Luxury Projects In Bangalore

East and North Bangalore have been destinations for hot property in Bangalore for some years now. However, water is a point of concern in numerous localities in this area and it might affect the pricing of property here. The areas that are covered by the BDA or Bangalore Development Authority master plan shall receive municipal water right after the completion of the water project on the River Cauvery, according to the founder of the Adarsh Group, a popular property developer in Bangalore which has constructed roughly 5 million square feet of space in Bangalore.  

However, areas under the BIAPPA or Bangalore International Airport Planning Authority located in North Bangalore and BMRDA or Bangalore Metropolitan Region Development Authority in East Bangalore might not receive water from the Cauvery. In these areas with water scarcity, it would be best to develop residential villas which are low density with low requirement of water. Moreover, on adoption of the system of dual piping which uses recycled water, the impact of water from natural resources shall be less in these developments.

There are several reasons for the premium real estate market to boom in Bangalore. A number of HNIs or High Net Worth Individuals are here who purchase villas and luxury flats. A major section of these people are from the top ranking IT professionals group and other businesses. Moreover, NRIs who are returning are potential purchasers of luxury apartments and villas. This is causing a boom in the luxury housing segment.

The standard definition of premium and luxury property is much misused nowadays. A study of the real estate market shows the definition of ultra-luxury and luxury projects according to developers.
Luxury villas and apartments are often slotted in the high price category because of the inclusion of a few important features. For example, a line of newly developed plots do not make a villa. Therefore, interactions with clients reveal what a client perceives as luxury and hence the builders develop properties accordingly. By balancing these two importance factors, you can zero in on real estate investment especially for high end ones.

One of the foremost things suggested by consultants of real estate is to form a list of facilities and environment that a buyer sees as luxury. The type of surrounding, the estimated size of rooms and garden or perhaps the size of a private pool that should be in a villa that they are thinking of investing in should be included in the list. The Indian market is a price sensitive one. Therefore, notwithstanding the financial or social status of a person, buyers ask about the fuel efficiency of an Audi or BMW car prior to making a buy. Quite alike, when priced well, premium or luxury is sensible and not simply for paying extra money for a flat that may actually become a trap to block your corpus so much so that you struggle to find a tenant or buyer later on, according to the CEO of Residential Services in JLL India.

Some pointers that need to be checked out as per industry experts prior to investing in luxury and ultra-luxury projects in Bengaluru.

Track Record: A developer’s track record on the basis of execution of past projects and present status of the project in question. These need to be charted along with the location of the project, credential of the builder and project amenities and features.

Project Density: It refers to the number of apartments in total the project is providing, the number of flats on a floor and the kinds of upcoming building projects in the locality. A residential gated community comprising of villas beside a mall or line of mid-range projects affects the ability for value or rental growth, according to builders.

Not long term always: The belief that one can make more money through luxury properties only in the long run is completely baseless. In the past decade, mid segment properties have found more or similar growth when compared with the luxury section. Buyers have to determine whether the luxury segment is actually the correct choice for them.

Knowing your trade-offs- Buying luxury assets as a once in a lifetime purchase is easy. However, the cost of maintaining the property can be back breaking equally. When you consider the cost and stress that comes with it consequently, buying 2 upper middle section properties makes more sense than buying a single premium property.

For the past couple of years, East and North Bangalore were the destinations for hot properties. For the past few months, developers have turned their attention to South Bangalore which has seen more property launches happening in the area. Post development of the NICE Road, there is improved connectivity between the IT Hub of Electronic City and South Bangalore. Keeping this point in focus, the middle section market is doing quite well in South Bangalore. Larger land parcels are available in this region which is why more launches are being made.

