CREDAI property fair draws positive response

Chennai

The 3-day event by Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu members, drew an encouraging response from prospective home buyers in and around the city. The property fair showcased 250 plus properties in Chennai Trade Centre from developers across the city.

Over 32,000 people visited the event and the volume of business generated by 65-member developers during the show has been estimated to have crossed Rs 100 crore. The developers are quite upbeat over the outcome of the show and the impending potential for housing market in and around the city for the rest of the year.

Housing finance companies and banks have issued in-principal sanctions for home loans worth Rs 150 crore on submission of basic documents during the show. The encouraging response for home loans could be attributed to the flexibility in terms of lending rate and concessions extended during the show. Even the property developers have offered sops by way of reduction in rates for those who were buying during the event.

According to CREDAI sources, residential properties in the price range of Rs 50 lakh to Rs 4 crore including high-end homes drew good response. The properties showcased during the show varied from Rs 15 lakh to Rs 10 crore covering apartments, villas and developed plots. A majority of the response was from the end users who have evinced keen interest to invest in residential properties.

The number of exhibitors was more than previous years and the layout was done in such a manner to give a thrust to the concept stalls over traditional cubicles. This has given a better image of the exhibits in a market where fierce competition dominates today.

In order to create awareness about the intricacies involved in the home buying exercise, leading law firm Rank Associates has been engaged to provide free legal advisory services to prospective buyers. CREDAI Tamil Nadu has a consumer redressal mechanism and the grievances received have been passed on to the committee for quick processing.

As the overall response to the Fairpro 2012 has exceeded CREDAI’s own expectations, they are contemplating to extend the show to NRIs as well in future in select countries like Middle East, Singapore and UK.

Source: http://content.magicbricks.com/credai-property-fair-draws-positive-response

Chennai

The 3-day event by Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu members, drew an encouraging response from prospective home buyers in and around the city. The property fair showcased 250 plus properties in Chennai Trade Centre from developers across the city.

Over 32,000 people visited the event and the volume of business generated by 65-member developers during the show has been estimated to have crossed Rs 100 crore. The developers are quite upbeat over the outcome of the show and the impending potential for housing market in and around the city for the rest of the year.

Housing finance companies and banks have issued in-principal sanctions for home loans worth Rs 150 crore on submission of basic documents during the show. The encouraging response for home loans could be attributed to the flexibility in terms of lending rate and concessions extended during the show. Even the property developers have offered sops by way of reduction in rates for those who were buying during the event.

According to CREDAI sources, residential properties in the price range of Rs 50 lakh to Rs 4 crore including high-end homes drew good response. The properties showcased during the show varied from Rs 15 lakh to Rs 10 crore covering apartments, villas and developed plots. A majority of the response was from the end users who have evinced keen interest to invest in residential properties.

The number of exhibitors was more than previous years and the layout was done in such a manner to give a thrust to the concept stalls over traditional cubicles. This has given a better image of the exhibits in a market where fierce competition dominates today.

In order to create awareness about the intricacies involved in the home buying exercise, leading law firm Rank Associates has been engaged to provide free legal advisory services to prospective buyers. CREDAI Tamil Nadu has a consumer redressal mechanism and the grievances received have been passed on to the committee for quick processing.

As the overall response to the Fairpro 2012 has exceeded CREDAI’s own expectations, they are contemplating to extend the show to NRIs as well in future in select countries like Middle East, Singapore and UK.

Source: http://content.magicbricks.com/credai-property-fair-draws-positive-response

Fifth annual FAIRPRO to start off from Feb 17 in Chennai

Chennai - Touted as the fairest property fair in Chennai, 65 eminent developers will be coming together at the 5th annual FAIRPRO, which will be held at the Chennai Trade Centre from February 17 to February 19. FAIRPRO is organized by the local chapter of CREDAI (Confederation of Real Estate Developers’ Associations of India), the apex body for private real estate developers in the country, and will underscore its new ‘Mission Transparency’ initiative. Bound by a rigorous Code of Conduct, the builders exhibiting at FAIRPRO are operating under strict instructions to be transparent in all dealings and documentation with customers and to disclose and declare all components of the sale in consideration. “Transparency is our key focus this year,” says T Chitty Babu, President of CREDAI, Chennai chaper, adding, “We wish to promote our philosophy of Ownership without burden.”

According to him, only properties that have been “legally cleared” and have been approved by CREDAI standards will be exhibited at FAIRPRO. He says, “We intend to offer this platform for homeseekers to help them own a property that is based on the strong values of trust and integrity. As per the rules of CREDAI, customers will be given a clear break-up of all the costs involved of the property they intend to purchase, which means there will be no hidden costs.”

