Thursday, October 29, 2009
Real estate Market’s liking it too
The improving fundamentals of real estate developers on the back of the real estate price hikes, increased liquidity through QUIPs, real estate asset sales and pre-sales observed over the last few months is not lost on the real estate market. The BSE Realty index, the worst performer of 2008 is up 248 per cent since its March 2009 lows. This indicates that current valuations are not cheap. In a bid to cash in on the real estate recovery, leading realty companies are planning to raise money from the primary realty markets to the tune of over Rs 14,000 crore. This could also suck out liquidity and may cap appreciation of real estate prices of listed scrips, says analysts.
leading to higher prices of projects and property
The uptick has however led realty players to increase property prices. Ramnath believes that new properties launched in Mumbai, for example, were offered at 10-15 per cent higher property prices as against their lows in March 2009 quarter. Moreover, real estate developers are now offering properties without any discount and freebies (such as waiver of stamp duty and registration charges of properties).Says Dutt, “Real estate Developers in key cities have been hiking prices to test the flexibility of the real estate market. At first, this trend was evident only in the luxury and semi-luxury segments, but it has now percolated down to the mid-income housing segment as well.” A good example is DLF’s Capital Greens project in Delhi. DLF increased its prices at Phase II of this real estate project to Rs 6,750 per square feet in September 2009, which is at a 30 per cent premium to those in Phase I launched in April 2009.
Friday, October 23, 2009
PROPERTY OPTION FOR SENIOR CITIZENS
Reverse mortgage is a popular in the West among senior citizens who want to tap their realty property for cash.
Ashish Gupta outlines some legal aspects of reverse mortgage
In the present day circumstances of cash crunch, property can be a valuable source of getting real estate funds, without physically disposing off the property.
As a concept, reverse mortgage is of immense use in unlocking the otherwise illiquid asset of property. Hitherto immovable property has been treated as one of the most illiquid assets. Reverse mortgage unlocks the liquidity potential of this real estate asset. It helps the owner get a return from his immovable property, without having to part with it. The owner can continue with the possession of the property during his lifetime.
WHAT HAPPENS TO TITLE?
In case of a reverse mortgage, the realty property owner surrenders the title of the property to a financial entity. The financial entity doesn’t pay the entire amount to the owner upfront. On the contrary, it pays out a regular sum each month for the agreed time.
HOW IS IT DIFFERENT FROM MORTGAGE?
Reverse mortgage is different from mortgage. Mortgage is a form of hypothecation of the property to a bank, as a security for a home loan. A common form of security which a bank insists on is the mortgage of the house for which the home loan is being availed of by the borrower.
Mortgage refers to the transfer of interest in a specific realty property for the purpose of securing either the payment of money advanced or to be advanced by way of home loan, or an existing or future debt.
The transferor is called a mortgagor, the transferee is called a mortgagee, the principal money and interest that are secured by the mortgage are called the mortgage money, and the instrument by which the transfer is affected is called a mortgage deed.
A reverse mortgage is available to those above a specific age. The aim is to use the property and make it generate a return while in use by the owner. The amount is paid out each month is for a specific period of time.
RISK OF FINANCIAL INSTITUTION
The financing institution has to bear the risk of the individual outliving the agreement. At the expiry of the agreement period, the monthly payments to the owner stop. The monthly payout depends on the value of the realty property, the term of the agreement and the rate of payment. The valuation of the property is to be done by experts. The entire payout mechanism calculation and computation depends on the law of probability.
Courtesy:- TOI dt:- 17-10-09
Ashish Gupta outlines some legal aspects of reverse mortgage
In the present day circumstances of cash crunch, property can be a valuable source of getting real estate funds, without physically disposing off the property.
As a concept, reverse mortgage is of immense use in unlocking the otherwise illiquid asset of property. Hitherto immovable property has been treated as one of the most illiquid assets. Reverse mortgage unlocks the liquidity potential of this real estate asset. It helps the owner get a return from his immovable property, without having to part with it. The owner can continue with the possession of the property during his lifetime.
WHAT HAPPENS TO TITLE?
In case of a reverse mortgage, the realty property owner surrenders the title of the property to a financial entity. The financial entity doesn’t pay the entire amount to the owner upfront. On the contrary, it pays out a regular sum each month for the agreed time.
HOW IS IT DIFFERENT FROM MORTGAGE?
Reverse mortgage is different from mortgage. Mortgage is a form of hypothecation of the property to a bank, as a security for a home loan. A common form of security which a bank insists on is the mortgage of the house for which the home loan is being availed of by the borrower.
Mortgage refers to the transfer of interest in a specific realty property for the purpose of securing either the payment of money advanced or to be advanced by way of home loan, or an existing or future debt.
The transferor is called a mortgagor, the transferee is called a mortgagee, the principal money and interest that are secured by the mortgage are called the mortgage money, and the instrument by which the transfer is affected is called a mortgage deed.
A reverse mortgage is available to those above a specific age. The aim is to use the property and make it generate a return while in use by the owner. The amount is paid out each month is for a specific period of time.
RISK OF FINANCIAL INSTITUTION
The financing institution has to bear the risk of the individual outliving the agreement. At the expiry of the agreement period, the monthly payments to the owner stop. The monthly payout depends on the value of the realty property, the term of the agreement and the rate of payment. The valuation of the property is to be done by experts. The entire payout mechanism calculation and computation depends on the law of probability.
Courtesy:- TOI dt:- 17-10-09
Thursday, October 22, 2009
REAL ESTATE AND DEVELOPERS REALTY
Real estate Developers will continue to launch affordable housing projects as this is one way to raise resources to service their accumulated debt, says Prabhakar Sinha
The real estate market may witness an oversupply like condition in the affordable property segment of residential real estate making prices range-bound in times to come.
Though the global financial crisis affected property developers badly, it brought cheer to the middleclass end users as property builders were forced to bring down their property units prices to the affordable range of Rs 5 lakh to Rs 30 lakh.
In fact, the crisis led to emergence of a new segment of real estate affordable housing in residential real estate in the country. This helped revive realty market and instilled a new confidence among property developers and end users, according to Samir Jasuja, founder CEO of Prop Equity Research.
In order to bring down prices to drive sales, real estate developers cut the rate by lowering specifications and also by reducing the size of property units. The combined effect of cutting the rate and reducing the size led to a steep fall in prices of two- and three-bedroom apartments, by as much as 30% to 40% from their peak level of early 2008.
The fall in prices spurred demand. Many real estate developers even sold their entire realty projects in only a couple of days. This is mainly because real estate developers could successfully convey the impression to property buyers that availability of affordable apartments at prices at which they offered would not last long. This made the realty buyers queue up to buy these affordable apartments.
But as demand rose sharply in this realty category, more and more realty developers launched affordable apartments in the affordable segments and supply increased manifold. According to Jasuja, this realty category is now beginning to get overcrowded with a rapid increase in supply, which is outstripping absorption and leading to an inventory pile up.
According to the accompanying chart, absorption rate or sold-out rate in the last one year in affordable apartments in the price range of Rs 5 to Rs 15 lakh is much better than that in the Rs 15 to Rs 30 lakh range. This is also because of the number of affordable apartments launched in the Rs 5 to Rs 15 lakh price range is much smaller than that in the Rs 15 to Rs 30 lakh range in the National Capital Region (NCR).
