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| September
2008 | Issue XI |
www.axiomestates.com |
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| INDUSTRY
NEWS |
INSIDE |
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Long
term outlook remains positive: Experts
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Despite
the current market slackness, experts across
the spectrum continue to remain optimistic
about India's real estate industry, currently
the third largest in the world. Ernst and
Young believes that the market is witnessing
a transitory slowdown. "Considering the
opportunities present as well as the strong
economic fundamental drivers, the outlook
for the mid-to-long term is positive,"
a report released at a Ficci-organized summit
read.
In
another report a Cushman & Wakefield predicted
that the country's realty demand would cross
the 1,000 million sq feet mark by 2012. "Indian
demand for real estate across office, retail,
residential and hospitality sectors is expected
to cross 1,000 million sq ft by 2012.Despite
the expected slowdown in the office market,
the demand for commercial office space is
projected to be 243 million sq. ft, which
is around 22% of the total demand projections
for the next five years,". While the
commercial office sector would witness a demand
for 48 million sq feet, demand in the residential
sector would be at 114 million sq. feet by
2012. According to the report, demand in the
retail and hospitality sectors would follow
at 19 million and 17 million sq feet respectively
in the next 5 years. The National Capital
Region (NCR) has come out as a preferred spot
for sectors. Niranjan
Hiranandani, Hiranandani Group of Companies
Managing |
Director feels that the emergence of new markets,
ongoing corporatisation of the sector, introduction
of innovative products, integration with global
markets and greater transparency and new funding
mechanisms, would
sustain market momentum. Compared to the past
10 years, the real estate sector is expected
to grow at the rate of 100 times in the next
ten years, though profit margin would be less.
"The
NRI demand remains stable and is expected
to pick up from the next quarter," comments
Mr. Rajesh Goenka, Chairman, Axiom Estates.
"With developed markets uncertain, international
investors are looking upon India as a relative
safe haven with strong fundamentals and genuine
end user demand."
"In
the long-term, strong demand for real estate
in India will remain intact and will probably
see us through another real estate cycle once
the market finds its own level by responding
to these short-to-mid term global and domestic
factors," noted Anurag Mathur and Sanjay
Dutt, Joint Managing Directors, Cushman &
Wakefield. A few factors, such as liberalised
economy, dynamic workforce and strong realty
demand across sectors, would make Indian realty
market in the coming times more reliable for
investments. |
HDFC
Funds to Rescue Troubled Projects |
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Deepak
Parekh, Chairman Housing Development Finance Corp
(HDFC) said that its property funds and asset management
unit have nearly $1 billion available funding which
will be used to buy distressed real estate projects.
He said that such buy off might happen within six
months if the current downward trend continued. Parekh
said, "I would like to see both my funds, the
international and the domestic fund, play a much greater
role in takeovers and buyouts of real estate projects
which are facing difficulty". The asset management
unit of HDFC raised almost Rs 4,000 crore ($900 million)
under portfolio management services. Only Rs. 300
crore of this 4000 has been invested till date. "We
will function like an asset reconstruction fund"
Parekh added.
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Rohan Mithila, Pune
One
of the newest and greenest developments by the Rohan Group
in Pune, the Rohan Mithila is spread over 56 acres dotted
with lush green landscaping, several pools and interesting
architecture. Apart from spacious 1 to 3 BHK apartments, duplexes
and penthouses; the project comprises 1.5 million sq ft of
commercial space with mechanized parking space, 75,000-sq.
ft. recreational club, restaurants, ATMs, travel agencies.
Few apartments share common walls, ensuring utmost privacy
for the residents. To add on to the exciting leisure facilities,
is the convenient location of the project. Mithila is just
2 km from the Pune airport and the Koregaon Park is 4 km from
the project. |
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Development
restrictions may ease in Mumbai
Mumbai, chronic space shortage may ease in
the future as several steps are being considered to release
more space in the island city. The Maharashtra Govt. is considering
the possibility to increase the FSI in Mumbai from 1.33 to
2.2. FSI or floor space index is the ratio of total floor
area to total plot size. A senior official from the urban
development ministry of Maharashtra said: "A team of
state government officials and a team of experts from the
World Bank are working on the proposal to have a common FSI
for both the island city and its suburbs. Currently, the island
city has an FSI of 1.33, while in the suburbs it is only one."