Stressing the fact that only legally approved properties are being exhibited at the fair, Ajith Chordia, Treasurer of CREDAI, says, “Customers sometimes tend to be unaware of the hidden taxes such as vacant land tax and the buyer comes to know about it only after the sale.” This year, CREDAI has gone the extra-mile by offering a legal counter which will be set up at the fair to answer customers’ queries on the legal aspects of their purchases. “The legal corner will be managed by our rank associates, so that buyers can make purchases confidently,” says N Nandakumar, Secretary of CREDAI.

As the number of builders who will be converging this year at FAIRPRO has risen exponentially this year, Suresh Krishn, Convenor of FAIRPRO is optimistic about the positive impact that the fair can create. “The reach of the upcoming fair is estimated to increase by nearly 50 percent. The FAIRPRO website has already registered over 20,000 hits and nearly 85 stalls have been booked so far,” he says. In his view, the most important increase is the sizeable expansion of the product range. “We are offering an unbeatable variety with projects ranging from Rs 10 lakhs to Rs 10 crores. This year, we expect to create transactions to the tune of nearly Rs 250 crores,” he says. With a staggering 250 projects on display, the three-day fair is set to be a unique opportunity for interested buyers to compare prices and projects offered by the exhibitors. Spot booking, numerous discounts and hassle-free home loans are also some of the highlights of FAIRPRO 2012.

Source: The Times of India, Chennai

Investment potential areas in Chennai in 2012

The year 2011 witnessed significant developments that impacted the Indian economy. Rising interest rates, global uncertainties, declining foreign investments, dip in GDP, et al. The real estate sector is by no means an exception especially with limited access to funds by developers, increasing debt and PE funds’ higher expectations.

For end users in housing, the timing is just right as the government is all set to hike the guideline values for registration purposes during January which in turn might increase the housing cost. For medium to long-term investors, developed plots offer potential scope for price appreciation. Here again location and proximity to state or national highways with ongoing infrastructure development should be considered before plunging into investment.

Sriperumbudur and Wallajabad areas are cited as potential areas in Chennai awaiting a number of integrated township projects and limited projects now on offer for blue collared workers in the area. Prices range from Rs 500 per sq ft off main road and industry analysts expect the rates to double in a span of five years, if not earlier.

For HNIs and those having liquidity, the better option is to go for pre launch offers as developers are keen to negotiate on apartment prices and offer discount for upfront payment. A typical investor keen to invest Rs 40 lakh – Rs 50 lakh for a 2-BHK unit with an area of 1200 sq ft can anticipate a return of Rs 800 per sq ft in two years in an average location in Chennai. Besides he has the option either to go in for registration of the unit or exit.

As residential development revolves around growth corridors like OMR, GST road and Oragadam-Sriperumbudur belt, even rental prospects appear better as corporate leasing demand is inching high due to the influx of skilled professionals to the city. In fact leading property developers on GST road have firm commitments for ongoing projects from select corporates for leasing once the projects are ready for occupation.

As regards commercial property, the yield depends on the scale of investment. For large scale investors, it varies from 9 to 11 per cent per annum pre-tax whereas for investors with a targeted investment limit of Rs 10 crore and below, the yield ranges from 7 to 9 per cent per annum pre-tax. Blue chip tenants do not prefer buildings strata title, as a result the commercial property transactions are now seeing a trend where developers are only selling the whole building or at least one owner per floor. This leaves limited room for retail investors, and the opportunities are limited to the high net worth individuals.

Source: http://content.magicbricks.com/investment-potential-area-in-chennai-in-2012

Potential for property management companies in metros

With the continued migration of residents both within the country and abroad, investors in real estate have been finding it difficult to manage their properties during their absence. There were few options except to rely on relatives or friends for such needs. But times are changing, especially with India liberalising investment norms by foreign companies. One area that has virtually caught the attention of the foreign companies involved in property management is the huge potential at metros and secondary towns.

A number of MNCs have set up shows in metros and tier II cities across the country to provide property management services. This is not only beneficial to the NRI globetrotters but even to residents who are compelled to shift their work places across the country. Though, no precise data is available on the size of the industry, industry sources estimate it as a billion dollar business given the volume of units available, value and the growing need for such specialised services in this sector.

Software and management systems, minimising legal exposure by using best industry practice management, procedures, skilled manpower to handle varied jobs are major strengths that differentiate professional players from others in the industry. “About 30% of our business revenues come from property management services”, says Alexander Moore, Chief Executive Officer – India, LJ Hooker, in Bangalore, which is planning to extend its network to Chennai.

