How To Get The Best Real Estate Deal For Yourself!

Getting the best real estate deal for yourself is no mean feat. You need to be very sharp and on the ball at all times. Real estate is one sector where a lot of fluctuations have happened in recent times. These fluctuations can either be good or bad depending on the present condition of the market and its intrinsic mechanisms. Real estate markets are not really in good shape in present times. Why is this so? This mainly has a lot to do with the market trends that are dominating the economy at present. Real estate markets are having to deal with a slump in demand. It is important to know the background context of real estate in India before you actually think of purchasing a property for yourself.

Real estate has been bogged down by certain problems like price stagnation and unaffordability. Stagnation of prices has mainly resulted from the initial conundrum of lower supply levels and burgeoning demand points. Price increases mainly resulted from this dilemma and henceforth were propelled upwards by sky rocketing development of particular areas and locations in all major cities, even in the suburbs or outskirts. Right now, prices have reached a maximum level which is both unaffordable and unreasonable for entry and mid range buyers. The luxury and premium housing markets continue to do well in India which is rather surprising considering the current state of the Indian economy.

However, there has been a huge slump in demand from the mass as a result of which, unsold inventory has been piling up by the dozens. It is the same situation for hundreds of realtors, developers and companies in this sector across the country. Real estate prices have now saturated and there have even been price corrections in some areas. Price corrections have been to the tune of ten to fifteen in prime locations of cities like Kolkata, Delhi, Mumbai and Bangalore. On the other hand, prices of property in the outskirts or rapidly developing outer fringes have seen a slight appreciation backed by popular demand from customers.

In areas where price corrections have not taken place yet, developers are looking at ways and means to make the offer more lucrative for hard pressed customers. This is another predominant trend that is being witnessed in the real estate sector of late. In this scenario, you need to be careful if you need to obtain the best real estate deal for yourself. Bear in mind that buying your dream home in the present scenario may not be as easy as it looks. Always have a solid database of information and details relating to properties available in your preferred areas and locations.

Always be flexible with regard to factors like location and other amenities. It pays to be flexible in the current scenario as you might end up getting hold of a fabulous deal with only a few tweaks here and there. Do not go by the first impression of the developer or real estate company selling you a particular property. Do not be influenced by sales pitches and the claims of the developer. Developers often make absurd claims about the location in question and its advantages which may not often translate into actual, tangible reality.

Always make your own inquiries with regard to the area, its advantages and benefits, transportation facilities and the like. Always insist on certain basic amenities like power backup, security services, generators, playing areas for children and recreational areas when you start searching. This will help you narrow down developers who have projects that may be to your liking. Keep in mind that you may not find all your desired amenities in one single location. This hard to predict and you may lose out on a good deal if you are too rigid. If it pertains to something absolutely important and necessary you should not be making any compromises.

However, if it is something that can be substituted or replaced or even done without, do not hanker unnecessarily with the developer. Always bear in mind that developers dole out freebies, special payment offers, flexi payment schemes and other benefits in order to offset the impact of high prices on customers.

Make sure that your developer or realtor offers some tangible benefits in this regard. It makes no sense to go for a particular property otherwise and you will find loads of projects and developers which provide you certain extra benefits. Always negotiate with the developer as to the final prices. If the prices cannot be lowered throw in an extra benefit or two wherever possible. Keep in mind that price corrections are not unnatural and it is the developer who should be worrying about stock clearance and not you.

Undue hurry and desperation often gets the better of us and forces us to make a rapid choice. Do not be hurried by the statements of the developer pertaining to limited properties being up for sale and the huge rush expected and so on. Take your time in deciding on the purchase and do not be worried about missing out on anything. While dealing with the developer or real estate company, always be firm yet friendly. Do not be overtly aggressive especially in India as developers tend to rely more on personal interaction here.

