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Sector poised to turn THE CORNER IN 2014-Sanjay Rastogi, Says

Year 2014 may pretty well be considered as the year of real estate maturity. 

    There is an all-pervasive view that after the general election in 2014, REIT, FDI in retail and a number of other funding options for the real estate sector will actually be put in place. 
    Real estate, after all, is a game of market sentiments and those sentiments can be revived within a few months on the back of sound economic fundamentals and market demand. Even foreign investors maintain that Indian economic fundamentals are worth a look—the worry is policy ambiguity which deters serious investors. Realty expert say that the decline in the number of launches will help property owners firm up their rents and also help new sellers in the resale market to demand more in capital value terms. 
    In the New Year, for the first six to eight months, growth momentum may not be the same as it used to be during the boom period between 2006 and 2008. However, economic indicators suggest that the market is poised for growth in the second half of the year after the general election in May 2014. 
    Buyers can be cautiously optimistic about a healthy recovery in the real estate market, as existing conditions favour a long-term investment horizon. While there may not be any corrections, buyers can bargain for some discounts on the quoted rates in new launches. 
    Investors and buyers continue to chase residential real estate assets, especially those properties which are mid-sized and priced reasonably and offer locational advantage and good infrastructure. While there is demand for affordable housing, premium properties too have attracted buyers in prime cities of the Delhi NCR, Bangalore, and Mumbai. However, most of the demand is in the Rs 3,500-5,500 per sq ft segment. 
    The depreciation of rupee provided a good opportunity to the NRI and high-value buyers of property in prime locationswhich improved the sale figures—although the bottom lines remained sluggish due to increasing cost of raw materials. Developers and builders expect development authorities like the Noida-Greater Noida authorities and the Yamuna Industrial Development Authority to settle land-acquisition issues of the farmers of Noida, Greater Noida, and Yamuna Expressway peacefully; this would improve the law and order situation in the area considerably and ensure smooth implementation of the projects lined up in these regions. 
    Rakesh Sharma, director of Antriksh Ideal Group, says: “Going forward, the supply situation will remain subdued due to the deferred completion of a number of new projects and reduction in number of launches across categories. Therefore, residential prices will see marginal increase in 2014. The supply levels are likely to improve in the second half of 2014.” 
    R K Arora, CMD of Supertech Ltd, says: “Year 2013 was a mixed bag of cheers and tears for the real estate industry. The uncertainties and the potential impact of Real Estate Regulatory Bill and Land Acquisition Bill continue to haunt developers, as these come with stringent penalties for delays, which are beyond the control of developers. The good news is the resolution of the land-acquisition issue in Greater Noida West; resumption of work there is music to the ears of developers and flat buyers. The long-standing demand of real estate industry for the central government to grant it the status of industry, which will help developers avail project funds from authorized sources among other things, needs to be addressed without delay in the New Year.” 
    Manoj Gaur, MD of Gaursons India Ltd, says: “The right product for the right market is one loud message coming out of Year 2013, and the developers who have done this research are doing well despite the slowdown. I am hopeful that the year ahead will be better than the current one, especially in the second half of 2014, when there will be clarity on the political and economic front after the general election. A lot is expected out of the next budget—the market sentiments will start changing thereafter.” Rakesh Yadav, MD of Antriksh Group, says: “The real estate is moving in the right direction despite a very stressful year. Policy makers will be forced to take cognizance of the contribution 
of the sector to the Indian 
GDP—it remains to be 
seen whether that happens 
with the next budget or after the election. But what can be vouchsafed is that managing the shortages is not the solution any more. The government has to take investmentfriendly steps to create surpluses now.” 
    Ashok Gupta, MD of Ajnara India Ltd, says: “There is growing evidence that though international investors and domestic investors seemed to target commercial property at the beginning of the Indian real estate boom, residential property is now more in demand. There are a number of reasons for this increase in demand for residential property, many elements of which are likely to continue for some time to come.” 
    Sushant Muttreja, MD of Cosmic Group, says: “While the Indian economy is expected to grow by 5% towards the end of 2013-14, this is well below the mark set during the boom time of recent years. Indeed, the RBI is forecasting that inflation will come down to around 5.3% by end 2014, which seem fairly high, but is certainly a major improvement on the current level of 6.5%. As a consequence, financial institutions are now limiting ready finance for the real estate sector.” 
    Deepak Kapoor, director of Gulshan Homz, says: “It is no surprise to learn that international and domestic investors are now targeting partiallycompleted developments, which only require additional finance to get them over the finishing line. So, taking account of the lack of new developments and the relatively small number of partially-finished developments, this will likely help maintain real estate prices in the short to medium term.” 
    Kushagr Ansal, whole-time director of Ansal Housing, says: “The Indian and Chinese economies have performed extremely well over the last five years or so, especially in light of the US mortgage crisis which impacted economies worldwide. Of late, there has been a slowdown in economic growth, which has perhaps caused many economists to rein in their optimistic forecasts from just a few months ago.” 
    However, the long-term dynamics of the Indian real estate market are still intact—a growing population, an expanding economy, increasing international investment, as well as a humongous middleclass which continues to grow even during these challenging economic times,” Kushagr Ansal says. 
    Rajesh Goyal, CMD of RG Group, says: “There is pent-up demand for a long-term real estate development in India. The economy is starting to improve again and inflation is set to fall significantly, which should ensure a steady long-term progressive Indian real estate market. There may be issues outside of the control of the Indian authorities but the dynamics required to expand the Indian residential real estate sector, as well as the commercial real estate sector, are certainly in place.” Vijay Jindal, CMD of SVP Group, says: “Though the realty sector made a promising start initially, compared to last year, the sentiment dampened due to rise in construction costs and rising rates of land and labour. Added to these woes were economic factors like plummeting rupee, abnormal rise in inflation and overall financial crunch faced by the end users—all of which made realty growth extremely sluggish. Let us hope the coming year brings a ray of hope that is beneficial for developers and buyers.” 
    Rahul Gaur, CMD of Brys Group, says: “Looking forward, the first half of the year 2014 may not be much different from 2013, but the second half promises to change the market dynamics. Developers also seem to have learned their lessons in the last four-five years, which saw the market tumble and started hurting our business. I think this will be a turnaround year for all the stakeholders.” 
    Gaurav Gupta, director of SG Estates, says: “Year 2014 looks to be the year of hope after a dull and average 2013. We hope to get a stable government by the middle of next year and, hopefully, inflation too will ease by March. As the rate of interest is at a peak, from here onwards it is expected to only fall. Also, it is expected that the new government’s policy will be clear on REITs and inflows may start in 2014. This will ease liquidity pressure, especially in commercial real estate.” 

