big point for the residents. People working in cities such as Gurgaon. They also have their house here as the area’s active metro services. It connects it to Gurgaon’s employment hubs via the Pink and Blue lines of the Delhi Metro.

Social amenities and Infrastructure:

In addition, Mayur Vihar is maintained by the New Delhi Municipal Corporation (NDMC), which has worked highly on improving its social and physical infrastructure. So, the given table highlights the infrastructure amenities in Mayur Vihar:

Mayur Vihar is maintained by the New Delhi Municipal Corporation (NDMC), which has worked highly on improving its social and physical infrastructure. The given table highlights the infrastructure amenities in Mayur Vihar:

Amenities Phase 1Phase 2 Phase 3
Hospitals Kukreja Hospital, Manglam Hospital, Apex Citi HospitalLal Bahadur Shastri Hospital, and Apex Citi HospitalMetro Multispeciality Hospital, and ESIC Model Hospital
Metro ConnectivityMayur Vihar Phase 1 metro station connects the Blue and Pink LineEast Vinod Nagar metro station connects to the pink lineTrilokpuri-Sanjay Lake metro station connects to the pink line
Road connectivityNoida Link Road, Delhi-Meerut Expressway and DND FlywayNH-24 connects for easy access to Noida and Greater NoidaIn close to NH-24
SchoolsAhlcon Public School, ASN International School, and Rishabh Public SchoolBal Bhavan Public School, and Mayur Public SchoolRyan International School, Somerville School, and Bharti Public School
Places of InterestAkshardham Temple, Uttara Guruvayurappan TempleSanjay Lake, Neelam Mata MandirAkshardham Temple, Sanjay Lake
Retail HubsGalleria Mall, Star City Mall and the DDA MarketPacific Mall, East Centre Mall And Cross River MallGharoli Market, Pacific Mall and East Delhi Mall
It is around 20 km from the Indira Gandhi International (IGI) Airport and approximately 11 km from the New Delhi Railway Station. Its prime location is the main reason why Mayur Vihar is a popular realty area in the east of Delhi.

Investment Possibilities:

The property rates in the Mayur Vihar have been stable despite the pandemic. Further, the lifted rental demand keeps it popular among investors. The minimum rent for a 2 BHK semi-furnished residential apartment in several phases of Mayur Vihar is in the following ways:

Phase 1Phase 2Phase 3
Rs 24,000 per monthRs 18,000 per monthRs 13,000 per month

At last, the strategic development of the area, balanced returns on investment, and impressive realty choices allow various income groups to invest in Mayur Vihar. All of the above factors make it a promising investment option for buyers who are looking to settle between a calm and green environment and a developed infrastructure.

East and Southern Bangalore to witness high demands

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Interestingly, the biggest coincidence that can be seen in all metro cities is the fact that in all of these, the southern part of the city experience major development and is always considered as the posh regions. The new flats for sale in Bangalore, especially in the south region are most popularly seen in Kanakpura Road. These flats are mostly in demand by the young professionals working here. However, the demand is not so great here when it comes to 3BHK Flats. The basic demand seen for 3BHK Flats in Southern Bangalore is seen in Whitefield and Electronic city. Southern Bangalore was the first part of the city which was established and is thus the most developed and has reached its saturation. The reason people tend to favour this place is the amazing connectivity with the electronic city via NICE Ring road. The infrastructure is well developed and has high growth potential in terms of real estate if you are looking to buy a property in Bangalore. The area has close proximity to office areas and offers and chilled out the environment.

Also, the east of Bangalore also experiences high demands in residential apartments. The areas like Brookefield, CV Raman Nagar, ITPL, KR Puram and Whitefield offers a lot of 2BHK Apartments which are ideal for you and your family’s needs. These flats are mostly preferred by high-end individuals, mostly the people working in the vicinity. Thus, both these areas are ideal for you if you need to settle in Bangalore with a lavish upfront.

Asia To Witness Surge In REITs

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Asian Continent Location Map
The number of Real Estate Investment Trusts (REITs) in Asia is expected to swell over the coming 3 to 4 years according to HSBC because of increasing demand for investments in more risk disinclined properties.

REITs invest in commercial properties mainly and pay rent collected from their properties to shareholders as dividend. This is why some investors see them as safer investments than property stocks.
Another advantage is that they usually offer returns that are higher than yields of government bonds.

