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The Real Estate India Pavilion will bring together several of the country’s leading real estate and property developers who will showcase an extended portfolio of high return commercial properties in India.

Shuckri Bundakji, Managing Director, DSL Exhibitions, said, ‘Our decision to hold the Real Estate India Pavilion as part of the Worldwide Property Show was made considering the exponential growth of the Indian economy and the resultant boom in the country’s property and real estate sector. Moreover, the Gulf and the UAE in particular have a significant number of potential investors who are interested in exploring viable high return investment opportunities in commercial properties in India.’

Anil Rana, Director, Voxpop Entertainment, who are in charge of managing the India Real Estate Pavilion said, ‘We are glad to be associated with a reputed exhibition such as the Worldwide Property Show and we look forward to reaping rich rewards at the event. The real estate and property sector across India has been flourishing in the recent years, reflecting the remarkable economic progress the country has been achieving of late. This creates an ideal scenario for us to present some of the most sought-after real estate India  projects to potential investors in the Gulf.’

Imagine a match without a referee. No rules are followed, Might becomes right. Fair play is abandoned. Star players are deliberately fouled. Pandemonium follows. This scenario is possible in any industry with regulations but no regulators.

Take the case of real estate India – a largely unorganized sector with a liberal sprinkling of small and big developers. While reputed developers have zipped through the learning curve to become professionally competent, many fly-by-night operators draw attention through their lack of transparency and inflated land bank claims. With no authority to put competitive market structures and regulatory frameworks in place, the situation could soon become a free-for-all.

Given the conditions, what the real estate India industry needs is an equivalent of cricket’s neutral umpire: An independent regulator with a clear mandate to ensure fair competition and protection of the interest of consumer, investor and the developer. This is necessary considering the real estate’s pivotal role in driving our economy by providing infrastructure, commercial, retail and housing facilities.

Courtesy: H.T. Business. Dtd: May 12, 2007

Over the past years, with more investment avenues opening up and offering better returns, investment in Indian real estate had taken a back seat. The reasons- price appreciation in real estate, and markets opening up with more sustainable demand.

Half a decade ago, we did not have a vibrant rental market for retail and commercial space. With increasing demand for retail space and office space, these two segments are witnessing improved rental yields and also attractive price appreciation in the field of Indian real estate.

With increased buoyancy, the Indian real estate market now falls in league with stocks, bonds, mutual funds, gold and commodities, and insurance policies as a viable investment option for investors in all categories- individuals, corporate, and funds.

Courtesy: The Times of India. Dtd: May 5, 2007

A PwC report estimates that demand from the IT / ITEs sector alone is expected to create 150 msf of space by 2010. “As demand for property is still very strong, real estate makes good investment decision” says Vishal Doshi, Senior Manager, Marketing, Kanakia Spaces. According to him, real estate has always been a long-term choice of many intelligent investors. Real estate India and investment experts caution against short-term investments, particularly in inflated markets as the market is still unsettled. It is another matter that prime properties will always fetch good returns. Bank FDs with higher interest rates are good bets for short-term investments.

Some experts call for wait and watch policy and advise property buyers to be on look out for property in India or any other location available on good terms. They caution against investing in overheated markets. Harsh Vardhan Roongta of Apna Loan.Com says that it is better to postpone the property in buying by about six months especially for investment as interest rates will further go up, there by dragging property prices down. But there are others who maintain that it is good time to buy property as real estate India sector is expected to remain subdued to stable in next months due to interest rates hikes and fund crunch to developers and end users.

Courtesy: Realty Plus Magazine.
April 2007, Vol. 3, Issue 8.

Dubai-based realty firm Al Fajer Properties on Wednesday announced its plans to invest up to $1 billion to develop commercial and townships projects in real estate India through joint venture route.

“We have looked at several locations-Gurgaon, Gujarat, Hyderabad, Mumbai and Chandigarh – for investments up to $1 billion thorugh a joint venture,” Al Fajer CEO Shahram Abdullah Zadeh said. Al Fajer is in talks with two real estate India developers in India and the JV is likely to be finalised soon, he said.

Besides, the firm also plans to create a real estate fund to facilitate investments by small investors in Dubai properties.

The company had received inquiries from small investors from India keen on investing in Dubai projects since it offered an attractive proposition to maximize returns with projected rental yield in excess of 20% per annum.

“Our decision to create an Indian small investor – focused Al Fajer real estate fund is in direct response to this demand.” Zadeh added.

