Indian Realty Market Regains Favour of Foreign Investors: PwC

Mumbai: A relaxed FDI (foreign direct investment) policy for the realty sector has reinforced the confidence of overseas investors and has helped India regain its place as one of the preferred investment destinations, according to a survey by PwC.

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According to the global consultancy firm, the overall outlook for investments in Indian real estate market seems to be positive on account of the fact that 80 per cent of the foreign capital inflows have been all-equity buyouts by big institutional players.

It noted that even those investors who had burnt their fingers in the first round of investments in 2006-07 "are not wary of Indian markets anymore, and are willing to bet their money once again on the Indian real estate story". 

"The progressive evolution of Indian foreign investment policy for the real estate sector through introduction of various liberalisation measures has reinforced the confidence of foreign investors and has helped India regain favour to be one of the preferred investment destinations in the Asia Pacific region," PwC said.

The findings of the survey showed that Bengaluru is emerging as the real estate capital of India as it overtook Mumbai in this year's rankings to become the most preferred real estate investment destination in India.

"While Mumbai and New Delhi have marginally dropped in rankings, from an investment prospect perspective, New Delhi ranks second and Mumbai ranks fifth in the buy recommendation rankings for industrial/distribution properties among the 22 cities covered," PwC India partner Abhishek Goenka said, citing the survey results.

"Furthermore, Mumbai ranks eighth and ninth, for office and residential buy recommendations, respectively. These numbers, in a way, indicate that the investment prospect rankings of these cities could move up and push into the 'top-10' bracket in the years to come," he added. 

Giving city-wise observations, the survey results said that the financial hub Mumbai is on a recovery path as far as the commercial real estate side is concerned.

"On residential end, there is currently a reasonable amount of oversupply in the suburbs; however, with recent slowdown of approvals for new projects, the oversupply situation could get addressed to certain extent," it noted. 

Meanwhile, the survey observed that New Delhi is expected to see the biggest pipeline, primarily due to Delhi-Mumbai Industrial Corridor.

Tokyo, Sydney, Melbourne, Osaka and Ho Chi Minh City emerged as the top five cities in the world in terms of investment and development prospects in their respective realty markets.

The survey was conducted across 22 cities in the world. 

Source - NDTV

Crowd-funding: The new concept in real estate

Can crowd-funding be exercised to assist developers in the completion of their projects? Is Mumbai ready to emulate this Americanised idea?

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Recently, there was news about a real estate developer in the United States being crowd-funded by his buyers when he ran into financial deficits and was unable to complete his project. The apartment buyers in that project came forward and contributed according to their capacity and helped the developer complete his project, so that they can get the possession of their apartments. This strategy not only helped the buyers as they were able to move into their property (for which they had already made the initial payment for) but also helped the developer greatly, as he was able to complete his project, raise more capital when buyers moved in and was also able to keep the faith of the buyers intact by giving out a clear picture. This incident brings to the fore an important question: Can crowd funding as a concept is introduced in Mumbai? We asked a few Mumbaikars about the same and got several different responses. Here's a look:

Arun Parikh, a Mumbai-based investor, says, "This seems unlikely. The general public in Mumbai is wary of fake builders who gather money and grab land parcels. In case such a concept ever gets implemented, people will be highly sceptical about getting their money back. Also, they would doubt whether their apartments would ever get completed once the money gets contributed."

Vaibhav Dubey, a production manager for films and TV, feels, "Such a scenario is very unlikely in Mumbai, as there exists a credibility issue with developers. One can never be sure (even after contributing) whether he will ever be able to move into his own home. Buyers should ideally go in for ready-to-move-in homes and not get stuck with under-construction properties."

Avantika Kukreti, a media professional, shares, "With many projects coming up in and around Mumbai, people, though spoilt for choice, are confused. Then, there are so many news updates about projects being delayed and possessions taking time. I have experienced it personally, as we booked our flat in 2006 and got the possession in 2014. I think as long as the developers can't keep deadlines, they simply can't be trusted."

Tushar Upreti, author, film-maker opines, "Crowd-funding is a great way to infuse life into projects that are facing a financial crunch. Many real estate projects shut down in the metros due to a lack of funds. Crowd funding is a win-win situation for both, buyers and sellers, where they come on one single common platform to turn dreams into reality, without involving a third party (financerbanks)."