    Kaushal Jain, MD of Arihant Group, says: “Homebuyers have complained about the high price rates of residential property this year, which is why demand did not take off as expected. This led to huge inventory pileup, which developers had to sell by offering freebies during the festive season. At the same time, realty players have also had to grapple with raw material costs as well as other external and internal development charges. The new government must come up with coherent and sustainable policies which will retain investors’ interest in the sector.” 
    Vikas Jain, MD of Sarvottam Group, says: “Year 2013 was full of ups and downs for real estate industry; rising inflation brought real estate to a low point while the land acquisition bill deepened the misery. But at the other end, REIT is a ray of hope for the industry to solve the liquidity crunch while the FDI in real estate could well be the biggest pacifier.” 
    Sanjay Rastogi, director of Saviour Builders, says: “Year 2013 started on a positive note with interesting launches across India and the sector was very much upbeat about a realty boom. But the industry was soon dogged by economic slowdown, falling rupee, escalating property prices, slow progress in infrastructural development and a host of other issues. All these came upon us at once and pulled down all hopes of a revival. Looking at the coming year, we expect some favourable and unbiased policies from the government so that we can bring up affordable housing for homebuyers.”

For more Information:-  Sanjay rastaugiSanjay Rastogi Builder,Real Estate IndiaReal Estate Company in India,  Affordable Houses in Noida , Residential flat in Ghazibad

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Over 150 million sq ft of new office space by 2017: CBRE

New Delhi: The commercial office segment of India’s top cities is expected to see fresh supply addition of more than 150 million sq.ft by end-2017. According to CBRE Research, the next four to five years (including the concluding months of 2013) are slated to see the completion of a number of under construction and planned commercial office projects—almost comparable to the existing Grade A office space of India’s National Capital Region (NCR) and its financial capital put together.

