Not just Gulf money driving Kochi realty market

A city with almost every household having one family member working in the Gulf, Kochi or Cochin’s resident population is waking up to new business avenues. This transition is also leading to a growing demand for commercial and residential property. What has transformed the once sleepy hamlet into a metropolitan zone is the fact that it is no more just the gulf money that is catalytic to the economy. Today Kochi is growing commercially with tourism and international trade. The IT industry is establishing a sound base here, and the demand for office spaces, hotels and retail outlets is increasing.

One of the most densely populated cities in the state of Kerala, Kochi has seen the real estate prices soaring with the influx of developers from other states chasing too little a land parcel and trying to get a bigger slice of the market pie. With the influx of foreign tourists, it is no wonder that the tiny city has developed an increasing need for real estate development.

Gone are the days of crowded apartments lining up the streets. The influx of developers from Bengaluru, Delhi and Mumbai has led to a fierce competition and the result is increasing thrust on the aesthetics, artistic excellence, high-end amenities and innovation forming an integral part of every residential project.

As per industry estimates, both demand and supply levels are balanced now and in areas where demand exceeds supply, prices are inching high. “Quite a few projects have been launched in the last one year, resulting in increase in demand,” says G Anil Kumar, General Manager, Operations, Southern Investments.

In the wake of the city being exposed to a few fly-by-night operators in the past, and instances like -a-Day Properties’ unethical practices, the Kochi property market is extremely wary of the deals now. There is no speculative buying seen today and the genuine end-users are active in the market, according to property consultants monitoring the market movements.

Prices have gone up by 20-30 per cent but are currently holding steady across micro markets, and it is unlikely to increase in the near future due to a combination of factors, say realtors. Consecutive hikes in home loan lending rates and dip in affordability have impacted the overall demand for housing with people postponing their decision making, believes industry watchers.
However, a section of property consultants maintain that since the market is divided between residents and NRIs, home loan rate hike may not have much impact as not all of them opt for home loans. The supply level for built units has considerably reduced, resulting in demand for new projects.

The high-end projects are finding ready acceptance in areas like Marine Drive as well as in neighbouring towns like Thrissur. For instance, Sobha Developers launched villas in the price range of Rs 2 crore and high-end apartments in the price range of Rs 70 lakh-1 crore, which is in demand. “There is a market for good quality developers and high-end homes,” feels P Ramakrishnan, Deputy Managing Director, Sobha Developers.

With the proliferation of educational institutions and medical facilities, there has been a constant flow of migration from other areas in search of greener pastures. The cumulative impact of all this is that Kochi is the most densely populated city in the state of Kerala.

On the commercial front, Infopark has ambitious plans to become one of the major IT Parks in the country. Established in 2004, it has already attracted investments from IT majors like TCS, Wipro, Affiliated Computer Services, OPI Global, IBS Software Services and US Technology. While upmarket residential demand has picked up, commercial property demand is yet to gain momentum.

The influx of several IT majors and MNCs in Kakkanad is instrumental for the surge in housing development in and around Kakkanad. While the real estate market is recovering, the developers are cribbing the new FSI norms bringing down FSI from 4 to 2.75 and the minimum road width has been enhanced from 5 m to 7 m which has pushed the land prices up for development.

Though retailing is yet to pick up as per mega city standards but retail rates are high on the main pockets of the city. However, there is lack of retail space in the city which is one reason cited for the surge in lease rentals for retailing.

A number of infrastructure projects under varying stages of implementation have given a virtual boost to the growth of all-round realty development. The roll-out of two mega infrastructure projects, the International Container Transshipment Terminal (ICTT) and the Smart City, have kicked off another round of upswing in the realty sector of central Kerala. The last such boom was seen around five years ago and had vanished three years later leaving the realty sector of the state in a state of gloom.

The ICTT and Smart City projects have given a new lease of life to the industry if brisk land deals in Kakkanad (where the Smart City is coming up) Edappilly, Kalamassery and Thripunithura are any indication. The average land value in the vicinity of Kochi city has suddenly jumped by Rs 50,000 a cent and in locations like Kakkanad the increase is around Rs 1 lakh a cent. The average per cent value in this area is Rs 6 lakh-plus now. According to real estate dealers, rich NRIs are now interested in buying a piece of land in the vicinity of the proposed Smart City as the current price is lucrative.