The increased activity in the REIT IPO market this year especially in the Asian continent is due to successful listing of Cache Logistics Trust in Singapore. Also Sunway City plans to list its REIT in Malaysia come July.

At the Reuters Global Real Estate and Infrastructure Summit which was held today, Managing Director and Head of Real Estate Advisory for Asia Pacific at HSBC, Mr. Jason Kern had to say,
“I see proliferation of REITs, absolutely. I think we’ll have twice as many REITs in Asia as we do today in the next three or four years.”
He anticipates Singapore to witness most of the activity with more than 20 to be listed there in the coming years from companies all across Asia. It already has more than 20 listed REITs such as Fortune, Saizen from Hong Kong and Ascends from India. Australia and Malaysia are also showing growth patterns.

Kern further added, “What I find in my space is that investors are more risk-averse for sure. They are more defensive. We actually still find very strong demand at the most defensive end of the spectrum, which are the REITS.”

This Trend is only to bring fortune to our Country as well.

Affordable Housing, a priority for real estate

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With an aim to achieve housing for all by 2020 and thus planning new flats in Delhi/NCR till 2022, finance minister on January 1 had stated that the affordable housing schemes will be given infrastructural status which will be a great deal for builders like Ashiana, Housing, Puravankara. This move will dip the costs for the builders and developers and attract most and more investors.

It would also mean a great hike in demand for loans which would be a step in the forward direction for housing finance companies like Gruh Finance, as well as Repco Home Finance.

“Infrastructure status to the affordable housing segment especially to Noida real estate will mean lower loan costs for the sector and thus aims at the margin issues that private players in this segment face,” said Nidhi Seksaria, Advisory Partner & Leader – Real Estate, BDO India LLP.

“The combined with interest subventions, this could be a big step in making apartments for sale in Noida more affordable,” he said.

Ashiana Housing was already trading 15 percent higher at Rs 163. On the other hand, Puravankara was up by 3 percent. The housing finance companies, Gruh Finance was already up by 1.4 percent while Repco Home Finance was up nearly 2 percent.
To achieve the targets set by the government in the affordable housing sector, the builder tends to increase their number of apartments with a certain decrease in amenities which consequence into lower costs. The competition has increased in the past quarter and thousand of new flats for sale in Noida are being constructed and ready for you to live in.

Ban on registering the Unapproved plots in Tamil Nadu

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The banning on the registration of plots which are still unapproved is back in Tamil Nadu with full force. The Madras Court on Friday clearly ordered to restrain all registrations of plots which are still not approved or those who apply for the re-registration with pending layout approvals. The law has been confirmed for the next three weeks and till no further notice comes.
Adding to the ban, the Justice M Sundar and the Chief Justice Indira Banerjee asked for all the details of the applicants of registration with unapproved plots in the violation of the court dated as on September 9, 2016, ban order.
The legal justice has stated that the decision for these issues will be taken after a special sitting which will be organised either on May 4 or on May 5.
The law has turned sour after the case that held on September 9, 2016, when the Chief Justice Kishan Kaul rapidly approved all the registrations of the plots which were still not approved or of those who tried to convert farmlands into housing plots without following the rules and regulations. Also, the bench held responsible all the officials who were personally liable for the violation of rules and regulations.

Why Attapur deserves your Investment

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In the city of Hyderabad, Attapur is now developing as a new suburb which is an ideal location for the residential complexes now. The main reason behind this is the presence of several different colleges which makes it an ideal location for the students to live in. It is also really close to Jawahar Nagar, the educational hub of Hyderabad. Not only the students but the people who work in the IT Hub of Hitec City also prefer this place as it is in close proximity given the excellent transportation and the development of roads. The fact that Attapur provides people with a lot of housing options that too in affordably large sizes, make the residents travel 10km each day to and fro for their work.
Many people say that Attapur is the centre of their work and other public infrastructure needed by them. The location is in close proximity to their offices, their children’s schools, Airport, Koti and Secundrabad. The main purpose of each and every resident is solved because of this and people find no problem in travelling a few kms for every work present in equal distances.
When it comes to water and transport, the PVNR Expressway connected to the outer ring road makes it really easy for the people to commute.