Gurgaon realty saw the launch of maximum number of apartments in the affordable range. But the sold-out rate here is the second worst at 37%, next only after Greater Noida realty, where it is only 25%. As sales in affordable range of apartments picked up, many property developers jumped onto the affordable housing bandwagon to bail themselves out of the global economic crisis. Many of them treated affordable housing category as the new mantra in marketing and launched several realty projects in this affordable housing category resulting in an oversupply in the market, Jasuja says.
Interestingly, as demand picked up and number of transactions increased, many realty developers revised prices upwards, by around 10%. However, property consultants feel price hike is more cosmetic in nature as property developers are giving discounts over quoted prices. Some real estate developers increased the quote prices, but the discount was also suitably hiked. Data collected by PropEquity from 13 cities suggests that rate of sales (absorption) of affordable units have slowed down in the September 2009 quarter. In the early phase, the euphoria was mainly due to a huge pent up demand in the affordable housing category.
Falling absorption velocity coupled with an oversupply in this affordable housing category has now resulted in an inventory pile up. As cost of carrying inventory in real estate sector is very high, real estate developers will resort to price correction at the cost of profits.
But realtors argue the prices are at rock bottom. In most of the areas of NCR, realty developers are selling apartments at 30% to 50% discount to the average price of affordable apartments in the area. In most of the cases, they are working on a very thin profit margin. Therefore, a further cut in prices will be a big disincentive to launch the real estate project itself. However, bankers and property consultants feel that most realty developers are under a huge debt. They need funds to service their debt. As they are not able to raise funds through equity-sell, they have no choice but to launch new real estate projects for the purpose. Therefore, the supply of affordable housings will continue.
As affordable housing is witnessing sales, realty developers are launching them. If the economy revives, demand for affordable housings will further increase. In fact, the requirement of housings in this segment is huge. If the economic growth picks up, the sentiments would improve and influence people to buy houses flats apartments. Besides, a better economic environment enhances financial security. This will also result in an increase in transactions. The prices, however, will remain under pressure for some more time.
The real estate market may witness an oversupply like condition in the affordable property segment of residential real estate making prices range-bound in times to come.
Though the global financial crisis affected property developers badly, it brought cheer to the middleclass end users as property builders were forced to bring down their property units prices to the affordable range of Rs 5 lakh to Rs 30 lakh.
In fact, the crisis led to emergence of a new segment of real estate affordable housing in residential real estate in the country. This helped revive realty market and instilled a new confidence among property developers and end users, according to Samir Jasuja, founder CEO of Prop Equity Research.
In order to bring down prices to drive sales, real estate developers cut the rate by lowering specifications and also by reducing the size of property units. The combined effect of cutting the rate and reducing the size led to a steep fall in prices of two- and three-bedroom apartments, by as much as 30% to 40% from their peak level of early 2008.
The fall in prices spurred demand. Many real estate developers even sold their entire realty projects in only a couple of days. This is mainly because real estate developers could successfully convey the impression to property buyers that availability of affordable apartments at prices at which they offered would not last long. This made the realty buyers queue up to buy these affordable apartments.
But as demand rose sharply in this realty category, more and more realty developers launched affordable apartments in the affordable segments and supply increased manifold. According to Jasuja, this realty category is now beginning to get overcrowded with a rapid increase in supply, which is outstripping absorption and leading to an inventory pile up.
According to the accompanying chart, absorption rate or sold-out rate in the last one year in affordable apartments in the price range of Rs 5 to Rs 15 lakh is much better than that in the Rs 15 to Rs 30 lakh range. This is also because of the number of affordable apartments launched in the Rs 5 to Rs 15 lakh price range is much smaller than that in the Rs 15 to Rs 30 lakh range in the National Capital Region (NCR).
Gurgaon realty saw the launch of maximum number of apartments in the affordable range. But the sold-out rate here is the second worst at 37%, next only after Greater Noida realty, where it is only 25%. As sales in affordable range of apartments picked up, many property developers jumped onto the affordable housing bandwagon to bail themselves out of the global economic crisis. Many of them treated affordable housing category as the new mantra in marketing and launched several realty projects in this affordable housing category resulting in an oversupply in the market, Jasuja says.
Interestingly, as demand picked up and number of transactions increased, many realty developers revised prices upwards, by around 10%. However, property consultants feel price hike is more cosmetic in nature as property developers are giving discounts over quoted prices. Some real estate developers increased the quote prices, but the discount was also suitably hiked. Data collected by PropEquity from 13 cities suggests that rate of sales (absorption) of affordable units have slowed down in the September 2009 quarter. In the early phase, the euphoria was mainly due to a huge pent up demand in the affordable housing category.
Falling absorption velocity coupled with an oversupply in this affordable housing category has now resulted in an inventory pile up. As cost of carrying inventory in real estate sector is very high, real estate developers will resort to price correction at the cost of profits.
But realtors argue the prices are at rock bottom. In most of the areas of NCR, realty developers are selling apartments at 30% to 50% discount to the average price of affordable apartments in the area. In most of the cases, they are working on a very thin profit margin. Therefore, a further cut in prices will be a big disincentive to launch the real estate project itself. However, bankers and property consultants feel that most realty developers are under a huge debt. They need funds to service their debt. As they are not able to raise funds through equity-sell, they have no choice but to launch new real estate projects for the purpose. Therefore, the supply of affordable housings will continue.
As affordable housing is witnessing sales, realty developers are launching them. If the economy revives, demand for affordable housings will further increase. In fact, the requirement of housings in this segment is huge. If the economic growth picks up, the sentiments would improve and influence people to buy houses flats apartments. Besides, a better economic environment enhances financial security. This will also result in an increase in transactions. The prices, however, will remain under pressure for some more time.
Wednesday, October 21, 2009
GOOD NEWS FOR EIGHT LAKH PEOPLE
Right Move DDA to denotify 230 Colonies; MCD to Take Them Over
Good news for residents of the 230 colonies that were unauthorized till last year.
After staying in limbo for the last three years, the Delhi Development Authority (DDA) has finally decided to de-notify these colonies in its board meeting held on Monday. Around 8 lakh people live in these colonies.
Till now, these areas were under DDA but post de-notification, the Municipal Corporation of Delhi (MCD) would immediately take over the control of building activities as per building bylaws and provisions of the Municipal Corporation Act.
The proposal will now go to the Union Urban Development Ministry for final approval before it comes into force.
These 230 colonies are part of the 1,436 unauthorized colonies that were regularized by the Delhi government last year. But since they were notified areas under DDA development control, their residents found it difficult to get their building plans sanctioned from DDA.
Besides, these areas were bereft of basic civic amenities like water and electric supply, roads and sewer lines as the MCD and Delhi government provides these basic services. All this will change with MCD taking over control.
"These areas would become developed as the civic agency is responsible for providing and maintaining these services," said a senior DDA official who did not want to be quoted as he is not authorized to speak to the media.