“The growing importance of property management services should be realised not only by the end users but by the property developers and architects at the project implementation stage itself,” points out Christie Cherian, Managing Director, Red Sky Property Services, in Chennai.

A number of MNCs have already entered the Indian market. LJ Hooker, Red Sky, Ray White, Remax, among others. Industry sources point out that there are 12 major international brands providing similar services are likely to enter India in the coming years. The range of services includes preventive maintenance, placement, contracting, response maintenance, signage, commercial cleaning, pest control, annual maintenance contracts, health and safety.

In countries like Australia there are five companies for every 30,000 to 40,000 households but in India companies like LJ Hooker are aiming to target one unit for every 500,000 households. Being a consumer driven business, if companies meet the specific needs of homeowners, Indians, particularly NRIs, will heave a sigh of relief while investing in real estate.

Source: http://content.magicbricks.com/potential-for-property-management-companies-in-metros

Chennai tops in NRI demand in US

In a survey conducted during the property show held in Edison, NJ, it has been estimated that 31% of the visitors preferred Chennai for investment in real estate. The demand for other cities ranged from Bangalore, Hyderabad, Mumbai, Ahmedabad, Pune, Delhi, Coimbatore, Kochi to Visakhapatnam.

Unlike earlier, the categories of properties preferred ranged from apartments to villas and developed plots. In fact the demand for villas in the vicinity of Chennai among US NRIs has shown an upward trend with the availability of multiple options, township development and a range of services inbuilt in each and every project. A majority of the visitors desired home loans to partly fund their investment exercise. While a section of the visitors preferred properties for their own use, others opted for getting periodical return on investment.

During the show, guaranteed rental income properties were on display where investors can earn rental income from day one due to tie-up with corporates in Chennai. Investors were keen to enquire more details as that would offset their initial financial outgo as well enable them to offset their EMI through rental income.

Though a full scale recovery is still a long way to go across US, corporates are increasing their spending as is evident from the spurt in demand by techies for rental accommodation in Edison, said a senior official working with an international consultancy firm in New York. There is a spurt in the number of IT projects’ spending in the tristate area with the number of expatriates in particular from India visiting for project related assignments, it is said.

During 2008, apartments were available just for the asking in Edison area due to frequent layoff and expatriates eventually returning home. But today, several apartment complexes are getting filled up, which is a good sign for the gradual improvement in the overall market scenario especially with the H1B quota being utilised fully, said a local resident in Edison.

There is another reason for the trend towards investment in India. NRIs had lost capital values considerably while investing in real estate across US. For instance, an NRI who had invested in housing in Anaheim during 2006 at US$950,000 saw his investment declining to US$625,000 in a matter of just six months. Another NRI who had put his investment in housing in Orlando saw his investment nose-diving from US$400,000 to US$125,000, according to market sources.

Source: http://content.magicbricks.com/chennai-tops-in-nri-demand-in-us

Hike in land prices in Chennai

The prolific growth of Chennai in all three directions has impacted land price to a considerable extent. Lack of adequate housing development and high cost of housing are attributed to the steep hike in land prices. There is no scientific rationale to value the land price and on most occasions, it is the demand-supply mismatch that tilts the price.

According to industry sources, property developers are unable to get access to the land owners and will have to deal with the power of attorney holders. The due diligence exercise involving whether the power has been revoked or not is again a time consuming affair and unless the location justifies, developmental efforts were in vain.

Revenue records are still not updated, even though computerisation process started as early as in 1986 and unscientific land use has restricted urban development area. The process of verification even today involves travelling several miles which again is a time consuming process especially when the developer is entering the Chennai for maiden development. Recently some of the records have been shifted to Tiruvannamalai. The agony and the associated hardship for property developers need not be overstressed in such a scenario.

Yet another factor inhibiting housing development is the archaic rules and the inability of the related government departments to agree on vexatious issues. For instance when DTCP finds there is a proposed road admeasuring 60 ft, FSI at 2.5 is sanctioned whereas CMDA does not agree with the view unless there is a road already laid and the developer ultimately lands in reduced FSI. All the additional cost is ultimately passed on to the buyer. The industry sources have already voiced concerns that because of the delay in approval process alone, a consumer has to fork out Rs 233 per sqft as additional cost while buying an apartment in Chennai.

This is apart from the government levies which is considered 33% of the unit cost. However, the CMDA has recently introduced several measures to reduce the delay including green channel option.