Siddharth Sharma, an IT professional, adds "This is definitely possible in India and even in Mumbai. Maximum Mumbaikars are office-goers. They book a house and start paying the EMIs to the developers with a notion that they will get the possession of the apartment within the stipulated time. If the possession is delayed, the payment towards the rent is increased. So, if by crowd funding, the rental cost does not increase for a long time, then, it is something that should be taken up."

Source - TOI

Mumbai Metro: The new realty magnet

Industry experts believe that there is an enormous scope for real estate development in areas surrounding the Mumbai Metro line.

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Infrastructure development acts as a catalyst for growth of the residential and commercial property segments and in this context, the Phase -1 of the Mumbai Metro has played a pivotal role.

Taking this forward, Maharashtra chief minister and chairman, MMRDA, Devendra Fadnavis has sanctioned the expenditure of Rs 35,400 crores for the development of 118-kms Metro network.

It includes 40-kms Dahisar-CharkopBandra-Mankhurd Metro-2 corridor (Rs 12,000 crores); 40-kms WadalaGhatkopar-Thane-Kasarvadavali Metro-4 corridor via Wadala GPO and R.A.Kidwai Marg (Rs 12,000 crores); 27-kms Dahisar-E-AndheriE-Bandra-E Metro-5 corridor (Rs 8,100 crores) and 11-kms Jogeshwari-Vikhroli Link Road Metro-6 corridor (Rs 3,300 crores).

The Metro project will attract people in its vicinity as it helps in better connectivity to other parts of the city. Hence, industry experts believe that there is an enormous scope for real estate development in and around the metro.

Additionally, property prices in the area are expected to rise significantly once the project gets underway. Ramesh Nair, COO business and international director, JLL India, points that the areas which will benefit from the Metro connectivity have already seen a price rise of 400 percent over the last eight years and this trend is set to continue with this imminent launch.

Phase 1 of the Mumbai Metro has resulted in a marked improvement in the realty development along the metro route and areas close to metro stations. It has helped in better east-west connectivity within the city and helped in saving precious time commuting between work and home."The metro phase 1 project was a blessing for most people travelling from eastern to the western suburbs and vice-versa, as there was no direct link earlier between these areas. The metro phase 1 project has helped in taking the load off the existing road and rail infrastructure and has received a very good response from commuters utilising the services at optimal levels. This decongestion has attracted buyers who were earlier hesitant to buy residential or commercial spaces earlier. Places like Chandivali and Sakinaka in Andheri (east) are easily accessible after Phase 1 of the metro came up and demand is taking an upward trend," says Manju Yagnik, vice-chairperson, Nahar Group.

The infrastructural initiatives have always contributed to the real estate boom in the city. Nishant Agarwal, managing director, Avighna, believes that the future infrastructure plans for Mumbai will also continue to fuel growth in this sector.

"The proposed Underground Metro line connecting Dahisar to Mankhurd will further strengthen the resolve of real estate developers to venture into these areas with housing and commercial projects," he says.

Source - Property Times

Ganesh Chaturthi to cheer the property market

Ahmedabad

The festive season coincides with the return of a positive outlook for realty sector and Ganpati festival gives it a boost.

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Festival season this year is different for the real estate sector as developers are betting on the renewed market sentiment coupled with tradition to see their sales counters abuzz with activity. The positivity has already begun with Ganesh Chaturthi and hopes are held for the upcoming festivities to last until Diwali.

"The festive season is considered a peak time by developers, since 25-35 percent of their annual sales happen in this relatively short period," avers Jatin Patel, marketing manager of a real estate firm. As always, developers have lined up various offers to sweeten the deal for buyers. "Serious inquiries and sales have already increased by 15 percent at the beginning of this festive season. Also, it seems the additional sales momentum will be maintained at a steady 20-22 percent even after the festive season is over," says Pradeep Singh, a local real estate developer.

The market has witnessed sales to the extent that developers expect that if one goes by the trends during Ganesh Chaturthi, this year will end on a good note. "There has been significant response and bookings at this Ganpati festival. Even investors are seen making use of freebies, discounts and making investments wisely," says Parag Tyagi, a property consultant.

However, buyers are playing smart and scanning the market for the best of deals. "If the offer translates into savings on the bottom line, such as hard discount, free parking space that we would otherwise have had to pay for or waived stamp duty and registration charges, we intend to definitely consider it as long as the property itself meets our real needs and measures up on key investment parameters," says Nishit Mehta, a hotelier who intends to invest in real estate soon.

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