Also, once it comes under the MCD's control, it would be the civic agency's responsibility to check that no unauthorized construction and encroachment takes place in these areas.
"We decided to de-notify these areas as they had remained undeveloped for a very long time despite being declared development area," said a senior DDA official.
Also, because of lack of enforcement, these areas had seen a mushrooming of unauthorized construction and development of unauthorized colonies.
"There has also been a persistent demand from various quarters to denotify these areas as the ground reality had changed," he added.
Courtesy:- HT dt:- 15-10-09
Good news for residents of the 230 colonies that were unauthorized till last year.
After staying in limbo for the last three years, the Delhi Development Authority (DDA) has finally decided to de-notify these colonies in its board meeting held on Monday. Around 8 lakh people live in these colonies.
Till now, these areas were under DDA but post de-notification, the Municipal Corporation of Delhi (MCD) would immediately take over the control of building activities as per building bylaws and provisions of the Municipal Corporation Act.
The proposal will now go to the Union Urban Development Ministry for final approval before it comes into force.
These 230 colonies are part of the 1,436 unauthorized colonies that were regularized by the Delhi government last year. But since they were notified areas under DDA development control, their residents found it difficult to get their building plans sanctioned from DDA.
Besides, these areas were bereft of basic civic amenities like water and electric supply, roads and sewer lines as the MCD and Delhi government provides these basic services. All this will change with MCD taking over control.
"These areas would become developed as the civic agency is responsible for providing and maintaining these services," said a senior DDA official who did not want to be quoted as he is not authorized to speak to the media.
Also, once it comes under the MCD's control, it would be the civic agency's responsibility to check that no unauthorized construction and encroachment takes place in these areas.
"We decided to de-notify these areas as they had remained undeveloped for a very long time despite being declared development area," said a senior DDA official.
Also, because of lack of enforcement, these areas had seen a mushrooming of unauthorized construction and development of unauthorized colonies.
"There has also been a persistent demand from various quarters to denotify these areas as the ground reality had changed," he added.
Courtesy:- HT dt:- 15-10-09
Thursday, October 15, 2009
REALTY NEEDS A STRONG REBOUND, NOT JUST QIP FUNDS
Placements May Have Brought In the Much-Needed Funds, But Developers Yet To Weather Slowdown Storm: Crisil
Real estate shares have been star performers since the turnaround in the stock market from March this year. What also boosted the sentiment was the fact that some of the leading names in the sector were able to raise equity funds by qualified institutional placements (QIPs), helping them tide over a severe liquidity crisis. Property developers’ shares suddenly find themselves in a virtuous cycle. The fact that institutional investors are willing to invest in these companies has pushed up stock prices, in turn attracting more investors. While QIPs may have solved short-term concerns of the real estate sector, a strong rebound in demand is imperative if the sector has to recover from the serious miscalculations
Made in the past, says Crisil Research in a note.
Aggressive debt-funded land acquisition had led to severe liquidity crunch among developers during the slowdown, which began in early 2008. QIPs helped improve the liquidity situation of developers and reduced their gearing. However, valuations of realty shares look stretched, as demand for property — residential and commercial — continues to be significantly below peak levels, the note says, adding that the QIP route should not be considered a fund-raising tool, but as the last and undesirable alternative to internal accruals. This is because developers may enjoy better short-term liquidity position, but at the cost of stake dilution. “QIP issuance results in dilution of shareholders’ stake, hence, it is not a preferred mode of raising funds, as a few investors would gain the ability to influence stock prices,” the note says.
Just like developers, equity shareholders also witness dilution in stake after a QIP. However, retail investors experience deterioration in earnings per share and also face the risk of institutional investors exiting their investments in the short term, which may lead to a sharp decline in stock prices. Hence, investors may have been able to earn short-term returns, but the gains are laced with certain risks.
Till October this year, seven real estate players have raised funds through QIP — Unitech (two issues), India bulls Real Estate, HDIL, Sobha Developers, Orbit Corp, Parsvnath Developers and Ackruti City. The promoters of DLF also offloaded some part of their stake to QIBs, but not through QIP, as the existing equity was diluted and no fresh issues were made.
Yet, some industry sources point out that despite its shortcomings; QIPs have their advantages as well.
“Both demand and liquidity is important. If developers are bound by liquidity constraints, they will not be able to complete projects or take up new ones. This will increase demand, and in the process spiral up prices,” said Jones Lang LaSalle Meghraj chairman and country head Anuj Puri. “If there is a steady supply of projects, prices will be under check,” he added. The BSE Realty index has been the best performing sectored barometer since early March, rising 241%.
Courtesy:- Et dt:- 14-10-09
Real estate shares have been star performers since the turnaround in the stock market from March this year. What also boosted the sentiment was the fact that some of the leading names in the sector were able to raise equity funds by qualified institutional placements (QIPs), helping them tide over a severe liquidity crisis. Property developers’ shares suddenly find themselves in a virtuous cycle. The fact that institutional investors are willing to invest in these companies has pushed up stock prices, in turn attracting more investors. While QIPs may have solved short-term concerns of the real estate sector, a strong rebound in demand is imperative if the sector has to recover from the serious miscalculations
Made in the past, says Crisil Research in a note.
Aggressive debt-funded land acquisition had led to severe liquidity crunch among developers during the slowdown, which began in early 2008. QIPs helped improve the liquidity situation of developers and reduced their gearing. However, valuations of realty shares look stretched, as demand for property — residential and commercial — continues to be significantly below peak levels, the note says, adding that the QIP route should not be considered a fund-raising tool, but as the last and undesirable alternative to internal accruals. This is because developers may enjoy better short-term liquidity position, but at the cost of stake dilution. “QIP issuance results in dilution of shareholders’ stake, hence, it is not a preferred mode of raising funds, as a few investors would gain the ability to influence stock prices,” the note says.
Just like developers, equity shareholders also witness dilution in stake after a QIP. However, retail investors experience deterioration in earnings per share and also face the risk of institutional investors exiting their investments in the short term, which may lead to a sharp decline in stock prices. Hence, investors may have been able to earn short-term returns, but the gains are laced with certain risks.
Till October this year, seven real estate players have raised funds through QIP — Unitech (two issues), India bulls Real Estate, HDIL, Sobha Developers, Orbit Corp, Parsvnath Developers and Ackruti City. The promoters of DLF also offloaded some part of their stake to QIBs, but not through QIP, as the existing equity was diluted and no fresh issues were made.
Yet, some industry sources point out that despite its shortcomings; QIPs have their advantages as well.
“Both demand and liquidity is important. If developers are bound by liquidity constraints, they will not be able to complete projects or take up new ones. This will increase demand, and in the process spiral up prices,” said Jones Lang LaSalle Meghraj chairman and country head Anuj Puri. “If there is a steady supply of projects, prices will be under check,” he added. The BSE Realty index has been the best performing sectored barometer since early March, rising 241%.
Courtesy:- Et dt:- 14-10-09
REALTY REVIVAL: THE BIG PICTURE
Low-cost housing will lead the recovery process, stresses a FICCI survey
Even as the economy picks up and reports speak of crore-plus apartments being sold within hours, `affordable' is still the operative word in the residential property segment, as indicated by figures in a latest FICCI survey report.
