India Real Estate – Page 34

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

Anuj Puri, Chairman – ANAROCK Property Consultants

Real estate prices in Mumbai – India’s high-flying financial capital – are never out of the news.

From South Mumbai’s spectacularly pricey trophy properties to the chronically unaffordable price tags of what passes for mid-income and affordable housing in the city, there is no getting over, under, around or through the extremely high property prices in Mumbai.

Mumbai’s sky-high real estate rates – what lies beneath?

Before we go into which parts of Mumbai can still reap decent returns on real estate investment, it is important to understand why the city was such an investment hotbed in previous years – and in fact still draws patient, well-capitalized investors.

Of course, the city’s extremely steep capital and rental values were (and continue to be) their primary incentive. There are several reasons for Mumbai’s exorbitant property prices – some are logical and have to be accepted as facts of life here, while others have more to do with unabashed market manipulations.

Supply-related challenges

Geographical constraints:

Its unique geographical attributes have been one of the leading factors influencing the astronomic property prices in Mumbai.

by Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

One of the interesting new trends in Kolkata’s residential real estate market has been the entry of new players. The capital values of residential realty have seen a price increase in Q4-2017 ranging from 2 to 3% as compared to Q3-2017.

A number of upscale multi-storied projects were launched in 2017 in the southern part of the city – for e.g. Tata 88 east, Mani Vista, Signum Victoria Vistas, Aspirations Elegance and Onex Privy. The capital values of these projects were in the range of INR 8,000 to 12,000/sf.

Effect of demonetization

As everywhere else in the country, demonetization had some effect on Kolkata’s residential sector. However, since Kolkata’s residential sector is largely end-user driven, the effect of demonetization was not very severe, as the buyers are willing to wait for the market to stabilize.

In the office asset class, there has been no major impact due to demonetization. However, leasing demand has certainly reduced post-demonetization.

Top-selling residential projects

Kolkata’s residential property market is seeing a splurge in supply – which,

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 Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

When the scion of one of the world’s most iconic real estate brands comes to India to help market yet another luxury homes project – this time in the Millennium City of Gurgaon – the market sits up and takes notice.

By all standards, the upcoming Trump Towers are a sizeable undertaking – the 47-storey towers will put 250 exclusive units on the market, with completion and possession slated for 2023.

As can be expected from such an iconic development by a brand that has already made a strong imprint in Mumbai, Pune and Kolkata, the price tags are astronomic, ranging from INR 55-110 million.

This gives rise to a logical question – at a time when the luxury housing market in India has yet to pull itself out of the doldrums, is there any appetite for such an offering? Let’s examine some facts.

In the Asia Pacific region, India ranks 4th in the list of countries with largest HNI population. The HNI stratum of the Indian population largely remains shielded from the macroeconomic risks,

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‘

by Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

The Finance Minister’s fifth union budget on 1st February 2018 was probably one of the most closely-followed events for the Indian business community.

Not only was it the final budget before the 2019 general elections, but strong rumours of a populist Budget were sending all sorts of mixed signals to various industries.

In any case, all sectors – and specifically real estate – had harboured considerable hopes from this Budget. Battered and bruised after demonetization, RERA and GST, the sector looked forward to at least some major announcements that could re-inject the market into a growth trajectory.

Above all, real estate players fervently hoped for the long-awaited and long-elusive infrastructure status. The logistics sector and affordable housing had received it sometime back, but the market needs the benefits of infrastructure status on a much broader spectrum.

Expectations notwithstanding, the real estate industry got neither infrastructure status or, for that matter, any additional direct policy push from Union Budget 2018-19.

Why is infrastructure status so important for any sector?

How can this status impact the country’s economy at large?

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The Reserve Bank of India’s stance of keeping the repo rate unchanged at 6% is exactly along the lines of our expectations.

Considering that the inflation has inched up (Dec-17 CPI at 5.21%, up from 3.58% in Oct-17 and well above the target of 4%), crude oil prices are rising in the international market and the Government plans to increase the crop support price, maintaining the lending rates unchanged is justified.

We believe that the interest rates will soon start inching upwards, which is already being factored into the rising bond yields for the past few months.

The real estate sector can and should look at the long-term economic prospects and implications on which the monetary policy decisions are based, as these will dictate the growth trajectory for the sector.

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Vartak Nagar is a residential suburb in Thane once known largely for its tapered roads and deplorable infrastructure. The residential market was predominantly defined by low-rise developments that housed industrial workers from the nearby manufacturing units.

Today, with the rapid urbanization of Thane and its surrounding precincts, Vartak Nagar has witnessed a significant upgrade in terms of both civic and social infrastructure, and its revamped market profiling has turned it into a promising real estate destination in the Mumbai Metropolitan Region (MMR).

It now has excellent road connectivity to the central and western suburbs via the Eastern Expressway and Western Express highway (via Ghodbunder road) respectively. Vartak Nagar is also well-connected through an established rail network.

Its proximity to the serene Upvan lake and exquisite view of the scenic Yeoor hills have become the major drivers of consistent real estate growth in Vartak Nagar.

Moreover, it still has an abundant supply of land parcels (primarily through the redevelopment model) available at competitive prices. This is a major draw for developers of residential projects since the lower land prices allow them to sell their properties at attractive rates.

Homing In On Andheri – East

Is 2018 the Turnaround Year for Indian Real Estate?

Which Mumbai Real Estate Locations Still Deliver Good ROI?

Kolkata Real Estate – A Real-Time Update

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

The Trump Effect On Gurgaon’s Luxury Housing Market

Why 2018 Will Be A Year of Consolidation for Smaller Developers

Budget Blues: Infrastructure Status For Real Estate Could Have Saved The Day

Monetary Policy – Lending Rates Unchanged, But May Inch Upward Soon

Thane’s Vartak Nagar – A New Real Estate Hotspot Emerges In MMR