This upward trend in real estate in Kochi is an indicator of a healthy and reviving economy. In Jones Lang LaSalle’s World Winning Cities programme Kochi stands out as offering amongst the most favourable prospects of the India 30. The city offers shining possibilities across all sectors due to a favourable combination of wealth, connectivity, infrastructure, labour skills, low operating costs and tourist appeal.

Kochi’s USP
Booming tourism & international trade
ICTT and Smart City projects
Proliferating educational institutions
Medical facilities
NRI investment

Not just Gulf money driving Kochi realty market | Track2Realty || India's real estate e-newspaper
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  • Good introductory brief on Kochi market.
    Where can I get more info on Kochi commercial/retail market- rates, terms & conditions etc ?
    I dont see any discussion on IREF- any other links to find out more
    Or any reliable brokers to get in touch with ?
  • Lulu Group to invest Rs 350 crore at Kochi's Infopark

    Lulu Group to invest Rs 350 crore at Kochi's Infopark - The Economic Times
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  • Metro alignment to be revised for SmartCity

    KOCHI: A meeting of top officials and SmartCity authorities have decided to modify the alignment of Metro rail so as to provide access to the IT project.

    Earlier, the alignment, which was extended to Kakkanad, was to end outside the Infopark campus. As per the original plan, the alignment would turn left on the Edachira-Brahmapuram Road before ending outside the Infopark premises.

    But, now the alignment would turn right before ending on the road leading to SmartCity, thereby reducing the distance to the project site by around 500 metres.

    The meeting convened by chief secretary Jii Thomson also decided to construct a permanent bund across Kadambrayar. In the absence of a permanent bund, the SmartCity site would flood during heavy rains. Irrigation secretary V J Kurian, who attended the meeting, agreed to take measures to construct a permanent bund across the river.

    The SmartCity director board to be held on September 5 will decide on the day to inaugurate the first IT building. Officials with SmartCity said that the work was fast nearing completion.

    The construction of the four-lane road from Edachira to Brahmapuram will be over by August-end. An estimate of Rs 5.5 crore for the road from Brahmapuram to Karimugal has been submitted for the approval to the government. The government will give its nod for it soon, the chief secretary said.

    Meanwhile, the government has not yet issued a fresh notification to extend stamp duty exemption to co-developers of SmartCity. For the last six to seven months, the co-developers have been waiting to register land after the registration department insisted they pay the stamp duty for the same. Though the rules by the Centre clearly states that exemption can be given to developers as well as co-developers, the order issued by the state government in this regard did not have the term co-developers. As the co-developers are not ready to pay the stamp duty, they have not started work, SmartCity officials said.

    On Monday also, authorities promised to issue notification to extend duty exemption to co-developers.

    Metro alignment to be revised for SmartCity - The Times of India
  • Kochi grabs top slot as real estate destination: PropEquity report

    NEW DELHI: Just like their bigger counterparts, southern tier II cities have also outperformed their northern peers as top residential real estate destinations, with Kochi grabbing the top spot, according to a new report by property research firm PropEquity.

    "Much like tier I cities, northern tier II cities are also marred by project delays, expensive properties and a demand and supply mismatch," said Samir Jasuja, managing director and founder, PropEquity, adding, "Southern India ha ..

    Read more at:
    Kochi grabs top slot as real estate destination: PropEquity report - The Economic Times
  • This is in right time to invest in Kochi. Big players like DLF and Purvankara are generating good turnout of their inventory. The only challenge so far that I have faced is getting clarity from builders on clearance and permits for towers planned by new builders
  • M J Infrastructure plans Rs 1000 crore investment in Kerala realty sector

    KOCHI: The Bangalore-based realty major M J Infrastructure is entering Kerala and plans to invest Rs 1000 crore in the next two years.

    The company chairman and managing director Dr P Anil Kumar said the company has planned five residential projects , three in Kochi and one each in Thiruvananthapuram and Kottayam. The Thiruvananthapuram residential project is designed as a residential township with two separate segments of 86 villas and 96 apartments.

