Bangalore A Haven for Real Estate Investment

By: Karshni on 23:52

The real estate industry in India is undergoing a phase of transition. The year 2013 saw a steady market for real estate in major Indian cities. In Bangalore, the residential market has been pretty stable as compared to its neighboring cities. It is expected that in 2014 the real estate market will gain momentum and get back on track. However, the development of the industry is largely dependent on the macroeconomic condition of the country.

A Silver Lining: 

In-spite of the sluggish economy, there is rising economic prosperity among the masses which has increased the available purchasing power. Mid-range residential properties have been a popular property choice among people. Bangalore's real estate market caters to large consumers who are local buyers, working professionals who have migrated from other cities and also NRI clients. Bangalore in particular, has a large clientele from across the globe which is the reason why real estate market is still flourishing. Contemporary consumers have provided the opportunity to realty developers and builders to expand their product base. As a result, various new projects are being launched ranging from mid-range apartments to high-end luxury villas and integrated townships.

Sliding Rupee Value: A Boon in Disguise:

Like several other industries, the real estate industry has been affected by global slowdown and sliding rupee value. Inspite of the challenging economic condition, the real estate sector in India has performed comparatively well. While, there was a slowdown in demand for properties by local buyers, superior dollar value has encouraged NRI clients to buy properties in India. Bangalore being one of the most favored destinations among Indians living abroad, the sluggish rupee value has in turn attracted NRI clients to invest in Bangalore, thereby, salvaging Bangalore's real estate market to a great extent.

However, the recent announcement by Reserve Bank of India to hike repo rates by 25 bps (basis points) has been a constant debate. It is anticipated that such a move will push banks to increase the loan rates, which in turn will have a visible impact on home buyers.

Growth of Bangalore as a Real Estate Market: 

Bangalore is a haven for real estate market. Over the years, real estate industry in Bangalore has witnessed massive growth due to improved infrastructure, better civic facilities, better road developments and better rail networks among others. Due to better connectivity and infrastructure, realty development is able to expand its borders to areas out of city limits which have great potential of becoming future hot spots. The improving socio-economic condition has encouraged the populous mid-income earning families to invest on real estate sectors. As a result of FDI will see many international players entering the Indian real estate market and a surplus demand is anticipated in commercial and retail segments.

Regions in Bangalore foreseeing Growth: 

The city is seeing rapid developmental activities in all the four directions. East Bangalore is becoming fairly popular among realty developers and potential home buyers due to better road connectivity which has as come a result of ORR linking to major IT corridors and other places of interests. Areas such as Whitefield, Marathahalli, Kundalahalli,

K R Puram, Kasturi Nagar, ITPL and Mahadevpura are some of the favorite residential destinations.

West Bangalore, covered by residential localities, is witnessing major developments

in the form of commercial and retail complexes and high-end residential projects.Some of the areas which have come to focus due to recent developments are Yeshwantpur, Malleswaram, Rajajinagar, Matthikere and Vijayanagar.

North Bangalore has been a popular residential destination both for end-users and investors. Developmental activities in these areas have been phenomenal. The region provides easy connectivity to major areas in the city which is one of the main reasons driving the demand in areas like Hebbal, Yelahanka, Ramamurthy Nagar, RT Nagar, Banaswadi, Hormavu and Sahakar Nagar.

South Bangalore is fast emerging to be a favorite region for real estate development. The entry of multi-national companies has boosted developmental activities in this region. Further, the development of NICE Road and Metro Rail connectivity to the region have increased the value for properties in localities like HSR Layout, Sarjapur Road, Electronic City, Bannerghatta Road, JP Nagar, BTM Layout, and Uttarahalli.

Road Blocks to Overcome: 

The future of real estate industry in Bangalore looks promising but it is also filled with obstacles and challenges. Some of the challenges can be controlled, while others need intervention from higher authorities. For instance, the recent move by Reserve Bank of India to hike repo rates by 25bps will definitely pinch the realty developers across the country. This step will push financial institutions to increase loan rates which in turn will affect the demand for residential properties.