If you want to own a second house or apartment in Bangalore, there are several segments in which you can invest in. However, in the long run, the best one will prove to be the price range between INR 1.25 crores and INR 2.0 crores. The best locations to own second house property in Bangalore are South Bangalore, North Bangalore and Bangalore East along the area of Outer Ring Road. There are several builders who are considering projects here. The cost of 2BHK and 3BHK apartments is between Rs 70 lakhs and Rs 1.50 crores. There are several affordable housing projects coming up here too, where 1BHK and 2BHK apartments under 700sq. ft. can be bought for Rs 30 lakhs and Rs 40 lakhs. Areas such as Yelahanka, Whitefield and Hebbal Road have seen good appreciation in property values per year. With proximity to the IT companies and improved connectivity, these areas are becoming hotspots for renters and buyers of affordable housing. As explained before, maintenance costs may take a toll on you hence it would be better to invest in an affordable housing or mid segment project.

Demand And Pricing Of Real Estate In Bangalore

Bangalore is home to thousands of non-natives who flock down from different parts of the country to work in the flourishing IT sector. Most of the housing demand is from these people who earn a hefty sum every month. The residential property bazaar of Bangalore has been quite steady in the first quarter of 2014. The mid segment which forms majority of the sales showed a good balance between supply and demand and registered steady growth.

Almost 90 percent of the market is comprised of 2BHK and 3BHK apartments. Incidentally, the 2BHK apartments had a demand of 54 percent almost which is roughly equal to the market’s supply. When developers have understood the markets well and catering to demands accordingly, then supply in the market is almost equal to the demand. It is a healthy market where both consumers and producers gain.

In terms of the price bracket, it was seen that apartments in the range of Rs 40 lakhs and Rs 60 lakhs had almost 28% growth in Bangalore for the first quarter of 2014. Similarly, the segment comprising of the upper middle demand, which comes in the Rs 60 lakhs to Rs 1 crore categories the demand stayed at 23% whereas the supply was at 20%. In this case too, market demand and supply more or less matched.

However, the trends noticed in the luxury and budget segments were much in contrast to the middle and upper middle segment. For apartments in the range of Rs 20 and Rs 40 lakhs, the demand was around 28% whereas the supply was a meagre 19%. In the Rs 100 lakhs and above category, the demand was a mere 15% while the supply stood at 23%.

Therefore, areas in JP Nagar and Whitefield had a steady rise of only 3% each followed by Bannergatta Road, RT Nagar and Hebbal which had a 2 percent rise only in property value. En route areas or areas in proximity to the IT corridors such as HSR Layout, Silk Board, CV Raman Nagar, Electronic City and Bellandur also did not show any rise or fall in the property value. It was the same as it was back in the October to December quarter of 2013.

Electronic City has a diverse set and wide range of offerings that are priced between Rs 40 and Rs 60 lakhs, which makes it one of the most affordable localities of Bangalore. Similarly is the case with areas such as HSR Layout, Marathahalli, Mahadevpura and Silk Board. These areas cater to the upper middle and middle class community. There are several ongoing and completed projects of most of the noteworthy real estate in Bangalore.

Closeness to work place, bettered connectivity due to broader roads, flyovers and outer ring roads have ensured Bannergatta Road, Whitefield and Sarjapur the top spots among the most preferred localities of the city.

What determines the cost of an apartment?
There are several steps to undergo for a project even before it is pre launched. Other costs that property development has to bear are manpower cost, construction cost, material cost, regional fluctuations, inflation, approvals that have not yet been gotten and numerous other issues.

These factors significantly affect the final price of an apartment. The cost matrix of a developer has been given below so that buyers can understand what they are paying for and therefore can plan budget allocation effectively.

A project is sold usually at a margin between 18 percent and 25 percent. Almost 30-40 percent of the cost incurred by a developer is the land cost followed by 30-40 percent more as construction cost, based on the location of a project.

As 60% of the cost is received by a developer, he/she/the developing company does not feel compelled to lower the prices even when sales are low. This is a theory propounded in the RICS School of Built Environment. A reliable developer will put in a lot of sweat to ensure that the papers are in order and that the land bought has no litigations. The developer also has to ensure plenty of access to water, sufficient manpower at the time of construction and numerous other clearances that are required during construction of an apartment complex.