Always look for locations that have upcoming and proposed projects and development opportunities. There are loads of development opportunities in place across multiple locations. New and upcoming areas offer loads of fabulous deals for real estate buyers and investors. If you buy a property in an upcoming area at a cheap price now, you will stand to reap the benefits later. If you are an investor, always have a wide margin of about three to four years for getting your investment back.

Follow these tips towards getting hold of a fabulous and attractive real estate deal for yourself. Real estate markets are witnessing major changes and you should get your share of the pie as much as you can! 

Mumbai becomes Expensive for Residential Property Buyers

The Indian real estate market has been witnessing a nationwide slump of sorts. This has mainly been attributed to a combination of factors revolving around the state of the economy. The Indian government has done little to revive the sector with cutting edge reforms and policies even though a few bills were passed in the year 2013. As a result, the industry is now awaiting the election results with a view towards praying for the formation of a stable government at the center. Why is this factor important for developers and real estate companies all across India? This necessitates a thorough study into the present condition of the real estate market in India. Firstly and most importantly, real estate is suffering owing to a severe lack of demand. Indian real estate thrived on huge levels of demand and this was considered to be a permanent factor given the levels of growth.

However, the poor economy and other factors have put the brakes on the steady progress of the Indian real estate industry. Why has demand dropped down to such levels? This mainly has to do with economic fluctuations and changing market conditions. Alongside, the extremely high prices of real estate in maximum areas has put paid to any hopes of attaining a home at affordable rates. This is proving to be the biggest reason behind the steadily dwindling demand especially in metro cities and major business hubs of India. On the other hand, suburban areas and projects situated on the outskirts of major cities are witnessing a tiny growth in demand owing to more affordable prices and better transport connectivity. Alongside, these areas are even witnessing an appreciation in their capital value with the steady development of infrastructure and social amenities in the region.

Surprisingly, demand in major cities like Delhi, Mumbai, Bangalore, Chennai and Kolkata has come down to surprising levels. High prices have severely affected the budget housing and mid level housing segment in major Indian cities including the top eight. Alongside, the premium and luxury segments have not been hit as badly as the entry and mid level areas. However, even these projects are struggling to find buyers owing to high prices of land and liquidity crunches. Developers are in a stressful situation right now and the major problem pertains to unsold inventory. Unsold inventory has gone up to unprecedented levels and is steadily piling up for major real estate companies.

Along with unsold inventory, the high prices of land are making it impossible for developers to reduce prices and offer homes at lower costs to buyers. They are now offering various discounts, special offers and other freebies in a bid to clear out their inventory. This makes it a win-win situation for buyers and investors who can afford it. Yet, the expensive nature of real estate purchases cannot be denied especially in a city like Mumbai in spite of forecasted price revisions and corrections owing to a slump in demand.

Mumbai is one city where the cost of acquiring residential real estate may just increase by leaps and bounds. Mumbai residents are praying for price corrections and revisions to take place and at the same time, the values of property in the city are rising steadily day by day. According to a study brought out by the noted real estate advisory and consultancy, Knight Frank India, it has been found that the values of residential land available in Mumbai have increased to the tune of almost 35.2 percent which is mindboggling and astonishing to say the least! The very fact that this has happened in the previous couple of years is another worrying factor. Land which is used for residential development has now become costlier and the increase in these prices is mainly attributed to factors like residential price hikes along with multiple norms of development.

What prospective customers and Mumbai residents do not realize that the values of built spaces have also been influenced by this increase in the values of residential land. Owning a home in Maximum City has become more and more difficult and expensive in the last couple of years and this is one harsh reality that prospective buyers and city dwellers have to accept without any real solution in sight. This is something that has affected the morale of all those aspiring to own a home in India’s financial and business capital. According to Darshan Vyas, Managing Director at True Value Realty, a Vadodra based brokerage firm, the overall pricing of built spaces is one aspect that is dynamic and all movement happens likewise in an effective manner.

