With a recovery in the residential portion of the real estate sector gaining ground, developers in Mumbai are banking heavily on the premium category. While relatively older apartments in South and central Mumbai continue to command a premium, new properties in these locations have not been left behind. Developers said that the big-ticket deals in the sector are in the range of Rs 5 crore to about Rs 35 crore. The price starts from twenty-five thousand to one lakh rupees per square feet. Among the properties that are bringing in high levels of interest are Mantri Ruby in Walkeshwar, Orbit Arya in Nepean Sea Road and Mittal Grandeur in Cuffe Parade. Adjoining areas like Worli Seaface and Mahalaxmi are also viewing concern from buyers. A deal for the sale of a new apartment in Cuffe Parade was hit at Rs 33 crore, with the transaction expected to be completed in about a month. One more property in Cuffe Parade, Mittal Grandeur, has an asking price of fifty crore rupees per apartment. This is for eight thousand square feet property having six bedrooms.
Tag Archives: Real Estate
Oberoi Constructions plans IPO early next year
Real estate firm Oberoi Constructions plans to launch its IPO early next year.
The IPO may happen in the first quarter of next financial year.
The Mumbai-based developer has “delivered” four million square feet of property and plans to add another four million square feet in the near future.
The share offering would be utilized to “fund growth” in the company. They already have a very decent land bank. They will use the cash for business and further land acquisition.
Real estate recovery story being scripted by investors
The real estate recovery story is being driven by the residential segment, but contrary to the claims made by a number of developers that end-users are their main buyers, the current trend is being driven by investors.
Investors are back in good numbers and before the curve goes up, they want to buy. Some who have bought are already hoping to book profits during this Diwali. This could be a precursor to further improvement in investor sentiments, since investors would take this as a sign to look towards a sustainable run in the future.
Investors moved away from the residential real estate market when the market crashed last year and many have not been came back. The last few months though have seen a number of affordable launches at price points, which have stimulated the market. Most developers have launched mid-income housing in the Rs 20-40 lakh range, which has created a movement.
Reason behind New Delhi’s real estate hike
New Delhi has been considered the business of real estate in India. With the growing number of students, tourists and bureaucrats, the real state of Delhi has become an area offered in India. Apartments, houses, land, agricultural and industrial lands, industrial and residential plots, are the main segments in which the real estate industry in New Delhi is thriving. Real estate prices in the city depend on a number of factors, including the location, accessibility, etc. Tourists look out for accommodation that is close to historic monuments and, secondly, the employers look out for residential properties that are easily accessible from the airport, train station, etc. Real estate demand in Delhi has increased more than ever. It has become the preferred place for foreign direct investment and many multinationals have established their headquarters at the site and adjacent areas. The search for a real estate agent recognized as offering real estate in New Delhi, according to your budget and needs. Beyond this, there are some other important factors such as strong economic growth, the recovery of financial markets and investor friendly policies of the government will also increase the demand for real estate in the city.
No late delivery fine if date not assured
Real estate developers cannot be fined for late delivery of possession of a flat to an allottee if no specific date of its delivery is mentioned in the contract.
The National Consumer Commission further held that the acceptance of the belated delivery of the flat in 1993 without protest renders it impossible for the consumer forum to award compensation to the buyer in this case.
Realty Prices In Mumbai Rise
Though realty prices across India are still smooth, Mumbai’s realty market has surely started heading north. Realtors in Mumbai have hiked prices for their developments by 5-15%, depending upon the location. Modern India Ltd, a Mumbai-based realty company, has finalized the sale of 4 residential flats, sized 2,100 square feet each at its high-end Belvedere Court, Mahalaxmi, at a price of twenty-five thousand rupees per square feet. Recent research reports (Market Beat) show that comparable flats (Vivarea, Planet Godrej) in the vicinity fetched between Rs 19,400 and Rs 20,000 per square feet, which clearly indicates a price rise of 25% in that area. Though prices had declined only by 30-35% in Mumbai and its suburbs, they are again moving up and still demand is pouring in, which is beneficial for developers.
Temasek look at Prestige
HDFC Property Ventures and Temasek are in talks to invest about Rs 625 crore in the Bangalore-headquartered Prestige Group, as cash-hungry real estate companies continue to tap private equity funds to meet critical funding needs.
HDFC’s real estate fund along with Singapore’s Temasek is in discussions with Prestige, which is seeking a valuation of $1 billion for its business. But the deal could take some time to fructify as both sides need to iron out a number of issues, including pricing.
Prestige Estates is seeking a valuation of about $1 billion. It is not clear if Temasek and HDFC are willing to do a deal at that price. They may look at something between $800 million and just under $1 billion.
The two funds may jointly pick up a little over 15% stake in Prestige Estates Projects, valuing the holding entity of the southern real estate major anywhere between $800 million and $1 billion.
