Hyderabad is the world’s second most affordable office market: Survey

BANGALORE: Hyderabad is the world's second most affordable office market after Surabaya in Indonesia, according to a survey, while Chennai and Pune are at fifth and sixth positions, reinforcing India's reputation as among the cheapest destinations for foreign firms to set up operations.

"Tier II cities in China and India continue to dominate the list of top-10 most affordable markets globally," said a survey by consultancy firm DTZ, which measured occupancy costs per workstation in 126 business districts across 49 countries in 2012.

"2012 has seen office space absorption rates across Indian cities drop by a fifth. We expect the office space absorption to be stable in the current year, driven by signs of overall improvement in global and domestic economies. Rentals are also expected to appreciate across the country," said Rohit Kumar, head of research at DTZ India.

According to the survey, it costs companies between $2,620 (about Rs 1.41 lakh) and $9,810 (Rs 5.27 lakh) per annum per employee in the top six Indian cities to set up operations, compared with $23,500 (Rs 12.63 lakh) per workstation in London West End.

China's Chongqing and Nanjing, followed by Cancun in Mexico, also figure among the ten most affordable markets. As per the report, a majority of markets in North Asia and India saw a 2-10 per cent rise in occupancy costs. This has forced occupiers in many markets to increasingly consider secondary space, particularly where prime space is limited to cut cost.

The total commercial office space absorption for the quarter ended December 2012 was 6.8 million sq ft, a decrease of 19 per cent compared with the previous year. Vacancies across cities are expected to rise in 2013, except Bangalore, a recent report by DTZ India said.

"Companies continue to consolidate and relocate to less premium locations. Many firms are now looking to cut real estate costs, which comprises 22-27 per cent of the total operational expenditure, the second biggest component after human resource," said Sridhar Raghavendra, founder of FM Zone India, a real estate and facility management firm.

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Residential market grows in Guduvanchery-Thiruporur Road, Chennai

Chennai

Strategically located on the Grand South Trunk Road (GST), Guduvanchery has always been a preferred a residential location in Chennai owing to its excellent connectivity and immediacy to SEZz. However, the buyers’ focus is now shifting towards the road stretching from Guduvanchery to Thiruporur. This is a result of escalating residential values in the locality owing to increased guideline values along the GST road. Thus, Guduvanchery, once considered amongst the affordable locations of Chennai suburbs, has become relatively expensive now.

The Guducanchery-Thiruporur stretch has been brimming with real estate activity for quite sometime now with pace of construction and sales picking up in the last six months. “Several developers have completed their projects here while others are under construction,” says Abdul Kasim Tariq of Smart Choice Realty, a city based firm. “Nearly 2000 apartments,” continues Tariq, “have come up on this road of which about 1000 are completed while the remaining would be given possession in another 2-3 months.” Some of the developers to have set base here include Lancor Developers, DVS Developers and Sriram Shankari Developers among others.

Demand on this stretch is being driven by the two SEZs. Guduvanchery falls between the Mahindra World City and MEPZ, both located 13-15 km away. “The maximum demand exists for 2BHKs followed by 3BHK units which are available for a price range of Rs 2,400- 3,000 per sq ft,” informs Tariq.

At present the Guduvanchery-Thiruporur road is generating a lot of interest from the investors. Talking about this Tariq says, “Nearly 60 per cent buyers are investors who either invest for long term returns or for rental returns. Only about 30-40 per cent demand comes from the end users.” The stretch has seen an average appreciation of nearly 40 per cent in capital values of projects in the last 2 years thus promising good return on investments. There is also a huge demand for rented units from the professionals working in the SEZs. The rental values vary between Rs 8000-9000 per month for a 2BHK units and it ranges from Rs 10000-12000 per month.

Source: MagicBricks.com

RBI rate cut may boost demand for real estate

The rise in demand will be mainly in tier II and tier III cities where prices are still affordable, say analysts

Banks have a 67% share of the housing finance market, estimated at `7 trillion as of 31 December. Photo: Hemant Mishra/Mint

New Delhi: The Reserve Bank of India’s (RBI’s) monetary easing could prompt a rise in real estate demand, leading to prices firming up after having dropped around 4% in the recent past, said R.V. Verma, chairman and managing director of National Housing Bank (NHB), the regulator for housing finance firms.

Builders with unsold stock may raise home prices, Verma said on Thursday.

“The Residex (index of property prices in various Indian cities) for January-March could reflect this trend. We are watching it closely,” he said.

RBI cut the key policy rate by 25 basis points (bps) in its 29 January review of monetary policy, and analysts expect it to follow an easy money policy to boost economic growth. Following the RBI rate cut, many banks announced cuts in lending rates, fuelling expectation of a pick-up in retail housing demand. NHB also reduced its prime lending rate, or the rate at which it it lends to other banks, by 25 bps to 9.75% the same day. One basis point is one-hundredth of a percentage point.

The rise in demand will be mainly in tier II and tier III cities where prices are still affordable, said Verma.

“There has been a position of oversupply, which has had a moderating effect on prices. Prices are down 3-4%, primarily in tier II and tier III cities, because this is where the demand for housing loans is concentrated under the slab of Rs.10-25 lakh,” Verma said. “However, because of the increase in positive sentiments and the likelihood of lending rates going down further, the demand may pick up again leading to a price rise in houses by developers which have been under pressure till now.”