According to the report, `Indian real estate: the current scenario', 34 per cent demand in residential realty lies in the Rs 5 lakh-Rs 15 lakh segment; 26 per cent in the Rs 15 lakh-Rs 25 lakh segment; 22 per cent in the Rs 25 lakh -Rs 40 lakh segment; 12 per cent in the Rs 35 lakh-Rs 50 lakh segment; and only 6 per cent demand is for properties priced above Rs 50 lakh.
Parking funds in affordable housing projects has emerged as the safest bet, says the survey, followed by the development of demand based commercial spaces. Special Economic Zones (SEZs) and the retail segment are expected to be the least preferred asset class to drive the sector towards recovery.
Experts predict a 25-30 per cent renewal in demand in the residential segment by the end of 2009. In contrast, demand in the commercial segment is expected to pick up only after the third quarter of 2010. Till the end of this year, a demand rise of only 10-12 per cent is expected in the retail segment.
Transparency needed
According to the survey, the stimulus packages and interest rate cuts have made it easier for developers to access bank finance.
However, banks are still cautious when it comes to lending and prefer lending to credible developers and for projects that are nearing completion. The developers surveyed feel that transparency in operations could enhance their credibility and bring credit within reach.
While qualified institutional placement (QIP), a process of selective equity issue, has emerged as one of the most popular modes of raising funds in recent times, lack of awareness about real estate mutual funds (REMFs) and the ambiguous policy framework have prevented the funds from really taking off in the Indian market. Issues relating to taxation and exit need to be resolved and the guidelines made clearer for the REMFs to perform better.
Not seeing green
According to the report, the biggest hurdle facing the `green building' concept in India is that of ignorance - about the long-term benefits of such buildings and, as a result, there is resistance to this new practice among builders.
The next major obstacle is the lack of integrated designing and insufficient infrastructure to support green building construction. Bylaws should make it mandatory for developers to adopt sustainable and green methods of development.
Courtesy:- HT Estates dt:- 10-10-2009
Even as the economy picks up and reports speak of crore-plus apartments being sold within hours, `affordable' is still the operative word in the residential property segment, as indicated by figures in a latest FICCI survey report.
According to the report, `Indian real estate: the current scenario', 34 per cent demand in residential realty lies in the Rs 5 lakh-Rs 15 lakh segment; 26 per cent in the Rs 15 lakh-Rs 25 lakh segment; 22 per cent in the Rs 25 lakh -Rs 40 lakh segment; 12 per cent in the Rs 35 lakh-Rs 50 lakh segment; and only 6 per cent demand is for properties priced above Rs 50 lakh.
Parking funds in affordable housing projects has emerged as the safest bet, says the survey, followed by the development of demand based commercial spaces. Special Economic Zones (SEZs) and the retail segment are expected to be the least preferred asset class to drive the sector towards recovery.
Experts predict a 25-30 per cent renewal in demand in the residential segment by the end of 2009. In contrast, demand in the commercial segment is expected to pick up only after the third quarter of 2010. Till the end of this year, a demand rise of only 10-12 per cent is expected in the retail segment.
Transparency needed
According to the survey, the stimulus packages and interest rate cuts have made it easier for developers to access bank finance.
However, banks are still cautious when it comes to lending and prefer lending to credible developers and for projects that are nearing completion. The developers surveyed feel that transparency in operations could enhance their credibility and bring credit within reach.
While qualified institutional placement (QIP), a process of selective equity issue, has emerged as one of the most popular modes of raising funds in recent times, lack of awareness about real estate mutual funds (REMFs) and the ambiguous policy framework have prevented the funds from really taking off in the Indian market. Issues relating to taxation and exit need to be resolved and the guidelines made clearer for the REMFs to perform better.
Not seeing green
According to the report, the biggest hurdle facing the `green building' concept in India is that of ignorance - about the long-term benefits of such buildings and, as a result, there is resistance to this new practice among builders.
The next major obstacle is the lack of integrated designing and insufficient infrastructure to support green building construction. Bylaws should make it mandatory for developers to adopt sustainable and green methods of development.
Courtesy:- HT Estates dt:- 10-10-2009
Wednesday, October 14, 2009
CRASH GURU: US HOUSE PRICES COULD FALL 10% MORE
Nouriel Roubini, the high-profile US economist who foresaw the credit crunch, warned that house prices could fall by another 10 per cent, underlining the fragility of America's nascent economic recovery.
Property prices in the US have already dropped by almost a third from their peak, as the crisis spread from lower-paid sub-prime borrowers to engulf the entire housing market. But Roubini said there could still be worse to come -- and added those banks' heavy losses on home mortgages are likely to be repeated in the sliding market for business premises.
"The stress is moving from residential mortgages, that are still in deep trouble, to commercial real estate, where they are just starting to recognize that they're going to have massive, massive losses," he said.
First-time buyers have been helped by an $8,000 tax credit, but this is due to run out at the end of next month.
Roubini's latest warning came despite several pieces of upbeat news from the recession-hit US economy in recent days, including official figures released on Thursday which showed that the pace of job-shedding is beginning to slow.
Fewer workers filed new claims for unemployment benefits last week than at any time since January -- 521,000, down from 554,000 a week earlier. "The notable downturn in jobless claims shows improving labour market conditions," said Michelle Meyer of Barclays Capital.
Courtesy:- HT Business dt:- 10-10-2009
Property prices in the US have already dropped by almost a third from their peak, as the crisis spread from lower-paid sub-prime borrowers to engulf the entire housing market. But Roubini said there could still be worse to come -- and added those banks' heavy losses on home mortgages are likely to be repeated in the sliding market for business premises.
"The stress is moving from residential mortgages, that are still in deep trouble, to commercial real estate, where they are just starting to recognize that they're going to have massive, massive losses," he said.
First-time buyers have been helped by an $8,000 tax credit, but this is due to run out at the end of next month.
Roubini's latest warning came despite several pieces of upbeat news from the recession-hit US economy in recent days, including official figures released on Thursday which showed that the pace of job-shedding is beginning to slow.
Fewer workers filed new claims for unemployment benefits last week than at any time since January -- 521,000, down from 554,000 a week earlier. "The notable downturn in jobless claims shows improving labour market conditions," said Michelle Meyer of Barclays Capital.
Courtesy:- HT Business dt:- 10-10-2009
PRESTIGE ESTATES PLANS RS 900-CR IPO, TO DIVEST 15%
Realty firm Prestige Estates is planning to raise Rs 800-900 cr through an IPO that would see the Bangalore-based company offloading 10-15% stake. Senior investment bankers confirmed the development indicating that the company could get listed by March next.
It is believed that the company has mandated investment banks like Kotak Mahindra Capital and Enam to prepare the road map for the eventual listing.
When contacted, Prestige Estates CMD Irfan Razzak said: “I am unable to comment on the matter at this juncture.” The move, it appears, comes after discussions between Prestige Estates and leading private equity players like HDFC Property Ventures and Singapore’s Temasek, reportedly failed over valuation issues. ET, in its September 7 edition, had spoken of Prestige Estates initiating discussions with these two entities.
