- Bank lending to real estate slows down July 25, 2015
Banks have reduced exposure to the commercial real estate sector as it struggles with rising inventory
As the real estate sector continues to struggle with rising inventory and threats of a price crash in certain pockets, banks have also reduced lending to the commercial real estate sector.
According to Reserve Bank of India (RBI) data, between May 30, 2014, and May 29, 2015, lending to commercial real estate business grew at 7.5 per cent whereas in the corresponding period a year ago it grew at 17.8 per cent.
Bankers said the general slowdown in the economy coupled with the challenges in the real estate sector had led to slower lending. “General economic activity has been relatively low and that holds true for even commercial real estate business. Apart from this, there have also been concerns on the quality of projects which have been lower. So it is a combination of the risk appetite and also lower demand,” explained Jaideep Iyer, group president-financial management of YES Bank.
- Dip in Borrowing Cost to Boost House Purchases in 2015: Survey July 8, 2015
Mumbai: Declining borrowing costs, improving employment outlook and availability of affordable housing projects are encouraging prospective home buyers to purchase new properties in 2015, a survey has said.
According to a report by ZyFin Research titled ‘New Home Purchase Sentiment Index’, the regulatory changes including the recent Cabinet approval to the Real Estate Bill (Regulation and Development) are also expected to boost home buyers’ sentiment further.
The macro-analytics firm said the sentiment is gradually becoming conducive for home buyers this year compared to 2014.
There has been a significant rise in sentiment as the index stands at 43.9 in June this year compared with 30.7 in the same period in 2014.
- Inflation Priority Makes RBI Prepare to Mop Up Liquidity July 7, 2015
Mumbai: The Reserve Bank of India aims to drain money markets of excess liquidity to counter inflationary pressures arising from higher government spending, according to policymakers, though it could hamper chances of banks lowering lending rates.
Commercial bankers say it would be easier to reduce lending rates, as the RBI has urged them to do, if surplus liquidity prevailed for some months.
The liquidity surplus – now around Rs 35,000 crore has dragged the average call money rate down to close to 7 per cent this month. Some analysts expect it to reach Rs 30,000 crore to 50,000 crore ($4.7 billion to $7.88 billion) by August.
A senior policymaker aware of central bank’s thinking, who requested anonymity, said the RBI wanted to nudge the call rate up to nearer the 7.25 per cent policy repo rate.
- Is Indian real estate heading towards a tectonic shift? July 31, 2015
MUMBAI: JLL Research’s latest report ‘Is Indian Real Estate Heading Towards A Tectonic Shift?’ examines the transitions that India’s real estate has undergone over the past decade. Among the major trends is about companies migrating to offices in the suburbs and peripheral areas of major Indian cities.
“Mumbai has been an exception to the trend of office migration to Peripheral Business District (PBD) due to lack of supporting infrastructure and connectivity. However, the city witnessed a steady shift in office stock from prime Commercial Business District (CBD) areas like Nariman Point to Secondary Business District (SBD) precincts such as Lower Parel and Andheri- Kurla road. An exodus of offices out of CBD was sparked by lack of quality office stock and the complicated ownership structure,” said Anuj Puri, chairman and country head at JLL India.
The opening of Bandra-Worli Sea Link in 2009 enhanced connectivity from the island city to the suburbs while the Santacruz-Chembur Link Road (SCLR) and Mumbai metro projects improved east-west connectivity. The lack of any significant mass-transit projects along the crucial North-South corridor and to Navi Mumbai over the last decade has restricted the development of office districts in PBD precincts. This is evidenced by the modest increase in office stock in PBD as compared to SBD, said the report.
- Realistic Expectations to Boost Real Estate Demand: CII July 30, 2015
MUMBAI: Low cost housing will be possible with rationalization of taxes as tax collection from real estate has increased tenfold and consolidation of land prices which have increased by 4 times in last 5 years, mentioned Niranjan Hiranandani, Managing Director, Hiranandani Group of Companies while speaking at CII’s 7th edition of Real Estate Conclave 2015 held in Mumbai. He further stated that the corporate participation in the real estate market has helped in increasing the reputation of the sector. “The Hon’ble Prime Minister has a vision of housing for all by 2022 and the industry should make its objective to releasing it. The sector for a long time has been catering the high end demand in the market and needs to reassess its strategy with the 70% of the demand existing for affordable housing”, added Hiranandani.