Source: http://content.magicbricks.com/hike-in-land-prices-in-chennai

Retail gains momentum in Chennai

Demand from retailers and influx of quality supply in the near term augur well for Chennai’s retail scenario. Construction activity in Chennai’s retail segment picked up pace in the second half of last year due to increase in demand from retailers both in CBD and Off CBD locations.

A majority of the developers and large scale land owners are coming up with larger floor plates while few land owners are willing to go ahead with BTS (Built-to-suit) options in order to cater to enhanced demand levels from retailers.

During the last six months, most of the construction activity was limited to high street locations such as Nelson Manickam Road, Poonamallee High Road, Adyar, TTK Road, North Usman Road and Velachery.

Approximately 300,000 sq ft of retail space was released during the last six months in this micro market. Chennai retail market is expected to witness the completion of almost 2.6 million sq ft of mall space by the end of second half of this year, according to CB Richard Ellis survey.

Rental values on high street locations of Nungambakkam High Road, T Nagar and Anna Nagar remained stable, while those in Adyar and Velachery depreciated by almost 20% and 11% respectively. On the other hand, Alwarpet observed a rental increment of 12-13% during the review period, largely attributed to an increase in demand for large retail spaces, ready fit out options and built to suit proposals in the upcoming projects.

Rental values witnessed pressures in retail mall properties, with a decline of almost 30% in Spencer Plaza (Anna Salai) and around 5-10% in Chennai Citi Center, Ampa Skywalk Mall and Express Avenue. A key reason for drop in mall rentals has been the reducing sales and declining footfalls, largely attributed to an unfavorable tenant mix and poor infrastructure facilities in these malls.

The retail real estate market in the city is expected to maintain an optimistic trend over the next few months. This is largely due to increase in demand from retailers and release of quality supply in the near term. Rental values are expected to witness an increase in select developments in the CBD / Off CBD micro markets, while remaining stable elsewhere.

Source: http://content.magicbricks.com/retail-gains-momentum-in-chennai

Property Rates in CHENNAI

Chennai, previously known as Madras, is one of the four metropolises of India. Being the capital of Tamil Nadu, the city is the centre of all political, business and cultural activities of the state. The city has gradually changed its profile. Earlier it was popular for being a trading spot, but now a house for sale in Chennai is something which attracts everyone. Now it is gaining repute for its IT and industrial development. The Chennai property market is driven by the commercial and residential segment. Most of the development is happening on the Old Mahabalipuram Road. Here, many plush property projects are coming up. Most of the commercial development is focused around the IT industry. This comprehensive chart is specially designed to keep you in the best knowledge of areas and their ongoing property trends which will help you in finding your dream home right away. Last Updated: September 2010 

CAPITAL VALUE

Locality Apartment (Rs/sq ft) Plot (Rs/Ground* in Lakh) Apr-Jun’10 (%) Sep’10 Apr-Jun’10 (%) Sep’10 North (1) -2 to 0 5300-6000 0 68-78 West (10) -30 to 25 2600-10000 0 to 16 45-118 South (12) -25 to 30 3400-16000 -19 to 20 36-250 Central (3) -9 to 30 6000-9000 0 to 30 216-275 IT Corridor(8) -9 to 14 2800-5500 -7 to 28 31-117 Others (18) -22 to 0 3400-26000 -20 to 15 46-560

RENTAL VALUE

Locality Apartment 2 BHK (Rs/month) Apr-Jun’10 (%) Sep’10 North (1) 0 13000-17000 West (10) 0 to 29 7500-23000 South (12) -12 to 11 8500-21000 Central (3) -9 to 0 19000-26000 IT Corridor(8) -13 to 0 8000-15000 Others (18) -15 to 20 8500-75000

Source: http://content.magicbricks.com/property-rates-in-chennai

Chennai real estate likely to see good times in 2012

In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply. Chennai’s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011.

The absence of overt speculation has also ensured that developer has move pricing of homes in a stable and gradual manner. Unnatural spiking has therefore been successfully kept at bay. We expect interest rates to decrease over the course of 2012, and this will result in greater demand for homes in Chennai in 2012.

Increased job security in the city has definitely helped the market to maintain buoyancy and a positive outlook. Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues.

CONFIGURATIONS IN DEMAND

The preferred size for 3BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. Again, the main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT / ITES sector.

This is a welcome trend which is enabling architects, planners and developers to come up with better quality dwelling units. Affordable housing units continue to rule the roost in areas where social infrastructure lags and capital values are therefore lower.

We expect overall demand for residential properties in Chennai to increase once the interest rates stabilises from their current peak. There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure.