A part of the cost is sometimes borne through money that comes in from pre launch loans and offers, in case of advanced land construction and development. With the corpus coming in, the developer can go ahead with debt finance and construction.
By this time, developers often reach break-even and start thinking about earning a profit. Banks too want to lend money in projects that are being held by good developers. One of the biggest avenues for earning for a bank is from construction lending. The lending from banks keeps the projects on track for developers.

House hunters and investors should always remember that developers never play with their own pile of money. The construction industry functions this way globally. Moreover, wealthy financers will not force a schedule of repayment either. Therefore, there is no reason to drop the price of real estate in the short run.

When considering the various segments of construction, luxury projects have the largest margins followed by the mid segment. The affordable segment presents profits only in bulk. Therefore, projects which have a margin of more than 25 to 30 percent can see a correction in long term. These luxury projects are usually in the bracket of Rs 8000 sq. ft or more and offer all the amenities that one would want to see in and around their area of residence.

Projects of the middle segment which are sold at Rs 4,000 for square feet can be expected to fall a bit depending on the ability to bargain of the buyer as the profit margin is much lower. Since investors would not pull out for the next 5 to 10 years, prices of real estate tend to stay stable. If inflation at 7 percent is factored in, then the real cost of an apartment can actually fall depending on money’s value.

The Top Players in the Real Estate Market in India

The Indian real estate market is one of the biggest drivers of the economy and creates thousands of employment opportunities every year. Housing is one sector where demand is more than supply and this should see further growth of this industry in the future. Who are the major real estate players in India? Here’s taking a look at the top real estate players from various Indian regions. These are the movers and shakers of the industry and have been recognized for their contributions in this field.

Top Real Estate Players in the North

DLF Ltd is one of the biggest players in the country and is considered to have the biggest market capitalization, developable area, earnings and annual revenues. It is headed by the Chairman, Dr. Kushal Pal Singh. DLF has a presence in almost thirty Indian cities and has developed area of a mindboggling 238 million square feet. It also has planned projects spanning over 413 million square feet and the entire product range of the company include IT parks, residential apartments, multiplexes, townships, hotels, commercial complexes and so on. This is the only real estate company that has been incorporated into the MSCI India Index, BSE Sensex, MSCI Emerging Markets Asia Index and NSE Nifty. It is also known for its luxury DLF Emporio mall.

Omaxe Limited is spearheaded by the CMD Rohtas Goel and the company has made a name for itself with its variety of commercial and residential projects. There are more than fifty projects that the company is undertaking at present and it was the first construction outfit in north India to get the ISO 9001:200 certification. The group specializes in malls, group housing, hotels, integrated townships, commercial complexes and SEZs among other projects. It has also got into constructing highways and bridges in Punjab. Unitech, headed by the Executive Chairman, Ramesh Chandra is another real estate behemoth in northern India and has also received ISO 9001:2000 certification. The company is operational in sectors like IT parks, SEZs, residential projects, amusement parks, retail and even hotels.

There are more than 600, 000 shareholders of this company. It has also entered into mainstream infrastructure. The company has a failed venture, namely Uninor telecommunications, a joint venture with Norway’s Telenor Group which made the headlines.

Western India’s Real Estate Kings

MD Milind Korde heads Godrej Properties Limited, one of the biggest real estate players in this belt. The company was setup under the umbrella of the much respected Godrej group in the year 1990. This is one of the top real estate companies in the industry and has a fabulous brand image. The group has several successful projects to its credit and is currently involved in almost eleven cities throughout the country. The company is also listed on the BSE and the National Stock Exchange or NSE. The popularity of the company can be gauged by the fact that it managed to sell more than two hundred residential units within two days of the launch of the Godrej Frontier project in northern India, its first foray into this region.

