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Hebbal to Tumkur road belt holds potential
06-Jan-2015
While the Outer Ring Road (ORR) has dramatically altered the development landscape in the north, east and south Bengaluru, in the west, it has helped connect the primarily industrial regions as well as the peripheral areas. This has led to a gradual residential spread over the years in the belt connecting Hebbal with Tumkur Road. The setup of the international airport has further aided development in the north-west towards Tumkur Road, thanks to comparatively lower rates and availability of land parcels too.
The north-west section of the ORR, from Hebbal to Tumkur Road, covers the areas Lottegollahalli, BEL Circle, Jalahalli, MS Ramaiah Road, Yeshwanthpur, Peenya, Chokkasandra, Vidyanagar, T Dasarahalli, Bagalakunte, Anchepalya and Nagasandra. This stretch of the ORR is densely populated and has traditionally been the primary industrial hub of the city .
Srinivasa Reddy, Associate Director Research and Real Estate Intelligence Services, JLL India, gives a snapshot of the region. “At present, this section of the ORR is surrounded by vacant land parcels and is predominantly an industrial area dominated by warehousing and industrial activity.These industries comprise large public sector units and various small-scale industries.There are no graded major operational commercialoffice buildings in this stretch of the ORR. The commercial base in the surroundings has been predominantly government offices, training institutes, small industries, and warehouses.“
Easy access brings locations closer
This location witnessed an influx of large domestic and multinational industrial entities. The elevated flyover over Tumkur Road leading up to Nelamangala considerably re. duced commuting time to the key business districts and also l provides easy access to the Nice , Road and the ORR. Travel time f to major arterial roads such as Hosur Road, Bellary Road and Mysore Road has also reduced s significantly .l Srinivasa Reddy says, “Locations in this belt are con. nected well to schools, hospi tals, malls and workplaces on the ORR as well. The improved . connectivity will lead to increase in residential property values in the future. The up coming residential projects here will attract buyers from the immediate surroundings due to improvement in the sol cial infrastructure.“
The Green Line of the Metro, going up to BIEC, will further promote connectivity in this region.
“After the completion of the underpass at CNR Rao Circle, it takes just 20-30 minutes to reach Yeshwanthpur from M G r Road as opposed to an hour ear lier,“ says Shabeer Sait, Exec utive Head of Operations, Irshad's Property Matters.
Locations in focus
Srinivasa Reddy says, “The availability of land parcels at relatively cheaper prices, improved connectivity, proximity to the airport and workplaces in Bengaluru north to prominent tech parks and availability of residential options at relatively cheaper price points compared to other locations are driving the real estate growth in this location.“
Shabeer Sait adds, “Some of the prominent locations between Hebbal and Tumkur Road are Byatarayanapura, Jalahalli and Yeshwanthpur.Presently , the areas in this belt are still primarily industrial areas with not much commercial activity.
Once this stretch is also made signal-free in future, it will boost connectivity and development in this region.“ According to research by Irshad's Property Matters, off Tumkur Road, the average unit size for a two-bedroom apartment is between 1,200-1,400 sqft and between 1,600-1,800 sqft for a three-bedroom apartment.Prices are in the range of Rs 5,000-5,500 per sqft.
Srinivasa Reddy says, “With an attractive investment proposition in the medium to long terms, the housing sector is likely to perform better. An investor should look at four to five years as minimum invest ment horizon in residential developments in the price range of Rs 4,000-6,000 per sqft.“
Outlook
According to Shabber Sait, once corporates move into the north, the west will transform into an attractive residential destination. He explains, “Many Special Economic Zones (SEZs) have been planned around the airport. Once the commercial infrastructure in the north is in place in the Information Technology Invest ment Region (ITIR), Airport City, Devanahalli Business Park and the Financial District the landscape of the west will change and it will be a premium area. We will witness significant demand for residential options from employees working in the north.“ Many mixeduse joint venture projects that have come up in the west have given a boost to demand for homes here too.