Demands in Bangalore West take a major hike

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The increasing commercial demand in the vicinity of West Bangalore is asking the residential sector to grow and lead the city to a better place.
The Mumbai-Bangalore Industrial Corridor, Greater Peenya Industrial Area, proposed Peripheral Ring Road (PRR) Metro Rail connectivity, Dabaspet Industrial Area, integrated townships along the NICE corridor, all these factors make the west of the city an investment destination. The plots in Bangalore in this region is owned by automotive parts, manufacturing, electrical, electroplating, pharmaceutical, chemical, electronics, building materials, aerospace components, garments, castings, forgings, foundries, and scientific instruments industries.
The whole area is well connected to the plunged road built over Peenya international airport, in the Mysore road. It is also connected to NICE corridor as well as the metro rail network.The well established and renowned market of Yeshwanthpur having a micro market with healthcare, retail and other public infrastructure gives a major push to people to come and live here.
Shrinivas Rao, CEO of APAC, Vestian Global services stated that the major factors that increase the rates of property in Bangalore are the presence of economic complexes and industrial sectors with the perfect physical infrastructure and amazing connectivity with all public convenience nearby. It has been noted that after 2008 this western area of Bangalore was influenced by a major hike in IT and ITeS companies which came and set up their base here. These industrial areas included Kumbalgodu and Bidadi which resulted in their nearby localities like Kengeri to become a popular residential choice for those who are employed in this area or the vicinity. According to reports and databases, Kumbalgodu Industrial Area, Bidadi Industrial Area and Global village IT park, together holds a total number of 80,000 employees. Also, after the rapid metro connectivity in this region, it has become very easy for people to travel and save their working hours. With all these factors in hand, the fact that region is well connected to the NICE Road, Outer Ring Road and Tumkur Road gives the place an additional advantage to grow more property in Bangalore west.
Currently, 79854604-lake_6the development that is being done in this region comprises of apartment projects and plots in Bangalore West. The Kengari residential sectors incorporate a large scale of apartment projects and townships in the mid segment value people. It is thus expected that the annual residential sale growth in this region is 6-8 percent while the rental yeild will be 4 percent.

Pune to set out new rules

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The district consumer court has set out a new rule that an occupancy certificate will be issued by the municipal corporation in favour of an interested flat buyer, which will be sufficient to say that construction activity is successfully completed as per the sanctioned plan.
The court also ruled that a flat resident cannot seek his case to be treated as a “representative complaint” without first complying with the necessary requirements of such a plaint. Section 12 (1) (c) of the Consumer Protection Act needs a complete publication of a notice at the time of filing of the respective complaint about the complaint to be treated as a representative case.
A bench of O G Patil , V P Utpat, and Kshitija Kulkarni on Wednesday rejected the complaint by Kondhwa Khurd resident Anand Ranjalkar, who alleged that the builder of their housing scheme delivered him a 1bhk flat in Pune, which was of lesser area than it was originally agreed for, He also claimed that the builder had failed to secure a completion certificate. He also referred to common reliefs relating to the developer’s “failure” to form a society and execute a proper conveyance programme.
In July 2007, Ranjalkar had openly purchased a property in Pune under ‘Kumar Prithvi’ scheme, developed by Sukumar Township Development Private Limited in Bhavani Peth, Pune for Rs 28.7 lakh. The construction firm, as said and confirmed, delivered property to him on March 3, 2009.
In July 2011, after two years of getting possession, Ranjalkar filed a consumer complaint alleging the super built area of the flat was 39.87 sqft lesser than the area that was committed to him in the agreement. He said that he made the measurements done by an architect.
Lawyer Sunita Kinkar, representing the firm that supplied the possession, argued that Ranjalkar was bound by the agreement, to refer any further dispute to an arbitrator and that he did not comply with the norms for converting his complaint into a representative case for seeking common reliefs.
The bench, therefore, rejected Ranjalkar’s application, filed counter-arguments, for publishing a notice of a representative complaint first and held that the matter will then be treated as an individual complaint. “The complainant, in his individual capacity, cannot seek his justice as regards formation of society and execution of conveyance deed, etc. The after effects of the complainant will remain only as regards shortfall in area and completion certificate,” it held.