SUBURBAN DEMAND DRIVERS

• Positive market sentiments

• Possible softening of interest rates

• Increased job security

• Unaffordable property rates in the central city Year 2011 saw residential property pricing in Chennai moving up in a phased and rational manner, which helped in sustaining the momentum. Prices rose by between 8-30% in different areas, but these rises took place in small compartments and in proportion to the actual sales in particular locations and projects. We expect a similar trend to prevail in the year 2012.

Expected Price Movement For 2012

• OMR – 15-30%

• GST – 10-15%

• City – 20%

• NH-4 – 5-8%

AREAS TO WATCH

• Madhya Kailash – Sholinagnallur

This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years. Encouragingly (and in contrast to other parts of OMR) all completed projects here are fully occupied.

• Velachery

Velachery is seeing consistent growth, because it is one of the few areas which are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram-Thoriapakkam, the 200 FT. MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.

Source: http://content.magicbricks.com/chennai-real-estate-likely-to-see-good-times-in-2012

Housing prices projects mixed trend

At a time of slowdown in real estate development, housing prices have more than doubled in three cities of Chennai, Faridabad and Bhopal in four years.

A National Housing Bank report released on Monday said three other cities Jaipur, Hyderabad and Bengaluru recorded fall in prices residential properties.

The Citywise housing price index, NHB Residex, incorporated in 2007 with a base of 100 said June 2011 quarter showed index for Chennai residential property prices have gone up to 248 from base 100 in 2007, which means property prices of metropolitan city surged 148 per cent during the period.

This is followed by city of Bhopal that has witnessed 124 per cent growth; Faridabad comes third with a rise of 120 per cent.

However cities like Jaipur, Hyderabad and Bengaluru have registered a downward trend with 36 per cent, 9 per cent and 8 per cent drop respectively.

“In India land policies have created distortions that have led to inordinate high prices in many key metro cities. In places like Mumbai and Delhi and some large metros, land constitutes 90 per cent of the cost of the house, which signifies we have wrong faulty land policies and with those land policies you cannot have a solution for affordable housing,” said HDFC chairman Deepak Parekh.

The report also revealed that total outstanding housing loans have been growing at a steady pace. While the growth was 21.71 per cent in FY11, it was 20.79 per cent in FY10. Housing finance companies had witnessed a decent growth of 16.12 per cent in FY09.

Meanwhile Reserve Bank of India (RBI) is advocating for inclusion of low cost housing loans under the priority sector-lending category. “We are trying to put housing finance for weaker section as part of priority sector. A committee is looking into it. Hopefully, by the first week of February this report will come,” said RBI deputy governor HR Khan on the sidelines of the conference.

Union Bank of India chairman and managing director MV Nair is currently heading the committee, which was constituted by RBI to look into various issues, related to priority sector lending. Proper documentation and due diligence standards are also under consideration to ensure that loans extended by banks are for the target segment, which need special attention and treatment, the terms of the report said.

The panel will also review current allocation mechanism for Rural Infrastructure Development Fund (RIDF) and other such funds.

“The apex bank is also trying to coordinate with government and market regulator SEBI for developing and broadening the corporate bond market. As much as 40 per cent of the total bank lending is for priority sector including agriculture and small sector industry,” added Khan.

Source: http://www.mydigitalfc.com/news/housing-prices-projects-mixed-trend-448

Hindustan Construction Plans to Sell Part of Stake in Real Estate, Infra Units

NEW DELHI – India’s Hindustan Construction Company Ltd. plans to sell part of its real estate and infrastructure units, as well as aggressively chase outstanding payments with state-run companies to reduce its debt, a senior executive said.

Chief Financial Officer Praveen Sood said the company is looking to raise up to 5 billion rupees through the stake sales.

Friday, the company said it swung to a consolidated net loss of 1.30 billion rupees in the quarter ended Dec. 31, compared with a net profit of 79.4 million rupees a year earlier.

Source: http://blogs.wsj.com/dealjournalindia/2012/01/23/hindustan-construction-plans-to-sell-part-of-stake-in-real-estate-infra-units/

Indian realty market gains favour of NRIs as rupee continues its decline

For several months, India has suffered the double misfortune of a slowing economy and high inflation. Now, it is also facing a rapidly depreciating currency against the dollar.

While a falling rupee is not the best news for domestic markets, it certainly provides a good opportunity for exporters and NRI investors, who stand to gain from the weakening rupee on conversion, making India an attractive destination to park any surplus funds.