Chandru L Raheja also runs the K Raheja Corp which is another real estate behemoth in the Western region. This company has been operational for four decades and more and has specialized in residential properties, hotels and commercial buildings all over the country. The group has also got into hospitality and retail and there are several successful projects under its belt. The K Raheja Corp has also committed towards building Leed Certified Green Building Projects only in the future which gives it a unique dimension of sorts. CMD Vikas Oberoi also runs Oberoi Realty Limited which had its IPO and is a strong presence both in Pune and Mumbai. The company focuses mostly on social infrastructure, retail, office space, hospitality and residential segments.

South India Sobha Developers is the leading company in this space, headed by Chairman PNC Menon and was founded in the year 1995. This company is worth more than ten billion dollars and had its IPO in the year 2006. The company has loads of commercial, residential and contractual projects to its credit and is known for its commitment to development. MR Jaishankar heads the Brigade Group as the CMD and the company is one of the leading lights in South India with its headquarters in Bangalore. The company specializes in sectors like hospitality, property development, education and hospitality. The Puravankara Group is managed by the CMD and Founder Ravi Puravankara. The company has projects located in Dubai, Kolkata, Chennai, Colombo, Mysore, Coimbatore and other areas.

East India Ambuja Realty dominates this sector, headed by Harshavardhan Neotia, the CMD. The company has been a prominent name in Eastern India and is the first company to receive the ISO: 9002 certification in this sector in Eastern India. The Group takes care of hospitality projects, commercial projects, residential units and retail projects as well. The company is presently building malls, IT parks, business hotels, hospitals, luxury resorts and a university. The City Centre brand of malls built by the group has also done immensely well. Sushil Mohta led Merlin Group has also been at the forefront of development in the region with commercial complexes and residential properties. The group has also gone into bungalows, office towers, premium housing projects, malls, country homes and the like.

The Merlin Group has a sizeable presence in Ahmedabad, Chennai and Chattisgarh among other areas and has also entered sectors like stadiums, service apartments, townships, resorts and new generation clubs. Surendra Kumar Dugar and Pradip Kumar Chopra control the PS Group which is another top company in this sector. The group now has seven key players under the umbrella with a strong interest from the next generation with regard to taking the business forward. PS Group builds shopping malls, integrated townships, hotels, residential complexes, hotels, IT parks and other commercial buildings. The company has successfully completed more than a hundred projects successfully and has loads of exciting projects in the pipeline too.

Why Bangalore is an Even Playing Field for Real Estate Investments

Real estate investments are dicey things in today’s times. Realty is one sector which is witnessing a downturn currently. As a result, investors are afraid to pump up their money and most people are unable to contend with the constantly rising prices. This is a period of large scale transition as far as Indian real estate is concerned. The last year was a fluctuating market with customer demand dropping hugely and prices steadily softening in major real estate markets. However, Bangalore has always had a real estate market at the residential level as compared to other cities in India. The realty sector in Bangalore is expected to gain a bit of necessary momentum with a revival of customer demand for the same. Bangalore should always make for an even playing field when it comes to real estate investments.

Economic prosperity has been on the rise among the masses and purchasing power has increased to a great extent as well despite an economy that has struggled to barely stay afloat. Residential properties have been quite popular especially at the mid range level. The real estate market in Bangalore has been catering to a huge customer base including NRI’s, professionals, businessmen and people who have come in from other metropolitan cities in India. There is a global client base which is the backbone of the real estate market here. Modern day customers have given real estate developers plenty of scope to expand their offerings and product range. Alongside, this has given rise to loads of new projects coming up all across the city including luxury villas, condominiums, mid range residential apartments and townships as well.

The real estate sector has been hit hard by the sliding value of the rupee and the slowdown in the global market at large. Economic conditions are quite challenging as well and in spite of the same, the real estate sector has largely performed well and above expectations. The superior value of the dollar has worked in a positive manner at the other side of the spectrum, acting as a catalyst for greater investment by NRI’s in Indian properties. Bangalore is one of the most conducive environments for NRI’s and this has attracted greater foreign investment in real estate projects in Bangalore. This has boosted the market to some extent and has been a benefit in disguise for the real estate industry in Bangalore. Yet, home buyers will be affected, no doubt by the increase in repo rates by almost twenty five basis points as per the announcement by the Reserve Bank of India. This will serve to make home loans substantially costlier and may impact the fortunes of the real estate industry in the state.