5 reason you should buy a property in Noida

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After the utterly clumsy place of the capital region of India, Delhi and the densely overcrowded place for offices, Gurugram people are quite as well left with a choice of Noida. This is the reason that the residential sector of Noida Real estate is highly increasing since the past two decades. Noida is considered as a cheap and easy city to live in provided its easy connectivity to Delhi, Faridabad, Agra, and Haryana.
Noida has been considered as the most affordable place to live in given the high number of affordable flats here. There are many reasons that add to the fact but if we want to name a few we can easily do so by guiding the basic points.
The first one can be the extremely well maintained and thoughtfully built infrastructure. The infrastructure that has built the city is the basic reason for more and more citizens coming here. The excellent infrastructure makes it capable of being the next best thing in the world. The availability of lands for residential, commercial as well as infrastructural facilities is something that makes it top the list leaving Delhi and Mumbai behind.
Second reason is the reputed faces of developers who are eyeing in this place to make their new launches. Builders like Supertech, Unitech, Ansal, Emaar, MGF and now Godrej has made their new launches in Noida and Greater Noida. These flats suffice all the segments of the society and promise to be affordable with the availability of luxury.
Third and the most important reason that helps people to relax and invest in these lands is new rules against Forgery. New and quick rules have now been applied to the forgery cases of land. Earlier, the land disrupts were handled by the court’s jurisdiction which always tends to stretch such cases to a number of years, but now a sigh of relief has approached when all these cases are being handed over to the stamps jurisdiction.
The fourth best reason would be the easy connectivity of Noida to other regions like Delhi, Ghaziabad, Gurgaon, Agra. The major plus point Noida has is the rapid availability of Metro from Delhi to Noida. Also, the ongoing construction of Metro from Delhi till Greater Noida via Noida will add a golden point to all these and make it more convenient for those who travel till Greater Noida and will also decrease the traffic on roads.
The fifth point is for those who have a property in Noida or are living on rent flats in Noida. The major availability of marketplaces throughout Noida makes it very easy and accessible to live here.

Regular efforts for affordable housing for all

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Metropolises such as Noida are under scrutiny and major comprehensive plans are being drawn to build better infrastructure. The Centre is facilitating adequate amount of funds for urban local bodies in states to make cities more liveable by providing them more and more properties in Noida. “We are taking into account the, roads, water supply etc. and creating a major five-year development plan,” Naidu said while talking about Bengaluru, Pune and Noida cities. He stated that more and more 1bhk flats in Noida will be created so as to provide the urban localities the desired liveable surroundings.

State participation is the major key to achieving adequate infrastructure and it is therefore the essence of realising the ‘Housing for All 2022’ dream. Affordable housing will be a success only when these type of states perform. Around 23,000 houses still lie vacant in Delhi alone because of lack of infrastructure and therefore their buyers. “Where there are people there is a shortage of houses and now there are houses but nobody interested to reside in them. It is proving to be a grave problem,” said Naidu. The main infrastructure concerns that needs to be seriously looked after are drainage, sewage, main roads, byroads, rain water drainage, maintenance of water bodies, etc.
It is now supposed to be joint effort by the Centre, states and local bodies. People only set their keen eyes on better quality and good services. If the states can figure out a method to provide the correct measurements then there’s no going back. “They should try and study the development patterns of several states. Learn from other’s mistakes,” suggested Naidu.

Property Exhibition To Be Held In Kuwait On Jan 11 & 12

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Builders from across India will display their new launches in Property Exhibition which will be held in Kuwait on January 11 and 12. The builders hope to find some NRI customers.

Property Exhibition The platform to gain firsthand information

Property Exhibition: The platform for NRIs to gain firsthand information.

Indian Property Exhibition will be held at Ramada Hotel in Al Rigga, Kuwait. The exhibition will be opened for the visitors from morning 10.45 am to evening 8.30 pm. This is the 23rd Indian Property Exhibition  held in Kuwait.

Mantri Group and North Town will sponsor the property exhibition, a meeting point for the home buyers and builders. Nearly 100 projects will be displayed. Properties from tier I and tier II cities are also expected to be displayed. Continue reading →

Liquidity Issues Upset Real Estate Private Equity

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Real estate Private Equity (PE) firms are again troubled by Liquidity issues. This is mainly due to the over transparency demands from the investors.