Banks have a 67% share of the housing finance market, estimated at Rs.7 trillion as of 31 December. In the Trend and Progress of Housing in India 2012 report released on Thursday, NHB said the housing finance industry could see around 20% growth in 2012-13 from the previous year.

Industry experts said prices are likely to rise in some areas.

“In markets like National Capital Region (NCR) or Mumbai, there have been fewer launches, but pricing has not taken that much of a hit. Prices have been stable or have seen a marginal increase,” said Neeraj Bansal, director, real estate, KPMG. “However, in other parts, where demand has gone down significantly, the developers have been offering good discounts on available prices for ready properties.”

The outlook has become more positive following the cut in interest rates. “There is an increase in positive sentiment, which may lead to an increase in prices in select cities,” he said.

The industry also expects the budget will contain steps that will boost the industry.

“If the industry receives a stimulus, the following quarters post the budget can see more buying from end-users, which will invariably lead to a rise in housing prices,” he said. Bansal said Andhra Pradesh, Mumbai, NCR, Chennai and Bangalore may see house prices increase in the near future. According to some industry estimates, house prices could rise 5-10% in the next few quarters .

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Property show at Hitex centre

HYDERABAD, FEB. 5: The real estate portal IndiaProperty.com will host the ninth edition of its property show Gruhapraveshm 2013 during February 8-10 at Hitex Exhibition Centre here.

Ganesh Vasudevan, Chief Executive Officer of Indiaproperty.com, in a statement said the growth of IT and ITES sectors and the cosmopolitan nature of the city is slowly becoming a choice of residence for many.

“The attractive real state prices and new infrastructure projects are giving a push to the residential and retail investments in the city,” he said.

The show provides an extension of the online support to buyers and developers and provides an opportunity for potential home buyers to interact with one another at a common platform. The event will showcase over 200 new properties.

The company stated that Hyderabad is basically a services sector growth driven market with preference for gated community ventures and projects offering quality amenities. Areas such as Gachibowli, Kondapur, Madhpur and Miyapur close to the IT hubs are popular.

The portal is providing ‘Call n List’ service to enable customers to list property online by providing information through a toll-free number.

rishikumar.vundi@thehindu.co.in

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CREDAI hails infra status move for affordable housing

Welcoming Union Housing Minister Mr Ajay Maken's move to accord infrastructure status to affordable housing, realtors' apex body CREDAI called for extending similar treatment to the entire housing sector.

"We are happy that the Centre has come half way through on the developers and customers' demand for according infrastructure status to the housing sector to facilitate easy financing and other benefits and to give a much-needed boost to the most important need of a man after food and water," said Mr. Lalit Kumar Jain, National President of CREDAI.

CREDAI - Confederation of Real Estate Developers Associations of India - has over 10,000 members and associations in 20 cities across the country.

Mr. Jain said Mr Maken, in his speech in Mumbai at an international conference, has made a good beginning and "we hope he will move further in a positive direction."

CREDAI has been relentlessly campaigning for infrastructure status for housing sector, declaring it as an industry and creation of special housing zones with tax reliefs on the line of SZEZ," Mr Jain pointed out.

He expressed the hope that the State Government will take note of Mr. Maken's suggestion to increase FSI limits so as to encourage housing for slums that sprang up in central locations.

"We have been stressing that nobody would like to be displaced from the area where one has grown up and has his source of income there. Relocating such people - who are in millions - will only lead to added pressure on the existing infrastructure like travelling," Mr. Jain argued.

Half of Mumbai lives in slums and the solution to housing shortage is manifold. Mass rental housing for the benefit of people with transferable jobs and those who cannot immediately buy houses of their own, affordable housing for low income groups and economically weaker sections with enhanced FSI limits and special housing zones on the outskirts like Navi Mumbai and Thane and Mira-Bhayander are some of the solutions that CREDAI has suggested.

CREDAI has also put forth a plan of action to the government to come with realty reforms covering banking and administration. Affordable finance for affordable housing sector and speedy or single-window system of clearances, automation of the project clearance process to eliminate human interaction that causes corruption are among the steps that CREDAI suggested.

Mr. Jain expressed the hope that the Centre will follow-up with Mr. Maken's welcome move and announce some pragmatic and practical measures to give boost to the housing sector.

Housing, along with construction industry, contributes as much as 11% to the GDP and supports some 400 industries which can substantially multiply if supported with proactive policies. Hence revival of housing sector is vital for rejuvenating the national economy, he added.

For the original post visit: http://economictimes.indiatimes.com/markets/real-estate/news/credai-hails-infra-status-move-for-affordable-housing/articleshow/18347588.cms

Hyderabad Second Most Affordable Office Market in World

Bangalore: Indian cities are on the list of world’s most affordable office markets, according to a report published by DTZ, a property consultant. Indian cities like Hyderabad, Chennai and Pune are on this most affordable list and Hyderabad stood at second position on the list.

"Tier II cities in China and India continue to dominate the list of top 10 most affordable markets globally," DTZ said in its report.

The report mainly highlighted the occupancy costs for prime office space across 126 markets globally.

"The most affordable office market remains Surabaya ($ 1,610 per workstation per annum), followed by Hyderabad and Chongqing," the report said.

Indian cities like Pune and Chennai stood at fifth and sixth positions, respectively. But, London’s West End has come up as the least affordable office market worldwide, according to DTZ.