According to Vyas, there are two major aspects that influence the cost of any built property these days, namely the cost of construction and the cost of land. The former is one aspect which is by and large stable as far as trends in both large and small cities are concerned. The latter is the factor that makes the real difference in this case. For instance, the cost of land is lower in places like Vadodra as compared to Mumbai owing to lower demand per square feet. High levels of demand and lower supply of residential spaces have now pegged values of land to exorbitant heights.

Values of property too have a relationship that is symbiotic with the values of land. This proportionate growth is behind the sudden appreciation in property values in Mumbai. This premier city is now one of the most expensive propositions for Indian buyers. Prices have largely appreciated to the tune of ten percent and this has even gone up to forty five percent in some areas. Appreciations have been observed in places like Navi Mumbai and Thane among others. According to Mehul Thakur, the Viva Homes director, the annual increase in prices of land in Mumbai is mainly due to the constrained supply of ample land along with the rising demand for quality residential property. The Mumbai real estate market will soon be on an upswing and positive market sentiments will again prevail after the elections.

According to Thakur, affordable housing is a pressing need in Mumbai and realtors should not scale up their prices any further in case of positive market sentiments as this will only serve to dampen the same and lower demand further to unacceptable levels. The focus should be firmly on affordable housing according to Thakur and many other industry professionals and experts. Whatever be it, residential real estate is set to become even more expensive in Maximum City!

A Lowdown on the Current Situation of the Real Estate Market in India

Are you worried about picking up the right real estate property? Understand the true dynamics of the prevailing situation in the Indian real estate market first. Otherwise, you will end up making a wrong decision. The economy and its performance have a lot to do with the overall customer demand for both commercial and residential properties. Overall demand for properties in a particular city has more to do with the location than anything else and this also pertains to factors like infrastructure. The real estate has phases of both depression and growth and currently, supply is more than demand, a very rare case in this industry.

Indian Real Estate

Market depression is primarily responsible for the difficulties faced by developers in selling homes. According to Pankaj Kapoor, the MD of Mumbai based Liases Foras, a real estate analytics firm, the housing sector is facing a situation on the throes of typical recession. According to the firm, the NCR-Delhi region saw sales of just 1.24% of inventory in the June quarter of 2013 while the monthly sales velocity should ideally be at least 2.75%! The Mumbai Metropolitan Region saw sales velocity figures of just 1.12% while the numbers were 1.53% and 2.27% for Chennai and Bangalore respectively. Pune’s market had a figure of only 1.61% while Hyderabad had only 1.34% of sold inventory.

According to co-founder Kartik Varma at PropTiger, a property brokerage, the market is witnessing a definite slowdown and lowering of business volumes. Transactions are going down by the day and unaffordability counts as the major reason for the same in cities like Mumbai and Delhi and not the shortage of willing buyers. Kolkata and Chennai are typically conservative real estate markets and supply overhang is not as pronounced as say markets in Pune, Mumbai, Delhi-NCR and particular areas in Bangalore. There are buyers for homes that are priced quite reasonably and are habitable. However, affordable housing is only available in locations that are far from the heart of major cities and this is a major reason for the slump.

Developers are still launching newer projects in spite of a drop in overall customer demand. However, in what is a first, many of these new projects are a quest to align reasonable prices with decent amenities. Alongside, middle income housing and affordable housing is sectors that are now drawing more developers owing to the immense demand in only these two areas. About 85% of all launches in the prominent eight Indian cities revolved around these two segments and most buyers in India are currently looking for properties priced between INR 40 to INR 80 lakhs. There is a huge demand for properties priced between INR 20 lakhs and INR 40 lakhs from end users mostly. Government support with a subversion of 1% interest for loans till INR 15 lakhs along other tax deductions mainly fuel this demand.