Real Estate Private Equity

Upset.Real Estate Private Equity

Global Market Outlook reports that stiff natured liquidity causes greater troubles to the real estate PE firms. Stiff liquidity forces the PE firms to quit the real estate. Private Equity fund managers say that this situation is created by the higher transparency demand by the investors. Continue reading →

Private Equity Firms Ready to Quit Real Estate India

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Private Equity Plans to Quit Real Estate India

Private equity (PE) firms were the top investors in the 2006-08 boom years of Real estate. But the recent situation shows that they look ways to exit. Though they aim to exit profitable returns hold them tight in the field. Fallout of negative returns from their real estate investments makes them rethink of their exit. Continue reading →

Reliance PMS Launches Real Estate Oriented Fund

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Reliance Capital prepares to launch its maiden real estate focused fund of र 1,000 crore by the end of the year 2012. Reliance Capital is owned by Anil Dhirubhai Ambani (ADA) Group. This maiden launch of Reliance Capital in the realty industry will be done under the surveillance of Reliance Portfolio Management Services (PMS). The new fund will aim at constructing residential properties.  The investment will be concentrated in the cities like Pune, Chennai, Bangalore, Mumbai and Delhi primarily.  Reliance selected these cities as the real estate markets of these cities are more firm and have an increasing value appreciation.

Real Estate Investing in Pune, India’s Other Growth City

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Most of the funds are based out of Mumbai, which gives Pune obvious preference, as the city’s proximity allows these funds to track and monitor the market – and their investments – easily. Also, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore.

According to Sameer Gholve, Manager of Capital Markets at Jones Lang LaSalle India, Pune has been favoured destination amongst Real Estate PE funds since 2005 – the year FDI opened for real estate.

The total flow of PE funds into Pune until December 2011 was approximately US$800 million. This consisted of both foreign and domestic monies through around 32 major transactions over the last five years. 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010 arrived. The renewed investor confidence resulted in a massive recovery of private equity deal closures in Pune

As expected, most of these funds have been invested in the residential property asset class. In fact, residential real estate has proved to be the most consistent and enduring magnet for private equity funds into Pune’s real estate sector. In comparison, investments into SEZs, industrial parks (STPIT) and mixed-use townships have primarily been seen only before mid-2008. From 2010 onwards, the interest in these formats as asset classes has been quite meagre.

Significantly, 61% of the total private equity investments that have been seen in Pune were done in projects located in East Pune. East Pune has the majority of the city’s IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada, Weikefield IT Park on Nagar Road, etc. These IT developments have had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has caused the arrival of massive malls and also generated a huge demand for quality residential projects. These projects are proving to be the major magnets for private equity investments into Pune’s real estate sector.

ASK group plans to fund in Indian Real Estate Projects

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Real estate fund house ASK Property Investment Advisors has said it is planning to fund to invest in Indian real estate projects.

The company has already committed $40 million (Rs 200 crore) out of its second domestic fund. It has formed a subsidiary in Singapore that will be raising this offshore fund. To be launched in July, the ASK Real Estate Special Opportunities Fund plans to invest in projects with a completion cycle of three-four years.

“We are a domestic fund and are constantly looking for opportunities in the domestic markets. Developers are constantly scouting for investments to buy land. We have so far deployed funds in ten investments,” Mr Amit Bhagat, Managing Director and CEO, ASK Property Investment Advisors, said.

The average investments will be to the tune of Rs 75-125 crore. The second fund will invest in mid-sized development projects in key cities such as Delhi-NCR, Mumbai, Pune, Bangalore and Chennai. The ASK Group had raised its first domestic fund of $75 million in 2009. It was also targeted at residential segment. “We have committed 100 per cent of the first fund,” he added. Industry sources note that realty focussed funds pan-India are looking to rise over $5 billion from both domestic and offshore markets.