The top seven cities in the next few years, could, therefore, potentially see completion of office space worth the market size of yet another Mumbai and Delhi NCR. At this stage, it would be interesting to consider the exponential growth of India’s investment grade commercial office footprint over the last ten years. From a total Grade A office space stock of about 42 million sq.ft across the top cities in 2003, to the current market space of more than 400 million sq.ft—the sector has witnessed growth in excess of 800% over the last decade.

With respect to Asia Pacific, although Tokyo clearly sets the benchmark for office space development in the region, the supply growth anticipated in the commercial markets of Hong Kong and Singapore will nearly double that of Tokyo in the coming years.Going forward, however, the commercial Grade A office markets of Bangalore, Mumbai and the NCR are likely to observe some of the highest growth rates in the region.

These three metropolitan centers—together with the tier-II locations of Chennai, Hyderabad, Pune and Kolkata—have more then 150 million sq.ft lined up for completion within the next four to five years. Bangalore, in fact, would be comparable to the development patterns of Shanghai’s office market, while those of Mumbai and the NCR would be comparable to Kuala Lampur and Bangkok, respectively. Substantial opportunity, however, lies for further growth as the commercial office real estate space in the country’s major hubs continues to be lesser than other developed global cities, such as New York and London.

The three major metropolitan centres of Bangalore, Delhi NCR and Mumbai are slated to account for nearly three quarters of this planned supply, with Bangalore and the NCR alone expected to contribute to more than half of the total upcoming office space addition by 2017-end. Most of these are planned and under-construction IT/ITeS spaces. Gurgaon and Noida are likely to attract the maximum number of these projects in the Delhi NCR; and quite a few micro-markets in Bangalore too are expected to follow suit. While the Outer Ring Road (ORR) stretch is anticipated to witness more than half of the supply set to hit Bangalore in the next four years, the rest of the city’s upcoming office space will come up in the North Bangalore area, followed by Whitefield and Electronic City.

IT/ITeS development being fairly recent in Mumbai, in comparison to the other two major Indian cities, the metropolis accounts for lesser supply addition. The fact that the core city does not offer much scope for additional space creation, also adds to a comparatively conservative supply plan for office space. The peripheral business districts of Thane and Navi Mumbai are expected to witness maximum supply in the next four to five years, followed by the suburban Bandra-Kurla Complex (BKC), and the commercial micro-markets of Malad and Goregaon.

The period 2014–15 is likely to see the maximum share of this upcoming supply, since projects slated for a release during this period are both spill-overs of pent up supply from 2013–14, as well as planned projects already under-construction. With a considerable level of supply lined up for 2014–15, rental values of select micro-markets—such as Gurgaon, ORR, Thane and Navi Mumbai—are likely to remain under pressure.

While the total office space shares of the three main cities are anticipated to see a rise in the coming years—Bangalore is likely to occupythe maximum share, followed equally by Mumbai and the NCR—the tier-II locations of Kolkata, Pune, Chennai and Hyderabad are actually going to see a comparative slide, albeit slight; in the total share of commercial office space. In the long run, such a top-heavy growth pattern may prove unwieldy for India’s commercial real estate sector.Another indicative trend worth noting is the growth of urban sprawls across the top Indian cities, with commercial development spiralling outward from existing urban centers towards peripheral locations. Land value is usually considered to be the chief driver of development patterns; and when property values are lower on the periphery of urban centers,land is consumed at a faster rate as populations and businesses shift from urban cores to suburban fringes.

This projected expansion of India’s real estate sector, however, is subject to an effective utilization of the potential opportunities for growth, and implementation of relevant policy measures to resolve bottlenecks plaguing the industry.