The inevitable slow-down of the Indian economy, coupled with the Foreign Institutional Investors (FII) pulling funds out of the stock-market sent the Rupee into a free fall, declining as much as 15 per cent in 2011; in fact the rupee hit an all time low of 52.73 against the US Dollar on November 22, 2011.

Additionally, real estate in other parts of the world is sinking. Volatile or flat-lining economies in the Middle East and Europe make investing in these regions risky and further make the case for a more lucrative return on investment within the Indian real estate sector.

With the rupee on the decline, Indian homes have become significantly cheaper for NRIs. For example, NRIs living in the US could receive as much as a 20 per cent savings on their purchase price.

Many from the NRI community look to invest in residential apartments that have comprehensive amenities and safety features required for a comfortable living.

Some NRIs residing abroad look for opulent homes with absolute luxury; a property that can be used as a second home investment and eventually be used as a retirement home.

Second home is extending good support and an attractive investment option for property buyers.

This also becomes a good investment avenue, as the second home segment all over the country has been appreciated astronomically in recent times.

Real estate is considered a great long-term investment, and a second home is great way to get into the action. Given this, many domestic realtors are focusing their efforts on making upcoming property development sites attractive to NRIs.

To illustrate: TATA Housing's recently launched The Promont, an ultra-premium residential project in Bengaluru. This project is being designed by Moshe Safdie, an internationally renowned architect who has designed world class structures such as the Marina Bay Sands in Singapore.

The Promont will be equipped with all the amenities to support and maintain the lifestyle choices and preferences specific to most NRIs, with amenities like clubhouse, indoor temperature controlled pool, private gymnasium, squash court, children pool and play area. It is the most premium property executed by TATA Housing.

With the value of the Indian rupee dropping, and the simultaneous pick-up of interest from NRI's in domestic property investments, several banks have made it easier for NRI's to buy property.

For example, Reserve Bank has granted general permission to a few financial institutions providing housing finance to grant loans to NRIs for acquisition of residential property for self-occupation subject to certain conditions.

Similarly, authorized dealers have been given permission to grant loans to NRIs for acquisition of house/flat for self-occupation on their return to India subject to certain conditions.

The inflow of NRI money will also benefit real estate companies in paying off their dues and commitment against property already purchased as their revenue will simultaneously increase.

This is a good time for real estate developers to market existing and new projects to NRI community and create a win-win situation on both sides by offering attractive deals in new investments, offering schemes for higher interest benefits on early payment rebate options on existing projects that have investments from members in the NRI community.

The Indian market has been gaining momentum with the NRI's investing in realty sector and this upcoming trend has been mainly prominent in the Indian metros. This time will prove very fruitful for NRIs to invest in any kind of real estate as the Indian rupee value has declined.

The investment made by NRIs in Indian real estate will be a rewarding experience and would make them proud owners of their property.

This is the best time for NRIs to buy premium projects as the Developers are offering better product and amenities and once can differentiate better brands that are available.

Source: http://ibnlive.in.com/news/indian-realty-market-gains-favour-for-nris/222240-24.html

Qualifying test devised for realty brokers

PUNE: The Estate Agents' Association of Pune (EAAP) has devised a test for real estate brokers who intend to become its members.

EAAP president Govind Bhagchandani told reporters on Tuesday that RE-MET (Real Estate Membership Entrance Test) is an entrance level test mandatory for aspiring real estate consultants who wish to be members of the association. It is an online test, developed and offered by National Association of Realtors - India (NAR - India) of which EAAP is a founder member, Bhagchandani added.

The test module shall attempt to create a clear qualitative difference between its members and any other practicing real estate consultants, he said. The existing members of EAAP would also have to clear the test, he said, adding that the process of existing members taking the test has already begun.

Bhagchandani said anybody can take the test and obtain a certificate from EAAP.

EAAP vice president Kishen Milaney said the association is also planning to start a 'Customer Redressal Cell', where it will look into the complaints made by customers against their members and mediate to solve the problems.

He said as part of its Silver Jubilee Celebration, EAAP has planned a seminar 'Marketing Real Estate (Best Practices)' at Hotel Sun & Sand on January 19. The association will also release its EAAP directory at the hands of CREDAI (National) president Lalit Kumar Jain on January 21, he said.

Source: http://timesofindia.indiatimes.com/city/pune/Qualifying-test-devised-for-realty-brokers/articleshow/11536867.cms

Mum, Delhi slip on real estate list

MUMBAI: Due to rising economic and inflationary pressures, rankings for two major metros of the country, Mumbai and New Delhi, slid down to 15th and 12th position, respectively, on the list of foremost real estate investment markets, a survey by consultancy firm PwC said.