Indian Real Estate Market Among the Most Lucrative Sectors for NRIs

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Indian real estate market is one of the most lucrative sectors for Non-Resident Indians to invest their foreign money. Moreover, this trend will continue for more 4-5 years as the consumption story of Indian real Estate market is not going to get over in near future leading to immense commercial growth prospects that in turn increase the demand for real estate. Although Indian Realty market is facing downfall, it is not correct to say that all cities are experiencing the same situation. It has been observed that some of the cities in India always have good chances of investment and these cities even in worst circumstances would be able to provide good investment returns. One more factor that attracts NRI’s to invest in India is the bigger geographical area. Unfortunately, NRI’s put their money into property prevailing in big cities and metros, but they should be informed appropriately about the outskirts of the big cities and even about the tier-2 cities that offer a great deal of real estate investment in present scenario.
Not only this, but the recent significant depreciation in the value of rupees in respect of dollar/pound/euro has given a profitable chance to the NRI’s to clandestine their foreign earned money into some good  investment plans. However, quite a few times NRI investors face some issues with liaison services in real estate industry, but once these intermediary services will improve more and more foreign investors would be lured to purchase property in India in lieu of high returns.
Foreign investment is also a good sign of growth for Indian Real Estate market as well. In this current state of affairs when the Indian Realty market is experiencing a huge downfall, the foreign investors seem to be the ray of hope. With more and more NRI’s investing in small and even big commercial properties in India, the Real estate market will soon see a huge intensification. It has been observed from past trends that around 70% of foreign investment has been done in residential sector, but according to the Indian developers there are various commercial investment opportunities also existing for the foreign investors who wish to set up a business in India.
However, it has been told by the real estate experts that present time when foreign currency is in appreciation, it is the encouraging time for NRI’s to make some good investment in realty market in India. Office plots, residential spaces and even apartments are easily available for NRI’s.
Indian property developers also have a notion that the downfall of realty market in India is the result of the global meltdown and depreciation of rupee. Their belief is not vague, but they also consider that ambiguities in western economies led to the build-up confidence of NRI’s into Indian market and they are keen on purchasing property here. Their investment is a huge support for Indian Realty market and soon with the rupee appreciation these investments will strengthen the economic situation as well.

2012 is a Tougher Year for Fund Raising

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Due to global issues, liquidity is becoming a problem. Though the phase is temporarily, the concern cannot be ruled out. Indian real estate sector is banking on the fact that change will take place and market will come out of the situation. The fact of the matter is that next 12 months and in fact 2012, does not look too bright for the sector.

The global debt worries have led to more and more uncertainty. In the last few months, the sector has been plagued by a potential liquidity squeeze. The situation is very unsettling and the fear is that we might end up looking at the year 2008 situation. It is certain that banks will get into selective lending with more strict verifications. In 2012, we are expecting that interest rates might get stabilized but disbursal of home loans will come down.

As RBI has been steadily increasing interest rates, debt for developers is becoming expensive. Also many banks are right now not keen to lend to real estate projects. Due to global uncertainty even private equity is cautious of investing in India. In fact, companies have started looking at alternative routes of fund raising. And many a deals are being done as structured debt deals hiding behind the facade of an equity structure.

In structured debt deals, the companies—investor and investee—sign two agreements. In the publicly announced agreement the investor—a PE or a VC fund—buys an equity stake in the company; and in the second contract they have buyback clause, which allows investee company to buy back its shares from the PE/VC fund at a price that will give the fund a return of about 20% per annum over the duration of the investment.

All signs currently suggest that 2012 would not be an easy year. As debt becomes more expensive and PE funds find it difficult to deploy cash due to global economic conditions, we would see higher number of structured deals taking place in 2012. Though these structured deals are being done, they have their share of problems. The problem is when the side-contracts are not honoured.

Realty PE Deal Volume in Q1 rises but Big Deals are missing.

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Private equity deals are alive and kicking in Indian real estate space even though headline numbers do not reflect the same due to the absence of big ticket investments. The total number of PE deals during the first quarter of CY 2012 has hit a three-year high, according to VCCEdge, the financial research platform of VCCircle.

There were 12 deals worth $279 million in Q1, compared to 9 deals worth $432 million in Q1 CY2011 and 4 deals worth $97 million in the same period in 2010, according to VCCEdge. This is much lower than the peak of 22 deals cumulating to $1.2 billion in the first quarter of 2008, after which stock markets went into a tailspin due to global financial meltdown.

Although the overall value of PE investments has shrunk and investors remain cautious about the sector, it does not necessarily reflect a poor investment scenario in the realty space, according to analysts.

Shobhit Agarwal, joint managing director (capital markets) at property consultant Jones Lang LaSalle India, says, “Most of the funding that is happening now is for last-mile project completion where most of the money has already been spent by the developers and they don’t need large-size funding.” In fact, the projects are 60-70 per cent complete and developers are looking for some more equity to finish them off, he adds.

Last year, the average deal for PE investments was skewed up in the first quarter due to two $100 million-plus investments, including one by Ascendas. This pushed up the average deal size to around $50 million, as against the average size of $20-25 million in Q1 of the previous two years.