For more Information Sanjay Rastogi,     Real Estate Developers in Delhi NCR      Builders in Delhi NCR       Email Us Or SMS :SAVIOUR at 53030

How to generate superior returns from property investment

How to generate superior returns from property investment

Investing in property requires sizeable capital. Several times, people who do not have experience and expertise in the real estate market prefer to stay away from it. They are aware that investing in real estate could be rewarding, especially at a time when other financial instruments such as equities, mutual funds and commodities have been generating average returns which are lesser than a good investment in real estate. So what is the solution? Should they just jump the gun, invest and run into uncalculated risks? Is there any other way? Here are some ways through which one can invest in real estate and generate hassle-free returns.

Real Estate funds

Often mistaken as Real Estate Mutual Funds (REMFs), these funds have no relation to the equity markets. REMFs invest in the shares of real estate companies listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Given this nature of investment, REMFs are intrinsically associated with stock market volatility. Real estate funds, at the other end, invest in real estate projects.

How to invest in Real Estate funds?

At present, there are six Real Estate funds operational in India: HDFC, ICICI, Birla, Piramal IndiaREIT, Milestone and Dewan Housing. Now the question is how to invest in these funds and what is the minimum level of investment?
Currently, only Piramal IndiaREIT Fund V is open for subscription. The fund aims to achieve the target of Rs 1,000 crore and has collected Rs 750 crore so far. “I think, the rest of the amount will be collected in the next two weeks,” said Dhiraj Mittal, chief executive officer, Prime Capital Services. The minimum ticket size for investing in this fund is Rs 25 lakh, and then one can buy units in the multiples of Rs 1 lakh per unit.

An investor does not need to pay the entire amount upfront. At first, he has to pay 10 per cent of the total amount, and then the rest of the amount in a period as specified by the Fund house. The payment is spread over several months.

What is the expected Return on Investment (ROI)?

“These funds generate post-tax annual returns in the range of 10-20 per cent. The returns may vary depending on the economic and business environment,” Mittal added. Also, there is a lock-in period of 6 years as well. Large and mid-cap funds, at the other end, generated returns to the tune of 6.31 per cent in 2012-13.

As per the company reports, the Piramal IndiaREIT Fund I which was launched in 2006, posted an internal rate of return (IRR) at 30.2%. Fund II posted IRR at 20.9 per cent. IRR for Fund III and fund IV have not been declared yet.

Who can invest?

As per the guidelines of the Securities and Exchange Board of India (SEBI), all Indian resident individuals, Hindu Undivided Families (HUFs), corporate houses, financial institutions and trusts are allowed to invest in the Real Estate funds. “NRIs cannot invest in such funds,” said Rajat Dhar, managing partner, Cogent Advisory.

For more Information Sanjay Rastogi,     Real Estate Developers in Delhi NCR      Builders in Delhi NCR       Email Us Or SMS :SAVIOUR at 53030

Saviour Greenarch Project Greater Noida West

Greenarch, a joint venture project by Saviour Builders Pvt Ltd. and New Way Homes Pvt Ltd., is one such project that meets your criteria of a luxurious home. Greenarch has been conceptualized by the renowned architect, Hafeez Contractor. The project is lavishly landscaped with dedicated areas and specific gardens for meditation, barbeque, yoga and sports. All in all, Greenarch fulfils all your desires of living a lush lifestyle. Being located at Greater Noida (West), Greenarch gets an edge as it is a two-sided open, corner and rectangular plot of 40,000 Sq. Mtr. The entire project is eco-friendly and faces 32,000 Sq. Mtr. lush green belt area. For more information

Three real estate investment hotspots for Rs 50 lakh in NCR

The NCR cities of Gurgaon, Noida and Ghaziabad still have a number of residential properties under Rs 50 lakh. Here are three locations, which you could consider from a 3-5 year investment horizon.

Sector 92, Gurgaon: As a developing area, Sector 92 in Gurgaon holds a promising future. It is accessible from the NH-8 as well as Pataudi Road. At present, some stretches, which connect this sector to the main roads, do not have proper roads and street lights, but the picture is expected to change once more and more people start moving into the surrounding areas. At present, there are several real estate projects that are near completion.

However, the area has a long way to go in terms of metro rail connectivity. IFFCO Chowk Metro Station, which is the nearest, is at a distance of almost 15km. “The sector is a part of the Gurgaon Master Plan 2021 which indicates that the area will get the necessary infrastructure,” says Pradeep Verma of Shine Properties.

