Anuj Puri – Page 25

Homing In On Andheri – East

Anuj Puri, Chairman – ANAROCK Property Consultants

Since Mumbai is the commercial and financial capital of India, almost all major Indian corporates, as well as leading Indian PSUs and MNCs, have their offices set up in the city.

Traditionally, Nariman Point in South Mumbai (the traditional Central Business District) was the preferred location for high-grade office occupiers, and therefore commercial office space investors.

However, today Bandra-Kurla Complex (BKC) has emerged as an alternative location to the traditional CBD. It has become more acceptable to MNCs as it offers a better-built environment. The Suburban Business District (SBD) in the North of Mumbai is also a major commercial office market.

Geographically, this micro-market contains all areas in Andheri, Jogeshwari and Juhu. However, a lot of the Grade A office buildings are to be found in the Andheri East area.

In the past, Andheri was known as a ‘suburban district’ which was absorbed by Mumbai city as Greater Bombay. It emerged as one of the prime residential and commercial real estate destinations.

Andheri East is a mixed land use precinct with some of the most prominent hospitality and industrial developments in its vicinity.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

A quick look at the numbers of the first month of 2018 reveals that the market is changing for good. With new launch sales of 500 units across the top 7 cities of India in January 2018, new launch sales have doubled from December 2017.

This uptick is a major motivational boost to stakeholders who had been grappling with subdued demand for the past few years. Although a couple of months into 2018 are not a major indicator of how the markets will behave during the ensuing months of the year, they surely provide guiding cues.

As ANAROCK’s Annual Residential Report 2017 illustrates, there are certain teething troubles in the sector that is adjusting to the new ways of doing business, and a few trends are likely to stick around in 2018:

A continuing buyers’ market

With the crackdown on black money and benami transactions, stringent norms and compliances under the RERA regime, investors – and, more importantly, speculators – have been pushed out of the market.

The Indian real estate sector was extremely buyer-friendly in 2017 and presented an opportune time to ‘seal the deal.’ This trend is likely to continue in 2018 as well and may,

by Anuj Puri

PRESS RELEASE

Chennai Saw Highest Housing Sales Dip In 2017, Bengaluru Lowest – ANAROCK Report

Unsold inventory decreased by 10% from 8.04 lakh units in Q4 2016 to 7.27 lakh units by Q4 2017

Mumbai, 22 March 2018: Fewer launches, subdued sales and muted property prices defined 2017 for the Indian residential real estate sector, according to a detailed report by ANAROCK Property Consultants.

With an annual decline of almost 50% in new launches and 15% decline in sales across top 7 cities in India, the sector was effectively shattered in 2017.

“A spate of policy reforms and structural changes literally crippled the sector,” says Anuj Puri, Chairman – ANAROCK Property Consultants. “Simultaneously and consequentially, it transitioned rapidly into a transparent and buyer-friendly one. With only end-users left to drive the market and investors more or less evaporating completely, developers throttled back severely on new launches to allow the market more scope to absorb the already staggering unsold inventory.”

2017’s Depressed New Launch Readings

The top 7 cities recorded new unit launches of around 26 lakh in 2017 as opposed to 2.50 lakh in 2016.

by Anuj Puri

Speculator-driven NCR & MMR saw sales drop by 68% and 27% since 2013-14

Anuj Puri, Chairman – ANAROCK Property Consultants

From observing residential market trends over the past five years, it clearly emerges that 2013-14 was the last year where things still looked vibrant for the sector. Housing sales began plummeting after that, and there is no clear revival in sight as yet.

A quick trends assessment for the past 5 years reveals that during 2013-2014, an average of 3.3 lakh units was sold annually. Thereafter, with too many project launches facing off with decreasing demand, unsold inventory began piling up across the top 7 cities of India.

Housing sales dropped significantly in the 2015-2016 period. On an average, only 2.7 lakh units were sold across top 7 cities of India during 2015-16, recording a significant drop of 17% from the average sales of 2013-14.

When demonetization hit the nation during the 4th quarter of 2016, the situation turned from grave to savage. Immediately after the demonetization impact, the real estate sector was battered with RERA and GST which severely shook up the sector.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Traditionally, the Gudi Padwa festival season is an auspicious time to invest in real estate. Considered a time of renewal, it coincides with Punjab’s Baisakhi, Tamil Nadu’s Puthandu, Andhra Pradesh’s Yugadi and Kerala’s Vishu.

Since a large cross-section of Indians tends to link property acquisition with auspicious dates, activity levels on the property market tended to increase visibly in this period.

However, Gudi Padwa 2018 is not likely to bring the accustomed uptick, which – though almost non-existent even in the last 2 to 3 years – arrived in the backdrop of a more complex set of challenges than ever before. This year, this festive season will be juxtaposed with some interesting market dynamics.

The residential real estate market in many cities has been slowing down, and developers are hoping that Gudi Padwa will prove to be a turning point for many developers who have been struggling with slow sales as well as policy-induced compliance pressures and generally negative market sentiment.