"At $ 23500, London West End has regained its position as the world's most expensive office location in 2012, overtaking Hong Kong which was the least affordable market in last year's report." the report said.

(With PTI inputs)

For the original post visit: http://www.siliconindia.com/realestate/news/Hyderabad-Second-Most-Affordable-Office-Market-in-World--nid-140190.html

Green spots to be reclassified as industrial zones

CHENNAI: In a move that will bring down the city's green cover to a mere 3%, the Chennai Metropolitan Development Authority (CMDA) has decided to reclassify several green zones as industrial zones in the suburbs. Noombal village in Ambattur and several areas in Thiruverkadu that are under threat from rampant real estate development are being reclassified. The concept of protected green belts with construction and development norms was introduced to maintain the greenery and reduce pollution.

A senior CMDA official said they have decided to reclassify Noombal village, near Poonamallee bypass road, from green to industrial category. "Noombal and several green zones in Tirverkadu have lost their green cover. Major developmental and construction work has taken place in these areas. The government as well as private parties have been responsible for the spate of development activities. Noombal was not included in the list of green zones in the CMDA master plan released in 2008," he said.

As per CMDA records, the area has already been turned an industrial or commercial area. "Of course, reclassification will make the area free from regulations," said a CMDA official. "But development has been taking place in all these green zones since the late 1990s," he said. The process of reclassification will require several rounds of consultation with people and experts. The decision is likely to receive objections from environmental groups. Reclassification will make the area free of regulations. Green zones, mostly agricultural lands, are major sources of ground water and balance ambient temperature levels in the summer.

M G Devasahayam, a member with the CMDA monitoring committee, said CMDA has made a disastrous decision. "This is another example of introducing a system to help the real estate mafia. The plan will make Chennai unlivable as temperatures will rise and groundwater will deplete if the remaining green cover is destroyed," he said. "Inviting industries into an already over-crowded region will only make things worse," said a consultant with the state government.

For the original post visit: http://timesofindia.indiatimes.com/city/chennai/Green-spots-to-be-reclassified-as-industrial-zones/articleshow/18342173.cms

Udhayam Theatre complex for sale

CHENNAI, FEB. 3: The Udhayam Theatre complex, a nearly 1.4-acre plot at Ashok Nagar in the heart of the city, is back on the block for a potential sale.

In a public notice today, the court-appointed receiver has called for bids for the 26-ground (62,400 sq.ft.) with a four-screen cinema complex and a marriage hall.

The upset price has beenset at Rs 95 crore.

LAST DATE FOR BID

The last date for the bid is March 20, 2013. The bids will be opened on March 23.

This is the third time the property, with over 50 shareholders, all members of six promoter families, has been put up for sale since 2009.

It had originally been put up for sale through an international property consultant who had tried an e-auction with an upset price of about Rs 100 crore. But the deal could not be finalised then.

For the original post visit: http://www.thehindubusinessline.com/news/real-estate/udhayam-theatre-complex-for-sale/article4375421.ece

Schools move south for more space

CHENNAI: When Irudaya Gandhi's husband left for Dubai last year, she had two options - continue to live with her children in their apartment in Royapettah or move closer to her parents' house in Chitalapakkam. For the 37-year-old the choice was obvious and she moved.

"Three years ago, the choice may not have been so easy because I have the children's education to think about. I realised there are many schools in the suburbs and decided to move," said Gandhi, whose children study at N S N Matriculation Higher Secondary School.

Five to seven years ago it was not uncommon to find families moving out of the suburbs in search of good schools in the city. Over the last couple of years, with the development in the suburbs, urban experts have been noticing a trend of reverse migration where families are moving back to the suburbs.

"While education is among the driving forces for this trend of reverse migration, there are other factors such as congestion in the city, pollution and skyrocketing real estate prices that are driving people to the suburbs," said Raj Cherubal, founder of Chennai City Connect, an NGO that works on infrastructure issues.

The lack of space and soaring real estate prices within the city have pushed people wishing to start schools outside the city limits. "To start a new school within the city is close to impossible. The management has to deal with outdated and unnecessary regulations regarding the size of the buildings and space, among others. The process is relatively hassle-free while setting up a school in the suburbs," he said.

Many schools have mushroomed in the southern suburbs such as Chromepet, Chitalapakkam, East Tambaram, Palavanthangal and Madipakkam. "When we set up our school in Nanganallur, there were hardly any educational institutions here. Within a decade, at least 10 recognised schools have come up," said K Vasudevan, principal of Prince Matriculation Higher Secondary School, which has more than 2,700 students.

With the development of the suburbs, connectivity to the city has also improved, drawing more students from the city. Although education is the driving force, families who have moved say staying in a suburb has other advantages. "Water is available in plenty. It is relatively less noisy, congested and polluted," says K Jeevan who moved to Indira Nagar two years ago after renting out his house in Vadapalani.

"Today, only a few banks are headquartered on Anna Salai. A large number of companies and factories are in Sriperambudur or on OMR, which were very different places 15 years ago. Residential clusters have started coming up here. With different types of schools coming up, people have no reason not to set up base here," said P Vishnucharan, correspondent of Shree Niketan Group of Schools in Tiruvallur.