Rent depends upon various factors
If we talk about rental system, it completely depends upon the age of building. The building of old age is not supposed to be as costly as the new building is. As we know that real estate do not comes into the category of depreciable asset, but still, the building with age factor more than twenty loses its rental market value. The fact behind it is the use of old fittings and loss of elegance with time. Most of the people prefer well maintained modern house for rental purpose.
Rush is back
We often read that recovery in realty market is visible now. Such news has reached to general people and they have started looking at property of their choice at affordable rates. Competition between builders results into rate cuts and attractive offers for buyers. It can be easily figured out by taking a look on the increment in property registration in major cities. With the improvement in macro-economic conditions and affordability of buyers, developers witnessed a stronger response to new launches across cities over the past quarter.
Real estate recovery is now visible
As we all know that property buyers are coming back to market, this time can be marked as market revival time. Once again the buyer has lots of choices and the seller has more profit from dealing. After observing the increase in demands in real estate industry, developers are all set to increase the prices of realty projects. If we talk about real estate companies, almost every company including DLF, are working on the same strategy.
With the wish to see real estate at its best in near future, I hope that the buyers will have more and more choices available to fulfill their needs.
Update yourself with recent realty trends
Real estate is known as growing industry. That is why, change is the only constant thing or I must say that the change is the only predictable thing for this industry. We got the know the prediction that real estate will be on peak for residential properties and in the very next week we hear that investing in commercial properties are good for future. Such trend may create dilemma for the prospective buyers and investors.
The best way to update yourself with recent and upcoming trend is to keep your eyes on reliable websites. Information technology is playing very important role in providing information on time, which is needed before taking investment decision.
Real estate demand revitalizes
The global economic slowdown has provided end users a unique opportunity to buy their sweet homes as prices in many areas in National Capital Region have fallen steeply. Apartments are now available in some markets at almost 50 percent of the prevailing price a couple of years ago. The average price in Gurgaon has fallen by almost thirty percent and in Noida by more than fifteen percent in last two year.
According to PropEquity, Noida and Faridabad demonstrated high absorption primarily due to launch of affordable housing projects. The projects of Jaypee in Noida and BPTP in Faridabad were primarily driving the high absorption values in these cities with these developers commanding more than seventy percent of the market share for the period of Jan-Jun ’09. Noida maintained its top position in NCR with the launch of 7,032 units, and beats Gurgaon by a large margin of over 2,300 units.
However, the slowdown had its effect on the timely delivery of apartments. Unavailability of finances and lack of demand have forced developers to go slow in implementing projects, which were launched earlier. According to the report, amongst the cities witnessing the maximum number of delays in project completion, Ghaziabad and Gurgaon had 71 percent of the projects under implementation falling behind schedule.
IFCI expands in real estate business
Financial institution IFCI will amplify its existence in the real estate business. After serviced apartment project in Delhi, IFCI Infrastructure Development Ltd (IIDL) will launch three similar projects in Lucknow, Guwahati and Chennai.
To woo foreign traveller, IIDL signed a contract with Singapore’s Frasers Hospitality to manage its serviced apartment property named Fraser Suites in the capital city. IIDL is planning to develop a total of two million square feet area in the three cities.
CEO and MD of IFCI Atul kumar Rai said that IIDL would shortly start developing serviced apartments at other locations. He said that the company would also like to buy lands in the auctions of governments land development authority.
IIDL has plans in hand to develop two million square feet commercial space. CEO of IIDL said that if they get other striking proposal to develop residential projects, they would undoubtedly think about them.
Real estate- the best investment destination
The economic slump had a major impact on real estate. The price has come down over the last few months. People with a huge disposable income can explore investing in real estate for diversification of their assets. Reduced home loan interest rates and lower property prices makes it an opportunity hard to resist.
Some investments are considered safe in times of recession like precious metals and foreign currencies. In this list of investments that are popular during times of financial insecurity, real estate can be included.
Real estate is considered a hedge against forces of inflation. Inflation has led to the rupee value depreciating and property prices travelling upwards. Property investments are usually held over a long term.
Green buildings in demand
New trend of real estate industry is the green building concept. Such green buildings are environment friendly and energy efficient. A green building uses less energy, water and natural resources, creates less waste and is healthier for the people compared to a standard building. According to Mr. Ajay Mathur, Director General for Bureau of Energy Efficiency (BEE) under the Ministry of Power, “Today, India has close to 30 million square feet of green buildings; an amazing achievement given the fact that we had only about 20,000 square feet in 2003 when the movement started here”.
These buildings are wooing more and more buyers day by day. Green buildings are in existence from 2007 and now various Government organizations are spreading awareness and popularizing its energy efficiency feature.
Real estate rentals come down
The trend of Delhi/ NCR shows a huge fall in commercial real estate rentals. It is well known that companies are moving their offices from gurgaon to other areas of NCR because of the high rental costs there. Most of the commercial areas in delhi are offering fully furnished office spaces at much lower cost. This trend has made a tremendous change in gurgaon commercial rental market. However, a clear scenario will be visible in near future but the change is on its way.