Srinivasa Reddy says, “North-west ORR continues to hold immense potential for further real estate development.The land values are comparatively lower in this part of the city. The planned Peripheral Ring Road (PRR) will lead to improved connectivity and also reduce travel time required to reach different parts of the city.The travel time required to reach the airport from Tumkur Road is likely to be reduced by 50 percent once the PRR is operational. Over the long term, this micro-market is expected to perform well as it emerges as one of Bengaluru's most promising growth corridors.“
Source: Magicbricks.com
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Upcoming ITIR, Devanahalli pushes Nandi realty
05-Jan-2015
The upcoming Information Technology Investment Region (ITIR) in the Devanahalli-Doddaballapur region is expected to push realty in Bengaluru. Nandi Hills, which was not seeing much real estate activity, has witnessed a revival with this development.
This infrastructure has brought positive changes in the locality, which has become a prime address for many who now look forward to investing in second or holiday homes here. A local broker in the area says, “Infrastructure growth has played an important role, as a number of people who wished to live in the core of the city and want second or weekend homes away from pollution and traffic but still remain connected to the city, have found a place in Nandi Hills.”
What attracts buyers?
“Those who bought villas here to use them as weekend homes expecting scope of appreciation in future. As the social infrastructure still needs to be put in place and with development happening, the area is expected to offer good returns in future.”
Nandi Hills offers clean air and beautiful environment free from pollution and traffic. At present, land here is affordable and with realty development the area is bound to appreciate. The locality is within 30 km radius of the Bengaluru Kempegowda International Airport. It also has good roads connecting it to the main city.
The cost of villas in Nandi Hills ranges from Rs 1.5-10 crore. Prices further vary as per the sizes and available amenities.
Buyer’s profile
The buyers in the area are industrialists, HNIs, upper-class families and NRI’s. Nandi Hills attracts investors who plan to settle down here later or garner healthy returns.
Is it the right time to buy?
Nandi Hills, located in North Bengaluru boasts good connectivity and is a hub of natural beauty, greenery, peace and has the right temperature. Being located close to the upcoming ITIR in Devanahalli, with proposed IT and SEZs coming up and availability of affordable land makes it a good time to buy here.
“If not as first home, then buying a second home here will be good. Among all my clients, majority of the people have bought holiday homes in the area to move in later,” says Fayaz Ahmed, consultant, Crescent Investment.
With major infrastructure development in the pipeline and many more physical developments expected to come up, Nandi Hills will benefit both investors and prospective buyers.
Source: Magicbricks.com
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Invest in real estate now, residential rates may rise in latter part of 2015
29-Dec-2014
Most real estate markets in India, with the exception of Bangalore, remained stagnant in 2014. Sales velocity stayed low. This was due to already high prices, poor buyer sentiment, uncertainty regarding the country's economic recovery and lack of confidence in one's job prospects. Only properties that were nearing completion appreciated as buyers sought to avoid the risk of delays.
Fewer new projects were launched in 2014 compared to the previous two years.While developers did not lower their rates, they reduced the size of apartments to decrease the ticket size and appeal to more buyers.
The Bangalore market, however, continued to hold up because most of the projects launched there were aimed at mid-segment buyers and prices had not turned unaffordable.
On a positive note, the absorption of office space in 2014 was 45% higher than in the previous year. "The increase in demand for office space indicates that the economy is on the mend. If this trend continues in 2015, it will have a positive effect on the residential market," says Sanjay Dutt, executive MD, South Asia, Cushman & Wakefield. According to a thumb rule, each 1 million sq. ft. of office space absorbed creates a demand for 8 million sq. ft. of residential space
Key takeaways from 2014
One of the major takeaways from 2014 for endusers was to avoid investing in early stage projects of builders who are financially weak. As sales slowed and financing became difficult to obtain, project delays became rampant. In 2015, buyers should opt for projects that are complete or nearing completion.