Suburbs and other areas on the fringes of major cities are witnessing a real estate boom with affordable housing projects aplenty. Buyers are looking at snapping up properties in remote locations which have good infrastructure and decent connectivity options. However, local builders mainly dominate this segment and companies stay away owing to low margins of overall profits with these projects. At the other end of the spectrum, high end premium projects are also being launched in top Indian cities which are situated close to business and commercial hubs. Yet, this segment has also seen a slump in sales as more and more buyers adopt a cautious approach towards investing and decide to wait for better deals courtesy impending price revisions.

Ideally, real estate markets in all cities should see corrections in prices owing to unsold inventory and diminishing sales and this is happening in some areas but by and large, real estate prices are either going up or are static. Mid segment prices have gone up last year and returns for investors have been decent too. Surprisingly, real estate investment returns have been very good and have gone up to the tune of almost 30% in some markets with an average of 20% prevailing across almost all cities which is more than returns from stock markets or even gold according to Frank Knight India studies. Prices should be static over the next few months of 2014 according to experts and analyst. Small price revisions will happen thereafter but nothing in a big way.

However, some experts beg to differ and state that price corrections of about 10-15% should be in place over the next couple of years. Alongside, time corrections could also take place and this is substantiated by the fact that properties in secondary markets are being sold at prices which are less by 10-20% than what is charged by builders. One thing is for sure: there should be no sudden price increases in the near future. Alongside, the sector will also be under a lot of pressure owing to newer rules and regulations. There should be a new law in place soon which will make life very difficult for real estate developers.

According to financial advisors, if you are thinking of buying a house, you should do it immediately as you will save on income tax and house rent. Alongside, the market will never be quite perfect for purchasing a home. Property prices will not be rising largely anytime soon but they might just rise a little after the elections. Thus, it makes sense to go for a property now with some additional discounts thrown in from the builder’s side. Flexible payment options are now available and this makes it a good time to snap up your desired property. The resale market is still going strong and many properties are selling at cheaper prices than those originally desired by developers. If you are looking to sell your home, you might do well to wait till the election results. However, buyers should not waste time as the market will never be as perfect as they want it to be!

Should You Invest in Real Estate at this Point of Time?

Many of us are concerned about the overall real estate scenario in India. Indeed, the market has witnessed loads of downturns in recent times. The Mumbai real estate market has been suffering and stagnating on the pressure of unaffordable prices and other problems. This is not a problem unique to Mumbai alone. Even areas in Kolkata, Delhi, Bangalore, Hyderabad and Chennai are witnessing major problems on account of high prices and lack of customer demand. Indeed, customer demand has dwindled by unexpected proportions. Overall customer demand has gone down due to the extremely high prices of property in most areas.

On the other hand, suburban areas are witnessing renewed demand with a slew of affordable housing projects being implemented in these areas in major cities. These areas should be witnessing price increases as well in the future owing to speedy development. Price saturation in posh areas and localities has left developers with little choice in terms of selling inventory. Inventory has been lying unsold and developers are doing their best to lure customers with offers, flexi-payment options and other special benefits. However, this strategy has not been working for quite some time now. Unsold inventory has been putting pressure on developers from various quarters. Alongside, home loans may become more expensive owing to an impending in repo rate courtesy the RBI.

This will force banks to jack up their rates of interest and will in turn, affect demand for property in almost all locations. Alongside, the sector is dreading the aftermath of the land acquisition act which is also slated to be cleared this year. This may make things tougher for realtors and force them to increase property prices by a fair margin, which again, will affect demand. In this scenario, is it really the right time to buy property in Mumbai? Recent reports of price revisions and corrections have raised the hopes of many people with regard to finally being able to invest in Maximum City without any hassles.

According to a recent study and report brought out by leading real estate industry expert, Knight Frank, the prices of real estate have gone down in particular areas of Mumbai. This depreciation has been to the tune of a staggering ten percent and this has raised the hopes of investors by a fair margin. Alongside, these findings have also highlighted the fact that up to 45% of all new properties under construction are yet to find any buyers. According to real estate market experts, it is the same situation in other metro cities as well. Prices are and will be softening steadily in the wake of diminishing demand. Will this make for an ideal investment situation?

