Real Estate Trends – Page 37

Coworking Space – A Threat To Conventional Offices?

Anuj Puri, Chairman – ANAROCK Property Consultants

Coworking spaces have redefined the work culture globally and India is one of the most fertile grounds for the growth of this new work environment option.

From simple workplace with ungainly desks and chairs to much better-utilized spaces, automation and even added recreational facilities, office space structures in India have indeed changed a lot.

One of the offshoots of this evolutionary process is the rise of workplaces that can be easily accessed anytime and from anywhere – a plug-and-play concept of office spaces.

In short, coworking or shared office spaces.

Buoyed by the Central Government’s efforts to create a viable eco-system for young entrepreneurs, India is witnessing the mushrooming of multiple start-ups and SMEs across the country. Such businesses are increasingly focusing on co-working spaces.

These shared spaces are often in prime locations and provide a perfect platform for growth-seeking start-ups.
Moreover, they come at significantly lower costs than traditional office formats
They offer more flexibility greater flexibility to both employees and employers, and
They do not require a massive fixed capital investment.

by Anuj Kejriwal

Anuj Kejriwal, MD & CEO – ANAROCK Retail

There is so much talk of the death of brick-and-mortar retail as a consequence of the aggressive advent of e-commerce into the country, when the fact is that shopping malls have just got started in India – and they are definitely here to stay.

As developers learn through trial and error and come up with more winning formulas for their malls, and as retailers get more into omnichannel selling, we will see the Great Indian Mall revolution spin into its next cycle of evolution.

Why the Indian Mall Story Rocks

Unlike ‘couch potato’ e-commerce shopping, malls offer an experience… a touch-and-feel benefit which online shopping cannot. Also, going to a mall becomes an outing for the family and friends, often coupled with a meal at the food court and a movie at the cineplex.

All this in air-conditioned comfort, escalators and lifts connecting everything to the parking below, and scrupulously cleaned sanitary facilities at all levels. The massive Indian middle class loves this experience and online retail is unlikely to put malls in the shade in India anytime soon.

by Sukhdeep Aurora

Sukhdeep Aurora, Chief People Officer – ANAROCK Property Consultants

Open offices are a new-age commercial spaces trend which is catching up across the globe, including in India. Improving wireless technology to suit changing business requirements is truly an enabler for this transformation.

Millennials and globe-trotters today account for a large and ever-increasing share of the Indian working population – they operate on a very collaborative wavelength and are, by and large, not at home in the traditional cubicles model that so far defined most Indian office spaces.

To cater to the evolving mindset of a Gen Next workforce – and to achieve better productivity and employee retention – an increasing number of progressive firms are now transforming their offices into trendy, happening, open spaces that promote innovation and collaboration.

Advantages of the Open Office Culture:

Employees can interact and collaborate easily, which not only improves productivity but also fosters a stronger sense of camaraderie
Colleagues can discuss and seek advice without scheduling formal meetings
Collaborative offices are vibrant spaces that emit positive energy and therefore uplift the innovation quotient
Making the spaces where employees spend a significant portion of their day more vibrant and energetic makes them look forward to hitting the office
Open offices reduce the cost of construction as walls,

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Project delays are one of the most alarming issues historically dogging the Indian real estate sector.

The dearth of effective planning and execution of construction activities, escalating construction costs, approval delays, diversion of allocated funds to other projects and tepid sales are some of the predominant factors resulting in project delays. The homebuyer is, of course, at the losing end.

To put it in numbers, during 2017, out of the total 5.8 lakh residential units slated to be completed across the top 7 cities in India, only 1.5 lakh units were actually delivered until December 2017. This indicates that around 4.3 lakh units actually missed their stipulated completion deadlines.

The National Capital Region (NCR), one of the country’s largest residential markets, was seriously wounded by sudden policy changes, structural reforms – and the dubious practices of unscrupulous developers.

As a result, it topped the list of cities with maximum project delays. Around 1.5 lakh units in NCR missed the 2017 deadline. The story in Mumbai Metropolitan Region (MMR) was no different with nearly 1.1 lakh units missing the said deadline.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The housing ministry’s decision to tweak the eligibility criteria for MIG-I and MIG-II home buyers for houses eligible for interest benefit under PMAY is a phenomenal move to boost sales of large-sized apartments.

As per the revised norms, MIG-I category home buyers with household income between ₹ 6 lakh – ₹ 12 lakh are now eligible for a subsidy for homes up to carpet area of 160 sq. m. from the earlier 120 sq. m.

Similarly, MIG-II category home buyers with household income between ₹ 12 lakh – ₹ 18 lakh are also eligible for a subsidy for homes with a carpet area of up to 200 sq. m. from the earlier it was 150 sq. m.

This change will have a significant impact on home sales in tier II and tier III cities where the land costs and therefore capital values of properties are low and larger apartments are within the reach of such buyers.

The timing of this increase in carpet area eligibility norms is perfect, as the RBI recently decided to revise the housing loan limits for Priority Sector Lending (PSL).

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

With the implementation of accounting standard – IND AS 115, real estate developers will have to do away with the existing percentage completion method and adopt project completion method.