Real estate prices have gone up by close to 40%, say builders. "The prices have touched Rs 3,200 to 3,500 per sq.ft. Despite the rise, the demand is high as the cost is less than the city," says Prakash Challa, national vice-president of real estate body CREDAI.

For the original post visit: http://timesofindia.indiatimes.com/city/chennai/Schools-move-south-for-more-space/articleshow/18327309.cms

Property values rise by 21% in Perumbakkam, Chennai

Chennai

With the IT sector growing across Old Mahabalipuram Road (OMR), real estate market of Perumbakkam, a suburb in south Chennai, is benefitting on account of its location. Being 2 km away from OMR, it is almost equidistant from all prime IT hubs such as Velacherry and Sholinganallur and the commercial Thoraipakkam. As per MagicBricks.com data, the locality has witnessed a whopping 21 per cent rise in property prices in the Oct-Dec, 2012 quarter.

Perumbakkam is well connected through OMR, Tamabaram-Velacharry Road and Medavakkam-Sholinganallur Road. Its strategic location has been a major reason for a steady demand and capital appreciation in this area. “Perumbakkam enjoys good connectivity with important roads and is close to the upcoming ELCOT SEZs. Therefore, one can expect a good increase in values in five years,” says R Murugesan, CEO, Shriram Properties.

“Apart from the location advantage, another factor adding to the price rise is the Government’s policy of premium FSI which came in 2010. The policy gave the builders a scope to make larger homes, due to which the prices have risen from Rs 2800 per sq ft in 2010 to Rs 5,000 per sq ft in 2012,” says A Jaiganesh of India Infoline Ltd.

The locality is primarily driven by end-users accounting to almost 60 per cent of the total buyers. Thus, in accordance to the demand, majorly 2 and 3 BHKs of sizes ranging from 900-1,500 sq ft are offered in Perumbakkam. The average prices of these range from Rs 3,800-5,000 per sq ft,” says Dhan Raj of Naidu Realty, a city based realtor.

Owing to this, the rental market too has witnessed an escalation of 8 per cent in the last 6 months. The rental values range between Rs 15-18 per sq ft.

Looking at the prospects of the locality, many new developers have entered the realty market including Indiabulls developers, Embassy Property Developments Ltd, Renuka Foundations, Chettinadd Housing and Rajarathanam Constructions.

Thus, with its outstanding connectivity, proximity to commercial locations and social infrastructure, Perumbakkam seems to be good for all buyers. While there is comfort for end-users, investors can hope for large appreciations in the coming years.

Shradha Goyal, MagicBricks.com Bureau

You are here:Home»Property News»Chennai real estate news Residential plots- the preferred property type in Sriperumbudur

Chennai

Sriperumbudur, an industrial hub strategically located along the Chennai-Bangalore highway, is witnessing a huge demand for residential plots. As per the data on MagicBricks.com there exists a demand of nearly 75 per cent for residential plots in the locality. Affordable prices as compared to other parts of the city and good connectivity are driving demand. The locality connects Tambaram, Tiruvallur, Oragadam and Poonamalle.

Availability of space at less per sq ft value in comparison to the Central Business District (CBD) areas has prompted many developers and buyers to start real estate activities in this area. “Plot rates are comparatively affordable here than other areas closer to city. Investors and speculators have invested more in plots. More demand is seen for plots having a size of 600 to 3000 sq.ft,” says A M Haree, vice president, marketing, V G N Developers. “Moreover,” he continues, “the demand is largely limited to a budget range Rs 18-25 lakh.” Residential plots are available for a price of Rs 400-1000 per sq ft.

The hype around the upcoming Green Field international airport has also enhanced buyer interest in the locality giving an added edge to the property segment. The industrial development in the locality is a known fact. Sriperumbudur houses various software and manufacturing industries such as Nokia, Saint Gobain, Ashok Leyland, Hyundai, Nissan, Renault, BMW, Godrej, Motorola etc. Professionals working in these organisations have been driving the residential demand in the locality. However, investors have also entered the market with plots offering an appreciation of 20-30 per cent, informs Haree.

Apart from investors, end users are also eyeing plots here to build their own homes. Apart from the industrial developments with several automobile and electronic companies offering job opportunities, several educational institutes are also in place here. Thus the prospect of having an independent house at affordable prices in a locality with reasonably well developed infrastructure is set to drive demand for plots here.

Source: MagicBricks.com Bureau

Housing Board to redevelop flats in Chennai

Chennai

The state government on 29th January announced redevelopment of 17 housing board residential enclaves in various parts of the city.

The government is planning to construct multi-storeyed apartments in those locations at a cost of 1,740 crore. Of the 6,254 apartments to be constructed, 3,646 will be earmarked for government officials’ rental accommodation and the remaining 2,608 will be sold to public under self-financing scheme.

Existing buildings in those places are low-rise structures that had underutilised the permissible floor space index (FSI is the ratio of land area to the built-up area). While redeveloping them, the government will be able to construct more dwelling units.

There are 2,238 apartments at sites identified for redevelopment. They include Peters Colony and Lloyds Colony in Royapettah and Todhunter Nagar in Saidapet. They are in a dilapidated condition and need to be pulled down urgently.

Though the government had planned to redevelop the 25-acre housing board site at Foreshore Estate, it is restrained by the new Coastal Regulation Zone notification. Hence, multi-storeyed buildings cannot be constructed there.