The price of a 1,000 sq ft apartment in a multi-storey project ranges between Rs 48-50 lakh in this area.

Sector 120, Noida: It is a well-connected area with wide roads. Some large residential real estate projects have already given possession in the past few months and some are at the final stages of completion. A number of families have already moved into this area and there is limited availability of ready-to-move-in apartments in the resale market.

The sector enjoys easy accessibility to prestigious schools, hospitals and shopping centres. The nearest metro station, Noida City Centre, is located at a distance of 5km.

In Sector 120, the price of a 1,000 sq ft apartment in a multi-storey project would start from Rs 42 lakh onwards.

Vaishali, Ghaziabad: This location offers a number of options in both under-construction and ready-to-move-in properties. One can find a 1,000 sq ft single floor or an apartment in a multi-storey building within Rs 38-45 lakh.

“Vaishali has its own metro station and thus, is connected to all major parts of New Delhi, Noida and Gurgaon.


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Regularisation of unauthorised buildings in Govt. Land on Cards

Bangalore: Karnataka government has planned to introduce an amendment to the Karnataka Land Revenue Act 1964, to regularise unauthorised constructions of dwelling houses in government lands in urban areas, official sources said.

The amendment Bill would seek to insert a new section 94 CC in the Act, providing for grant of land in the case of unauthorised construction of dwelling houses in government land in urban areas.

Governor H R Bhardwaj had returned the Karnataka Land Revenue (Second Amendment) Bill, 2012, passed in both the Houses of the Legislature during the previous BJP government on the ground that “the amendment does not serve any public good or social cause. On the other hand, it may lead to illegal grabbing of government land.”

A team of advocates is studying the points raised by the Governor. Keeping in mind public interest, the government would draft the Bill again and introduce it in the Assembly.

Regularisation of constructions on government/revenue lands would benefit lakhs of households in Bangalore. The proposed legislation is aimed at regularising unauthorised occupation of revenue land belonging to government in urban areas with dwelling houses constructed, by granting the land to unauthorised occupants, the sources said.

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Largest Hub for Affordable Housing

Noida, Greater Noida, and Yamuna Expressway have vast tracts of land and are poised to facilitate the expansion of the NCR; in particular, they are expected to provide affordable housing to the burgeoning population of the NCR. PRABHAKAR SINHA writes

Noida Extension, now known as Greater Noida West, is one of the fastest developing areas and the largest urban development for affordable housing in the National Capital Region (NCR).

It is within an easy distance from central Delhi and Noida, and one can buy a two-bedroom apartment for as little as Rs 25 lakh here.

Around 2.5 lakh dwelling units are planned to be constructed on the entire area of Greater Noida West, which is being developed on 8,980 acres. According to the available data, around 50 developers are implementing over 60 townships and standalone projects in the area. When all the projects are completed in the next five years, the region will house a population of over one million.

The area is a big draw for end users as it is only 6km from Noida’s city centre and the commercial hub in Sector 62. It is also within easy commutable distance from workplace for thousands of people and accords a great opportunity to middle-class end users to own their own house here. The authority is now developing roads, sewerage, water supply and electricity, which are of world-class infrastructure grade.

When the project was started in 2010, rates of the apartments were around Rs 2,000 per sq feet. But due to the land agitation, the prices in the area went up and are now quoting at around Rs 3,000 per sq feet. But still, due to its easy commutable distance from central Noida and Delhi, houses in the area are in high demand. Any investment made in real estate in the area at the present rates, consultants say, will fetch good returns.

The developments in the Noida Extension took off in 2010; a period when builders faced a tough time due to the global slowdown, which impacted the domestic economy also. At that time, Noida Extension was planned as a hub for affordable housing with developers launching projects at very competitive rates, ranging between Rs 1,800 per sq feet and Rs 2,200 per sq feet.

Many developers also sold one-bedroom apartment for as little as Rs 10 lakh in the region. A two-bedroom apartment was available for Rs 15 lakh to Rs 18 lakh. Not only this, a three-bedroom apartment was selling for Rs 22 lakh to Rs 24 lakh.

A few hundred metres from this area, apartments are being sold at Rs 4,500 per sq feet. In this way, Noida Extension still provides affordable housing at highly competitive rates.