However, Bangalore provides a great opportunity for buyers looking to snap up some exquisite properties at good prices. Bangalore possesses fabulous overall infrastructure, road developments, connectivity, facilities, rail networks and other amenities which are considerably better than other states. Alongside, realtors have expanded their overall network to areas that are on the outskirts of the city and these areas can become hot spots in the future. Socio-economic conditions have vastly improved in Bangalore as well and families from a mid-income background have been investing in this sector as well. FDI will also ensure that many more international companies invest in the real estate market in India.

There are some particular regions in Bangalore that have seen tremendous growth in recent times. Here are some of the top areas for real estate investments in Bangalore. Development has been taking place rapidly across all areas of the city. The popularity of East Bangalore is on the upswing owing to top notch road connectivity garnered as a result of IR corridor linking and other areas of special interest. This includes areas like Mahadevpura, Whitefield, Kundalahalli, ITPL, Marathahalli, K R Puram and Kasturi Nagar as well. West Bangalore is now swarmed by residential areas and localities. There are some major developments taking place at this end as well. This has been through retail complexes and residential projects of a high end or premium nature. Alongside, commercial complexes have also come up in West Bangalore.

Some of the top areas for investments in West Bangalore include Malleswaram, Vijayanagar, Yeshwantpur, Matthikere and Rajajinagar. Alongside, North Bangalore has also come up as a viable destination for real estate investments. Some of the major areas in this belt include Hormavu, Hebbal, Sahakar Nagar, Ramamurthy Nagar, Banaswadi, Yelahanka, RT Nagar and Ramamurthy Nagar. These areas are properly planned and have tremendous connectivity with regard to providing access to major city areas. This is the major factor behind the rising demand for quality real estate in these areas.

South Bangalore has also emerged as a major real estate hub and various multinational companies have come into this area, thereby boosting developmental activities. Metro connectivity is superb for this area and the NICE Road development endeavor has also been a success. The value of properties in locations like Electronic City, Uttarahalli, HSR Layout, JP Nagar, Sarjapur Road, BTM Layout and Bannerghatta Road has increased manifold as a result. There is also multiple road blocks that need to be overcome properly if the real estate industry in Bangalore has to thrive.

In spite of a promising future ahead, there are major challenges lying in wait for real estate in Bangalore. Some of these can be tackled with ease while intervention from higher bodies and seats of power is necessary to take care of the others. The Reserve Bank of India strategy, mentioned earlier, with regard to hiking repo rates by a whopping twenty five basis points will definitely hit real estate companies hard all across India and also Bangalore. Loan rates will be increased by all financial institutions and public demand for residential properties will come down all of a sudden. Alongside, regulatory approvals take loads of time which is another huge problem while launching big projects. Political will and mechanisms play a huge role in determining approvals and regulatory bills.

The Land Acquisition Act, which is slated to be a reality soon, will be a point of concern for most real estate developers. This may also influence prices of real estate in Bangalore and project development costs. All in all, Bangalore still offers a level playing field for real estate investments.

Top Places to Buy Property in Major Indian Cities!

Real estate is one area where most Indians take an active interest in. However, most of us suffer from lack of proper knowledge pertaining to the best places to invest our hard earned money. There are some places which are havens for real estate investment across major Indian cities. Here are the top places for real estate investments across major Indian cities!

NCR-Delhi Region

Property consultants usually favor the NCR-Delhi region a lot and this has been even more pronounced with the infrastructural development of the area including New Gurgaon, the Dwarka Expressway and the Noida Extension. This area offers a huge incentive for buyers and investors. According to real estate consultancy, DTZ India, the market has gradually been shifting towards end-users owing to the lower prices and corrections as compared to the investor driven demand earlier. There are many residential projects coming up right along the Dwarka Expressway which is progressing at a steady pace. This will be an expressway of eight lanes which will link Delhi and Gurgaon. Many new projects here are slated to be ready by next year and will primarily be for middle and high income groups.