The talks were aborted as the Bangalore-headquartered firm was looking at a valuation between $800 million and $1 billion, which the potential PE investors were not willing to fork out.
Started in 1995, Prestige Estates has over 180 developments with a built-up space of 20 million square feet. Prestige Estates joins the ranks of Emmar MGF Land, Lodha Developers and Sahara Prime City all of whom have made a beeline for raising finance through the IPO route. Conservative estimates indicate that real-estate IPOs could easily mop up over $5 billion.
The revival in the stock market since March has incidentally seen a spate of qualified institutional placement (QIP) based offering from realty companies. Unitech, Indiabulls Real Estate and Sobha Developers were some of the listed firms which rose funding through the QIP route.
Courtesy:- ET dt:- 12-10-09
It is believed that the company has mandated investment banks like Kotak Mahindra Capital and Enam to prepare the road map for the eventual listing.
When contacted, Prestige Estates CMD Irfan Razzak said: “I am unable to comment on the matter at this juncture.” The move, it appears, comes after discussions between Prestige Estates and leading private equity players like HDFC Property Ventures and Singapore’s Temasek, reportedly failed over valuation issues. ET, in its September 7 edition, had spoken of Prestige Estates initiating discussions with these two entities.
The talks were aborted as the Bangalore-headquartered firm was looking at a valuation between $800 million and $1 billion, which the potential PE investors were not willing to fork out.
Started in 1995, Prestige Estates has over 180 developments with a built-up space of 20 million square feet. Prestige Estates joins the ranks of Emmar MGF Land, Lodha Developers and Sahara Prime City all of whom have made a beeline for raising finance through the IPO route. Conservative estimates indicate that real-estate IPOs could easily mop up over $5 billion.
The revival in the stock market since March has incidentally seen a spate of qualified institutional placement (QIP) based offering from realty companies. Unitech, Indiabulls Real Estate and Sobha Developers were some of the listed firms which rose funding through the QIP route.
Courtesy:- ET dt:- 12-10-09
Thursday, October 8, 2009
RAHEJA BAGS 500CR DELHI SLUM PROJECT
Delhi Development Authority (DDA) has awarded Delhi’s first slum redevelopment project, worth Rs 500 cr, to a local builder, Raheja Developers, in a move that may see more such projects in the national capital resulting in better living conditions for urban poor and thousands of crores of businesses for builders.
DDA has awarded 5.22-hectare, or 13-acre, project at Kathputli Colony near Shadipur Depot in west Delhi to Raheja Developers for Rs 6.11 cr, a DDA spokesperson said. Under the scheme, the builder pays only Rs 6.11 cr—the bid amount—for the land, but has to build 2,800 homes, of 30 sq meter size each, for existing slum dwellers of Kathputli Colony named after its majority residents of puppeteers and craftsmen. In the bargain, the builder gets for commercial exploitation 10% of the total space slated for 2800 homes and also close to a hectare for high-end residential development. Therefore, the cost incurred in building 2800 homes for slum-dwellers will be offset by the sale of commercial space (office, shops) and high-end houses in the project, while land would come dirt cheap at Rs 6 cr.
DLF has recently sold 1,250 apartments in its Capital Greens project, just 3-4 kilometers from Shadipur Depot at a rate of Rs 5,677 a sq ft. Raheja Developers will have to create temporary accommodation for the slum dwellers at a piece of land close to the project site that will be given by the DDA in a month or two. The builder will be expected to build homes for slum-dwellers within two years of the allotment of the land for temporary accommodation. Usually, slum redevelopment projects offer a very high margin of 70-75% to the developers, mainly because land comes cheap even as projects are fraught with political risks. In Mumbai, developers have to get the consent of 70% of the slum-dwellers and many a time face opposition from political interests as well as voluntary organizations. In Delhi’s Kathputli Colony project, the government has already got slum-dwellers on board. And Navin Raheja, CMD of Raheja Developers, said the project is a ‘loss-making proposition’, but he has taken this up because he is engaged in a social ‘mission’ to help urban poor get homes. He estimates this project to be worth Rs 500 cr.
DDA had invited technical bids for the project over a year ago. Eight developers, including Unitech, HDIL and Raheja, met the technical qualification criteria, but only one of them submitted financial bid early this year amid cash crunch faced by most realty firms.
Unitech, country’s second largest realty firm, declined to comment on why it didn’t submit a bid.
Courtesy:- ET dt:- 06-10-09
DDA has awarded 5.22-hectare, or 13-acre, project at Kathputli Colony near Shadipur Depot in west Delhi to Raheja Developers for Rs 6.11 cr, a DDA spokesperson said. Under the scheme, the builder pays only Rs 6.11 cr—the bid amount—for the land, but has to build 2,800 homes, of 30 sq meter size each, for existing slum dwellers of Kathputli Colony named after its majority residents of puppeteers and craftsmen. In the bargain, the builder gets for commercial exploitation 10% of the total space slated for 2800 homes and also close to a hectare for high-end residential development. Therefore, the cost incurred in building 2800 homes for slum-dwellers will be offset by the sale of commercial space (office, shops) and high-end houses in the project, while land would come dirt cheap at Rs 6 cr.
DLF has recently sold 1,250 apartments in its Capital Greens project, just 3-4 kilometers from Shadipur Depot at a rate of Rs 5,677 a sq ft. Raheja Developers will have to create temporary accommodation for the slum dwellers at a piece of land close to the project site that will be given by the DDA in a month or two. The builder will be expected to build homes for slum-dwellers within two years of the allotment of the land for temporary accommodation. Usually, slum redevelopment projects offer a very high margin of 70-75% to the developers, mainly because land comes cheap even as projects are fraught with political risks. In Mumbai, developers have to get the consent of 70% of the slum-dwellers and many a time face opposition from political interests as well as voluntary organizations. In Delhi’s Kathputli Colony project, the government has already got slum-dwellers on board. And Navin Raheja, CMD of Raheja Developers, said the project is a ‘loss-making proposition’, but he has taken this up because he is engaged in a social ‘mission’ to help urban poor get homes. He estimates this project to be worth Rs 500 cr.
DDA had invited technical bids for the project over a year ago. Eight developers, including Unitech, HDIL and Raheja, met the technical qualification criteria, but only one of them submitted financial bid early this year amid cash crunch faced by most realty firms.
Unitech, country’s second largest realty firm, declined to comment on why it didn’t submit a bid.
Courtesy:- ET dt:- 06-10-09
Patel Engineering forays into realty
As part of its strategy to unlock the value of its 1,100 acre land-bank, Patel Engineering plans to foray into the realty business and build commercial and residential property, IT parks and SEZs over the next three years, a top company official said. “The idea is to unlock the value of our huge land-bank which has been lying with us for nearly 30 years,” Patel Engineering Managing Director Rupen Patel said.
Courtesy:- BS dt:- 03-10-09
Courtesy:- BS dt:- 03-10-09
Patel Engineering forays into realty
As part of its strategy to unlock the value of its 1,100 acre land-bank, Patel Engineering plans to foray into the realty business and build commercial and residential property, IT parks and SEZs over the next three years, a top company official said. “The idea is to unlock the value of our huge land-bank which has been lying with us for nearly 30 years,” Patel Engineering Managing Director Rupen Patel said.