    He said there exists genui ..

    Read more at:
    M J Infrastructure plans Rs 1000 crore investment in Kerala realty sector - The Economic Times
  • Asset Homes to launch Rs 1000 crore worth projects

    KOCHI: The Kerala-based realty major Asset Homes is launching 12 projects in the state valued over Rs 1000 crore this year, taking the total number of projects implemented by the company to 80.

    Asset Homes managing director V Sunil Kumar said the new projects will include a healthcare cum residential hub in association with global healthcare chain BR Life group at SUT hospital campus in Thiruvananthapuram and an affordable housing project of about 850 apartments near Kochi.

    T ..

    Read more at:
    Asset Homes to launch Rs 1000 crore worth projects - The Economic Times
  • More opt to heat-proof homes in Thiruvananthapuram

    To beat the heat, many city residents have opted for heat-resistant roof and paints. Most of them do not find air conditioners affordable and such heat-proofing techniques are comparatively light on pocket.

    THIRUVANANTHAPURAM: To beat the heat, many city residents have opted for heat-resistant roof and paints. Most of them do not find air conditioners affordable and such heat-proofing techniques are comparatively light on pocket.

    "After covering our terrace with aluminium roofing sheets, temperature inside the house has come down dramatically," said Neethu Navas, a resident of Kowdiar. She was the first to go for additional roof in her colony, and now almost every house here has it. Sachin Abraham Joseph, who resides at Statue, too said temperature inside his house has come down by 7 degrees Celsius after installing roofing sheets and repainting the house with heat-resistant paints.

    "Every major paint brands now have weather-proof products. The demand for this type of paint, which reduces heat and dampness, has seen a considerable rise," said Chandra Kumar, managing partner of Devi Stores, a city-based shop. Though such paints can effectively bring down temperature inside homes by 10 degrees Celsius, they are expensive as compared to ordinary paints.

    "Aluminium and PVC sheets are the most preferred and effective ones. Now, we are witnessing a sudden surge in the demand for roofing sheets. The roofs can also protect the house from rain and possible leakage during the monsoon," says Abdul Faizy, owner of Brothers Engineering. However, he prefers traditional roof tiles.

    "Thatched roof with coconut palm leaves are the most suitable roofing solution for our climate. The next best alternative is traditional roof tiles. They do not absorb heat like concrete," says joint director P B Sajan of Costford, an eco-friendly construction company. There are special leak-proof and durable roofing tiles in the market, which make them more cost-effective. Aluminium roofing sheets too are popular, but the clatter they make during rains is a drawback.

    "A three coat painting procedure has to be followed, where 1 litre of paint could cover only an area of 10 square feet. In normal painting it could cover 100 to 150 square feet of area," said Chandra Kumar. Painting with lime coats can also save from heat, but it's not durable, he added.

    More opt to heat-proof homes in Thiruvananthapuram | ET RealEstate
  • Recession in Gulf ups demand for budget apartmetnts in Kochi

    City-based builders and architects said there were more takers for apartments in the 800-1,500 sq ft range, costing between Rs 40 and Rs 60 lakh.
    TNN | 22 June 2016, 7:35 AM IST

    KOCHI: The economic slowdown in the Middle East and uncertainties faced by the Malayali diaspora have led to an increase in demand for budget homes.

    The non-residential Keralite (NRK) and Gulf returnees are now more cautious about their investments, which has created a dent in the demand for premium and luxury segments in the city.

    City-based builders and architects said there were more takers for apartments in the 800-1,500 sq ft range, costing between Rs 40 and Rs 60 lakh.

    B R Ajit, chairman, Indian Institute of Architects (IAA), Kerala chapter, said the demand was too low in the city, particularly in the luxury and premium sector.

    "Other than NRIs, people do not have extra disposable income that can be invested in premium projects," he said.

    With the government and taxmen tightening their grip on black money, the inflow of money into the sector has also declined. "Black money is one of the main sources of funding in the real estate sector. About 30 to 40% of the black money has gone out of circulation in the country. Simultaneously, investment in the sector has also gone down in the state as well as in the entire country," added Ajit.

