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Indian Real Estate News

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  • Re : Indian Real Estate News

    Office rentals to remain strong across Bengaluru, Mumbai & NCR: Report

    Office rental forecasts over the next twelve months have been lowered slightly to 3.3% in the second quarter of 2017 from 3.5% in the first quarter of the yearKailash Babar | ET Bureau | August 01, 2017, 16:30 IST

    MUMBAI: In the backdrop of strong demand from office space occupiers, commercialrentals in National Capital Region, Mumbai and Bengaluru will continue to outperform, said RICS’ India Commercial Property Monitor based on a survey. Of these cities, Bengaluru is expected to do better than the other two cities.

    Office rental forecasts over the next twelve months have been lowered slightly to 3.3% in the second quarter of 2017 from 3.5% in the first quarter of the year. This is due to a moderation in rent expectations for prime office space, though office rental forecasts are still seen up 6.3% over the next year.

    “Strong economic growth is generating demand for office space. The last two years 2015 and 2016 have been quite good for the segment with pan India office vacancy at its lowest over 5 years. Vacancy levels in some cities such as Bengaluru, Chennai, Hyderabad and Pune is around 5-10%,” said Sachin Sandhir, Global Managing Director-Emerging Business, RICS South Asia. “On the supply side, there is a shortage of grade A office space. It is less than half of the current office stock across top eight cities at 280 million sq ft. The gap between demand and supply of good quality office space Is keeping office rentals strong.”

    Retail properties in NCR are, however, expected to see significantly less rental value appreciation over the next year than their counterparts in Bengaluru and Mumbai.

    According to RICS, respondents are modestly bullish on capital values over the next three months. However, this is mainly driven by the office segment as the outlook for the industrial and retail segments are flat over the next quarter. Respondents, however, do expect capital values to increase across all market segments over the next year.

    When viewed at the city level, respondents revised capital value forecasts over the next year lower, particularly in Bangalore. Headline capital values are now seen increasing 3.9% over the next year after contributors forecast a 6.1% appreciation last quarter. However, this market is still seen outperforming Mumbai and the NCR where headline capital values are seen up 3.8% and 2.9% over the next twelve months, respectively, the report added.









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    • Re : Indian Real Estate News

      Home buyers still in wait-and-watch mode; industry sentiment negative: Report

      The future sentiments are positive but not bullish as stakeholders expect clarity, on policy issues, to come in the next six months.Sanu Sandilya | ETRealty | August 01, 2017, 16:26 IST

      NEW DELHI: Home buyers are still in the wait-and-watch mode, with sentiments in the real estate sector moving in the negative zone in the April to June period this year due to ambiguity over policy issues related to the real estate regulatory Act (RERA) and goods and services tax (GST), revealed a survey by Knight Frank India, FICCI and NAREDCO.

      However, the future sentiments are positive but not bullish as stakeholders expect clarity, on policy issues, to come in the next six months.

      "Stakeholders are of the view that the going forward the economy will reflect better results and become more transparent," said Samantak Das, chief economist and national director-research, Knight Frank India.

      Das feels increasing transparency levels and special status given to affordable housing, by the government will smoothen the flow of institutional funds into the sector, that too at competitive rates.

      Housing project launches have reduced to almost zero recently as companies were either busy focusing on completing ongoing projects or adhearing to new RERA and GST guidelines.

      However, nearly 68% of the respondents feel launches will improve in the next six months. "It is likely that these positive sentiments are triggered by the upcoming festival season and expected clarity on policy issues," said the report.

      However, 68% of the respondents feel that it will take time for buyers, marred by project delays, non-deliveries and litigations, to return to the market.

      Around 59% of the respondents feel home prices will rise in the coming six months due to increase in compliance costs due to implementation of new policies.

      "While the current sentiments are down, the future is certainly bright in the residential property market. The success for this sector lies in the proper implementation of government schemes by the respective states," Das said.