Last year, however, PwC had ranked Mumbai at the third and New Delhi at the fifth place.

According to the report titled 'Emerging trends in Real Estate Asia Pacific 2012', the vacancy rates in Mumbai are likely to remain stable through the close of 2011 and into 2012 and the absorption will again be positive next year, but rental values will remain questionable as economic and inflationary issues continue to linger.

"In New Delhi, inflation continued to spike costs, and it may not be economically feasible to build there. On going funding problems do provide investment opportunities for private equity investors," the report said. PwC has ranked Bangalore as the 10th most favoured investment destination, a similar rating like last year.

"Bangalore's organic, growth driven market and ability to buck mega trends has helped it retain its credentials as a stable play and maintain its position on the list," the report said.

Source: http://timesofindia.indiatimes.com/business/india-business/Mum-Delhi-slip-on-real-estate-list/articleshow/11519623.cms

Debt repayments worry Indian developers

Mumbai: India's biggest developers have Rs1.8 trillion (Dh126 billion) of debt maturing in the next three years as ratings firms cut or withdraw their assessments.

DLF Ltd., the nation's largest builder, was downgraded by Crisil Ltd., the Indian unit of Standard & Poor's, on December 27 after its liabilities minus cash climbed to an all-time high of Rs242.7 billion in the three months ended September 30, data compiled by Bloomberg show. Fitch Ratings withdrew its rankings last month for Unitech Ltd., the second-biggest developer which faced a funding crunch during the 2008 credit crisis.

The rising risk of defaults in India's real estate industry shows the central bank's record monetary tightening in the last two years hurt companies that are already coping with the slowest economic growth since 2009.

"Slowing cash flows in a weak economic environment and the high levels of debt may further undermine the financial status of Indian builders," Kejal Mehta, an analyst at Mumbai-based brokerage Prabhudas Lilladher Pvt., said. "Ratings remain under threat due to delays in debt reduction and the pressure on profits. Given the high rates in India, it's difficult to expect a near-term improvement in the situation."

Rising costs

Debt costs jumped at India's real estate companies as the central bank lifted its benchmark rate by 3.75 percentage points in the last two years to rein in inflation.

The central bank's repurchase rate, currently 8.5 per cent, is the highest level since 2008.

The average mortgage rate at Housing Development Finance Corp., the nation's biggest mortgage lender, is 16.5 per cent, according to the company's website.

DLF paid a record Rs5.26 billion of interest in the third quarter of 2011, up from Rs4.96 billion in the prior period, data compiled by Bloomberg show. Similar expenses rose 11 per cent to Rs1.91 billion rupees for Housing Development & Infrastructure Ltd., the nation's third-biggest builder.

"In 2012, a number of distressed projects will be acquired by large developers at sub-valuation prices," Ramesh Nair, Mumbai-based managing director for western India at Jones Lang LaSalle India, said.

"Some developers are gearing up to sell their non-core land and divest their stakes in non-core businesses such as hospitality and retail."

Combined net debt

Kumar Urban Development Pvt. and Neptune Developers Ltd. borrowed at rates from 19 to 20 per cent in the second-half of 2011, according to data from the National Securities Depository Ltd.

Combined net debt of 11 Indian developers rose 19 per cent from a year earlier to Rs403 billion rupees in the three months ended September 30, according to Mumbai-based brokerage Edelweiss Securities Limited.

"Financing challenges will continue for high-risk real estate investments," Nair said. "With tighter lending policies, debt will become more expensive and many developers will seek other options for their funding needs."

DLF signed a Rs4 billion loan due in 2015 to refinance existing debt, data compiled by Bloomberg showed last week.

Rupee-denominated bonds returned 6.9 per cent in the past year, while Indonesian notes earned 20.2 per cent in the best performance among 10 Asian local-currency debt markets tracked by HSBC Holdings Plc.

Builders face liquidity crunch

Mumbai: Property demand has slumped in India's biggest cities as borrowing costs rose and economic growth slowed.

Home sales in Mumbai dropped 20 per cent in November from a year earlier to a 31-month low, according to Prabhudas Lilladher.

Sales dropped because of "a stalemate between the buyers and the builders," Samantak Das, Mumbai-based head of research at the Indian unit of Knight Frank LLP, wrote in a note.

Profits at Indian developers shrank 23 per cent last quarter from a year earlier, after falling 20 per cent in the three months ended June 30, according to Edelweiss. Net income at DLF slid 11 per cent to Rs3.72 billion in the quarter ended September 30 from a year earlier.