Investors who had bought many apartments in anticipation of flipping them found it difficult to hold on to their investments. Many were forced to exit at low or nil gains, or sometimes even at a loss. This brought home the risk of speculating and not having a sufficiently long investment horizon.
Outlook for 2015
If the economic recovery continues, sales may pick up gradually in 2015. Prices may, however, not rise in the first half of the year. "If we get a good Budget and the recovery continues, I would expect prices to move up in select micro markets in the fourth quarter of 2015," says Dutt. The already high price levels and pile-up of unsold inventories in the big cities will prevent prices from appreciating immediately.
Says Pankaj Kapoor, MD, Liases Foras, "Inventory levels have risen above 36 months in all the major cities, whereas efficient markets tend to have an inventory level of 8-12 months."
Potential buyers should not expect a sharp correction in prices. The increase in the price of land, construction and money spent on getting approvals has left developers with little room for cutting prices. Kapoor offers yet another reason. "Builders have depended heavily on investors to sell their projects. If they sell at lower prices now, those investors will feel cheated. Some may even default on payments," he says.
The current conditions offer end-users an opportunity to negotiate the best deals in terms of lower prices and better amenities. A variety of subvention schemes, which allow for deferred payment, are being offered. Make the most of them as they could be withdrawn once the market picks up.
Dutt suggests buying an apartment within the next six months. "The signs of a recovery are evident.
The sooner you buy, better the price you are likely to get," he says. Kapoor advises that you should buy in a market where the rental yield is higher than 3.5%. "If the yield is lower, it indicates that capital values have risen a lot already. This will limit the scope for future appreciation," he says.
If you are investing in realty now, have an investment horizon of at least five years. Those with the requisite risk appetite should identify a builder who is in financial distress. If you can get together with a few friends and negotiate a bulk deal, you could get a discount as high as 20-30% from such builders.
Source: Economic times
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What is Bengaluru doing to become a smart city?
24-Dec-2014
With the ambitious vision of Prime Minister Narendra Modi and support of the Urban Development Ministry in transforming new and existing cities as ‘Smart Cities’, Bengaluru is also making efforts to become one.
The concept of smart cities is to build smart townships to which few developers of Bengaluru are coming up with projects with intelligent social, economic and physical infrastructure. Such townships are targeted at meeting all the required features and facilities as of a smart township. A ‘Smart City’ does not mean having strong infrastructural development, communication and established social infrastructure. It also depends upon - will Smart Cities house ‘Smart Homes’ too?
An official from the Engineering department of the Bengaluru Development Authority (BDA) says, “The city has been taking initiatives to become a Smart City. One of the evident factors is the efforts taken by the city in offering Smart Homes with the use of extensive technology to make life simpler and more comfortable, reducing human efforts and at the same time ensuring being environment friendly too.”
How exactly will a Smart city look like?
Smart Features
Smart Planning: Availability of all day-to-day needs, workspaces, hospitals, sports academy, retail and schools all under one roof. Proper planning of a township ensures more space for residents along with more amenities and lowering the need to move out of your comfort zone.
Smart Water Management: Efforts to conserve water resources through extensive rain water harvesting, water recycling plants for landscaping and clean drinking water across the campus.
Smart Waste Management: Resource management techniques are being used such as organic waste converters which will convert the waste or garbage into manure to be further used in landscaping. Sewage treatment plants to recycle waste, water treatment plants and waste segregation for re-cycling.
Smart Energy Management: For efficient energy resource management, use of LED street lights, intelligent systems to monitor electricity usage in common areas and back-up for common areas are ensured in a smart township project.
Smart Transport: Smart transportation is encouraged within the township projects in order to minimize carbon emissions. Some of the features are availability of bicycles along with bicycle lanes for commuting within the township followed by eco-friendly shuttle service, electric vehicles for transport and their necessary charging points.
With each passing day, Smart Homes are becoming a reality across different parts of India with necessary infrastructure development efforts taken by the real estate industry.