But there is another reason for lower quantum of investments by PE firms in the realty sector. According to V Hari Krishna, director of Kotak Realty Fund, “Most of the funds are reaching their shelf life and new fundraising is not happening in the same pace as it happened in the earlier round. Therefore, a lot of funds have either exhausted their capital or are on the verge of it and investments are slowing down.”

Even though the average ticket size of PE investments has shrunk, real estate remains one of the top sectors drawing PE firms. During Q1, real estate accounted for almost 10 per cent of the total PE deal volume and around 15 per cent of total value of PE investments, as per VCCEdge.

Brokers Hunt for Jobs as Slump Hits Realty Sales

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NEW DELHI | BANGALORE: Broker in Bangalore bylane has just opened a stationery shop. He has named it ‘Smart Shop’, borrowing the name from the realty brokerage firm that he ran from the same premises until about two months ago. He switched to retail after his property business hit a rough patch following a slump in home sales. About 03-quarters of his revenues came from sale of apartments, the remaining from renting.

“With home sales dropping, it doesn’t make business sense anymore,” he says. It’s the same story in other big cities. In Mumbai, a mid-size broker has set up a small fast food joint to make ends meet. In Nagpur, a real estater has quit the real estate business and set up an ice-cream parlour. Their worries are not unfounded. While the large and established players in the property business have managed to stay, even during the slump, thousands of smaller players like brokers and agents are being forced to look for other jobs.

It also hit lakhs of people employed with such small outfits – each of which hires 5-15 people.With many brokers closing shops or reducing size, these people are out in the market, looking for jobs in sectors such as retail, banking, insurance and call centres. The real estate industry employs about 10 lakh people across the country, the majority in the unorganised sector.

In the first quarter of 2011, home sales dropped 17 per cent in Mumbai, 14 percent in Bangalore and 15 percent in Hyderabad. According to consultant Jones Lang La-Salle, unsold residential units in projects that are complete or are nearing completion in 6-12 months in Mumbai and Delhi-NCR are as high as 25 percent and 16 percent, respectively. In other big cities, including Bangalore, Chennai and Kolkata, the numbers range between 12 percent and 19 percent. Sales in tier-II and tier-III cities are steady, though there is some panic due to the increase in interest rates, which have climbed to about 11 percent from 8.25 percent a year ago.

“For smaller brokers, the impact of the current market factors is a lot more compared to the larger brokers,” says the president of the National Association of Realtors India . “Even for our members – who are fairly well-off – business is down 40 percent compared to 2009-10. But the smaller guys are in trouble and are setting up businesses that move on a daily basis. Many I know have asked their employees to look out” Ravindra Bramhe, chairman of the Maharashtra Property Brokers’ Association, says.

For whatever business is left in the market, there are hundreds of agents in queue. For instance, there are pockets on the Noida Expressway, near large projects, where real estate brokers can be seen sitting inside small tents, under the sweltering sun, waiting for business. Those who can’t afford to set up these tents can be seen on the roadside, running after every car that passes by, with brochures and flyers of projects in hand. Industry refers to them as the broker mandi. “All my friends and colleagues are now looking outside real estate before things get worse,” says Chaudhary. Many have returned to the insurance industry and others have found jobs with small call centres. A few have found employment with retail stores.

Realty Prices Peaking, Time to Sell Your House and a Correction in the Rancid

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As property prices exceeds the 2008 peak levels, realty experts believe that a correction is possible in the next couple of quarters, especially in cities like Delhi and Mumbai where prices have grown up fast. This offers an opportunity to real estate investors to gain profits.

A Navi Mumbai-based marketing executive, Parvinder Singh Sidhu, agrees. Five years ago, he had bought a second home of 750-sq-ft flat at Belapur in Navi Mumbai for about Inr13 lakh. At present, the price of the flat is Inr35-40 lakh. However, with the talk of correction in the Mumbai property market, Sidhu is planning to sell this house and earn profits now. “I have a house to stay, so I can think of selling this one. If property rates come down in the future, I could buy a similar property at a lower price,” he says.