Another common problem faced by realty developers is delay in regulatory approvals which is often a big hurdle in launching projects. In a country driven by sentiments, political order plays a vital role in defining and governing acts and regulatory bills which needs stability. The new 'Land Acquisition Act' will concern realty builders and developers in India and it may result in subsequent changes in real estate prices and increased costs in project development with lower profit margin.

http://www.siliconindia.com/realestate/news/Bangalore-A-Haven-for-Real-Estate-Investment-nid-163004.html

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Fancy things your real estate agent may tell you

By: Karshni on 05:38

BankBazaar.com

When investing in a real estate property, a real estate agent might prove to be a really valuable asset. However, if you don't keep your eyes and ears open, you might end up ruining your investment.

Ankit is a regular investor in the real estate industry and has been buying properties for some time now. Things weren't always good for him as he once fell for some fancy claims made by a real estate agent and ended up losing a huge sum of money. However, he now knows that even though there are several statements that the brokers make regarding the property they are offering, it is you who needs to be alert and attentive when investing your money.

When you are out for buying real estate property, you should always remember that agents are here for business. The enthusiasm of buying a plush new apartment can get you stalled between tall claims and misleading promises. So, the next time your broker tells you that he has a cozy apartment up his sleeve, you need to be alert that he might just be talking about a cramped one. The industry cliches can change the entire definition of a clean and high class apartment.

Be ready to hear the following things from your real estate agent if you are planning to invest in one of the posh localities of the city.

You Got the SeaView!

Having an apartment with a sea view is a dream of every investor. However, not every agent can do that for you, though they surely can promise you of getting one. The estate agents these days are quick to mention that a particular apartment comes with an ocean view. The thing that they don't tell you is that there are certain obstructions. So, when you pay all the money all you get is an ocean view which is obscured by huge buildings and trees. This is quite common in coastal areas like Chennai and Mumbai.

A Huge Garage that can Hold 2 Cars at a Time

Let's admit it that we all want to have a huge car garage that can hold at least 2 cars at a time. Now, this is what the agents promise you, but the truth is that such garages have storage regions or dryers installed in them and so the space is not enough for two sedans or even hatchbacks for that matter.

You'll Get a Superior Price when You Sell the Property

Whenever we invest our money in a property, our agents claim that they'll help us get a better price for the property in the near future. However, you shouldn't fall for the statement as this is something which is not in the hands of the agent. The market behaviour cannot be predicted accurately and hence, you should invest your money after knowing your requirements well. So, don't believe your broker when he says that he'll help you sell the property at an unrealistic rate.

This is the Best Locality

This is a common lie that you might hear from your agent. To put it simply, you cannot just rate a locality to be the best in an area. There are a number of factors to be considered while determining a property's value, but according to the agent the property they are offering is the best. They will tell you a lot about how the area around the property will develop in no time.

The Place is a Paradise for Investors

Your agent will probably tell you that this place is a paradise for investors and a huge investment house is coming up to build a multiplex and shopping mall. You shouldn't pay much attention to these claims as the market changes quickly and nobody knows what's going to happen in a short span of time.

Not Much Time or Units Left

They'll tell you that there is not much time left as they only have the last few units to sell. You should never hurry while investing in a property; instead you should stay calm and see why the agent is pushing so much on selling the property. Even if they offer you the flat at the most economical rates, you should not fall for the trap and instead take a sound decision.

With the increased rates of property, brokers tend to charge a huge sum from their clients as a commission. So, if you are already giving them their share, then there's no need for you to take a risk with your investment by believing everything they say.

BankBazaar.com is an online loan marketplace.

http://profit.ndtv.com/news/your-money/article-fancy-things-your-real-estate-agent-may-tell-you-382408

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Warren Buffett warns of liquidity curse, celebrates property wagers

By: Karshni on 23:28

Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., cited a farm he’s owned since 1986 to caution individuals against frequent buying and selling of stocks.

“Investors should treat their equity holdings like real estate purchases, focusing on the potential for profits over time rather than short-term price fluctuations,” Buffett, 83, wrote in an excerpt from his annual letter published on the website of Fortune magazine on Tuesday.

“Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations,” Buffett said. “For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.”

Buffett has pursued a buy-and-hold investment approach as he built Omaha, Nebraska-based Berkshire into a $280 billion company accumulating the largest holdings of Coca-Cola Co., American Express Co.and Wells Fargo and Co. He’s said individual investors may be better off avoiding his approach to picking stocks, instead purchasing a fund that holds every company in the Standard and Poor’s 500 Index.

