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Time To Home In On A Deal

Anshuman Magazine,Chairman & MD,, South Asia, CBRE
DELHI NCR: The National Capital Region (NCR) is among the most sought-after property investment destinations in the country. Noida Extension and parts of Greater Noida along the Taj Expressway are locations worth considering for price-sensitive home buyers. The Noida Expressway region offers a slightly higher price range, with significant ready-to-move-in units coming into the market this year. The area also awaits Metro connectivity. Gurgaon’s Southern Periphery Road offers more expensive apartment options, while the Golf Course Road and regions around it are an established high-end market. Faridabad’s Naharpar is an affordable housing location, awaiting Metro connectivity from Badarpur, which is slated to commence operations later this year. Quite a few under-construction apartment options are available in Ghaziabad’s Rajnagar Extension area and along National Highway 24 too. For investors with a long-term horizon, the Dwarka Expressway offers options from most major national developers. Gurgaon offers many investment options in the commercial segment — office buildings, IT SEZs, mixed-use development — with rental yields in the range of 9-10 per cent. Moving ahead, along National Highway 8, there are industrial/warehousing investment options along the Pataudi-Bilaspur-Taru stretch. Industrial space investment options are also on offer at the other end of Gurgaon’s Sohna Road, at Sohna’s upcoming Industrial Model Township near the Kundli-Manesar-Palwal Road.

 

G. Venkata Prasad, Former head, L&T Urban Infrastructure (Tamil Nadu); chairman, GVP & Associates

Chennai: For long Chennai’s residential real estate development was managed by local players. Major national players like L&T, Hiranandani, DLF, Mantri and Puravankara entered the picture from 2006 onwards.

The Chennai market has performed better than other metros, with 30,000 units being launched every year for the past four years. The city has also maintained a 10-month stock, considered healthy when compared to other metros. In the current year, the media set off panic about unsold stock, and the consequent negative sentiment has impacted sales.

The city’s southern region, particularly the Old Mahabalipuram Road (OMR) belt, also known as the IT Corridor, has grown substantially in the past couple of years. Considering the glut, stagnancy, both in pricing and absorption, could set in; investors should, therefore, be cautious if they are looking for quick returns.

However, one area on which the spotlight will be trained is the GST Road, specifically up to Guduvanchery/Maraimalai Nagar. It has industrial, IT and residential projects, along with educational institutions and, since it is well-connected to OMR, this area is high on the list of those looking for a locality to stay in other than OMR. Road and rail connectivity as well as the proximity to the airport makes it a hot spot to invest in.

Pankaj Kapoor, Founder & MD, Liases Foras

Mumbai Metropolitian Region:  The Mumbai realty market is risky. The inventory has grown from 71.6 millon in Q1 of FY09 to 150 million in Q2 of FY13 due to the continuing surge in launches.  The weighted average cost of a unit in Greater Mumbai and the Mumbai Metropolitan Region (MMR) stands at Rs 2.18 crore and Rs 1.3 crore, respectively. It appears that the ongoing correction will be prolonged — a 10-15 per cent dip over the next two years. So, it is not the best time to invest.
However, the eastern belt of Greater Mumbai that covers places like Byculla, Wadala and Sewri, priced in the range of Rs 13,000 to Rs 20,000 per sq. ft, has an edge over premium-priced places. Also, places such as Kurla and Saki Naka, not considered upscale, are likely to see an upside with the Metro giving them improved connectivity. The luxury segment is showing a price correction. Units costing above Rs 5 crore are most likely to show a further dip. Peripheral markets of Thane, Navi Mumbai, the extended western and extended central suburbs are poised for a correction to the extent of 15-20 per cent. Panvel may even see a larger dip. One of the basic reasons for this is lack of critical population density.
 

Pranay Vakil Founder, Knight Frank India; currently chairman, Praron Consultancy

Mumbai & International:  Contrary to popular perception, I would go with office/commercial property. This segment is at its lowest price and, therefore, poses the least risk. If one is able to invest in an office premise which is pre-let to a dependable ‘A’ class tenant, an investor can not only get recurring income by way of rentals, but make capital gains on a sale. Also, if the tenant is good and the lease terms favourable, selling, particularly to another investor, becomes a distinct possibility. Of course, an investment of this class presupposes the investor has in excess of Rs 10 crore.

In Mumbai, investors should consider buying into redevelopment projects of tenanted properties or flats for free sale that have come up as a result of slum rehabilitation. In the past, these have given good returns for both the developer and the investor. Developers like Omkar, L&T and Godrej Properties are taking advantage of these redevelopment opportunities and investors have got good returns.

Until recently, an individual could remit up to $200,000 per annum to invest in properties abroad. Although, this may not be possible at present, savvy investors can make investments through SPVs(special purpose vehicles). In places such as London (particularly Zones 1 and 2), investors have earned dollar-denominated returns in the range of 10-15 per cent. Dubai, too, is a possibility with prices cheap and the city seeing a turn around.

Sachin Sandhir MD, South Asia, Royal Institution of Chartered Surveyors

All India: In the real estate sector, while investments have come down, the potential for healthy returns exists. On the policy front, two measures — the Real Estate Regulation Bill 2013 and draft guidelines on Sebi (Real Estate Investment Trusts) Regulations 2013 — have the potential to change the fate of the sector. If implemented, these will not just bring greater transparency to the sector, they will help boost investments.