Courtesy:- BS dt:- 03-10-09
Courtesy:- BS dt:- 03-10-09
Monday, October 5, 2009
CLEANLINESS NEXT TO GODLINESS
It is believed Goddess Lakshmi appreciates cleanliness in a house on Diwali and that she visits the cleanest house first. So, get into the act and make your house shine, exhorts Vivek Shukla
With Diwali hardly a fortnight away, have you started ‘mission clean’ of your home or office to appease Goddess Lakshmi? If not yet, don’t delay this important assignment! You’re clean and clutter less space can fetch you huge returns, in case you either rent out or sell it. It is believed Goddess Lakshmi appreciates cleanliness in the house on Diwali — there is also an age-old belief that Goddess Lakshmi visits the cleanest house first.
Lamps are lit in the evening to welcome the Goddess and to light up her path into the house. Now, despite all our claims to modernity in our outlook, we start with the mop and swab at our homes and offices as the festival of lights approaches. However, some property owners don’t make any effort even during Diwali to make their properties neat and clean. Realty experts also strongly emphasize on the fact that properties that are aglow easily fetch better deals for their owners than those that are unclean.
Islam also requires a Muslim to clean his body, his clothes, his house, and the whole community’s living space. According to Khalid Ahmed, an Islamic scholar, Prophet Muhammad said: “Removing any harm from the road is charity (that will be rewarded by Allah).” Khalid says, “While people generally consider cleanliness a desirable attribute, Islam insists upon it, making it an indispensable tenet.” In the real estate, shabby-looking and badly maintained properties fail to attract the attention of prospective buyers and tenants.
Just visit any residential or commercial area, and you will easily find some properties that are spick and span inside out, while there are several others in an active state of neglect. It is really sad that some properties are hugely undervalued due only to the sheer apathy of their owners, who spoil the premium these properties can otherwise command. Unlike the shining and glowing offices and homes, unclean properties look very ominous too.
“It is a well-known fact that many properties suffer due to either sheer irresponsible attitude of their owners or when only the aged owners live in their house and their kids live abroad or elsewhere,” says Alimuddin Rafi Ahmed, CMD of ILD group. Realtors are of the opinion that apart from the fact that houses situated at nice locations like near parks or close to bus stands; the neat and clean houses are liked by one and all. Properties that are given a coat of whitewash at regular intervals, apart from granite polishing, and having nice fixtures in kitchens and bathrooms make a house attractive. And a house with manicured lawns is the most sought after. Even the minutiae matter - like clean switchboards!
Such properties will fetch their owner fabulous returns unlike those that are left to the mercy of god. R K Arora, CMD of Supertech Ltd, says, “It goes without saying that those who care for their houses also get nice returns. But often, in cases of property disputes, houses tend to be neglected and they fall into disrepair. In such a scenario, the disputant parties hardly spend any money on the maintenance part of the house.” Meanwhile, realtors have suggestion for all those who don’t keep their properties neat and clean — even if one were in some financial crisis, they must whitewash the property during Diwali time, or on some such occasion, regularly, if only to keep the price of the establishment intact.
Mahatma Gandhi used to say in his prayer meetings that “cleanliness is next to godliness”. And more often than not, he used to write in Navajivan the importance of cleanliness in our lives. On the issue of our unhygienic habits, Gandhiji strongly emphasized upon observing cleanliness in lavatories, and wrote in Navajivan on May 24, 1925: “I learnt 35 years ago that a lavatory must be as clean as a drawing room. I learnt this in the West. I believe that many rules about cleanliness in lavatories are observed more scrupulously in the West than in the East. The cause of many of our diseases is the condition of our lavatories and our bad habit of disposing of excreta anywhere and everywhere. I, therefore, believe in the absolute necessity of a clean place for answering the call of nature and clean articles for use at the time, have accustomed myself to them and wish that all others should do the same. The habit has become so firm in me that even if I wished to change it I would not be able to do so. Nor do I wish to change it.”
Courtesy:- TOI dt:- 03-10-09
With Diwali hardly a fortnight away, have you started ‘mission clean’ of your home or office to appease Goddess Lakshmi? If not yet, don’t delay this important assignment! You’re clean and clutter less space can fetch you huge returns, in case you either rent out or sell it. It is believed Goddess Lakshmi appreciates cleanliness in the house on Diwali — there is also an age-old belief that Goddess Lakshmi visits the cleanest house first.
Lamps are lit in the evening to welcome the Goddess and to light up her path into the house. Now, despite all our claims to modernity in our outlook, we start with the mop and swab at our homes and offices as the festival of lights approaches. However, some property owners don’t make any effort even during Diwali to make their properties neat and clean. Realty experts also strongly emphasize on the fact that properties that are aglow easily fetch better deals for their owners than those that are unclean.
Islam also requires a Muslim to clean his body, his clothes, his house, and the whole community’s living space. According to Khalid Ahmed, an Islamic scholar, Prophet Muhammad said: “Removing any harm from the road is charity (that will be rewarded by Allah).” Khalid says, “While people generally consider cleanliness a desirable attribute, Islam insists upon it, making it an indispensable tenet.” In the real estate, shabby-looking and badly maintained properties fail to attract the attention of prospective buyers and tenants.
Just visit any residential or commercial area, and you will easily find some properties that are spick and span inside out, while there are several others in an active state of neglect. It is really sad that some properties are hugely undervalued due only to the sheer apathy of their owners, who spoil the premium these properties can otherwise command. Unlike the shining and glowing offices and homes, unclean properties look very ominous too.
“It is a well-known fact that many properties suffer due to either sheer irresponsible attitude of their owners or when only the aged owners live in their house and their kids live abroad or elsewhere,” says Alimuddin Rafi Ahmed, CMD of ILD group. Realtors are of the opinion that apart from the fact that houses situated at nice locations like near parks or close to bus stands; the neat and clean houses are liked by one and all. Properties that are given a coat of whitewash at regular intervals, apart from granite polishing, and having nice fixtures in kitchens and bathrooms make a house attractive. And a house with manicured lawns is the most sought after. Even the minutiae matter - like clean switchboards!
Such properties will fetch their owner fabulous returns unlike those that are left to the mercy of god. R K Arora, CMD of Supertech Ltd, says, “It goes without saying that those who care for their houses also get nice returns. But often, in cases of property disputes, houses tend to be neglected and they fall into disrepair. In such a scenario, the disputant parties hardly spend any money on the maintenance part of the house.” Meanwhile, realtors have suggestion for all those who don’t keep their properties neat and clean — even if one were in some financial crisis, they must whitewash the property during Diwali time, or on some such occasion, regularly, if only to keep the price of the establishment intact.