“The goal of the nonprofessional should not be to pick winners,” Buffett wrote. “The ‘know-nothing’ investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results.”

The S&P 500 has returned about 7% annually over the past decade, beating by almost a percentage point the average yearly advance of Buffett’s company. Buffett has said he aims to increase Berkshire’s book value, a measure of assets minus liabilities, more rapidly than the S&P 500.

Retail property

Buffett’s track record of profitable stock picks and takeovers has helped make his letters a must-read on Wall Street. The billionaire has said he writes them to be understood by his sisters, who don’t work in finance. The full document will probably be released by 1 March, along with financial results for 2013.

In today’s excerpt, Buffett cited the agricultural holding and a 1993 investment in New York City real estate. Annual distributions on the retail property, near New York University, now exceed 35% of the initial investment.

He purchased the 400-acre (1.6 square kilometer) farm, located 50 miles (80 kilometers) north of Omaha, for $280,000 in 1986. He says he calculated the farm’s return to be about 10%, based on production estimates for soy and corn. The farm is worth about five times what Buffett paid, and earnings have tripled, he wrote.

‘Moody fellow’

The billionaire compared the daily fluctuations in stock values to an erratic neighbour standing near his property, yelling out offers for the land.

If a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his—and those prices varied widely over short periods of time depending on his mental state—how in the world could I be other than benefited, Buffett wrote. If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming.

“That’s not how equity holders often react,” Buffett said.

“Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally,” he wrote. “Because there is so much chatter about markets, the economy, interest rates, price behaviour of stocks, etc., some investors believe it is important to listen to pundits—and, worse yet, important to consider acting upon their comments.

Market fluctuations

Buffett has said that he regrets not taking advantage of such irrationality to sell holdings. Coca-Cola Co., one of Berkshire’s largest equity holdings, was one of the billionaire’s most successful investments in the 1990s, reaching prices that were more than 45 times earnings at the end of 1998.

The investment has fared worse since then. While the stock price has recovered most of its losses since falling from the 1998 peak, Coke’s price-to-earnings ratio is less than half of what it once was. Shares have declined this year as the soft-drink maker faces sluggish growth outside the US and concerns about the healthiness of its product at home.

Though I said at the time that certain of the stocks we held were priced ahead of themselves, I underestimated how severe the overvaluation was, he wrote in a 2005 letter to shareholders, reflecting on stocks in Berkshire’s portfolio in the late 1990s. I talked when I should have walked.

Despite that regret, Buffett reiterated his view today that excessive trading can diminish returns.

‘Frictional costs’

“Both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions,” he wrote. “The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit.”

Berkshire last week decided to stop letting high-speed traders purchase direct access to press releases distributed by its Business Wire unit. Such firms often enter and exit positions in less than a second. Buffett said last year that such activity is not contributing anything to capitalism.

Bloomberg

http://www.livemint.com/Money/RZ9ejMftBYOSuwjsoJ3m7L/Warren-Buffett-warns-of-liquidity-curse-celebrates-property.html

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Cushman & Wakefield reports private equity investments in real estate increased 13% in 2013

By: Karshni on 23:26

Global Real Estate Consultancy, Cushman & Wakefield on Monday reported that private equity (PE) investments in real estate increased 13% in 2013 compared to 2012. 

The total inflow last year was Rs 7,000 crore; it was Rs 6,200 crore in 2012. 

Overall private equity investments across sectors in India have also increased by 11% from USD 9.49 billion in 2012 to USD 10.5 billion in 2013. "The increase in private equity inflows was primarily due to rising investments in residential assets and other sectors like retail and hospitality, it said. While the number of deals has increased to 40 in 2013 compared to 34 in 2012, the average deal size has declined marginally and was approximately Rs 175 crore (USD 28 million). "Given the difficult economic conditions, developers are finding it increasingly difficult to raise capital through traditional sources and are opting for alternate sources," said the report. 

The total Foreign Direct Investment (FDI) inflow in Construction Development for the third quarter of 2013 was noted at Rs 3,200 crore (USD 520 million), which is the highest quarterly investment since Q3 2009. FDI inflow for the first three quarters of 2013 in Construction Development was Rs 5,500 crore (USD 900 million), a 25% increase from the same period in 2012. 