Observing that planned development leads to provision of all basic amenities to the people, a government release said only 6,950 sq km area of the total 1,28,869 sq km under the jurisdiction of the Directorate of Town and Country Planning (DTCP) had seen planned development. To ensure better development in the remaining 1,21,919 sq km, the state is in the process of developing a master plan, the release said.

As a first step, the DTCP has tied up with Bharatidasan University to prepare a master plan for 8,447 sq km area in Coimbatore, Madurai, Trichy, Tuticorin, Tirupur, Erode and Hosur. The project is expected to cost 4.92 crore.

The state has earmarked 10 crore for carrying out maintenance works of government officers’ quarters at Thanjavur, Erode, Hosur, Trichy, Madurai, Ramanathapuram, Villupuram, Tirunelveli and Salem. From now, people applying for DTCP permission to construct buildings can submit their applications online. It is expected to eliminate delay caused in processing applications. The government has sanctioned 2.20 crore for this purpose.

Source: The Times of India, Chennai

HDFC’s luxury home show redefines demand pattern in Chennai

Chennai

India’s premier housing finance company HDFC’s 2-day luxury home show held recently in Chennai drew encouraging response from HNIs and corporate executives. Understandably the organisers have restricted the total number of exhibitors to just 12 in order to create an ambience where visual display would do the talking rather than just discussion across the table. A wide range of products from apartments to duplex homes and villas valued at Rs 2 crore and above per unit were on display.

Over 600 people visited the 2-day show held at Leela Palace Chennai in MRC Nagar. Significantly there was not much media glitz for the event as the city’s high profile customers were specifically targeted and invited through database of both HDFC and HDFC Bank. The demand for average home loan size ranged from Rs 1.5 crore onwards. A few developers have clinched deals during the show days and the event has convinced the developers over the consistent and growing demand for high-end homes in the city, according to the organisers.

The demand for high-end apartments valued at Rs 2 crore and above and located within city areas continues to dominate as is evident from the quantum of enquiries received by exhibitors at the show. The other category for which visitors evinced keen interest to ascertain the multiple options available and the time frame involved in completion is villas under various stages of implementation in city’s suburbs and peripheral areas.

There were limited luxury home shows held in the city earlier but they were fizzled out due to a combination of factors. What has made HDFC tick is the focused thrust given to invite the high profile clients to ascertain the demand pattern for high-end homes, according to industry sources. The strategy worked well for both the organisers and the exhibitors and it was a win-win situation. It is no wonder that encouraged by the response to the maiden luxury home show, the company is planning to repeat the show in the city.

V Nagarajan, Property Consultant

For the original post visit: http://content.magicbricks.com/hdfcs-luxury-home-show-redefines-demand-pattern-in-chennai/

Housing demand robust in tier II and tier III cities

Top six cities — Delhi-NCR, Mumbai, Pune, Bengaluru, Hyderabad and Chennai saw housing sales drop by 16 per cent to around 2 lakh units during 2012 because of high property prices, weak business sentiment and costlier home loan, as per a report by property consultant Knight Frank but real estate companies say housing demand continues to be robust in tier II and III cities.

Many developers were reluctant to launch new residential projects as a result of which the launches in 2012 slump by 30 per cent. “The overall residential market in these cities was plagued by high property prices, relatively higher mortgage rates, weak business sentiments and a bleak employment scenario. This is reflected in the launches which declined by 30 per cent in 2012 in comparison to a fall of 7 per cent in 2011.

“It is true that the high interest rates and input cost kept housing prices elevated in 2012,” confirmed realty firm OMAXE CMD Rohtas Goel when contacted by The Pioneer. “Housing demand continues to be robust in tier II and III city as affordability is a key factor in these cities even for middle income group. Cities like Jaipur, Indore, Lucknow, New Chandigarh have always found flavour amongst the people due to infrastructure boost and employment opportunities in these cities,” he added.

Realty firm Parsvnath Developers Chairman Pardeep Jain admitted that demand for housing differed from cities to cities. “In my view demand in 2012 was good on city to city basis,” Jain added.

Similarly developers’ apex body CREDAI Chairman, Lalit Kumar Jain said: “While there could be different statistics on the real estate industry performance, it is certain that the general atmosphere is not at all conducive for great sale of properties. First the cost of realty has been shooting up due to a variety of reasons like the ever increasing cost of inputs like cement, steel and even labour”.

“Adding to this was the inordinate delays in getting approvals. The cost of funding for both the developer and buyer was and still is very high. This has adversely impacted the project execution and even sales. There are quite a few projects that have been halted for want of funds and ever increasing costs,” he added.

The six cities witnessed launch of 2,41,811 homes in 2012 as against 3,43,142 dwelling units in the previous year, the report said, adding that absorption declined to 2,09,787 units in 2012 from 2,49,127 homes in the previous year. "This can be clearly seen by closely studying the gap between the launch and the absorption numbers. This gap reduced to 32,000 units in 2012 compared to 82,000 and 94,000 units in 2010 and 2011, respectively," Knight Frank said.

The two biggest residential markets i.e. NCR and Mumbai account for almost 60 per cent of total absorption, followed by Bengaluru (13 per cent), Pune (11 per cent), Chennai (9 per cent) and Hyderabad (7 per cent). Recently Finance Minister P Chidambaram had asked the developers to sell their unsold inventory at a lower price.

