Indians Third Biggest Investor in US Property Market: Brokerage

New Delhi: Indians are the third biggest international investor community in the US realty market, global brokerage Sotheby's International Realty said.

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Indians had invested around $8 billion last year in US property market, the US-based brokerage said.
Canadians and Chinese buyers topped the list of foreign nationals in terms of investment in US property market.

"I think and I believe Indians who live in the US are one of the largest group of millionaires in the America... they are already there and therefore they are investing in real estate," Sotheby's International Realty president and CEO Philip A White told Press Trust of India.

Sotheby's International Realty in August 2014 had signed an agreement with Indian firm RealPro Infra Pvt Ltd and established its Indian arm under the name North India Sotheby's International Realty, which caters to the luxury real estate demands of resident and global Indians.

Sharing the details of Indians' investment in the US, North India Sotheby's International Realty founder and president Ashwin Chadha said, "After Canadians and Chinese, Indians are third largest international community in US in terms of real estate investment and had invested around $8 billion last year."

Talking about the Indian market for the global brokerage firm, White said they are optimistic about Indian luxury real estate market and have huge expectations. India as a country has huge potential to be the top nation in terms of business for us and it may take few years to get there, he added.

"Indians searching property globally, I think we all know Indians put big premium on real estate as a tangible asset to protect from inflation or number of things. So I think they keep on looking at the opportunities," Mr White added.

Further elaborating about the brokerage firm's domestic operations so far, North India Sotheby's International Realty founder and CEO Amit Goyal said they have already tied up with some established players in the sector including Tata Housing, Sobha and Max Group's Antara Housing.

According to US-based National Association of Realtors data, Indians had spent $5.8 billion in fiscal 2014 to purchase real estate in that country. China topped the list of foreign nationals with $22 billion in realty for the one year period ended March 2014.

Source - NDTV 

Real estate investors duped by Abohar builder meet DGP

Chandigarh: Senior Congress leader Sunil Jakhar on Thursday led a group of people from different areas of Punjab to the director general of police, alleging that they had been duped by an Abohar-based builder in a real estate project and that no action had been taken even after 16-odd cases were registered. Following the representation, DGP Suresh Arora asked the inspector general of police (crime) Nageswara Rao to look into the matter.

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Addressing a press conference earlier, Jakhar, who is also the Abohar MLA, alleged that investors had told him that the builder took the help of liquor contractor Shiv Lal Doda, who has been named in a case involving the killing of dalit youth Bhim Tank last month, to make the police go slow against him after complaints were made in April 2015.

"The investors were called for a settlement at the same farmhouse where the dalit youth was mercilessly killed a few days before the incident," he alleged. "Money taken by the company run by the builder was never returned to the investors when they got to know that property promised to them was actually forest land. The police stopped its investigations into the case and this needs to be probed."

"There are two parts to the case. One is the financial fraud angle and the other is to do with police going slow. Since the fraud is spread across different states, there is need for a central agency to look into the matter," said Jakhar.

Apart from those who invested in the project, a former employee of the company was also present and claimed that over 30,000 people must have lost their money in the project.

The builder in question was not available for comments.

Jakhar said Doda had also sought police security at his liquor vends and had received a court notice in that regard. "Sangat darshan (community audience) programmes and manning liquor vends seems to be the propriety of the Punjab police," he alleged.

Source - TOI 

Investors turn pessimistic on commercial real estate

The Indian commercial property monitor also indicated that more number of respondents – investors and tenants – in the previous quarter felt that market valuation of the commercial properties were expensive compared to the quarter before.

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In contrast, the percentage of those who had previously felt that office spaces were fairly priced dipped in the third quarter ended September 30 compared with the earlier quarter.

In terms of the property price cycle of the commercial segment in the real estate sector, a large percentage – 38.3% – feel that it was in stabilization phase. The percentage, which believed it was in an early uptrend, was also high at 27.2%. An almost equal percentage of 24.7% felt the commercial property segment was in mid-downturn. Only 6.2% felt it was in mid-upturn and a small 1.2% felt it had peaked.

Devina Ghildial, managing director, South Asia, RICS, said the Indian commercial property market was on the upswing as demand was outstripping supply but growth in rentals was modest compared with earlier expectations.

"There is a dearth of available supply of grade A office or commercial spaces across major cities in India. Many new MNCs are looking to come into the country while existing large corporate are also ramping up their operations at a solid pace, but supply of grade A office space is not able to match up to this demand, leading to healthy appreciation," she said.

According to the report, there was a spurt in the demand for commercial property in the sector as auto, banking financial services and insurance (BFSI), telecom, fast moving consumer goods (FMCG), consumer durables, IT and e-commerce start-ups in the national capital region (NCR), Bangalore and Mumbai, which remained upbeat with closures of several large-sized transactions during the quarter.

Ashutosh Limaye, head – research & real estate intelligence service, JLL India, said commercial properties in India were most affordable when compared to other global markets with rentals having bottomed out and making its way up.

He said the rise in rental was "gentle" but the direction was definitely up.

"The rentals in the commercial segment of real estate is currently fair and competitive as it is still below the previous peak (in 2008)," said Limaye.

According to him, Bangalore was the only market that had reached its peak of 2008 while most others remained more than 10% below it.

Limaye said Chennai was 2% below its peak, Pune 10% while the rest were over 10% lower than their peak.

He said Mumbai and Delhi had reached a high of Rs400 per square feet (sq ft) per month in 2008.

"Today, Nariman Point is 30% below that (2008 commercial property rentals) while suburbs like Andheri, Kurla and others were 20% lower," he said.