The realty index grew by approximately 24% in Q4 2013. The report said overall net-absorption in the commercial office sector has been lower in 2013; primarily due to high relocation and consolidation activity with occupiers moving to better quality, larger and cheaper spaces in the suburban and peripheral locations.

http://timesofindia.indiatimes.com/business/india-business/Cushman-Wakefield-reports-private-equity-investments-in-real-estate-increased-13-in-2013/articleshow/30946673.cms

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Knight Frank sees revival in real estate market

By: Karshni on 23:23

While developers and financial institutions believe that the present residential and office markets are weaker they were six months ago, they are optimistic that the next six months would see a change.

This was one of the key findings of the FICCI-Real Estate Sentiment Index report launched by London based realty consultant firm Knight Frank in Mumbai.

The index is based on a quarterly review of stakeholders including developers, private equity funds, banks and NBFCs and is calculated on the basis of weighted average score of respondents across seven main cities.

While optimism is reflected among the respondents with regards to the residential sector in terms of launches, sales volume and price appreciation in the next six months, office sector as well as credit lending or funding situation are not expected to improve in the next six months.

According to the report, the residential index in terms of unit launches and sales volume have neared the 2009 levels that marked the global financial crisis following the collapse of Lehman Brothers in the US in end 2008. Office spaces on the other hand have seen their absorption levels significantly ahead of the 2009 level despite a contraction in office space demand, the report added.

Other highlights of the report includes Mumbai and Pune emerging as the frontrunners in price appreciation during 2009-2013, with Pune showing maximum appreciation among the IT/ITes driven markets of Bangalore, Hyderabad and Chennai.

The report also pointed that that the NCR market prices trended downwards till end of 2010, after which they have risen more than any other major residential market in India.

http://www.thehindubusinessline.com/economy/macro-economy/knight-frank-sees-revival-in-real-estate-market/article5689998.ece

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Tier-III cities drive retail realty market: Jones Lang LaSalle

By: Karshni on 22:28

Tier-III cities are emerging as attractive destinations for retail real estate primarily due to development of infrastructure and increasing purchasing power of consumers in these markets, according to property consultant Jones Lang LaSalle (JLL).

Cities like Ahmedabad, Chandigarh, Surat, Amritsar, Vadodara, Nagpur, Coimbatore, Lucknow, Jaipur, Ludhiana, Kanpur and Raipur are emerging as high potential markets for retail development.

"High immigration, excellent infrastructure, increasing per capita income and propensity to consume are key drivers for high market potential in the Tier III cities. Besides, growing office market is another important factor for retail development in such markets," the report said.

According to JLL, while Ahmedabad, Chandigarh and Surat have already emerged as high potential markets, cities such as Kanpur and Raipur are slowly moving up in their market potential and retail maturity index.

"While leading cities of Mumbai, Delhi and Bangalore have the highest level of market potential and retail maturity; rising income, consumption and infrastructure scenario in other cities make Tier III cities high potential markets for retailers and developers in future," JLL Managing Director - Retail Services Shubhranshu Pani said.

Cities like Mumbai and Delhi have witnessed an influx of big-box, fast-fashion and high-end retailers, it said.

Other leading cities such as Bangalore, Pune and Chennai have seen reasonably good absorption of retail spaces on the back of high consumerism supported by strengthening IT-ITeS sector and the strong auto, manufacturing and biotech sectors.

"Improvement in infrastructure, city expansion and the right supply of retail malls have been primary reasons for growth over the recent past," the report said.

http://www.mydigitalfc.com/real-estate/tier-iii-cities-drive-retail-realty-market-jones-lang-lasalle-372

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Gurgaon on its deathbed: Haphazard model of development causes severe water crisis

By: Karshni on 23:08

Pramod Bhasin is still coming to terms with the idea that Gurgaon, for all its glitter, may become uninhabitable in a few years. Genpact was one of the first global companies to set up office here — way back in the '90s — and Bhasin, who is the non-executive vice-chairman and former CEO of the company, has witnessed the breathtaking transformation of an agrarian district into an international business hub.

On the surface, Gurgaon continues to stir to life every morning with people rushing to offices within stylized glass-facade buildings and shoppers thronging the malls. Given the affluence, it would be difficult for anyone to suppose that the end of the city could be around the corner. But outrageous as it may sound, Gurgaon is on its deathbed. The problem is water and the signs are ominous enough to convince anyone who has studied the problem in detail that the city is on the brink.