The Dwarka Expressway is a great place for real estate investments owing to its proximity to the capital and the international airport in tandem as compared to the Yamuna Expressway, Bhiwadi and Noida-Greater Noida Expressways. The northern region is closer to Dwarka while the southern part is way closer to Gurgaon. The northern region, i.e. the Sectors 109-113, 103 and 106 will obviously be more in demand owing to their closeness to Dwarka and the airport as well. The prices in this region will increase by approximately 25-30 percent according to Knight Frank over a period of five years and returns on investments will be 16 percent annually on an average.

Noida Extension is another good area for investments and the area spans Sector 1, 2, 16C, 4, 16D, 16B and the Greater Noida Knowledge Park V. It is in close proximity to Noida, being only ten kilometers away from the Noida City Center and is only 18 kilometers away from the prime commercial area Connaught Place. There is a proposed link via metro rail which might happen here, thereby making the area even more attractive for investors. This is the best location in NCR if one is seeking affordable housing. Yearly growth should be in the range of 15-20 percent throughout five years. Annual returns should be about 16 percent annually according to Knight Frank.

Greater Noida is another favorable investment location. There are varied options lying between INR 3, 000 per square foot and INR 15, 000 per square foot. Returns are usually in the range of 18-30 percent and the residential real estate scenario here looks promising to say the least! Greater Noida is around forty kilometers away from New Delhi’s southeastern part and is steadily coming to the fore as a hub for education and industry. Noida can be accessed via a six lane highway which has been operational right from the year 2002 and there are many prominent companies who are present in Greater Noida. It takes a maximum of twenty minutes to reach Greater Noida from Noida and it is also connected to Agra through Mathura, courtesy the Yamuna Expressway. The metro railways will also connect Greater Noida with New Delhi, Noida and Ghaziabad as well. High end and mid range residential projects should be the real deal in this area and things are expected to brighten up in quick time. Prices may increase by around twenty percent annually in this region according to leading property consultants.

Mumbai and Associated Areas

Maximum city possesses a thriving real estate market even today. Prices have not risen as much as expected and the suburbs in eastern Mumbai should be attractive investment destinations with regard to viable returns as compared to areas in West and Central Mumbai. The emerging Ulwe area is a top investment spot if you go by connectivity and other attractions. This is situated just south of the Panvel creek and the Uran Road connects it with the Thane Belapur Road. The Jawaharlal Nehru Port can also be accessed via the JNPT Road. Belapur is only seven kilometers away and is a commercial hub. There are other office locations which are situated within twenty two kilometers. The Seawood-Uran-Nerul rail network should be ready and Ulwe will have access to prominent office areas through a mass rapid transport network.

The prevailing INR 4, 000 per square foot here is quite attractive now and this is slated to increase by almost twenty percent every year as per industry reports. Chembur is also a hot investment destination owing to its proximity to major office areas and also the Bandra-Kurla complex. Residential properties in this area will witness major demand as well. There will be more discounts offered by developers in this area as well. Alongside, the monorail linking Wadala, Jacob and Chembur will be coming up along with the Santacruz to Chembur link road and the Eastern Freeway. These projects will definitely improve overall connectivity of the place and prices should be rising by 18 percent annually which is quite profitable by all means. Wadala is another top bet owing to its connectivity via the Eastern Expressway.

It also has a good train network and the monorail project will be a big boon in this area as well. Annual returns should be in the range of 18 percent over a period of five years here.

Bangalore

The Information Technology hub has been at the forefront of development and new projects have been launched in particular areas that look quite promising for investors. Hebbal is a rising destination owing to the international airport and the technology parks located here. There are many prominent companies in this location. This area is slated to witness huge demand and prices should be increasing on an annual basis. KR Puram is another area which is perfect as a residential destination. Connectivity will improve vastly owing to the Peripheral Ring Road and metro and highway connectivity also makes this place a great investment location.