On upcoming policy review by RBI Goel, said: “It is widely expected that RBI will reduce rates as it is imperative for rates to come down in view of the economic condition.” Parsvnath Developers Chairman quantified his expecation on rate cut when he said: “We expect RBI cut rate by 50 basis point.”

“We expect the RBI to take a pragmatic and practical view of real estate industry that contributes almost 5 per cent to the GDP (Coupled with the construction industry, the contribution amounts to 11 per cent ). RBI, unfortunately, has negative approach towards real estate and the risk weightage of 1.25 percent that it gives discourages commercial banks from funding our projects,” CREDAI Chairman expressed his views on policy rates.

“We, therefore, expect RBI to cut down the repo rate and facilitate a drop in the rates of interest. Instead of choking supply by restricting funds, RBI should take steps to ensure increased supply of housing stock and allow the demand-supply market scenario to function to the benefit of the ultimate buyer,” he added.

CREDAI Chairman also said that the sector needed immediate banking reforms to rejuvenate the real industry to revive the economy as realty supports 400 plus industries. Real estate can be the new growth engine for the economy and we are sure the planners, bankers and the government realizes this indisputable fact”.

For the original post visit: http://www.dailypioneer.com/business/124670-housing-demand-robust-in-tier-ii-and-tier-iii-cities.html

Industrial development fuels residential, commercial demand in Oragadam

Chennai

Oragadam, a town located at the outskirts of Chennai is flushed with demand for residential and commercial units, triggered by overseas automobile and IT investments. The demand has translated into a surge in real estate prices. The proposed international airport near Oragadam has also complemented the area’s realty growth.

“With rapid growth of the automobile industry and IT sector, requirement for residential and commercial properties has increased. The market has also seen investments from foreign countries like Japan, Korea and Singapore. The consequent employment opportunity is increasing the need for housing, both own and rented,” explains Suresh Jain, Managing Director, Vijayshanti Group.

Residential scenario

Several renowned builders like Inno Group, Arun Excello and MARG ProperTies have launched projects in the locality. As per the Magicbricks.com data, the average sale price of multi-storey apartment is Rs 3,080 – 3,551 per sq-ft T Chitty Babu, CMD, Akshaya Pvt Ltd, says, “Compared to rest of the country, Chennai property prices are moving in tune with cost escalation. The market is readily absorbing launch of new projects and this has positively impacted the growth.”

A range of housing options are coming up in the region. Inno GeoCity is offering 4,000 houses spread across 131-acre Township with all social amenities. Rich India Cityscapes is coming up with row houses and semi Independent villa project called ‘VILLAGIO’. Another real estate major MARG ProperTies is coming up with a community housing project ‘Brindavan’ having 1,848 apartments with superior amenities. Arun Excello has recently announced a 100-acre gated community project ‘Temple Green Heights’ to offer 2,600 houses. Other new projects like Hirco Palace Gardens, Tata Housing, Temple Green, Raga Properties etc are also coming up in the locality.

Commercial scenario

The area is a manufacturing base for leading auto and auto component manufacturers, FMCG companies, logistics and warehouse service providers, IT and ITES firms, etc. The Oragadam SIPCOT (State Industries Promotion Corporation of Tamil Nadu) area is home to wide array of industries like engineering, bio-tech, IT and electronics units. Renault-Nissan, Daimler, Johnson Lifts and others have fuelled real estate growth in the locality.

Royal Enfield Motors is establishing a greenfield production facility. The unit is expected to commence production shortly.

Divya of MARG ProperTies says, “Anticipating the potential, many new industries are also exploring prospects in the area. Oragadam and Sriperumpudhur region is likely to offer employment opportunities for 300,000 people in 2013 and this would certainly have a positive impact on the residential market”.

Neha Nagpla, MagicBricks.com Bureau

AC market has been stagnant for past 2-3 years: LG officials

CHENNAI: Slowing down of the economy and delay in real estate projects are among the reasons that have led to stagnation in the air conditioner market for the past few years, top officials of consumer durables manufacturer LG India said today.

"The market has been almost stagnant for the last 2-3 years due to delayed projects in the real estate sector," Saurabh Baisakhia, Business Head, Air Conditioners, LG India, said.

LG Electronics' Head, Corporate Marketing, Sanjay Chitkara added that erratic weather, power cuts and slowing economy were the other reasons for the said market scenario.

Baisakhia noted that with an increase in possession of homes in the coming years, he expected the industry to look up as there is scope for "business to improve."

However, the commercial sector was doing well with an increase in office spaces and this segment contributed to about 15 per cent of the South Korean company's total business, he said.

LG had set its focus on key buying factors and was therefore working to provide the right value proposition to the customer including good payback options, he added.

Announcing the launch of a new range of ACs including the Inverter V series, he said split AC segment contributed to 75 per cent of the 3.2 million units strong AC market.

Responding to a question, he said he would "not rule out the possibility" of window ACs being phased out gradually in the coming years. Its market share has been constantly declining in the last few years, he added.

South India contributed to about 26 per cent of the company's overall market share while it stood at 23 per cent at the national level.

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Kolathur in Chennai witnesses demand for mid-range residential properties

Chennai

Kolathur, a well-developed residential locality in north Chennai is witnessing increased residential demand owing to its strategic location. It is situated in close proximity to localities such as Anna Nagar, Villivakkam, Perambur, Puzhal and Madhavaram. Buyers who cannot afford a house in localities such as Anna Nagar and Mogappair are opting for Kolathur due to relatively lower prices.