The city has almost exhausted its groundwater with an estimated 30,000 borewells having been sunk even as the water table recedes year after year. Almost all residential areas in the district were dependent on groundwater since there was no piped supply in a majority of the colonies here in the first place. As the groundwater is also drying up, people have been dependent on water tankers for many years now.

A Near-death Situation

Bhasin was one of the first business leaders to move to Gurgaon in 1998, soon after DLF's KP Singh convinced General Electric's Jack Welsh to move their outsourcing business into the city. The idea of the city becoming almost uninhabitable in less than three decades horrifies him. But it does not sound like an unreasonable proposition, he maintains. "It would be catastrophic because a lot has been invested in Gurgaon already. We have been saying that this can't happen. But it is happening. We will have to tackle it [the water crisis]."

Bhasin is not shocked to hear that experts have predicted a neardeath situation for the city. "We know about the extent of the water problem here. It is this crisis that has turned so many people in the city into activists and they are all doing a fine job trying to get the government to address the issue."

A study done by Megha Shenoy of Resource Optimization Initiative, a firm that does industrial ecology research in developing countries, says Gurgaon will be able to provide less than half the per capita water recommended internationally by 2020.

The study says that Gurgaon would have only around 48 litres per capita per day (LPCD) of water by 2020. The international standard is 130 LPCD. The population of the city would have increased from 25 lakh to 43 lakh by then. The study also says that in 2010, water available in the city was 83 LPCD.

"It is a very important issue. With rising urbanisation and a decadal population growth rate of 250%, the concretization of the city will continue. It will affect the catchment areas and lakes in the city. This combined with greater reliance on groundwater by the housing societies and industry will exacerbate the situation and the city may slowly die in future," says Ranen Banerjee, executive director — public sector and governance, PwC India.

http://articles.economictimes.indiatimes.com/2014-02-02/news/46898519_1_water-crisis-gurgaon-water-problem

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Stake your space on the web

By: Karshni on 23:08

Brian Sharples, founder of the US-based holiday rental site HomeAway, paid a neat $35 million to acquire a website called VacationRentals.com. He didn’t snap up the site for a hefty price only to acquire another dotcom business. He did it so that competitor Expedia couldn’t have it. This deal, the biggest in the domain name market, is a great example of how real estate on the internet can turn out to be a gold mine.

Buying domain names on the internet, with the intention of holding on to them until you are offered big money for the same, is now an organised market. The payoffs can be big if you are an affluent investor. Sought-after names can fetch millions of dollars at auctions. But this is not a gamble for retail investors. Be prepared to dole out big cash if you want to pick up names that stand a chance of hitting the jackpot.

Domain names in the top 20 list are insure.com, fund.com and beer.com. And how can you ignoresex.com? These fetched a cool $7-16 million over the last few years.

Domain names derive their value from being a unique address on the web. For anyone looking to set up shop on the world wide web, it’s the domain name that is the crowd puller. Look at it as the virtual world equivalent of owning prime real estate in Cuffe Parade or Connaught Place. That’s why there is only one hotels.com, toys.com, business.com — you get the picture?

Agreed, domain names are a great money-making idea, but how do you pick the right one?

Go with dotcoms

For starters, you should know that in the hierarchy of the internet, domains with ‘.com’ are the most valuable, as this is the most widely accepted extension for a domain name. Others, ending with .net or.org or .in, seldom net you good money.

Businesses are always on the lookout for short, crisp names that are easy to type out. Therefore,maltbeverages.com may not quite carry the same price tag as the pithy beer.com. Fund.com certainly says it better than assetmanager.com. Chuck apparelretailer.com in favour of clothes.com.

Keywords

Try second-guessing the Google junkies and select names which are keyword-rich. Put yourself in the buyer’s shoes and think up keywords that someone would type in when they’re looking for products or services to buy. For instance, loans.com was bought by Bank of America for $3 million. Toys’R’US, a leading toy store, paid $5.1 million for Toys.com.

If you have managed to find a sure-shot winner, be sure to grab other extensions as well. This will avoid someone else purchasing the same domain name and squatting on your territory.

