Office Rentals Crash Across The Board

Grade - 1 Office rentals have crashed in Q4 2008 across India. Noida and Mumbai saw the highest fall while Bangalore and Kolkatta have seen the least, but they have corrected. The following chart shows Office Rentals / Month in INR across various Indian cities.
Source: Goldman Sachs property report

Tags: Office Rentals, Commercial Property, India Real Estate, Real Estate

More Affordable Housing Projects

Last week we broke the news about Affordable Housing in Mumbai - Part -1 and Part -2. Today we have more inputs on the affordable housing projects in Bangalore, Chennai, Delhi NCR, Hyderabad, Kochi and Ludhiana and Pune. All prices in Rs / sft

Affordable Residential Apartments in Bangalore:
Brigade Jasmine Bangalore J P Nagar Rs 3090
Golden Gate Properties The Commune Bangalore Banashankari Rs 2200
DLF New Town BTM Extn Bangalore Bannerghatta 2775

Affordable Residential Apartments in Chennai:
Puravankara Provident Cosmo City Chennai near Siruseri IT Park Rs 1722
Indiabulls Real Estate Indiabulls Greens Chennai Off OMR Rs 2700
Alliance Group Orchid Springs Chennai Anna Nagar Extn Rs 3199

Affordable Residential Apartments Delhi NCR:
Omaxe Panache Homes Palm Greens Greater Noida Sector Mu Rs 2500
Omaxe Panache Homes Royal Residency Ludhiana Pakhowal Road Rs 2700
BPTP Park Serene Gurgaon Sector 37D Rs 1995
Vatika Group Vatika Lifestyle Homes Gurgaon Sector 84 Rs 2554
Bestech Group Park View Residency Gurgaon Sector 23 Rs 3654
DLF New Town Heights Gurgaon Sector-90, 91 & 86 Rs 2250
DLF Express Greens Gurgaon Sector 1 Manesar Rs 2350

Affordable Residential Apartments Hyderabad:
Golden Gate Properties The Commune Hyderabad Tellapur Rs 2200
Indu Projects Indu Skies Hyderabad Shamshabad Rs 2100
JMD Group Grandeur Hyderabad Kothur Rs 2778
DLF Lake District Hyderabad Kokapet Rs 3143
DLF Hyderabad Kompally Rs 2800

Other cities:
Gera Developers Park View 1 Pune Kharadi Rs 2550
DLF New Town Heights Kochi Kakkanad Rs 2500
Omaxe Panache Homes Royal Residency Ludhiana Pakhowal Road Rs 2700

Greed in Stocks Destroy Traders Investors Wealth

The Investors / Traders Greed for Indian Real Estate stocks has destroyed their portfolio as the famous theory of Radio Active Decay applies to investing in this sector. We have actively covered how stocks have fallen Month over Month and the following screen shot [expandable image] of Live prices is a proof :-)
Real Estate in India is dominated by Shady people of the society - Politicians, Bureaucrats, Black Money Businessmen etc. The forthcoming election is seen as a strong chance for Realty Developers to lobby with the Government asking for doubling of income tax rebate on home loan interest to Rs 3 lakh from Rs 1.5 lakh, hiking the limit of income tax exemption on rentals from 30% to 50%. Apart from enjoying an infrastructure status, further demands of realty sector is under consideration of finance ministry.

Even if the government does what is lobbied for the demand in Indian Real Estate will not pick up immediately. When cash rich companies like Microsoft are firing employees to face the slowdown, Indian employers are under tremendous pressure and hence employees, the ultimate consumers of real estate will stay away. Indian IT is the Worst Employer in 2008 according to FreePress India.

What about Black Money local businessmen, won't they com forward to invest ? No not immediately because Developers have jacked up the prices to such an extent that RoI even for these businessmen is not seen viable.

Affordable Housing or lowering the prices by further 25% is the only solution to this problem. Otherwise, soft corner from RBI Governor will create a mini sub-prime bubble of Real Estate Developers in India if it fails to recover the loans given by Banks to these Shady / Greedy Developers [After all, its our Deposits which the bank has lent]

Mumbai Affordable apartments - Part -2

Yesterday we covered some affordable homes being developed in Mumbai. As promised here are more developers we have spoken to and are developing affordable homes.