“There is a huge demand for properties in the range of Rs 25-35 lakh. Properties above this range are unlikely to get any buyers,” says R Murugesan, CEO, Shriram Properties. “The locality is largely a destination for the middle to lower middle income group,” he adds. As per MagicBricks.com data the prevailing price for multi-storey apartments vary between Rs 3800-4950 per sq ft while the rental values vary from Rs 20-49 per sq ft per month.

Residential demand is largely driven by the professionals working in various IT parks and companies in the vicinity such as India Land IT Park, Ambit IT Park, Tata Consultancy, HCL etc. Demand is also driven by the Ambattur Industrial estate as Kolathur is one of the nearest residential locations to the industrial belt. “Maximum demand is witnessed for 2 BHK units and rental demand is low. Those looking for rented dwelling settle for Annanagar as it is closer to IT hubs,” says Murugesan.

The locality has well developed social infrastructure with several schools such as St John School, Don Bosco School, super markets such as Reliance and Nilgris, banks such as Vijaya Bank, HDFC, Bank of Baroda etc, Spectrum mall etc. Kolathur is easily approachable to Perambur and Villivakkam railway stations and is in close proximity to Moogambikai bus stop. The inner ring road also passes through Kolathur, making it one of the best-connected areas in Chennai.

Source: MagicBricks.com Bureau

Property tax hiked in Chennai, will IT companies log out?

Chennai

The Corporation of Chennai on 21st January pitchforked infotech companies into a separate category of assessees, increasing the rates of property tax they will have to pay by up to 200%.

It may not be time as yet for companies to pull the plug on Chennai as a favoured destination, but industry representatives say they were taken aback by decision. “This is against the state’s policy of being an investor-friendly destination,” said Nasscom senior director K Purushothaman. “We will now have less incentive to invest in the city.”

IT companies in the heart of the city — Teynampet, Kodambakkam, Anna Nagar and Adyar, where the rate has been increased by 200% — will now have to pay the most. Firms in these zones so far paid anywhere between 3/sqft and 9/sqft. They will now have to shell out anywhere between 9/sqft and 27/sqft. This is much more than what IT companies pay in Bangalore (10/sqft per year for companies that own the building and 20/sqft for firms that rent commercial space) or Kolkata (12/sqft per year).

IT companies were so far clubbed with departmental stores and other small establishments in the ‘non-residential building’ category. The corporation has now moved them under the ‘special buildings’ category.

Source: The Times of India, Chennai

Chennai witnessing demand for luxurious penthouses

Chennai

Penthouses stand apart from other apartments by two factors – height and luxury. Typically, penthouses are located on the topmost floor(s) of the residential block, with exclusive private terraces and other luxury amenities. Height restrictions on residential buildings were recently lifted in Chennai and luxury, for those that can afford it, has never been a restricted commodity. A rise in the number of penthouses, presently being seen in the city, is an obvious indicator of a realestate boom.

Historically, penthouses have always stood as a symbol of economic growth. First conceived in New York the “Roaring Twenties” decade, they were built to accommodate the space shortage in highly developed urban areas, juxtaposed with the increasing affluence of those who were making big money in an economy that seemed rock-steady at the time.

Even as basic salaries stay put, affluence is increasing among the high-income groups, driving a demand for penthouses from those who don’t mind paying a little extra for the exclusivity. Developers who pay close attention to the whims of elite clients have woken up to the trend and are offering elaborate customisation, outfitting the deluxe pads with everything and the kitchen sink. “It is a segment that has been steadily picking up over a period of time,” says Kalpana Murthy, Associate Director of Residential Services at Cushman and Wakefield.

Kalpana has met several clients who are specific about their demands for a penthouse and do not want to settle for less. Although statistics that deal purely with the proliferation of penthouses are hard to come by, it is largely accepted that the trend is catching on in a rapid way. “Despite the increase, I wouldn’t say that there are as many penthouses in the city as there are in Bangalore,” says Kalpana, citing Bangalore’s expansive green cover and the perceived lack thereof in Chennai as a reason to blame. “Buildings are getting higher and it is the right time to promote the greening of our communities to prevent it from becoming a sterile concrete jungle,” she says.

Another deciding factor that has worked against Chennai’s favour has been the shortage of unique features at most penthouse projects, which the luxury clientele are normally keen on. In this regard, Chennai has only begun to shed its conservative thinking and key value-additions like smart home technology, automated security and surveillance systems, swanky automobile elevators and roof-top jacuzzis are yet to become viable, if not popular. Basics like water-proofing, tiling, fittings and fixtures, and space-allocation for the support-staff also deserve the highest attention. As Kalpana points out, “If the penthouse above my apartment has a rooftop swimming pool, I’ll naturally be concerned about my ceiling leaking out!”

Larger accommodation area (whether single or duplex), open-to-sky terraces and high-end specs are the three main characteristics of penthouses but Kalpana urges that there is a lot more to look into when you go shopping for one. “The expanse of the total built-up area and the private area is to be looked into. A minimum area of 500 square feet of private terrace is the norm. A built-up area of four bedrooms alone does not command the exclusivity of penthouse,” she says, adding, “When a penthouse occupies the entire floor, the non-FSI area is not a common area and yet it involves a certain amount of construction cost to the builder which has to be compensated,” Norms for Non-FSI garden space, terrace space, floor rise charges and PLC also influence prices but given the extra area that’s available, penthouses can be an interior decorator’s dream feels Kalpana.