Is it really a good time to cash in on your real estate investment? Yashwant Dalal , president of the (EAAI) Estate Agents Association of India, says that property prices in many markets have begun to show signs of correction. ” Where the rates have peaked, we expect the prices to go down by 25-40% in metro cities. If you had bought a house previously just as an investment, I would suggest that you sell as soon as you can and buy a similar property at cheaper price later,” says Dalal. According to him, property bought even 03 years ago may have appreciated nearly 100-150 percent in some areas, so it may be a good time to book profits.

TPG purchases 15% in Shriram Properties

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Texas Pacific Group Capital, a US-based private equity firm has taken up a 15% shareholding in Shriram Properties, the realty arm of diversified financial services group, forINR 450 crore. The transaction values the Bangalore-based developer at more than INR2,700 crore. TPG currently holds 49 percent shareholding in Shriram Retail Private Holdings and another 28 percent in Shriram Citi Union Finance. In March, the private equity firm had possessed the assets of Vishal Retail for INR 70 crore through Shriram Retail.

Shriram Properties said it would use the proceeds of the shares sale to venture into retail, hospitality and information technology parks, besides growing its base in the residential projects. “The money raised from private equity fund will also be used to purchase distraught assets in the market,” said M Murali. The company has postponed its proposed plans to increase money from the stock market this year. “We are in talks with builders for buying five projects in commercial and residential space,” Murali managing director of Shriram Properties said. Shriram’s move to diversify its asset portfolio comes at a time when developers are starting to push commercial assets such as retail, hotels and IT parks, riding on the back of economic recovery, to generate steady returns in the next couple of years.

Fire Capital Plans to Increase $ 100Million to Invest in Housing Projects

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Fire Capital, the first private equity fund focused on the Indian real estate sector , plans to increase $100 million to capitalize in housing projects. The company will increase the money initially from its existing investors in the US to invest in tier-II and tier-III cities in states like Haryana, Punjab, Rajasthan, told the CEO Om Chaudhry.

“There is an intense scarcity of residential projects, as India would require at least another 30 million homes by 2012 to fulfil the existing housing need. We want to cut some bit of the demand and supply gap in small towns and accommodate to the middle income segment,” he said. Majorly homes are needed in the mid and lower income group. Fire Capital, established in 2004, raised its first fund worth $121 million in 2006, with an ability to invest around $250 million through the co-investment commitments of its investor base. All the funds are almost over. It is raising the additional amount to built 25-50 acres with each builder in small towns this financial year.

The real estate sector in the country was one of the biggest effected area of the global economic recession in 2008-09 as buyers kept away from the market and banks became panicky about giving loans. Although recovery in the sector is gaining speed, but the amount of debt in the industry is a big concern. According to industry estimates, real estate firms have built up a total debt of about 75,000 crore. Property developers are increasingly approaching private equity firms to complete both existing and new projects besides repaying a part of their debt.

NRI TCG and US Based VRT Invests Rupees 270 crore in Mumbai, National Capital Region Residential Projects

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NRI investor Purnendu Chatterjee’s TCG Real Estate and US-based Vornado Realty Trust, is in the final stages of investing Rupees 270 crore in two residential developments in NCR and Mumbai. The fund will invest Rupees 150 crore and Rupees 120 crore in housing projects in Mumbai and Noida, respectively, and pick up 40-45 %  in each of the projects, said a person known with the fund’s plans.

“The 400 million  Dollars Fund works with land-owners, state governments and developers; particularly medium size developers who lack both money and management talent, to produce international quality real estates, which supply to the high demand sector of the industry. The Fund takes both controlling and minority positions. The Fund also looks at investing in related sectors such as construction, mortgage, lending and infrastructure. The Fund invests between  5 million Dollars to 50 million Dollars in each investment. TCG is the property development and investment arm of The Chatterjee Group.

 

When is the right time to Invest?

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invest
When the right time to enter into realty is is a kind of intuitive decision and can’t actually be described in words- it is more or less based on judgment considering the past facts. As per the present scenario, it would be good for the small investors to wait for around 8 to 1o months if they plan to invest in certain areas within larger cities like Mumbai since a correction is expected there in the midterm.

However, if planning to invest in other cities, the right time would probably be now. Since this view is always subjective, one must study the local market and inquire into the expected dynamics and prevalent there.

A proper measure is affordability. Since realty is not a one day investment, one should plan well his wealth and then invest into the market. Also, taking a back seat and using the policy of ‘wait and watch’ should be a game of experts, who on one hand hope for the profit, do have the bravery to bear loss, if any.