      With regards to the office real estate, around 64% of the stakeholders believe that new office supply will remain a challenge in the next six months due to project delays and lack of quality office space in key locations.

      This lack of supply is expected to put an upward pressure on rentals, according to about 86% of the respondents.










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      • Re : Indian Real Estate News

        RBI calls for single-window nod to affordable housing

        Slow clearances to such projects are "coming in the way" at the state level, RBI Governor Urjit Patel said, describing the PMAY as a "very important initiative".Shilpy Sinha&Kailash Babar | ET Bureau | August 03, 2017, 07:48 IST

        MUMBAI: The Reserve Bank of India governor Urjit Patel on Wednesday called for a separate single window mechanism for clearance of affordable housing projects as many are stuck at state government bodies.

        He said that affordable housing needs greater focus and has strong multiplier impact on the growth. Under the pradhan mantri awas yojana, government is targeting at housing for all by 2022.

        “We have mentioned that we could have stronger growth performance if some of these things are taken forward in particular removing infra bottlenecks, finding measures to reinvigorate private investment and provide thrust to affordable housing initiative of the government, which has a potential for very strong multiplier effects,” said Urjit Patel governor RBI at press briefing post announcement of the bi-monthly monetary policy. “Fair number of pieces of the jigsaw is already in places.”

        Affordable housing segment is booming with the push from government. According to industry estimate, disbursements in affordable housing of loans below Rs 10 lakhs have grown 43% in the last financial year. Overall housing loans grew by 23% while home loans above Rs 25 lakh saw a marginal decline of 1% during the last financial year.

        “I think, we need a time bound, single window clearance of this very important initiative, which has the potential for growth is going to come into place,” said Patel.

        Approval time usually ranges from six to 12 months. The process and time required for permissions is the same for all projects including affordable, middle income or luxury.

        In a report India Ratings had said that it expects demand for 25 million homes i.e, 4x of the entire current housing finance stock over financial year 2016-17 to 2021-22 in the medium income group and lower income group categories.

        Affordable housing finance largely for loan ticket size up to Rs 15 lakh will become a large segment for housing finance companies in the next five years, with the estimated share to increase to around 37% in FY22 said India Ratings and Research.

        "Town planning is invariably not very supportive of affordable housing. Factors such as density restrictions prevent developers from building small format homes. In Rajasthan, the approvals take around two months with single window clearance. I am surprised as to why this cannot be replicated in other states,” said Rajesh Krishnan, CEO of Brick Eagle that incubates affordable housing developers and funds their projects.

        According to Liases Foras, there were around 5,500 projects with apartments priced less than 30 lakh, while 10,000 projects were in less than 50 lakh price category across 60 cities of India as of March quarter end.

        “Approvals are a major issue in expensive property markets such as Mumbai Metropolitan Region, National Capital Region and Bangalore. It is not much of an issue in tier II, III and smaller towns. Apart from approvals, the biggest hurdle for affordable housing is expensive land prices,” Pankaj Kapoor, managing director of Liases Foras Real Estate Rating & Research.










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        • Re : Indian Real Estate News

          Farmers can now turn land along NHs into ‘highway nests’

          NHAI will allow access to these facilities from highways and help land owners get the land use changed from 'agriculture' to 'commercial' categoryDipak K Dash | TNN | August 04, 2017, 19:00 IST

          NEW DELHI: Farmers owning 2-5 acres along national highways can develop these land parcels into a 'highway nest' or 'highway village' with prescribed services ranging from quality food to clean toilets and comfortable resting facilities for travellers.

          NHAI will allow access to these facilities from highways and help land owners get the land use changed from 'agriculture' to 'commercial' category. "We will only be a facilitator. NHAI will pursue the case for setting up of fuel stations at these locations. These facilities will get the NHAI brand name and will have to comply with the service-level benchmark. We are not charging anything from them," highways minister Nitin Gadkari said on Thursday while launching the initiative to make farmland owners a part of the highway success story.