J C Sharma, managing director of Sobha Developers, said India offered arbitrage in two things – wages and salaries and office rentals. He said MNCs came to India because of these two arbitrages available to them to be competitive in the global market.

"If you, exclude markets like Mumbai, Bandra Kurla Complex (BKC) and Delhi, 90-95% of the transactions in the Indian commercial property sector were less than $1 per sq ft, which is very cheap compared to markets in other emerging markets and some of the Southeast Asian countries like Malaysia, Bangkok, Jakarta, etc," he said.

Sharma said high absorption rate in the commercial sector over the past few quarters in markets like Chennai, Kochi and others had resulted in better realisation in rentals.

Source - DNA 

Hyderabad investors look towards new areas

With the development of social and residential infrastructure around industrial areas in the city, few industry players are hoping to cash in on appreciated land values.

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Industry players state that with most of the industrial areas in the city being saturated, investors will have to look towards new areas where infrastructure is being set up. The concept of industrialisation has grown over the years says Anil Reddy, president, Federation of AP and Telangana Chambers of Commerce and Industry. “Today, to retain employees industrial areas have to include integrated townships with schools, hospitals and availability of all the daily amenities in their plans. Only then will employees be attracted to work in these areas. Patencheru initially only had an industrial area. But today it has a vast social infrastructure and it is part of GHMC.”

Balanagar, which is one of the saturated industrial areas, is witnessing escalation in its land value due to the development of residential and social infrastructure in the area. P V Rajam, president, Cooperative Industrial Estate, Balanagar explains that only the pharma sector in the city is on an upswing and many other units have become non-operational.

“The set-ups here have be running for decades and the machinery is worn out. However, the land value has appreciated a lot over the years and owners are looking to sell the land for commercial to sell the land for commerce or residential use for about 3 to 4 crore per acre or about 10,000 to 20,000 per sq yd,” says Rajam.

Some of the older industrial areas still lack basic infrastructure. Sadasiva Reddy, past president, Jeedimetla Industries Association says, “Despite being one of the biggest industrial areas in Asia, Jeedimetla doesn't have a proper drainage system in place. Depending on its make, a unit here costs about 10,000 to 14,000 per sq ft, while the rental is about 14,000 per sq m.”

V Pratap, proprietor of Sri laxmi Tower Fabricator chose to set up his industry near Cherlapally Industrial Area. He says, “This is a relatively younger industrial area as compared to the others in Hyderabad. Back in 2005, I bought land at about 600 per sq yd and today it is evaluated at about 12,000 per sq yd. The area is green, there are no chemical companies here, the 1st 3 phases have sound basic infrastructure, while in phase 4 and 5 the drainage work is underway."

The area is also constantly monitored by security personnel. The saturation of industrial areas is an indication that industries should move towards the ORR region. Areas, such as Shamirpet, Medchal, Jedcherla, Bhongir have potential for small and medium enterprises in form experts. There are about 28 industrial estates in the surrounding districts of Medak which include sectors such as pharma, knowledge parks, manufacturing hubs, food processing industries, plastics units, etc., states A P K Reddy, national president, Federation of Small and Medium Enterprises India.

However, Hyderabad and its peripheral areas remain the preferred area for industrial investment despite a National Investment and Manufacturing Zone (NIMZ) having been proposed at Zaheerabad in Medak.

“Small and medium size enterprises will invest in areas that are about 20 to 25 km around the city. Hyderabad is out of the cyclone and earthquake risk zones and the industrial land prices here are less than that in Mumbai, Bengaluru, Chennai and in some cases even Coimbatore and Pune. Only a few cities in central India such as Bhopal are priced at par with Hyderabad.

Setting up industries in areas such as Zaheerabad is viable only for large scale players who need about 100 acres of land,” says S V Sudheer, VP, Telangana Industries Federation. Interest from few investors towards the new state of Andhra Pradesh can be observed. However, these are majorly expansion plans as some areas of the state are flood zones.

Source - TOI 

Foreign real estate investors have become more realistic about Indian market

NEW DELHI: The real estate market in India has matured after the slowdown and investors now have a more realistic view about returns these days, says Robert Marten, managing director, Global Real Estate Institute (GRI), a global club of senior real estate investors, developers and lenders. 

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"There has been a spike in foreign investment in India after the new government. We will not see an overnight impact of the reforms, but the Indian real estate market is certain to revive soon," he says.

The real estate sector has been reeling under the impact of sluggish sales due to high prices and costly credit and a severe liquidity crunch due to the cautious stance of lenders for the past couple of years.

Real estate investors too have been a cautious lot after burning their fingers in the slowdown.

Marten feels that while the market is recovering, there are a few bottlenecks stopping the real investment flow. A major concern is finding a credible partner to enter the Indian real estate market. "Due to the fragmented nature of the Indian market, with each city has a separate market leader and finding a credible partner to put money in is the major question for investors," he says adding, "Complex policy and regulations in the country is the other major concern."

The government has recently announced the 'Housing for all by 2022' scheme to address housing shortage in the country. Marten says this affordable housing opportunity can play as a major trigger in reviving the real estate market, adding, "Provided the government makes this a realistic business proposition and attractive for developers."

The Smart City scheme, where there is a plan to build 100 smart cities, is another prime opportunity for the real estate market, for which the government has already allocated Rs 48,000 crore. Marten feels smart cities are not a real investment opportunity immediately, but will surely turn into a big business proposition in the longer term.

The real game changer will be the launch of real estate investment trusts (REITs), "which is sure to provide easier and safer entry route foreign players into the Indian market," he said.

Founded in 1998, GRI is a global club of senior real estate investors, developers and lenders, which meets annually in different regions of the world to discuss potential investment opportunities

Source - TOI