I think companies are doing dual cost cutting by moving their offices to other areas. First cost cutting is clear to everyone that is by reduction in rental cost. Second one is bit indirect. As it is known that gurgaon is well known commercial area. Every company provides conveyance facility to their employees because most of the employees come from other areas. If company shifts, the transportation cost will definitely reduce.
Real estate is back on track
According to CREDAI, real estate sector is picking up in both residential and commercial sector. Both real estate sectors are getting more and more enquiries. Along with enquiries, demand in both sectors has also increased. However, there are various major and minor factors behind this, but two major factors are, affordable housing concept and reduction in home loan rates. Investors have more choice and offer these days.
Mr. Raj Menda, President of CREDAI-Karnatak announced a 2 day realty expo starting from 15th of this month. This realty expo will showcase 150 properties. During this announcement Mr. Menda said that there is a growth of 60% in March of this year as compared to December last year.
Realty regulator is needed
HDFC chairman Mr. Deepak Parekh said that there is need of real estate regulator at state level to deal with issues concerning the housing sector. He pointed out that the Government should layout an institutional framework for a real estate regulator. Regulators’ role would be to regulate the affordable housing agenda, promote real estate reforms and ensure transparency especially by mandating that flats be sold only on carpet area and act as a platform to protect buyers from real estate deceit. Mr. Parekh suggested that affordable housing has to be enable to cut all income segments and has to make economic sense in terms of distance from work place.
Realty regulator is needed
Government should layout an institutional framework for a real estate regulator. Regulators’ role would be to regulate the affordable housing agenda, promote real estate reforms and ensure transparency especially by mandating that flats be sold only on carpet area and act as a platform to protect buyers from real estate deceit. Mr. Parekh suggested that affordable housing has to be enable to cut all income segments and has to make economic sense in terms of distance from work place.
Peninsula Land to raise QIP
Real estate company Peninsula Land is planning to raise a qualified institutional placement of five hundred crore rupees for acquiring land in Mumbai. Peninsula Land has already recognized five plots in Parel, Lower Parel, Kanjurmarg and Thane. The raised capital will be used for acquiring new properties. The company currently has a board approval to raise up to seven hundred and fifty crore rupees and will make a decision on the final amount to be raised in its annual general meeting.
Gurgaon lose its position of the biggest real estate rental
Gurgaon used to be the preferred place for office rental. During the last couple of months, office rental increased tremendously. This led many companies to think about moving their offices to other cities. Even the lock-in period has failed to stop the companies to shift. Companies are also getting fully furnished offices at almost half the rates compared to what they were paying. Due to such trend, the demand for furnished office space is on the rise in Delhi as well as in all the major towns of the country. Companies prefer to start their office in furnished offices rather than starting them in bare commercial place.
Let us find some positive aspects of recession
Everybody is cursing recession as it resulted into slowdown in market. But, have you ever realized that there is always some positive aspect behind every off-putting phase. Recession has changed the point of views of consumers, lenders and developers as well. Consumers became more cautious during spending their saved money. On the other hand developers shifted their focus towards low cost housing.
Recession has made tremendous changes in real estate, various real estate giants showed interest in housing for middle class people rather than building a huge complex. Investors may seem to be winners with recession giving them an opportunity to pick investments at more realistic prices.
Money raising by realty-focused PEs sluggish
Money by realty-focused PEs declined to over a four-year-low level in April-June quarter of this year as institutional investors remained uncertain in committing capital. Investors have turned carefull and are now looking at more established markets. In this quarter, 21 real estate funds made aggregate commitments of 10.3 billion US dollars, down 72.16% from 37 billion US dollars in a year period.
During this time of instability, investors are especially cautious and therefore they are looking towards more established markets, rather than emerging markets.
Anticipating slump in demand amid the global economic downturn, various investors have reviewed their investment portfolios and reconsider their allocations to PE real estate.
Slump in retail rentals
As per CBRE, New Delhi witnessed a decline in retail rentals of 25% and ranked 69th in rentals among the list of major cities across the world during the Q1 of this year.
Demand for retail space has decreased in most markets across the world as consumers cut back on spending and unemployment continues to rise in many countries. New Delhi in India saw a 25% decline in last 6 months.
Upward move in commercial realty
The commercial real estate market is slowly reviving as higher government incomes and an improving economy are prompting customers to invest. Developers say that there are more enquiries from investors.
Many developers, instead of selling their properties, are signing rental deals. In one recent deal, global consultant KPMG signed a deal with Lodha Developers for renting out a 130,000 square feet property at Mahalaxmi in central Mumbai, for a monthly rental of Rs 160 per square feet.
The company has 5commercial projects in Mumbai, in areas such as Parel, Worli and Thane. Recently, Lodha also bid Rs 710 crore for NTC’s 10.3-acre Finlay Mill land in central Mumbai.
Similarly, in a recent transaction in the commercial property space, investor C Sivasankaran acquired a 66% stake in a commercial property SPV from DLF for Rs 310 crore. Akruti City is the other investor in the SPV.