Sandeep Mehta, who is the President of CREDAI and the Managing Director of Jain’s Housing and Construction Limited, believes that premium prices command the best facilities and in Saligramam, the uppermost floor has been converted into a luxury floor with penthouse apartments of 3,000 to 4,000 square feet in size. Sandeep acknowledges that builders have to try and upgrade specifications suiting to the needs of high-end buyers and stresses on the livability aspect. In paperback fiction, penthouses may have gained a reputation of being high-end bachelor pads and swanky lovenests but they are also ideal for families. “The proximity to nature, availability of breathable air, lack of noise and pollution give penthouses the warmth and feel of a villa of an independent house within an apartment block,” he says. At Savithanjali, a project by Marg Properties, located near Kelambakkam, penthouses are designed with no common-wall sharing. “Given the preferential location, penthouses have an in-built advantage because of the height. At Savithanjali, the penthouse at the 16th floor offers expansive views of the sea and of OMR at night,” says B Balaji, the spokesperson.

At present, things are getting heated with the announcement of Akshaya’s Abov, which will be Chennai’s tallest residential tower. The penthouse on the 38th floor at Abov could be Chennai’s most exciting one as yet. “The duplex apartment at 11,000 Square feet will have South India’s largest floor plate for a penthouse of 6,800 Square feet, offering the architect plenty of scope to play with form,” says Chitty Babu, Chairman and Managing Director of Akshaya Properties. The distinction could mark the first step in making Chennai a hot destination for luxury penthouses but high-costs ensure a limited supply and accessibility to only those with deeppockets. Maybe money can’t buy you love, but penthouses could well be the next best thing.

Source: Times Property, The Times of India, Chennai

Entertainment, 20 or more km away

To watch a movie, Muthu Raja, 31, an IT professional has to travel 20 or more kilometres. For Divya Selvam, also employed with an IT firm, getting hold of necessities entails informing her colleagues a day or two in advance, who then buy and bring them for her.

Mr. Raja and Ms. Selvam may be living the suburban dream – with houses or other accommodation away from the bustle, noise and pollution that is associated with city living, but every weekend, they face that ultimate question: what do we do for recreation?

Cheaper accommodation in Chennai comes at a price – that of having to travel to the city for practically any form of entertainment.

With the growth of the IT and ITes sector in the city, hundreds of residents employed in these firms have chosen to live on the outskirts, primarily because their companies are located in the vicinity, and also because housing in areas that are not centrally located are priced lower. A real estate boom in these areas has helped — according to a report by Knight Frank, a property consultancy firm, the financial year 2012 saw the launch of 14,900 dwelling units in the city. Another 82,000 units are in various phases of construction. A chunk of these, experts say, are located in the suburbs in and around Old Mahabalipuram Road and Grand Southern Trunk Road.

But development-wise, the suburbs are a long way from catching up to the city.

Residents say that while facilities such as pharmacies, supermarkets and clinics have mushroomed in these areas over the last few years, they still have to depend upon the city for entertainment.

Mr. Raja, who has been residing in an apartment in Madambakkam near Selaiyur since 2002, says, “I would love to stay within the city but it has become a far-fetched dream owing to soaring land prices. And there is no way I can stay at home during weekends, so I spend time with my friends at Marina or Besant Nagar beach.

Ms. Selvam, who lives in a women’s hostel in Karapakkam near Tata Consultancy Services, says that even to buy medicines, she has travel at least a kilometre to Thoraipakkam. “The only reason I stay here is that travel to my workplace is greatly reduced as my office is just a ten-minute walk away. The only reason I go to the city is to shop. I frequently shop with my friends in T. Nagar or in one of the malls like Ampa Skywalk or Express Avenue on Anna Salai, says Ms. Selvam, who hails from Vellore and has been living in Karapakkam for a few months now.

Shopping apart, suburban residents also flock to the city on weekends for movies, a fine-dining experience or just to revel in the crowds and noise. Popular destinations are restaurants in Mylapore and Besant Nagar, shopping in Alwarpet and T. Nagar and movies in Royapettah, they say.

Future buyers do consider the distance factor when looking at a property in the suburbs, say experts. However, those who have bought properties in areas such as Padur and Madambakkam seem content with the to-and-fro arrangement,

Ranjit, another IT professional who has lived in a multi-storeyed building near Chettinad Hospitals in Padur, Old Mahabalipuram Road for the last five years now, said that while it was definitely inconvenient to travel all the way to the city just for recreation, he still preferred living in the suburbs.

“Even if I had the choice of an apartment inside the city, I would rather stay here since it is quiet and peaceful, with less pollution and traffic. On the weekends, if I leave home at noon, I return only around 2 a.m. the next morning on both Saturday and Sunday. First we go for lunch to a good restaurant in one of the malls, do some shopping in Mylapore and then head to the pubs late in the evening and return after midnight. This schedule does not bother me and I like working here and going to the city for the weekends,” he said.

For the original post visit: http://www.thehindu.com/news/cities/chennai/entertainment-20-or-more-km-away/article4326548.ece