Mahatma Gandhi used to say in his prayer meetings that “cleanliness is next to godliness”. And more often than not, he used to write in Navajivan the importance of cleanliness in our lives. On the issue of our unhygienic habits, Gandhiji strongly emphasized upon observing cleanliness in lavatories, and wrote in Navajivan on May 24, 1925: “I learnt 35 years ago that a lavatory must be as clean as a drawing room. I learnt this in the West. I believe that many rules about cleanliness in lavatories are observed more scrupulously in the West than in the East. The cause of many of our diseases is the condition of our lavatories and our bad habit of disposing of excreta anywhere and everywhere. I, therefore, believe in the absolute necessity of a clean place for answering the call of nature and clean articles for use at the time, have accustomed myself to them and wish that all others should do the same. The habit has become so firm in me that even if I wished to change it I would not be able to do so. Nor do I wish to change it.”
Courtesy:- TOI dt:- 03-10-09
CLEANLINESS NEXT TO GODLINESS
It is believed Goddess Lakshmi appreciates cleanliness in a house on Diwali and that she visits the cleanest house first. So, get into the act and make your house shine, exhorts Vivek Shukla
With Diwali hardly a fortnight away, have you started ‘mission clean’ of your home or office to appease Goddess Lakshmi? If not yet, don’t delay this important assignment! You’re clean and clutter less space can fetch you huge returns, in case you either rent out or sell it. It is believed Goddess Lakshmi appreciates cleanliness in the house on Diwali — there is also an age-old belief that Goddess Lakshmi visits the cleanest house first.
Lamps are lit in the evening to welcome the Goddess and to light up her path into the house. Now, despite all our claims to modernity in our outlook, we start with the mop and swab at our homes and offices as the festival of lights approaches. However, some property owners don’t make any effort even during Diwali to make their properties neat and clean. Realty experts also strongly emphasize on the fact that properties that are aglow easily fetch better deals for their owners than those that are unclean.
Islam also requires a Muslim to clean his body, his clothes, his house, and the whole community’s living space. According to Khalid Ahmed, an Islamic scholar, Prophet Muhammad said: “Removing any harm from the road is charity (that will be rewarded by Allah).” Khalid says, “While people generally consider cleanliness a desirable attribute, Islam insists upon it, making it an indispensable tenet.” In the real estate, shabby-looking and badly maintained properties fail to attract the attention of prospective buyers and tenants.
Just visit any residential or commercial area, and you will easily find some properties that are spick and span inside out, while there are several others in an active state of neglect. It is really sad that some properties are hugely undervalued due only to the sheer apathy of their owners, who spoil the premium these properties can otherwise command. Unlike the shining and glowing offices and homes, unclean properties look very ominous too.
“It is a well-known fact that many properties suffer due to either sheer irresponsible attitude of their owners or when only the aged owners live in their house and their kids live abroad or elsewhere,” says Alimuddin Rafi Ahmed, CMD of ILD group. Realtors are of the opinion that apart from the fact that houses situated at nice locations like near parks or close to bus stands; the neat and clean houses are liked by one and all. Properties that are given a coat of whitewash at regular intervals, apart from granite polishing, and having nice fixtures in kitchens and bathrooms make a house attractive. And a house with manicured lawns is the most sought after. Even the minutiae matter - like clean switchboards!
Such properties will fetch their owner fabulous returns unlike those that are left to the mercy of god. R K Arora, CMD of Supertech Ltd, says, “It goes without saying that those who care for their houses also get nice returns. But often, in cases of property disputes, houses tend to be neglected and they fall into disrepair. In such a scenario, the disputant parties hardly spend any money on the maintenance part of the house.” Meanwhile, realtors have suggestion for all those who don’t keep their properties neat and clean — even if one were in some financial crisis, they must whitewash the property during Diwali time, or on some such occasion, regularly, if only to keep the price of the establishment intact.
Mahatma Gandhi used to say in his prayer meetings that “cleanliness is next to godliness”. And more often than not, he used to write in Navajivan the importance of cleanliness in our lives. On the issue of our unhygienic habits, Gandhiji strongly emphasized upon observing cleanliness in lavatories, and wrote in Navajivan on May 24, 1925: “I learnt 35 years ago that a lavatory must be as clean as a drawing room. I learnt this in the West. I believe that many rules about cleanliness in lavatories are observed more scrupulously in the West than in the East. The cause of many of our diseases is the condition of our lavatories and our bad habit of disposing of excreta anywhere and everywhere. I, therefore, believe in the absolute necessity of a clean place for answering the call of nature and clean articles for use at the time, have accustomed myself to them and wish that all others should do the same. The habit has become so firm in me that even if I wished to change it I would not be able to do so. Nor do I wish to change it.”
Courtesy:- TOI dt:- 03-10-09
With Diwali hardly a fortnight away, have you started ‘mission clean’ of your home or office to appease Goddess Lakshmi? If not yet, don’t delay this important assignment! You’re clean and clutter less space can fetch you huge returns, in case you either rent out or sell it. It is believed Goddess Lakshmi appreciates cleanliness in the house on Diwali — there is also an age-old belief that Goddess Lakshmi visits the cleanest house first.
Lamps are lit in the evening to welcome the Goddess and to light up her path into the house. Now, despite all our claims to modernity in our outlook, we start with the mop and swab at our homes and offices as the festival of lights approaches. However, some property owners don’t make any effort even during Diwali to make their properties neat and clean. Realty experts also strongly emphasize on the fact that properties that are aglow easily fetch better deals for their owners than those that are unclean.
Islam also requires a Muslim to clean his body, his clothes, his house, and the whole community’s living space. According to Khalid Ahmed, an Islamic scholar, Prophet Muhammad said: “Removing any harm from the road is charity (that will be rewarded by Allah).” Khalid says, “While people generally consider cleanliness a desirable attribute, Islam insists upon it, making it an indispensable tenet.” In the real estate, shabby-looking and badly maintained properties fail to attract the attention of prospective buyers and tenants.
Just visit any residential or commercial area, and you will easily find some properties that are spick and span inside out, while there are several others in an active state of neglect. It is really sad that some properties are hugely undervalued due only to the sheer apathy of their owners, who spoil the premium these properties can otherwise command. Unlike the shining and glowing offices and homes, unclean properties look very ominous too.
“It is a well-known fact that many properties suffer due to either sheer irresponsible attitude of their owners or when only the aged owners live in their house and their kids live abroad or elsewhere,” says Alimuddin Rafi Ahmed, CMD of ILD group. Realtors are of the opinion that apart from the fact that houses situated at nice locations like near parks or close to bus stands; the neat and clean houses are liked by one and all. Properties that are given a coat of whitewash at regular intervals, apart from granite polishing, and having nice fixtures in kitchens and bathrooms make a house attractive. And a house with manicured lawns is the most sought after. Even the minutiae matter - like clean switchboards!
Such properties will fetch their owner fabulous returns unlike those that are left to the mercy of god. R K Arora, CMD of Supertech Ltd, says, “It goes without saying that those who care for their houses also get nice returns. But often, in cases of property disputes, houses tend to be neglected and they fall into disrepair. In such a scenario, the disputant parties hardly spend any money on the maintenance part of the house.” Meanwhile, realtors have suggestion for all those who don’t keep their properties neat and clean — even if one were in some financial crisis, they must whitewash the property during Diwali time, or on some such occasion, regularly, if only to keep the price of the establishment intact.