"Liquidity concerns remain a challenge for developers," Samir Jasuja, CEO at PropEquity, a Gurgaon-based real estate data and analytics provider, said. "Banks are already going slow on realty lending."

Source: http://gulfnews.com/business/property/international/debt-repayments-worry-indian-developers-1.965090

Bangalore real estate market plunges by 7% in Q3 FY 2011

BANGALORE: In a rising interest rate regime, where residential real estate is clearly feeling the heat, Bangalore as compared to other metros, is clocking in a fairly decent performance.

Bangalore residential sales volumes fell by a mere 7% y-o-y in Q3CY11 compared to the steep fall witnessed in the cities of Mumbai at 48% and Delhi at 31% due to healthy demand from the IT sector and only a modest (+7% y-o-y) increase in real estate prices, said a report by Prabhdas Lilladher, a brokerage firm.

The IT capital of India saw commercial realty absorption of 9mn sft in CY11, 28% jump as compared to last year. Rental also moved up by 10% across micro markets. "Commercial market is expected to continue to benefit from the relatively positive outlook in the IT/ITES sector," mentioned the report.

Some large realty companies such as Sobha Developers and Prestige Estates Projects, have been able to maintain sales volumes by starting H1 with a large quantum of launches.

Sobha clocked in sales of 2.77 mn in FY11, translating to Rs11.3bn in terms of value; this is likely to go up to 3.38 mn sft and Rs15.7bn, respectively in FY12. While, Prestige witnessed sales of 1.8 mn sft in volume terms and Rs13.8bn in value terms in FY11, which is likely to increase to 4 mn sft and Rs17.2bn, respectively in FY12.

"The strategy adopted by these companies is launching projects in attractive locations, focusing on the mid-income segment as well as expanding to newer cities," said the report.

Source: http://economictimes.indiatimes.com/markets/real-estate/bangalore-real-estate-market-plunges-by-7-in-q3-fy-2011/articleshow/11452960.cms

Demand of commercial realty dwindles in metros

Developers shelving projects as huge built-up space lies idle

The commercial real estate market across the country is facing a crisis with real estate consultancies estimating an excess supply to take care of next four years of demand. As several millions of commercial space is lying idle in Mumbai, Bangalore, NCR, Chennai, Hyderabad, Pune and Kolkata, developers have shelved their commercial projects and converted them to residential projects at several places.

Over 50 million square feet commercial space is lying unused in Mumbai, especially at Nariman Point, while in National Capital Region the inventory stands at 23 million square feet, Chennai 21 million square feet and Hyderabad and Pune 15 million square feet each. Ahmedabd has inventory of 6 million square feet, Kolkata 10 million square feet and Bangalore around 25 million square feet.

The excess supply is estimated at around 166 million square feet of ready and under-construction (to be completed within the next 1 year) commercial space across these cities, according to Pankaj Kapoor, chief executive officer of Liases Foras. He says on an average, there is inventory of around 50 months (approximately 4 years) in each city.

According to RESSEX (Real Estate Sensitivity Index) data, over 50 million square feet of inventory in commercial space is there in Mumbai, while the inventory in Bangalore is estimated to be around 25 million square feet. National Capital Region comes a close third at around 23 million square feet, followed by Chennai with 21 million square feet. Hyderabad and Pune has 15 million square feet each, while Kolkata and Ahmedabd have an inventory of 10 million and 6 million square feet respectively.

Commercial Real Estate prices across the country has seen a correction of over 25 per cent across the country due to dwindling demand, says Anuj Puri, chairman and country head of Jones Lang LaSalle.

Sarang Wadhawan, vice chairman and managing director of a leading commercial space developer HDIL, told Financial Chronicle, that they would go slow on commercial projects. “We will not execute all of them immediately as planned earlier. Sure, demand has slowed down due to uncertainty in the economy and companies cutting down on expenses leading to poor absorption of commercial space,” said Wadhawan.

HDIL at present is developing 9.29 million square feet of commercial space across the country. Godrej Properties, another major player, is now repositioning two prime projects – Godrej Garden City in Ahmedabad and Godrej Oasis in Hyderabad – with a focus on residential development as demand for commercial space is shrinking, as reported by FC last week. Pirojsha Godrej, executive director of Godrej Properties, said that they changed the business model for two projects to largely residential in nature.

Real estate prices in Central Mumbai, Bandra Kurla Complex and Andheri have seen sharp correction from its peak over last few months.

Source: http://www.mydigitalfc.com/news/demand-commercial-realty-dwindles-metros-421