How to buy one

All domain names are approved by the Internet Corporation for Assigned Names and Numbers (ICANN). There are many companies that help you register the names — GoDaddy and register.comare some popular ones. If the name you’re thinking of isn’t taken, your job is easy.

You create the domain name, register it for a small amount (starting with $10) and then simply wait till someone bids big bucks for it.

But to find a top-notch name, auctions may be a better avenue. There are many avenues to buy domain names in the secondary market through online auctions — Sedo is the largest domain market place. Heritage, afternic, snapnames and GoDaddy are some of the other auction websites. While buying names at an auction, your bids may be as low as $5 or as high as thousands of dollars.

Here, getting your hands on that one big name is far more desirable than buying scores of low-quality names at a bargain.

Fads on the internet can arrive and disappear in a blink. So, keep yourself updated on hot new trends. This will give you a clue as to what’s in and what’s out.

Plot or build

Just like with real estate, you need to decide whether you want to hold a domain name passively or build on it.

A domain name can be flipped (sold) in two different ways. One, you can buy a domain name and then resell it, without actually building any website.

The second way to monetise your investment is to build a website, market it, bring in traffic share and then sell it for a hefty sum. But you need to be a whiz at web development and set apart time and effort to invest. One of the best strategies is to buy domain names in your area of expertise. This way you can showcase good content.

You can also use Twitter or Facebook to market it. Once you bring traffic to your site, it can earn you revenues from Google adsense or affiliate sales. Voila! You are in business.

The winners of 2013

Sedo, the world’s largest domain marketplace, saw 34 of the top 100 sales. Netting more than $4.5 million in 2013, .com domains accounted for 83 per cent of the top 100 names sold. Leading the list for 2013 is Jobs.ca, which closed at $450,000, followed by Body.com at $380,000. Another unusual entry in the top 10 was Sandwich.com, which fetched $137,500 during Yahoo’s auction of more than 100 domain names in late November.

http://www.thehindubusinessline.com/features/investment-world/net-worth/stake-your-space-on-the-web/article5645730.ece

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Readymade real estate

By: Karshni on 07:18

Home buyers are always looking for the best deal they can find within the time and resources available to them. The market being low, this is the right time to invest. There are a lot of issues that need to be considered while choosing between a ready-to-move-in home and a home under construction.

When a project is announced, there is uncertainty about when you can get possession of the home. A majority of projects get delayed due to unforeseen circumstances. There is a loss incurred by home buyers during this period. The potential of renting the home is wasted if the duration of construction lasts more than a year.

Then, there is the issue of quality. Builders entrust the construction to a contractor, who may or may not execute a project well. There are promises made during the project launch about amenities, which are changed before the project is completed. Builders often do not get approvals for the amenities they promise during the launch.

When buyers buy ready-built homes, there is no scope for pre-EMI loss or rental loss, or construction delays. Nor is there anything missing — what you see is what you get when you buy it.

Here your main task is to ask the developer for all the documents — completion and occupation certificates, government approvals etc.

Of course, there is a flipside. When you buy a home that’s under construction, the price at the time of purchase increases considerably once the project is complete. Thus, your returns may be higher than from a ready-built home.

There are some taxation benefits with ready-built homes. These include:

The interest on the home loan is allowed as deduction from the date you buy the home.

The service tax component for an under-construction home burdens buyers to the tune of 12.36 per cent. However, the interest cannot be claimed every year, but only in the same year or the next year.

Given the supply surplus in the Chennai market, the city alone has over 1,600 projects that are ready-to-move-in.

http://www.thehindu.com/features/homes-and-gardens/readymade-real-estate/article5638649.ece

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Supreme Court verdict on private forest to pave way for real estate development: Credai

By: Karshni on 07:16

The Supreme Court's direction to the Maharashtra government to remove "private forest" tag attached to huge land parcels across the state is likely to give a push to development of real estate in such vacant areas, according to real estate developers' body Credai. 

"We are happy to hear this judgement as it will finally pave the way for development of forest land which has been lying vacant for years and most importantly regularise the homes of people living there," Confederation of Real Estate Developers' Associations of India (Credai) Chairman Lalit Kumar Jainsaid in a statement here. 

A three-judge bench of Justices R M Lodha, M B Lokur and Kurian Joseph recently allowed petitions by Godrej & Boyce, Oberoi Constructions and a host of other developers as well as residents' bodies affected by the High Court ruling. 