This is not a mere accounting change as it will have a severe impact on the ways & means in which the real estate developers run business, raise funds, price and sell projects.

Under the percentage completion method (old accounting standard), advance payments received from a home buyer towards an under construction flat were considered as revenue and added to the company’s turnover and net income generated from such projects were treated as profits.

However, under the project completion method (new accounting standard), advance payments received from a home buyer towards an under construction flat will have to be treated as loans and not income from sales. This will bear the following impact:

Real estate stock prices may witness a significant correction – stock prices are a function of the company’s profitability and leverage. With changes in the accounting standards, the price-to-book value ratio will change and will bear an impact on the current stock prices.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The Goods and Services Tax (GST), a revolutionary tax reform rolled out in July 2017, has effectively replaced the previous Gordian Knot of multiple taxes like VAT, central excise duty, commercial tax, service tax, octroi, etc.

It has made India a ‘tax-neutral’ nation – and while it evoked a response best described as ‘mixed’ from real estate buyers, most of them are in favour of it.

This is natural, as the unitary tax compliance system has simplified the homebuying process – and with the passage of Input Tax Credit (ITC), there may not be a significant additional burden to buying a home.

Homebuyers in the affordable housing segment – specifically homes of up to 60 sq.m carpet area in size – have benefited significantly from the reduction of GST by 4% (from 12% to 8%).

However, even almost a year after GST implementation, the only real clarity that exists for property buyers is on the prevailing GST rate of 12% on under-construction projects.

There is still confusion about the amount of rebate that a prospective homebuyer is entitled to on the back of the pass-over of ITC.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Across the globe, 5th June is celebrated as World Environment Day, which is the principal platform of the United Nation to create more awareness and action towards protecting Earth’s environment. This day has a very special significance for the real estate sector

Over the past few decades, fast-paced economic development coupled with rapid population growth and urbanization has led to a rapid depletion of natural resources.

The accelerated rate of resource consumption and rise in greenhouse gases’ emission has resulted in significant environmental degradation. This has, in turn, resulted in climate change, the rise in average temperature and deterioration of air quality.

The building sector is one of the major consumers of natural resources such as water, energy and other raw materials. It generates a large number of wastes and pollutants during the three phases of its life cycle – construction, maintenance and deconstruction.

As per estimates, the construction sector consumes an approximate 25% of water and 35-40% energy, apart from other raw materials. Additionally, it emits 40% of global wastes and 35% of greenhouse gases.

by Prashant Thakur

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Located in south-eastern peripheries of Pune, Undri was once a small and unremarkable village outside the Pune municipal corporation limits. After opposition from residents regarding merging of Undri into the Pune Municipal Corporation (PMC) in 1997, it was demerged in 2002.

In 2017, Undri came under the purview of the Pune administrative authority – Pune Metropolitan Region Development Authority (PMRDA). Many residents of the region, whose primary occupation was agriculture, sold their land parcels to private real estate players, thus paving the way for rapid growth of residential and commercial developments in Undri.

Surrounded by micro-markets such as Hadapsar, Pisoli, and Handewadi, Undri offers relatively serene surroundings with thick green cover. It has good social infrastructural facilities including educational institutions, healthcare facilities, and entertainment options.

Various IT-ITeS establishments including Magarpatta City in Hadapsar, Eon Free Zone in Kharadi and SP Infocity in Phursungi have created massive residential demand in and around the regions, eventually hiking property prices in these areas.

Undri caught the spill-over demand from these nearby markets with its relatively lower property values.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

‘Small is beautiful’ is the new buzzword with Indian millennials when it comes to buying homes in cities like Mumbai.

These young professionals are less focused on size and look for homes in locations close or well-connected to their workplaces so that their daily commute is reduced and work-life balance is maintained. Compact homes are also low on maintenance expenses and are invariably very budget-friendly in all respects.

With the ever-increasing rents in a city like Mumbai, buying a compact home is also a very suitable option for several new citizens. Taking a small loan and paying up the monthly EMIs on an investment-grade asset which can be easily resold is seen as preferable to shelling out hefty rents.

On the back of this trend – and the prevailing market sentiment which is averse to overly heavy investments into residential property – apartment sizes in the Indian metros are definitely shrinking as developers increasingly deploy affordably-priced homes for which the demand is currently the highest.

In fact, apartment sizes have already reduced significantly enough to justify any and all measures that help maximize the usability of the available spaces.

Coworking Space – A Threat To Conventional Offices?

Indian Malls – Change Is The Only Constant

India Inc. Goes Global with Open Offices

NCR Real Estate Market Report: Can NCR Deliver On Its Promises?

Revised Flat Size Norms a Major Demand Boost for Larger Homes in Tier 2/3 Cities

Change In Accounting Standards – Impact On Real Estate

One Year Of GST – Good, Bad Or Ugly For Real Estate?

Green Buildings – An Imperative, Not A Choice

Undri, Pune – from Nondescript Hamlet to Residential Hotspot

The Low-Down On Compact Homes In Mumbai