          These facilities will come up every 40 km. NHAI targets to set up 700-800 such facilities in the next one and a half years. Unlike western countries, most of the highway stretches in India lack good amenities for commuters. Gadkari said tourists have a harrowing experience when they don't find a good resting place even on tourist circuits.

          NHAI chairman Deepak Kumar said they have floated tenders for similar facilities where land is available with NHAI. The authority will set up 200 such facilities along NHs on franchise model and these will be operational in the next one year, he said.

          Highways secretary Y S Malik said the new facilities will offer an additional option to commuters to the existing 'dhabas'. "Only 30% of the land parcel will have construction and the rest will be circulation areas. People can park their vehicle comfortably and take a break," he said.

          Interested farmers will have to give the option based on the size of land. NHAI will chose land parcels which have more frontage areas on the NH.

          "The land owners have to invest and NHAI won't be involved in any manner," an official said.

          The NHAI chief said bigger land parcels will be qualified for highway village, which will have more facilities including rooms for short stay for passengers and dormitories for drivers, minor workshops for repair and village haat. Smaller plots will get the tag of 'nest' with relatively less facilities.










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          • Re : Indian Real Estate News

            Land with sick PSEs to be freed up for affordable housing

            The government has identified at least seven land parcels totalling over 2,500 acres where housing projects will come up. About half of the built-up area on these land will be “affordable houses”, sources saidDipak K Dash | TNN | August 08, 2017, 10:30 IST

            NEW DELHI: The government’s flagship affordable housingscheme is set to get a boost as Centre is pushing to free up huge land parcels belonging to sick and closing public sector enterprises (PSEs) in prime locations including in Gurgaon, Hyderabad and Pune.

            The government has identified at least seven land parcels totalling over 2,500 acres where housing projects will come up. About half of the built-up area on these land will be “affordable houses”, sources said.

            The identified land are 90 acres at Indian Drugs and Pharmaceuticals Ltd (IDPL) in Gurgaon, 29 acres at HMT Bearing Ltd in Hyderabad, 224 acres and 900 acres in Nainital and Burdwan respectively, 45 acres at HMT Watches in Nainital, 87 acres at Hindustan Antibiotics in Pune and 1,200 acres at Hindustan Engineering in Ranchi.

            The government has started the process of closing these loss-making entities and monetising their land which will be used to meet their outstanding liabilities.

            “The government is working on the best revenue model and also how affordable houses can be built at these locations. Whether these land can be sold out rightly or should be given on long lease will be worked in the next 2-3 weeks,” said an official.

            Sources said Niti Aayog CEO Amitabh Kant and housing and urban affairs secretary Durga Shanker Mishra held a round of discussion on Monday. They added the proper revenue model, process, bidding criteria will be firmed up in the next fortnight. National Buildings Construction Corporation (NBCC) is likely to be the the transaction advisor and project manager.

            TOI has learnt that at least 5,000 flats would come up in Gurgaon. “The housing project would be a mix of high-end dwelling units and affordable houses as well. A couple of successful projects will pave way for similar projects on lands available with similar PSUs and CPSEs,” a source said.

            The draft “Three-Year Action Agenda” of Niti Aayog has recommended the need to monetise the land in possession of the PSEs and to push the availability of land. “Many sick PSEs own large pieces of unused land in prime urban areas. Closure of these units can help bring substantial land into the market. The closure of a number of identified sick PSEs is underway and should be expedited.








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            • Re : Indian Real Estate News

              Occupiers prefer secondary business districts over old buildings in CBDs

              According to a JLL India report, the age difference between Delhi’s CBD vis-à-vis its SBD (Gurgaon Prime) is more than 12 years. Gurgaon is the preferred destination for corporates and MNCsKailash Babar | ET Bureau | August 08, 2017, 11:37 IST

              MUMBAI: Secondary business districts (SBDs) across the country are being preferred over the central business districts (CBDs) owing to more modern buildings that suit requirements of corporates and office buildings that can be upgraded into superior grade-A assets.