Dharti Associates Sai Dham Complex Kandivali (W)
2 BHK 60.00
3 BHK 81.00
Evershine builders Evershine Classique Vasai (E)
2 BHK 22.47
3 BHK 30.35
Mantri Realty Mantri Park Dindoshi, Goregaon (E)
1 BHK 57.23
2 BHK 40.40
Greencourt Developers Greencourt Developers Orchid Vasai (E)
1 BHK 16.53
2 BHK 24.22
Mayfair Virar Gardens Vasai (E)
1 BHK 13.61
2 BHK 17.98
1 BHK - Ready possession 17.50
2 BHK - Ready possession 23.20
Rustomjee Evershine Global city Virar (W)
1 BHK 13.30
2 BHK 18.60
3 BHK 30.00
4 BHK 56.00
Kalpataru Srishti Sector Mira road (E)
2 BHK 46.93
2.5 BHK 42.48
Arrow Arrow City Manhattan Pen, MMR
1 RMK 5.80
1 BHK 9.75
2 BHK 12.40

Do let us know if you book with any of these developers, your experience. This will help many others as well. Thanks and Good Luck.

Unitech, Haryana govt spat over land for SEZ

Realty major Unitech, which is in the midst of a financial crisis, has blamed the Haryana government for lack of support in land acquisition for its Rs 22,000-crore special economic zone (SEZ) at Sonepat. The government's attitude has led to the project being put on the back burner, the company added.

On the other hand, the Haryana State Industrial and Infrastructure Development Corp (HSIIDC) has countered the accusation stating that the company has not shown any serious interest in acquiring land since the formation of the joint venture two years ago.

Unitech, in an alliance with HSIIDC, had announced setting up an SEZ in Sonepat on over 10,000 acres of land, proposed to be developed in four phases.

HSIIDC had 10% equity in this project and it had to acquire up to 25% of the land for maintaining the congruity of the project.

Affordable Housing in Mumbai

As most of you must be looking for Affordable Residential Apartments/ Housing in Mumbai, our team has managed to get the prices from various builders for Affordable Housing, most of them less than 25 lakhs for 2 BHK.

Here is the complete list, [all prices in Rs Lakhs]
Chauhan Group Chamunda Classic Dahisar - Mira road
1 BHK 24.00
2 BHK 38.96
3 BHK 46.75

Sanghvi Group Sanghvi Nagar Mira road (E)
1 BHK 17.55
2 BHK 21.75
Sanghvi Complex Mira road (E)
1 BHK 15.79
2 BHK 17.41
Sanghvi Park Mira road (E)
1 BHK 13.99
2 BHK 22.49
Sanghvi Valley Thane - Kalwa (W)
1 BHK 19.99
2 BHK 28.99
3 BHK 40.99
Shankheshwar Nagar Dombivli (E)
2 BHK 15.99
Sanghvi Nakshtra Nasik
1 BHK 13.44
2 BHK 16.00
3 BHK 24.90
Sanghvi Nisarg Lonavala
1 BHK 14.41
2 BHK 21.75

Stay tuned we are also talking to various other developers and we will update it shortly. Good Luck for your dream home.

FDI accepting realtors may be barred from non-FDI compliant projects

The impotent central government has finally got some guts to stand up, but against its own businessmen as it will not not allow real estate companies, which have accepted foreign direct investment (FDI) to continue keeping projects that are not compliant with new FDI norms.

As per the norms, FDI is allowed in real estate projects involving housing, Information Technology (IT) parks, hotels & resorts and integrated townships. Projects like shopping malls, etc are not allowed to accept FDI. In this wake, developers that have both types of projects and if they are accepting FDI, they may have to let go the projects that are not in the FDI permissible list.

The issue was taken up by the Foreign Investment Promotion Board (FIPB) and has been referred to Department of Industrial Policy and Promotion (DIPP). One of options for realtors may be to set up n special purpose vehicle (SPV), which can manage the projects where FDI is not allowed. The matter is now pending with DIPP and a decision is expected soon.

Delhi NCR Market Condition Worsens

The recent rate cuts have failed to stimulate demand and transaction volumes have literally dried-up. There are almost no takers for luxury apartments and most buyers in the mid-income segment find homes priced above Rs4m unaffordable. Buyers are still in a wait and watch mode and are expecting prices to correct further. Many are willing to buy only at prices 20%-30% below what sellers are quoting today.

Prices in the resale market have fallen by up to 25% and could decline a further 5%-10%. Some small developers who have failed to start construction on their projects even 1-2 years after launch are being forced to refund money to customers. In such cases there are several instances of bouncing of cheques issued by developers and developers issuing post dated cheques (due after 1.5 years).

In some cases, where developers offered assured return schemes to buyers of their office / commercial properties, developers are borrowing funds from banks to pay the assured return promised by them.

Developers not paying commissions due to brokers for over a year and defaulting on installments due for land purchased at high prices in auctions are other instances of the severity of the liquidity crunch being faced by the real estate sector.