According to the national director at Knight Frank India, Mudassir Zaidi, the present time is highly favorable for property investments across India. Major cities have witnessed a dip in real estate prices owing to an uncertain economy, slackening demand and uncertain political climates. Alongside, prices should be rising if there is the formation of a stable government at the Centre after the 2014 elections. This rise in prices will mainly be due to the boost in confidence. However, the reverse will happen in case of a fractured or coalition government assuming the reins of the government. However, Zaidi also feels that the current pressure prevailing on real estate prices will not last for long if there is political stability and an improvement in market sentiments which would lead to price increases as mentioned above. As a result, this indeed makes for a good time to invest in real estate all across India. Even a report issued by Knight Frank states that prices are most likely to see a boost in the latter half of the year owing to the end of the elections and the improvement in economic conditions. However, there are several micro factors to be observed for that to happen.

According to the executive managing director at Cushman & Wakefield, the leading real estate consultancy, this does make for a good time with regard to investing in real estate only if other aspects like job security, business stability, proper financing and all other elements are in place for an individual. Most experts seem to concur on this fact and this should raise the expectations of serious real estate investors. Alongside, the study by Knight and Frank has highlighted the depreciation in prices to the tune of ten percent in certain areas of Maximum City. These include areas in Lower Parel, South Mumbai, Parel and even Central Mumbai. Alongside, stable prices have been witnessed for areas in Thane and Navi Mumbai among other suburbs.

According to market experts, the tide is turning in the favor of real estate investors and buyers. Inventory increases, lower demand and other factors are putting heavy pressure on real estate prices across India. Demand should also remain low throughout the first half of this year according to market experts. Knight Frank swears by an impending correction of prices which should further benefit buyers. Yet, Dutt highlights particular areas in Mumbai which have not yet witnessed any correction in prices. According to him, prices may not decline by whopping amounts but locations in LBS Marg, central south and other prime areas may see greater discounts being offered to buyers.

This will be done to fuel increasing demand. However, before investing, buyers must consider the viability of the location, the scope of accessing proper infrastructure and proper access to prime city locations. Another important factor behind investments lies in the social infrastructure surrounding a particular project. This includes colleges, schools and other educational institutes along with centres of recreation, entertainment, malls, health care provisions, retail outlets and many more amenities. There should be future developments planned for the area in question and there should also be a thriving transport network. These are factors that must influence your investment decision but otherwise, the first half of 2014 is indeed a great time to invest in real estate in India!

Should you Buy Residential Capital in Mumbai Now?

Is this really the best time to buy property in Mumbai? This is one question that has dogged various prospective buyers for a long period of time. There is a lot of anxiety prevailing around the real estate sector in today’s times. As a result of the otherwise sluggish market and other factors, prices of real estate are steadily softening in most areas of Mumbai. However, buyers are concerned about the pros and cons of investing right now or waiting for a further reduction in prices. Is this really a good time to invest in property in Mumbai? 

Mumbai has always been largely unaffected by the trends in the Indian real estate market and a large scale price correction in prices of real estate. Many of us dream about owning an apartment in the commercial and financial capital of India. Mumbai has always held on to its high prices much in the mold of other major cities like London or even New York. This has been a fact in spite of dwindling project launches, a sharp capitulation in overall demand and rundown financing for real estate developers. However, a recent study conducted by Knight Frank, the leading real estate consultants, indicates that prices may be softening in Mumbai. 

As per this study, the prices of real estate have been fluctuating in a somewhat narrow range and have largely been going down over the last four quarters. This has been happening with the adjustment of the market to newer launches. Premium micro markets usually witness more volatile pricing as compared to suburban micro markets which are close to the periphery. Prices have gone down by almost 10% across the last three quarters in locations like Mahalaxmi, Parel and Lower Parel. At the same time, the suburbs in Western and Central Mumbai along with areas in Thane and Navi Mumbai have seen overall stability of prices which have even risen with the passage of time. 