Indian developers tend to look at the tradition-fuelled appetite for housing purchases during festivals like Gudi Padwa so as to mitigate slow sales during the rest of the year and offer lower prices under the guise of festival discounts.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

With the advent of e-commerce in India, shopping converged into mobile devices in the form of websites and/or apps.

At the click of a button, one could buy groceries, apparel, electronics and almost everything else. For a while, it appeared that ‘couch potato shopping’ was a real threat to physical retail, and that shopping malls will run out of business.

That has not happened – in fact, shopping malls are witnessing a visible resurgence in India.

A clear measure of increasing focus on the retail sector is that private equity (PE) players invested more than $700 million into Indian retail in Q1-Q3 2017 itself – around 90% of the investments that came in during the past two years (2015 and 2016).

Shopping malls in India have come a long way indeed, from less than 5 malls in 2001-02 to more than 500 in 2017. Over the last few years, as the overall economy struggled, there was a drift of negativity about Indian shopping malls being able to sustain and were ‘going to be out of fashion’.

by Anuj Puri

Anuj Puri, Chairman, ANAROCK Property Consultants

Green shoots of improvement in new launches; 100% month-on-month rise in new launch absorption levels

2017 has been an action-packed year, not just for the real estate sector but for the entire nation.

While the structural changes and policy reforms (demonetization, RERA and GST) shook up the economy, it imbibed financial discipline, accountability and transparency across various sectors.

As per the statistics released by Economic Survey, the Indian economy is expected to grow at 7 to 7.5% in 2018-19, eclipsing China to become the fastest growing economy.

In 2017, the performance of Indian residential real estate was lacklustre due to the sector’s transition from an unorganized to an organized one, amidst changing regulatory environment.

The big-picture reforms are making the market buyer-friendly and further attracting global investors to consider India as one of the preferred destinations for real estate investments.

With two months into 2018, ANAROCK Property Consultant’s research report presents some of the trends reflecting the state of residential real estate market across the country’s top seven major metropolitan cities.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

After a protracted period where interest for real estate investment was concentrated primarily in the larger cities, we are now seeing a resurgence of the Tier 2/Tier 3 cities story in India.

Many of these cities are seeing increasing economic activity and infrastructure growth, to some extent reducing the outward migration to the metros.

This is a welcome dynamic which will eventually result in a more uniform spread of real estate demand across the country, and reduce the pressure on the larger cities.

What lies beneath

The ticket sizes for residential properties in tier 2 and tier 3 cities and towns start from a significantly lower base, owing to cheaper land prices and also the fact that developers active there are more aligned with affordability.

Buyers tend to be more cost-sensitive as economic drivers in the city may not be on par with those in the larger cities. Also, under the incumbent Government, many of these cities are now seeing significant infrastructure deployment. Quite a few have come under the Smart Cities program,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Real estate investors need to be an exceptionally canny lot, since various factors can negatively affect the value of one’s real estate assets. Being aware of these – and making suitable provisions and allowances for them – is an inalienable part of successful property investment.

The rising cost of money

Increasing inflation is the first factor that inhibits the profitability of a real estate investment. While investing in any kind of property solely for capital appreciation, one should always consider what the overall earnings would be worth at the point in time one wishes to liquefy them.

If one fails to plan for the inflationary effect, further property purchases may be out of reach – rendering the whole concept of real estate investment an exercise in futility.

A simple method of establishing whether inflation will erode one’s real estate investment is to determine if the interest rate earned on one’s savings is less than or equal to the rate of inflation. If it is, it means that your real estate investment too will suffer because of inflation.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Consolidation is the process of combining a number of separate parts into a single, more effective or coherent one. Whenever there is consolidation in any sector, the general perception is that everything is going down the drain.

However, the reality is that this process usually happens at the fag end of an industry downturn and actually helps in catalyzing a much stronger come-back.

The real estate sector is a clear case in point. It is emerging from a prolonged slowdown coupled with landmark policy inputs which have begun to edge out the ‘small fry’ – essentially creating an environment of large-scale consolidation of tier II and III developers. This dynamic alone will define 2018 as a year of massive positive change for Indian real estate.

In 2017, the overall Indian economy and the real estate sector, in particular, were well and truly shaken up by a series of unprecedented reforms and structural changes.

Without a doubt, demonetization, RERA and GST will go down in the annals of Indian real estate history as the ‘trishul‘

Homing In On Andheri – East

Is 2018 the Turnaround Year for Indian Real Estate?

Chennai Saw Highest Housing Sales Dip In 2017, Bengaluru Lowest – ANAROCK Report

Declining Housing Sales – The Devil in the Data

Housing Sales Herald A Tepid Gudi Padwa 2018 For Real Estate

The Resurgence Of Shopping Malls In India

State Of India’s Residential Real Estate Sector – 2 Months Into 2018

Tier 2 And Tier 3 Cities Stage Their Real Estate Comeback In India

3 Factors That Can Negatively Impact Property Investment Profits

The rising cost of money

Why 2018 Will Be A Year of Consolidation for Smaller Developers