The state govt. is also planning to raise the FSI to 4 within
500 m radius of the metro stations. A similar FSI has been
granted to Dharavi redevelopment project and for builders
undertaking slum redevelopment or rehabilitation projects.
He also added, "The current FSI is hardly enough if we
have to meet the growing demand for housing in the city. Nearly
80 sq km area out of total 437 sq km of Greater Mumbai falls
in a no-development zone, which includes national park, coastal
regulatory zone etc."
In another development,
the Supreme Court has removed restrictions on redevelopment
of cessed properties in Mumbai, setting aside a November 2006
ruling of the Mumbai High Court. Major builders like HDIL,
Hiranandani, Lodha Group, Akruti City, Lok Housing and others
have started showing interest for redeveloping old properties.
At present 70 developers are already engaged in redeveloping
old properties in Mumbai.
Another significant announcement
that will impact commercial buildings is that all upcoming
IT parks and IT specific buildings in Mumbai will be allowed
to utilize 80% of the total constructed area for financial
services, along with IT and ITES. Presently they can use only
30% of the total constructed area for financial services.
The state government
last week said that this decision has been taken in order
to help develop Mumbai as an international financial hub.
This would also generate additional employment. All buildings
which are eligible for additional 100%FSI can now utilize
80% of for financial services, apart from IT and ITES.
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Home
Loan Rates to fall: NHB
The National Housing Bank (NHB) anticipates
that home loan interest rates will come down from January.
Sridhar, Managing Director and Chairman, NHB, said that disbursal
of home loans had been steadily growing and the rising rates
of interest have not influenced it. In the last financial
year, home loans had grown at a steady pace of 20%. While
loan by banks has gone up by 14-15%, disbursement by financial
companies grew by 24%. "This year, too, the trend appears
to be similar, but it is too early to form a definitive view,"
he said.
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Affordable
housing is in
The
real estate industry witnessed a boom between 2003 and 2007..
An unprecedented rise in price, growth and profits saw realtors
shift focus on luxury apartments. As the sizes of houses got
larger, their price tags got heavier. However, in the wake
of the international slowdown, big builders who were hitherto
concentrating only on luxury projects have turned their attention
towards affordable housing projects. Projects below the Rs
50 lakhs mark are quite a trend among builders now.
Renowned
developer Purvankara Projects Ltd. is the latest to join the
bandwagon through its Provident Housing and Infrastructure
Ltd. unit. The company will invest Rs 8000 crore and plans
to build 64500 homes in Phase I of the project in Bangalore,
Coimbatore Chennai, Hyderabad and Mysore. It will develop
59.8 million sq ft during the first phase in the coming five
years. |
Home theatres
to woo buyers
Builders
are thinking up new freebies to woo top end buyers. HKMT Acoustic
Designs, a Delhi based company specializing in acoustically
customized mini theatres, has orders from builders like Omaxe,
DLF, Emaar MGF, Unitech to build mini home theatre for their
high end clients. Mini home theatres have become quite a rage
in recent times and the company has already built 180 mini
theatres for elite clients. By 2009 at least 300 mini home
theatres are expected to be installed in Ludhiana, Gurgaon
and Delhi NCR region. HKMT Director Mr. Himanshu Kumar said,
"Most of the 300 odd theatres which we are building are
for apartments and villas costing 5 crore and above in Ludhiana,
Gurgaon and Delhi NCR." Most of these theatres will range
between 300 and 400 sq ft in size and the company will charge
the developers Rs 6 to 12 lacs for each theatre.
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Speculative
Buying Declines
A real
estate report by Ernst & Young and Ficci states that speculative
buying in the real estate sector in leading cities is declining
and genuine end-users currently account for nearly 80% of
total property sale. According to the report, "the last
three to four quarters have witnessed a significant shift
in the buyers' profile with real estate prices reaching a
level where speculators/investors cannot realise significant
returns". Speculators used to account for 30-40% of total
sales previously, the report added. |
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Dr
Madhav Mehra explaining final points about assessments to
the Golden Peacock Award Jury people 