According to the CEO and MD of Orbit Corp, Pujit Agarwal, the study presents accurate findings to a large extent. However, he feels that the market trends are constantly in a state of flux, varying with regard to the area taken into account. He says that prices across South Mumbai have remained unchanged while price corrections have taken place to the tune of 15-18% which is mindboggling, in areas like Lalbaug and Parel and even close to Wadala. According to Agarwal, prices have been somewhat sluggish in comparison in the suburbs of Mumbai and have risen a little in places like Navi Mumbai. However, places like Dombivili, Thane and Kalyan have witnessed price appreciations to the tune of 10-15% and this is set to continue all throughout the MMR region. 

There has also been an appreciation in prices of resale flats or properties that have been completed even though strangely, there is a dip in prices to the tune of 10-15% for buildings that are still under construction as per the Chairman & Country Head at Jones Lang LaSalle India, Anuj Puri. The price drop may not be as visible yet owing to such manifold market variations. However, there are various concessions, such as free stamp duty, rent back, floor charge waiver, subvention policies, waiver in car parking charges and registration concessions that may be behind the overall 10-15% discounts that are being offered by real estate developers according to Knight Frank. Alongside, these discounts have been seen to go up to a whopping 25% when it comes to housing projects that are of a premium and high end nature. 

There is a large scale desperation noticed among builders and developers in Mumbai. This is because 1.3 lakh apartments are still unsold out of the 2.9 lakh residential units being constructed in the city. The NCR or the National Capital Region has 26% of unsold inventory as compared to the huge 44% witnessed in the MMR or the Mumbai Metropolitan Region. This is a huge worrying sign for developers. The overall demand on part of customers has come down quite significantly. The period between January and September in 2003, saw the launch of 47, 488 units at an approximate level. This translated into a drop of approximately 46% and 42% when the same period for the years 2010 and 2011 was taken into account respectively. Cancellations are another area which is causing problems for developers. The numbers have gone up in recent times and this again, does not augur well for the Mumbai realty sector at large. 

Is this the best time to buy real estate as a result? Experts feel that it would make sense to wait a little more especially if investors are targeting areas like central Mumbai. According to Knight Frank, there should be a more definitive correction of prices to come which should be even more beneficial than the current revisions. Builders have been stuck with unsold inventories and decreasing demand that will lead to greater pressure on the prices. When profits go down and costs of interest rise even further, developers will have to lighten their inventories and offer even lower prices. Alongside, prices have gone down by almost 10% in the central suburbs of Mumbai. However, the overall prices will not be going down owing to limited supply and this might be a dominant trend over the next few years. Alongside, areas like Navi Mumbai which represent particular micro markets might not see price corrections as well. There are many projects which are selling successfully while nearing completion and this is another factor behind the same.

According to Jones Lang LaSalle, real estate developers are also waiting for the results of the elections to determine the final prices. In case of a stable government being formed at the centre, there will be huge euphoria and it might boost demand, thereby leading to prices stabilizing. However, you would do well to wait if you are betting on a weak election result according to Puri. Going by that perspective, it would truly be a good time to snap up a property in Mumbai now!

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.

This May be a Landmark Year for Real Estate Funding!

Funding and its absence have been sore issues for the real estate sector all throughout the year 2013 and this has been one of the major problems faced by the sector. However, good news may be in store for developers and real estate conglomerates. There have been some policies and industry decisions that may just augur well for the sector at large. Big ticket funding is in store for the real estate sector in 2014. This will be a welcome development and may just prop up the sector in the context of a gloomy 2013 overall. Alongside, this money may come in as private equity or may even come in through the REIT or the Real Estate Investment Trust which is one of the biggest anticipated developments for the sector this year.