Courtesy: The Times of India.
May 3, 2007

A watchdog or a monitoring panel has been suggested for regulating the realty sector to check fake advertisements’ inserted in leading national newspapers that invite people to invest in dream homes or real estate India. “Budding real estate developers have been flooding national dailies with fake advertisements, luring the aam aadmi’s hard – earned money,” said the Associated Chamber of Commerce and Industry (Assocham). “The government should set up a watchdog, or else a monitoring committee, to protect sweat incomes of aam aadmi and the upper middle class, including NRIs, as also to monitor actual project costs invest in real estate India, including use of standard building materials,” the chamber said in a statement.

Courtesy: The Economics Times.
May 3, 2007

One of the main villains in the overvaluing of properties and the resultant slowdown is the all-round land game being played by property developers, investors and government authorities.

Developers have been resorting to large-scale land hoarding in the name of scaling up their operations, resulting in unprecedented hike in the rates of plots and constructed property. Many projects of developers have not even taken off the ground for years. The government has now put brakes on the developers out to play a similar game in SEZ projects.

But what’s a matter of concern is that even government’s real estate India agencies like Delhi Development Authority, Haryana Urban Development Authority etc have also been encouraging land profiteering. They have joined hands with banks to fund applicants of draw of lots schemes for plots such in turn encouraging land profiteering. Agencies of real estate India have been auctioning plots at unprecedented rates. Recently HUDA set a record of sorts when it auctioned a hotel site in Gurgaon at Rs 1.7 lakh/sqm.

Courtesy: Realty Plus Magazine.
April 2007, Vol. 3, Issue 8.

So in the backdrop of soaring realty prices high interest rates, stock market volatility and firming up of bank of FD rates, the big question is whether investment in real estate still a lucrative proposition? Also when the real estate markets are in correctional mode and headed for value zone, it is equally important to know whether one should postpone the decision to buy property in India and whether one should hold on to the existing property or sell it off.

Anuj Puri, a strong votary of real estate investment says that even in the present scenario, real estate India is a best bet for long-term investment. It has stable income yields; moderate capital appreciation with tax benefits and security of having a tangible asset. Puri’s viewpoint is endorsed by the finding of a latest NSSO survey on asset purchases. It reveals that land occupies 38.5 percent of the total value of assets in India while buildings from 37.8 percent.

Maj. Gen. Jayant Varma, ED, (North) of Knight Frank India says that real estate investment will still be a positive investment particularly as the demand for residential and commercial real estate India is still fuming up with retail and IT triggering residential real estate boom.

In order to make home loan and education loan businesses more attractive for banks, RBI on Monday increased their limits under priority sector lending.

While the limit for home loan has been doubled to Rs.20 lakh from Rs.10 lakh at present, that for education loan has been increased to Rs.10 lakh for studies in India and to Rs.20 lakh for studies abroad from existing limit of Rs.7.5 lakh and Rs. 15 lakh respectively. This, a senior banker said, would lead to lowering of interest rates on home loan up to Rs.20 lakh by half to one percentage point. Real estate India might get some benefit form this scheme.

The banker said RBI’s step would prompt banks to offer more housing and education loans. Normally, loans to priority sectors are not considered attractive as chances of their becoming non-performing are relatively higher compared to the loans given to the non-priority sector.

But, in case of home loan, the experiences are different. The bad loan portion in this segment is very low –around 1%. Therefore, the banker said that banks would like to exhaust the quota of priority sector lending in the home loan segment.

Banks are suppose to lend 40% of their net bank credit to priority sectors. Out of this, 18% should be given to the agriculture sector. And the 22% should go to other priority sectors like small and micro enterprises and weaker sections. Loans given for repairs of damaged homes of families up to Rs.1 lakh in rural and semi urban areas and up to Rs.2 lakh in urban and metropolitan areas also qualify for priority sector lending.

Recently, to contain inflation, RBI had squeezed the liquidity which led to rise in the interest rates.

As realty prices have gone up manifold in the last couple of years, RBI tried to restrict credit flow, mainly to the commercial realtry, by increasing risk weightage.

RBI dropped the investment in venture capital from priority sector list. Till now, investment in venture capital was eligible for inclusion in real estate India sector, subject to conditions laid down by Sebi. Similarly, loans to software industry with credit limit up to Rs.1 crore has been dropped, which till now was included in the priority sector lending.

Courtesy: The Times of India
01-May-2007.

Eros Group plans to construct a mall in Dwarka. The company recently purchased two plots near of the Delhi Metro stations. Located in Sector 14, the Eros mall will be spread over three acres of land. With a built-up area of approx 1,70,000 sq. ft., the retail space will be spread over five levels. With two levels of car parking, the mall claims to offer world-class facilities and convenience including state-of-art escalators, glass capsule lifts, food courts & kiosks, central air-conditioning and hi-tech security systems. Real estate India developers are looking forward for more development in this surround area.

Courtesy: E.T. dtd. 29-Apr-07