The new ruling will not just open up hundreds of acres of private forest land in the suburban Mumbai, but also pave way for developing more than 100 real estate projects and bring relief to nearly 5 lakh residents who faced the threat of losing their homes due to the Bombay High Court's verdict which upheld the state government's contention that these residents were encroachers. 

"This verdict can also set a precedent for development of huge government owned land by such as the Railways, Bombay Port Trust, etc, which are being misused and illegally encroached by slum dwellers, should be freed for development," he said. Jain further said this verdict was a good learning for government which should make the process of approvals much faster and implement the single window clearance system.

http://economictimes.indiatimes.com/markets/real-estate/news/supreme-court-verdict-on-private-forest-to-pave-way-for-real-estate-development-credai/articleshow/29703621.cms

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Real estate market in Delhi NCR up 22% in 2013

By: Karshni on 00:16

Stating that IT/ITeS remained the major occupiers contributing 50% of the total absorption, commercial space absorption in Delhi NCR witnessed 22% rise in 2013 as compared to 2012, according to a report by Colliers International.

The study reveals that 26% of the total absorption of more than 31 million sq ft across top 6 cities was contributed by NCR. 

'Engineering and BFSI, together account for 25% of the total absorption. Of the 8.31 million sq ft commercial lease in Delhi NCR, 70% of the space was leased in Gurgaon, 23% in Noida and the remaining 7% in Delhi.

Gurgaon is expected to witness further segmentation of micro-markets in cost terms in 2014.

''Gurgaon is expected to witness a lot of lease renewals in 2014 and 2015, as companies that set up offices in 2004 to 06 (the “first wave” of occupiers) approach the end of their lease terms,'' report states.

However, as in 2013, sales volume and sale market of commercial space in Delhi will remain low and stressed.

There was a marginal 3% Year-on-Year decrease in rentals in Delhi. Average rental values in Delhi NCR will remain stable and vacancy rate will fall marginally.

''Gurgaon and Noida witnessed stable rental values during 2013 baring few micro markets such as Cyber city in Gurgaon and sector 18 in Noida which witnessed an increase of 7% and 2.5% respectively, on year on year basis,'' report adds.

http://www.financialexpress.com/news/real-estate-market-in-delhi-ncr-up-22-in-2013/1221597

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Global real estate to get uniform international measurement standards soon

By: Karshni on 22:46

The International Property Measurement Standards Coalition (IPMSC) has launched a public consultation on the International Property Measurement Standard (IPMS) for office buildings. 

The three month consultation, closing on 04 April 2014, is calling for real estate (office) sector practitioners and stakeholders to contribute to the new international standard. 

The new standard, produced by the IPMSC Standards Setting Committee, is the first of its kind and will provide a common language for measuring offices across international markets, benefiting real estate practitioners including investors, lenders, agents, valuers and occupiers. 

The international standard will ensure that property assets are measured in a consistent way, creating a more transparent marketplace, greater public trust, consistency in the reporting of property size, stronger investor confidence, and increased market stability. 

At present, the way property assets - such as homes, office buildings or shopping centres - are measured varies dramatically from one market to the next. With so many different methods of measurement in use, it makes it difficult for global investors, occupiers and tenants to accurately compare space. Research by global property firm Jones Lang LaSalle suggests that, depending on the method used, a property's floor area measurement can deviate by as much as 24%. 

IPMS will be adopted by all 28 coalition organizations with firms around the world already lined up to implement IPMS from June 2014. The Dubai Government are the first government to commit to its adoption, which will underpin valuations of commercial property and financial reporting through IVS* and IFRS**. The new standard is considered one of the most significant developments in the real estate profession in recent history and will go beyond office measurement standardization to include other property types, such as residential, in the coming months. 

Strengthening public accountability of the IPMSC, the coalition can now announce the appointment of a Board of Trustees. Members from each of the 28 organisations are represented on the board, chaired by Ken Creighton (RICS), with Vice Chair Lisa Prats (BOMA International) and Secretary General, Jean-Yves Pirlot (CLGE). 

The coalition also confirms new IPMS members joining the coalition. Property Council of New Zealand (PCNZ); Asian Non-listed Real Estate Vehicles (ANREV), Assoimmobiliare, National Society of Professional Surveyors (NSPS) and Japan Association of Real Estate Agents (JAREA) have committed to the standards programme. 