Mahatma Gandhi used to say in his prayer meetings that “cleanliness is next to godliness”. And more often than not, he used to write in Navajivan the importance of cleanliness in our lives. On the issue of our unhygienic habits, Gandhiji strongly emphasized upon observing cleanliness in lavatories, and wrote in Navajivan on May 24, 1925: “I learnt 35 years ago that a lavatory must be as clean as a drawing room. I learnt this in the West. I believe that many rules about cleanliness in lavatories are observed more scrupulously in the West than in the East. The cause of many of our diseases is the condition of our lavatories and our bad habit of disposing of excreta anywhere and everywhere. I, therefore, believe in the absolute necessity of a clean place for answering the call of nature and clean articles for use at the time, have accustomed myself to them and wish that all others should do the same. The habit has become so firm in me that even if I wished to change it I would not be able to do so. Nor do I wish to change it.”
Courtesy:- TOI dt:- 03-10-09
BOOM TIME AGAIN!
Real estate sector in the country will witness a prolonged and robust demand with the top seven cities accounting for most of it. ET Realty explores this positive development
Real estate sector in the country will witness a prolonged and robust demand. According to a report by global realty consultation firm Cushman & Wakefield, the pan-India residential demand for 2009-2013 could be around 7.5 million units and that for office space at 196 million sq ft. The Cushman & Wakefield India Real Estate Investment report 2009 Survival to Revival Indian realty sector on the path to recovery estimates demand for retail space at around 43 million sq ft while the hospitality sector is expected to see a demand of approximately 6,90,000 room-nights in the same period.
According to Anurag Mathur, MD of C&W, India, though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector gradually return to the path of recovery and witness robust demand for real estate across sectors.
The pan-India residential demand is estimated to be over 7.5 million units by 2013, across all housing categories, of which 85% is expected in the mid segment and affordable housing segment, the report says. Of the total demand expected across India, 60%, equivalent to 45 lakh units, would be generated in top 7 cities (see chart). Mumbai is expected to witness the highest cumulative demand of 16 lakh units by 2013, followed by the National Capital Region, which is expected to see a demand of 10.20 lakh units in the same period. That means, on an average, every year there will be a demand of two lakh units. This is far than the pecked supply in the area.
According to the report, the demand for housing units will keep on rising year after year. The total demand for the housing units in all the seven cities will rise from 11.96 lakh units in 2009 to 13.32 lakh units in 2010 and to 14.86 lakh units in 2011. The figure will further rise to 16.63 lakh units in 2012 and to 18.64 lakh in 2013. Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.
Retail sector is expected to see a demand of approximately 43 million sq ft, mostly concentrated in the seven cities. Bangalore would see the highest demand of approximately 6.8 million sq ft however; Pune is expected to record the highest compounded annual growth of 51% for the next five years. The demand for the hospitality sector is expected to see a surge and is expected to be approximately 6, 90,000 room-nights between 2009-2013. NCR and Mumbai are expected to see the highest demand due to the higher volume of business travelers to these cities. Mathur says, While the upcoming 2010 Commonwealth Games have been the key demand driver for hospitality segment in NCR, the significant expected rise in office demand in the peripheral locations is also likely to play a role is boosting room-night demand. Factors like increase in urbanization, income growth, relatively high disposable incomes are likely to positively impact retail as well as residential demand in the city.
NCR is expected to see the highest demand in the hospitality sector, owing to its growing importance as commercial and political centre. The maximum surge for demand in hospitality is expected to be witnessed in 2010 during the Commonwealth Games. The retail demand is expected to be 66.6 million sq ft by 2013 and the residential demand in the same period is expected to be approximately 10.20 lakh units. Mumbai is expected to see the highest demand for residential space of approximately 16.40 lakh units due to the large scale urbanization. The mid-scale and affordable housing in suburban and peripheral areas will be the focus of this demand. The demand for hospitality in Mumbai is expected to be strong at over 98,500 room-nights, by virtue of the fact that the city is regarded as the financial capital of India and therefore the volume of both domestic and foreign business travelers is expected to grow steadily. Demand for retail is expected to be 6.19 million sq ft.
Courtesy:- ET Realty dt:- 02-10-09
Real estate sector in the country will witness a prolonged and robust demand. According to a report by global realty consultation firm Cushman & Wakefield, the pan-India residential demand for 2009-2013 could be around 7.5 million units and that for office space at 196 million sq ft. The Cushman & Wakefield India Real Estate Investment report 2009 Survival to Revival Indian realty sector on the path to recovery estimates demand for retail space at around 43 million sq ft while the hospitality sector is expected to see a demand of approximately 6,90,000 room-nights in the same period.
According to Anurag Mathur, MD of C&W, India, though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector gradually return to the path of recovery and witness robust demand for real estate across sectors.
The pan-India residential demand is estimated to be over 7.5 million units by 2013, across all housing categories, of which 85% is expected in the mid segment and affordable housing segment, the report says. Of the total demand expected across India, 60%, equivalent to 45 lakh units, would be generated in top 7 cities (see chart). Mumbai is expected to witness the highest cumulative demand of 16 lakh units by 2013, followed by the National Capital Region, which is expected to see a demand of 10.20 lakh units in the same period. That means, on an average, every year there will be a demand of two lakh units. This is far than the pecked supply in the area.
According to the report, the demand for housing units will keep on rising year after year. The total demand for the housing units in all the seven cities will rise from 11.96 lakh units in 2009 to 13.32 lakh units in 2010 and to 14.86 lakh units in 2011. The figure will further rise to 16.63 lakh units in 2012 and to 18.64 lakh in 2013. Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.
Retail sector is expected to see a demand of approximately 43 million sq ft, mostly concentrated in the seven cities. Bangalore would see the highest demand of approximately 6.8 million sq ft however; Pune is expected to record the highest compounded annual growth of 51% for the next five years. The demand for the hospitality sector is expected to see a surge and is expected to be approximately 6, 90,000 room-nights between 2009-2013. NCR and Mumbai are expected to see the highest demand due to the higher volume of business travelers to these cities. Mathur says, While the upcoming 2010 Commonwealth Games have been the key demand driver for hospitality segment in NCR, the significant expected rise in office demand in the peripheral locations is also likely to play a role is boosting room-night demand. Factors like increase in urbanization, income growth, relatively high disposable incomes are likely to positively impact retail as well as residential demand in the city.
NCR is expected to see the highest demand in the hospitality sector, owing to its growing importance as commercial and political centre. The maximum surge for demand in hospitality is expected to be witnessed in 2010 during the Commonwealth Games. The retail demand is expected to be 66.6 million sq ft by 2013 and the residential demand in the same period is expected to be approximately 10.20 lakh units. Mumbai is expected to see the highest demand for residential space of approximately 16.40 lakh units due to the large scale urbanization. The mid-scale and affordable housing in suburban and peripheral areas will be the focus of this demand. The demand for hospitality in Mumbai is expected to be strong at over 98,500 room-nights, by virtue of the fact that the city is regarded as the financial capital of India and therefore the volume of both domestic and foreign business travelers is expected to grow steadily. Demand for retail is expected to be 6.19 million sq ft.
Courtesy:- ET Realty dt:- 02-10-09
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