In context to Mumbai, Hiranandani stated that the development of infrastructure with Cross Harbour Bridge, Metro connectivity, River project for 24 X 7 water supply and open spaces on the reclamation lands are required for growth of real estate. The 4000 acre of salt pan land in Mumbai alone can create 5 lakh units of at Rs 2000 per sq ft and improvement of the slums around the city with development in slum policy for making it effective can solve the affordable housing in Mumbai. The vision of Project Naina shared by the Hon’ble Chief Minister of Maharashtra is expected to add around 2 times the land area of Mumbai to the city making housing for all a reality, added Mr Hiranandani.
- Supertech Projects Sets new Construction Benchmark for the Real Estate Sector July 29, 2015
Everyone fantasizes about living life king – size, but that proposition has very few practical implications since the real world is very much dominated by the strong influence of a piece of paper which is widely now as money.
But what if life bestows you with the opportunity to actually live your dreams within your affordability range without any compromises? Although it sounds very far-fetched, it is not that far from reality. Super tech Projects have proved their shimmer of opulence in real estate with the launch of their first luxurious project, Micasa, positioned off the Thanisandra Road in North Bangalore, which extends over 1.75 acres of land reflecting Spanish architecture. Already available for possession, Micasa is a perfect township built with extravagance to pamper the residents with elite-class living amenities. With configurations of 2 and 3 bedroom apartments in 4 towers, Super-tech Micasa has been efficacious in redefining the concept of luxury homes in a very affordable range.
Supertech, a well-known real estate brand with a rich experience of 27 years, is well acknowledged for the panache of architectural spectacles and for exhibiting international quality standards. With the versatility of crafting residential as well as commercial premises, till date they have successfully converted 33 million sq. ft. accommodating 30,000 families in 33 projects with the honor of the ‘Udyog Ratan Award’ in 2001.
Supertech Micasa Thanisandra Road, Bangalore is stuffed with the prerequisites of ultra-modern amenities to ensure that you’re living with the highest luxury quotient. Landscaped Gardens, manicured lawns with driveway pavers, grasscrete parking, artificial rocks with pebbles and seaters, water curtain falls with infinity pool, entry plaza with banding paving driveway, berm mound with accent plants and much more with state of the art designs, help to accentuate your way of living.
- ‘Railways Must Exploit Real Estate, Besides Fare Hike’ July 22, 2015
MUMBAI: The railway ministry and the state government need to look for out-of-the-box solutions, including a fare hike, exploitation of real estate and subsidies to shore up finances of the suburban railways, which cater to almost 75 lakh passenger per day.
Affordability and sustainability are key to ensuring commuters are willing to pay the right fare and the operator is able to run the services without compromising on safety, maintenance and comfort.
A fare hike is a solution but not panacea for all ills. An official said, “A survey revealed that commuters are comfortable with only a 15% hike. This should be the first step, even though it will give us Rs 250-300 crore more, which still leaves the suburban railways with a loss of around Rs 800 crore.”
The official said the railways was subsidizing the cost of private enterprises by charging low fares.
He said, “If higher fares are charged, traders and corporates will have to increase conveyance allowance to retain their workforces.”
Mumbai is the costliest city in terms of real estate but the railways has failed to exploit its potential.
A senior MRVC official said, “In Mumbai, only 6.5% of the revenue is through fare box revenue. Of this, only 27% of it is through rentals from stall-owners. We need to create more commercial space at stations to earn good revenue. It is challenging as we cannot open a mall or shopping centre, even though people would find it convenient. But it may add up to congesting the station building.”
He said, “The Delhi Metro Rail Corporation (DMRC) is able to earn almost 20% from non fare-box revenue. The Hong Kong Metro earns 41% through exploitation of real estate.”