But later, due to the farmers’ agitation and various court rulings on the land acquisition by the Greater Noida authority in their wake, all the projects here ran into a period of uncertainty.

This led to a complete halt in construction work for more than a year. Later, the Greater Noida authority settled with the farmers after paying an additional amount. As the authority runs its business in a no-loss-no-profit mode, it passed on the additional cost to the developers.

The authority levied an additional charge of around Rs 2,250 per sq meter, which is almost 20% of the original land cost, on the builders. This led to increase in cost for the developers.

But the developers decided not to charge anything additional from existing buyers. Thus, to recover the additional cost imposed upon them, the developers have been forced to increase the price of the remaining unsold units. Developers say that as 20-30% of the units have already been sold, they have to increase the price of the remaining 70-80% of their unsold stock to recover the increase in cost of the entire project.

Manoj Gaur, the managing director of Gaursons, says that the developers have to increase prices only to recover the increased cost burden. The delay in the construction of the project also led to huge escalation in costs, as the price of steel, cement and other inputs have gone up during the intervening period.

At the same time, large developers, constructing big projects and with only a small chunk of their inventory sold prior to the problem in the region, can recover the extra cost imposed upon them by increasing the prices of their remaining unsold units by a small amount. But the same is not true for small developers, who have already sold a substantial chunk of their projects before the problem erupted in the area.

In general, developers have increased the prices by between Rs 2,700 per sq feet and Rs 3,200 per sq feet in the area. Even then, the rates for apartments here are still the cheapest in the NCR.

The Greater Noida authority has decided upon a number of measures to increase connectivity to the area. To provide direct connectivity to the existing Sector 32 (City Centre), the Metro line will be extended up to Noida Extension via Sector 72. The 7kmlong stretch will cost around Rs 1,400 crore, of which Rs 1,100 would be shared by Noida and Greater Noida authorities, depending on the territory falling under their jurisdiction. The City Centre Metro station, which is proposed to link Sector 62, would branch out at Sector 71 to take the line till Noida Extension.

A 100m-wide commercial belt is planned on one side of the 130m road as per the Master Plan 2021.

To meet the basic needs of the area, the Greater Noida authority is planning to set up its own power sub-station to provide 24-hour quality power supply. A 315MW power sub-station is going to be commissioned soon, while construction of a pipeline from Dehra to Greater Noida via the Upper Ganga Canal is almost complete, which will give a 24×7 water supply; Greater Noida will get 85 cusecs of water through this pipeline.

Keeping pace with established project innovativeness and with a mission to change the very face of this smart city, several developers have entered the real estate market here. To increase the commercial space in the city, the authority has allotted several institutional and commercial plots.

The Master Plan-2021 of Greater Noida, which has been approved by the NCR Planning Board, envisions a grand plan of expressways, major road networks and Metro connectivity. In the plan, 16% of the total proposed urban agglomeration has been earmarked for green zones.

Because of its attractiveness, a large number of developers have flocked to the area. The largest player in the area is the Amrapali Group, which is developing a number of townships in the area. The group has projects like Amrapali Golf Homes, Amrapali Verona Heights, Amrapali Leisure Park, Amrapali Dream Valley, Amrapali Leisure Valley, Amrapali Spring Meadows, Amrapali LA Residentia and Amrapali Centurian Park, among others.

Another big player, Gaursons Ltd, has over 250 acres of land in the region. The group is developing Gaur City 1 on 125 acres, Gaur City 2 on 115 acres, and Gaur Saundaryam over 17 acres. The Supertech Group, which is among the three largest developers in the region, has townships like Eco village 1, Eco Village 2, Eco Village 3, and Oxford Square.

Besides these, a number of standalone projects are being implemented in the area. Paramount Group’s Paramount Emotions, Mahagun’s Mywoods, Earth Infrastructure’s Earth Towne, Ajnara’s Ajnara Homes, Le Garden, Gulshan Homz’s I Homz are some of the projects in the area. Antriksh Group has launched Antriksh Golf link over 61,000 sq meters in Sector 1.

Source:Times Property – 11th April 2013 – New Delhi

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