    Jortin Antony, a city-based builder, said that Malayalis living in Gulf countries were either losing jobs or did not have secure ones. Even people residing in UAE and Dubai "are not interested in investing in anything which cannot be traded for liquid cash within a few days".

    "The recession in Gulf countries has prevented many NRIs from investing in extravagant projects. Employees belonging to middle and lower income groups, who are returning from the Middle East, opt for budget homes or apartments," said architect L Gopakumar.

    Recession in Gulf ups demand for budget apartmetnts in Kochi | ET RealEstate
  • How to sell 3 BHK for less than 30 lakh

    A builder, who announced an upcoming project near Kadavanthra, was offering a three-bedroom apartment for Rs 26.62 lakh.
    TNN | 24 June 2016, 7:47 AM IST

    KOCHI: Builders are not known to be scrupulous while marketing realty projects. With the sector trying every trick in the book to gain some growth traction, many builders are announcing apartments that cost less than Rs 30 lakh within city limits.

    But once you approach them, the hidden charges become obvious. They will then reveal that they have charged only for the basic structure and the buyer will have to spend for fittings and other construction.

    A builder, who announced an upcoming project near Kadavanthra, was offering a three-bedroom apartment for Rs 26.62 lakh. But, if buyers need parking facilities, power connection, water supply, wardrobes and the like, they will have to shell out extra.

    A representative of the builder said, "We have obtained all permits and sanctions for the project. The price advertised indicates the construction cost. We have provided basic amenities. In the kitchen there will be a slab, pipe and sink. We provide all bathroom fittings and basic requirements like switches. We ensure that there will be provisions for fitting other electric and electronic equipment."

    He also pointed out that the buyer would have to meet 7% VAT, 6% service charge, contribution to the construction workers' welfare fund, expenses related to the functioning of apartment associations, and other mandatory payments stipulated by the government.

    Seena S, a school teacher and resident of the city suburb, said, "The advertisement gives a feeling that the apartment is affordable for the working class. Owning a home, that too in the heart of the city, is a dream. It's only when you talk to the builder that you realise the hidden costs involved."

    But, such 'gimmicks' do not come as a surprise for those who have been monitoring the real estate sector in the city.

    A V Antony, who has filed cases against builders for violating rules, said, "A closer look into the value of properties shown in the title deeds would reveal how prices are manipulated. When the property is undervalued, the government loses tax. These are some of the channels through which black money enters the economy. Buyers have to be cautious about the quality of construction."

    How to sell 3 BHK for less than 30 lakh | ET RealEstate
  • Auditors pick holes in Greater Cochin devpt body's defence of land sale to realtor

    GCDA executed the sale deed for the land parcel with Laina Roy, Sandeep Luis and Arun C Mathew, all partners of Blueone realtors on April 13, 2015.
    M K Sunil Kumar | TNN | Jun 27, 2016, 02.30 PM IST

    KOCHI: The local audit department has pulled up the Greater Cochin Development Authority (GCDA) for a land sale executed with a realty group in 2015 in which the per cent price tag was less than half of existing market rate. The agency sold 45.83 cents of land at Mathanagar in Kadavanthra at just Rs 8 lakh a cent, whereas the report by senior town planner of the agency had valued the land at Rs 17 lakh a cent.

    GCDA executed the sale deed for the land parcel with Laina Roy, Sandeep Luis and Arun C Mathew, all partners of Blueone realtors on April 13, 2015. As per the local fund audit, the loss incurred by GCDA on account of selling the land at a reduced price is Rs 4, 12,47,000. Had the land been sold at the market rate the agency would have fetched Rs 7,79,11,000. But the GCDA, which sold the land at the rate of Rs 8 lakh a cent could earn just Rs 3,66,64000.

    GCDA officials say that they had been forced to sell the land due to legal issues. In 2005, GCDA decided to sell the said land. During the auction, P A Naseer of Pathadippalam offered the highest rate which was Rs 5,25,000 a cent. Later, the original owners of land from whom the GCDA acquired the land moved the court challenging the sales citing that the land can be used only for the project said in the town planning scheme. Later, the court rejected the petitioners' plea in 2008.