The supply of commercial spaces has grown relatively faster than demand in the past 10 months. Due to an oversupply in certain key markets, the capital values of office spaces have bottomed out. Rents, on the other hand, have remained stable or flat.

Residential real estate assets remain sought after among investors and buyers, especially mid-size properties which are priced reasonably and offer location advantage and good infrastructure. Premium properties too have attracted buyers in cities such as Bangalore, NCR and Mumbai. The focus for investors seems to be the Rs 3,500-5,500 per sq. ft segment.

Going forward, the supply situation will remain subdued due to the deferred completion of a number of projects and reduction in launches. Therefore, residential prices will witness a marginal increase in 2014. Despite a recovery in the real estate market, buyers can negotiate hard for discounts on quoted rates in new launches. 

Satish B.N.Executive director (South), Knight Frank India

Bangalore:  There appears to be a clear intention on the part of the Karnataka government to develop North Bangalore as a major hub for real estate activities in the city. Devanahalli Business Park, Bangalore Aerospace Park and the Information Technology Investment Region (ITIR) are some of the projects being executed by the government in North Bangalore, near the airport. The recently inaugurated six-lane elevated corridor linking Hebbal to the Bangalore International Airport has further enhanced North Bangalore’s connectivity. Hebbal has already developed into a prime residential and commercial destination and, given the scarcity of land, promises further price appreciation to potential investors.

East Bangalore is another emerging investment hotspot. Proximity to the Outer Ring Road, coupled with the availability of large, graded office space, attracted major IT/ITeS companies to the region. This fuelled the interest of home buyers and, today, the area’s landscape has transformed into a self-sustaining IT/ITeS hub with support infrastructure like malls, hospitals and educational institutions.

The residential boom in this zone has primarily been along Whitefield Road, International Tech Park (ITPL), Old Madras Road, Old Airport Road, K.R. Puram, Mahadevapura, C.V. Raman Nagar, Hoodi Circle and Indiranagar. Moreover, the widening of the Old Madras Road has considerably reduced the commute time to ITPL. The proposed Metro project, from Byappanahalli to Whitefield, will further boost the prospects of East Bangalore.

Sunil Rohokale, MD & CEO, ASK Group

All India: Rising inventory, sluggish demand, liquidity issues faced by developers, highly leveraged balance sheets of large developers, rising taxes and new regulations made 2013 a forgettable year.

The new year, on the other hand, offers a glimmer of hope as signs of a global recovery are on the horizon. Interest rates are likely to be stable and, as developers focus on liquidity instead of profits, home buyers can look forward to better deals. Markets like Pune, Bangalore and Chennai will offer good investment opportunities for those looking at a price bracket of Rs 50 lakh to Rs 75 lakh. In Bangalore, areas like Whitefield, Outer Ring Road, R.K. Puram, Hennur Road, Kanakapura Road and Sarjapur Road look promising.

In Pune, one can explore areas like Kharadi, Baner, Wakad, Hinjewadi, Bavdhan and Viman Nagar; in Chennai, regions such as Medavakkam, Pallavaram, Pallikaranai, Porur and Sholinganallur provide attractive investment options. For those with a larger budget, Mumbai and the National Capital Region (NCR) offer a wide range of investment options. Luxury and city-centric demand have dried up and one can see a correction of 15-20 per cent in these segments.

There is huge unsold inventory in the commercial, office and retail spaces as businesses have been holding back expansion due to the slowdown and pending elections. Post-elections, if the economy picks up, one can expect a flurry of deals. Bangalore is expected to lead in office space absorption in 2014, followed by NCR and Pune.

Surekha Bihani , Head, Transactions (Kolkata), Jones Lang LaSalle India

Kolkata: Rajarhat, near Kolkata, has several factors going for it. It enjoys good road connectivity with the Eastern Metropolitan (EM) Bypass and Belgharia Expressway, linking the suburb to southern and northern parts of the city. The airport is also close to Rajarhat.

The area has played host to both national and international developers — DLF, Unitech, Tata Housing, Shapoorji Pallonji group and Keppel Magus. In addition, regional developers like Shrachi, Belani, Shrishti and Bengal DCL are also active. The average capital value in Rajarhat for commercial spaces is in the range of Rs 3,300-3,600 per sq. ft; rent is in the range of Rs 30-35 per sq. ft per month. It could increase by about 15 per cent over the next five years.

Mahisbathan, between Salt Lake Sector V and New Town, enjoys the same connectivity features as Rajarhat. This area is finding traction due its location. The average capital value for residential property is in the Rs 4,100- 5,000 per sq. ft range. EM Bypass and Park Circus Connector have good commercial and residential projects coming up, offering investment opportunities. It has good connectivity to Kolkata’s CBD. Currently, work on the Metro is in progress, which will provide better connectivity to the airport. In addition, work on flyovers and widening of the EM Bypass are in progress with the BRTS to be implemented as well.

Overall, residential investments are good for holding on to in terms of appreciation of capital values in the medium to long term of 3-5 years as, within this period, infrastructure and other facilities are set to develop.


Source : businessworld.in                 Date :  21 Jan, 2014

21 Jan, 2014


 

By vayaM CS