              “A look at different office markets shows how striking the average age of a city’s SBD vis-à-vis its CBD is. For e.g., in Mumbai’s case, the age difference between SBD-Bandra Kurla Complex and the CBD of Nariman Point and Fort area is a staggering 28 years,” said Ramesh Nair, CEO & Country Head, JLL India. “No wonder the CBD has shown decline in rents in recent years compared to all other micro-markets in Mumbai and corporates have shown consistent preference for the SBDs, especially BKC.”

              According to a JLL India report, the age difference between Delhi’s CBD vis-à-vis its SBD (Gurgaon Prime) is more than 12 years. Gurgaon is the preferred destination for corporates and MNCs whereas the CBD (Connaught Place) is preferred mostly by Indian firms and those having to liaison more with the government. Some of the more well-known names in Delhi’s CBD are expected to move to AeroCity.

              In Pune, the difference (of seven years) is still higher than that in other tier-I, II cities. While Mumbai and Delhi have been the traditional favourites of most Indian companies and MNCs – at least as far as setting up their Indian head offices is concerned, Bengaluru too has emerged as an IT and entrepreneurial hub in recent decades. Interestingly, the age gap between CBDs and SBDs in IT hubs is lower compared to Mumbai and Delhi, JLL said.

              Other cities that have seen more office space come up especially in the last 12-15 years are younger markets overall, which explains the lower age gap between their business districts. In some of these cities, especially Bengaluru, the CBD still has many pull factors unlike Mumbai and Delhi’s CBDs. The age gap in Bengaluru’s case is only five years as both the CBD and SBD started seeing developments around the same time.

              Like Bengaluru, Hyderabad too has an age gap of five years only between its business districts but the average age of its CBD (at 20 years) is five years younger than Bengaluru’s CBD. Kolkata (at 2 years) and Chennai (at 1 year) both have some of the lowest age gaps between their respective business districts. While Kolkata has the smallest grade-A office footprint in India, Chennai mostly has industrial parks with relatively lower demand for grade-A office spaces, the report added.










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              • Re : Indian Real Estate News

                Housing for all by 2022 faces 'slum challenge'

                The number of houses sanctioned for slum dwellers is just 2.2% of the total houses approved under PMAY, which includes interest subsidy initiativeDipak K Dash | TNN | August 15, 2017, 08:11 IST

                NEW DELHI: With the government sanctioning only 52,666 houses for the slum dwellers against the requirement of at least one crore houses under the in-situ scheme, the Centre's ambitious target to ensure "decent" dwelling units to all by 2022 seems to be on a slippery wicket.

                Under the in-situ development sub-scheme of PM Awas Yojna(PMAY-Urban), slum dwellers will get houses at the same location to ensure their livelihood is not disturbed. Though private investment is the key to such projects, the private sector has not come forward till now.

                The number of houses sanctioned for slum dwellers is just 2.2% of the total houses approved under PMAY, which includes interest subsidy initiative. The housing and urban affairs ministry recently submitted the details in Parliament.

                The Centre has set the target of two crore houses for the houseless in the next five years. According to official estimate, urban areas faced nearly 1.9 crore housing shortage in 2012. Reports also suggest there were little over one crore slum households across the country. Without ensuring slum dwellers are shifted to pucca houses, housing for all won't be a reality.

                The ministry said it has been urging states to do the needful and a meeting for a discussion will soon be convened.

                "Of the total number of affordable houses approved for construction in urban areas of about 24 lakhs so far, over 20% were for the benefit of slum dwellers. These include in-situ slum redevelopment for the benefit of about 53,000 slum dwellers and another four lakh slum dwellers having been sanctioned houses under other components of PMAY (Urban) like beneficiary led construction and affordable housing in partnership," a ministry spokesperson said.

                He added the issues concerning in-situ development are the attitude of slum dwellers themselves.















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