    "Naseer had not taken back the amount he deposited as earnest money deposit (EMD) during the tender in 2005. On GCDA's part, the agency hadn't terminated the tender. So, Naseer came up with claim after the court disposing land owners case. At first, the GCDA, which was planning construct an auditorium in the said land rejected the proposal by Naseer.

    But he moved the court which ordered to consider his application for securing land," GCDA secretary R Lalu said. " Then we again invited tender after fixing the base value at Rs 7, 57, 589. During the tender Naseer offered the highest amount," he said.

    But, the local fund audit department questioning the explanation offered by the GCDA said If the development agency had gone by court order, they should have sold the land to Naseer and not to Laina, Sandeep and Arun, all partners of Blueone Realtors.

    "As per the application given by Naseer in 2005, he wanted to buy the land for constructing houses for himself and siblings. So, if the GCDA had to sell the land, the agency should have sold it to Naseer," said K T Cheshire, RTI activist, who lodged a complaint with vigilance department seeking inquiry into land deals by GCDA.

    "It is interesting to note that the same person had offered Rs 5.25 lakh a cent for the land in 2005. After 10 years, the increase in the land value is just 2.75 lakh," Cheshire said.

    Auditors pick holes in Greater Cochin devpt body's defence of land sale to realtor | ET RealEstate
  • Kochi to become a preferred real estate destination: JLL

    PTI|Jun 27, 2016, 07.39 PM IST

    NEW DELHI: Kochi will become a highly- preferred real estate destination in the country driven by various infrastructure development projects in the city, which has been included in the list of Smart Cities programme, says a report.

    "Kochi hits a six to become the next highly preferred real estate destination in India," JLL India said in a report.

    All potential drivers like IT development for job creation, metro rail, the Smart City tag for basic infrastructure, port-ba ..

    Read more at:
    Kochi to become a preferred real estate destination: JLL - The Economic Times
  • Eco-friendly homes, but costly too

    As people become conscious, they do not hesitate to invest huge amounts for buying a villa or an apartment that is advertised as eco-friendly.
    TNN | Jul 14, 2016, 12.30 PM IST

    KOCHI: It seems the mantra of 'go green' has struck gold and people are now keen to own houses that use non-toxic paints, burnt bricks, stones, wood and clay as construction materials. But to own an eco-friendly customized villa, designed in tune with nature, you should be willing to cough up over Rs 2 crore.

    As people become conscious, they do not hesitate to invest huge amounts for buying a villa or an apartment that is advertised as eco-friendly. Such projects highlight features like rainwater harvesting and water recycling, organic waste management, use of thermally-conductive materials like burnt bricks, stone, wood and clay which reduce dependence on artificial temperature control, energy efficient lighting systems, provisions for adequate natural light and cross ventilation, terrace gardens and the like.

    A reputed builder who launched eco-friendly projects said that a 2,700 sq ft 4 BHK villa with a two-car porch and seven cents would cost Rs 2.05 crore. Similarly a 1,450 sq ft 3BHK eco-friendly apartment will be available for Rs 62 lakh, a 1,700 sq ft apartment will cost Rs 72 lakh and 2,200 sq ft apartment will cost Rs 92 lakh.

    "We have taken every possible measure to ensure that the water table is recharged. While the apartment complex has huge sump tanks to store water, the villas will have individual tanks. We have even tested the quality of underground water, and obtained certificates that it is potable," said the representative of a builder.

    However, architects said that concepts like eco-friendly buildings have just begun to catch up. They point out that few people were aware of the advantages. "It is not easy to communicate these ideas," said architect Biley Menon.

    "People often do not understand how certain building materials and tree cover helps in reduction of energy consumption. Investing in eco-friendly buildings is not a bad idea. Such concepts have to be incorporated during planning and pre-construction stage," he said.

    However, environmentalists said that eco-friendly projects could be constructed at much lower rates. Green activist Arun Thadagath said such projects would be a success 'only if the use of steel, glass and cement could be kept at minimum. "We are yet to explore available indigenous technology," he said.

    Eco-friendly homes, but costly too | ET RealEstate