Ken Creighton, Chair of the IPMSC Board of Trustees and RICS Director of Professional Standards: Less than a year after the coalition met for the first time at the World Bank in Washington we now have an international standard. This standard will undoubtedly have a profound and lasting benefit for the global real estate industry, financial markets and society as a whole, ensuring transparency and consistency are at the very heart of this global industry. 

Sachin Sandhir, Managing Director, RICS South Asia: Commercial real estate involves high ticket size transactions. The economic problems in the past have affected the growth of commercial markets around the world. Moreover, the ambiguity within measurement practices across the sector often leads to inconsistent values. The standards thus framed after due consultation will not only help in bringing consistency within the market but will also create a more transparent marketplace and increase stability. In the long term these standards will instill greater investor confidence and revive sentiment in the commercial real estate. 

Billy Davidson, Vodafone Global Property Director: Vodafone occupies space for a wide range of uses all around the world. Like many other corporates we have had to develop our own means of benchmarking these property assets. I am certain that IPMS will save corporate occupiers time, money and effort across their property portfolios, and will enable us to compare space between companies far more easily than today. 

Martin Bruehl, Union Investment, Head of International Investment Management:The usable space within a building is a vital metric in understanding the valuation and thus investment potential of a property. Investors currently suffer from having to make decisions based on information which is inconsistent from one market to the next. IPMS will address this existing problem; removing risk and ensuring property investors are armed with reliable and transparent information.  

http://timesofindia.indiatimes.com/business/india-business/Global-real-estate-to-get-uniform-international-measurement-standards-soon/articleshow/29147953.cms

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Bangalore untouched by property market gloom

By: Karshni on 10:11

While home builders and buyers in Mumbai and NCR were a worried lot, folks in Bangalore had cause to cheer.

Bangalore’s property market bucked the trend in other metros with many new launches, good demand and resilient prices.

Sector experts predict that residential property the city will remain a good bet for 2014, too.

Still-affordable prices compared to other cities, strong IT sector performance which should keep demand going, and interest from expats on a weak rupee, are seen as boosters to this market.

The city’s office space sales could be the highest in the country too, thanks to expansion plans of IT-ITeS firms and MNCs.

Bangalore will be second only to Tokyo in the Asia-Pacific region in demand for offices, estimates property consultant Cushman & Wakefield. This will help drive home demand, too. Every 100-200 sq ft office space addition means one employee added to the workforce.

Active home market

In 2013, Bangalore accounted for a third of all new property launches in the country, according to data from Cushman & Wakefield.

New units launched trebled to 40,000 units till September 2013. Most residential launches were in the price range of Rs 25 lakh to Rs 1 crore, according to Vestian, a real estate advisory firm.

Compared to the growing numbers of flats remaining unsold in markets such as Mumbai, Bangalore even saw a shortage of homes with a Rs 50 lakh to Rs 1 crore price tag.

The commercial segment, which was in the doldrums elsewhere in the country, was also resilient in Bangalore. Global majors such as LinkedIn started operations in the city, and local companies sought office space to expand. The city is home to around 2,800 IT/ITes firms and accounts for about 60 per cent of all biotech companies in India.

Unlike other regions, there was good momentum in infrastructure projects with the peripheral ring road, airport expansion and Bellary elevated expressway taking off, aiding home prices.

Development initiatives such as the Devanahalli Business Park, Hardware and IT Park in Bagalur and IT Investment Region near Chikkaballapur are expected to help demand in nearby areas.

Still, not all localities in the tech city may have a smooth ride. While north Bangalore outshone most other areas last year, the focus is now shifting back to the central business district and the outer ring road, observes CommonFloor, a real estate portal.

Prices have run up in the locality and may likely remain subdued this year.

Super-luxury homes 

With a high net-worth individuals population of about 10,000 — the third highest in the country after Delhi and Mumbai — Bangalore’s super-luxury segment is also worth watching.

While the supply has picked up, a lacklustre private equity, venture capital and M&A market, may act as a drag on demand, notes Vishnu Shankar of Crorepati Homes.

http://www.thehindubusinessline.com/industry-and-economy/real-estate/bangalore-untouched-by-property-market-gloom/article5574290.ece

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