As per industry reports and other news, there are private equity funds like Tata Realty & Infrastructure, Xander, Kotak Realty Fund and Blackstone among others, who are readying the process of setting up REIT in India once the regulator for capital markets, comes up with the final instructions and guidelines for these securities. Tata, Kotak, Blackstone and Xander already have running investments in commercial assets and IT parks which produce rent. These can be perfect options for REIT assets. They would only have to float a REIT and list it on the stock exchanges which would ensure investment exits. As per a report from Morgan Stanley, India holds mall properties which are worth a staggering $60 billion or INR 3.72 lakh crores. Office space alone stands at 400 million square feet in India.

Tata Realty and Infrastructure which is owned by Tata Sons is already present as an advisor to the TRIF-I realty fund and will be exploring options with regard to setting up REIT’s both in India and Singapore over a specific period. The first ever fund from Tata, namely the Tata Realty Initiative Fund already possesses a $750 million corpus of its own with approximately 90 per stakes in all the mall projects undertaken in Nagpur, Amritsar and other cities by the conglomerate. Blackstone, which is based in the United States of America, has already been doing the background work for a similar REIT launch. It is one of the most consistent investors in India with close to $1 billion worth of investments in SEZ’s, IT parks and other commercial properties. These include investments in Embassy properties projects and the DLF Ackruti Info Parks situated in Pune.

Xander has a capital base of more than $2 billion in addition to residential buildings, retail malls and office spaces touching the 50 million square feet mark. The company is also looking at REIT and other investors like Everstone and IDFC are also looking at REIT as a viable option. All organizations possessing investments in assets that produce rent could actually look at REIT’s once they are made legal in India. According to the Managing Director at RICS, South Asia, Sachin Sandhir, REIT would be a definite step in the proper direction for the industry. However, taxation issues should be absent as they would otherwise counter the motive behind the introduction of REIT.

REIT would bring investors in retail to the forefront and the announcement of the same has sparked sudden interest from foreign investors and funds. PE funds are a little down but have not dried up completely and this will augur well for REIT. According to a report by Cushman & Wakefield, private equity funds possess $2 billion which has been readied for real estate investments. In the first half of the year 2013, PE investments were noted at $276 million and this was about 46 percent lower than the same period in 2012. Looking solely at policies and decisions, multiple industry circles have realized the need for propping up the housing and real estate sector through various methods. This will help investments come into this sector and create more jobs in the sector.

The economy has to get back to 8-9 percent of growth and real estate will play a key role in this resurgence. The Regulator Bill, REIT instructions and the Land Acquisition Act are all significant developments and the Finance Ministry has pushed for various measures that should ideally benefit this sector. These new developments are very essential for the sector and should give it a shot in the arm. According to the President at Unitech, PK Tripathi, proper funding is the most important aspect and the biggest issue faced by it at the same time. The demand for quality housing is on the rise and there are umpteen regulations lined up which could make fund raising a little more tedious and problematic. Prices automatically rise when supply options cannot match demand owing to regulations and funding related problems.

REIT is a viable option that will definitely enhance the sector and will be a pivotal fund raising vehicle. Finance options will help buyers deal with liquidity problems and execute projects on time. Real estate had been suffering owing to multifarious regulations which do not allow foreigners to invest in Indian real estate companies or non allowing of finance for purchasing land. Navneet Bhadla, Brys Group Director feels that with the General Elections around the corner, the government will have one last shot at addressing the issues in this sector and subsequently pave the way for more economic growth. According to Bhadla, this year could be a huge revival for the sector if taxation policies are addressed and investment is allowed to flow into the industry.

On a sweeter note, REIT could well ease the fund crunch of developers and help pave the way for better and faster project delivery to customers. The announcement has certainly raised the hopes of developers and real estate organizations with regard to finally making up for lost ground. One can only hope that big ticket funding flows into this sector which is the backbone of Indian economic growth and prosperity!