Source: Magicbricks.com
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Mumbai, Delhi, Bangalore to be hot investment spots in 2015
10-Dec-2014
A stable government at the Centre and its plans to set up smart cities has revived investors' interest in the country with Mumbai, Delhi and Bangalore set to emerge as hot investment destinations in 2015. According to a report by PwC, titled 'Emerging Trends in Real Estate Asia Pacific 2015', the rankings for the three major metros, among the 22 cities surveyed across the region, have improved significantly as compared to last two years. While Mumbai climbed to 11th position, Delhi's ranking improved to 14th and Bangalore to 17th, indicating a significant improvement in investor sentiment in the country, PwC India Partner Gautam Mehra told reporters. In 2013 and 2014, Mumbai stood at 20th and 23rd position, respectively. While Delhi ranked 21st in both the years, Bangalore stood at 19th and 20th position in 2013 and 2014, respectively. "There is certainly a positive vibe complemented by the expectation of an improved economy and a more transparent environment, keeping interest levels up among investors," he said. The positive sentiment can be gauged by the fact that global real estate funds focused on India are seeking to raise USD 6 billion in new capital, on top of USD 1.6 billion raised in the first seven months of 2014 and most of this is aimed at residential projects, he added. In addition, there has been a significant rise in interest from large sovereign and foreign institutional players over the course of 2014. "There is excess liquidity across various jurisdictions in the market, which is looking at opportunities for investment and India is emerging as a promising destination. "Additionally, the expected developments around creation of smart cities focused on large scale manufacturing, and the roll-out of REITs, if implemented well, are expected to further add to the momentum," Mehra said.
Source: Moneycontrol.com
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City’s seamless connectivity pushes realty development
09-Dec-2014
Mobility is a social and economic need. It influences the way people are connected to their work, education, healthcare systems, leisure or social services-related destinations. Private motor vehicles, formal public transportation such as bus, suburban railway, Metro and Monorail, and informal transportation such as autos and cycling make up the entire gamut of urban transport mode. The concept of seamless connectivity introduces a new paradigm in urban mobility to ensure a sustainable, reliable, and well-integrated, high capacity public transportation alternative for the citizens.
Naveen Nandwani, Executive Director, Cushman and Wakefield, elaborates, “The multiple modes of public transportation that usually function in isolation are brought together under a single system, which will further enhance the user experience as a whole, and save time and money. As the movement of people shapes the patterns of urban development and future urbanisation, this seamless connectivity in urban transportation needs to be introduced in coordination with land-use planning and largescale infrastructure improvements.“
Advantages of seamless connectivity
An integrated transport network provides people with several options for transport that are efficient in terms of speed, quality, comfort and cost. Consequently, residents are not pressed for choices for residing, working, access to social infrastructure such as medical and educational facilities, or even for entertainment.
Naveen explains, “Cities with integrated and seamless connectivity can ensure that their physical and economic growth is not restricted to only pockets or stretches but is balanced and sustainable. Thus, a comprehensive development plan for any city focuses on the ease of mobility.“
Bengaluru -a perspective
There are various proactive measures taken up by the government of Karnataka to augment and expand the city's physical infrastructure and developing major infrastructure projects to encourage the overall economic development. The Bruhat Bengaluru Mahanagara Palike (BBMP) has about 3,500 km of road (including 250 km of arterial roads and 100 km of national and State highways), 38,000 intersections, 41,000 small roads, 162 signalised intersections, and 600 manual intersections.The Urban Local Bodies (ULBs) around the city have around 2,400 km of road network.
Srinivasa Reddy, Associate Director Research and Real Estate Intelligence Services, JLL India, says, “The city will be looking at significantly altering the 'radial through the core' traffic pattern by improvingdeveloping key 'rings' within city areas. The Outer Ring Road (ORR) is at a radius of 7-10 km from the city center, covering a total length of 62 km, and connects all major roads and highways in and around Bengaluru. However, over time, the ORR has almost become a city road, with local traffic, many signalled intersections and developments all around. Metro Rail project will also decongest the traffic on the city roads.“
Presently, the segments of Phase 1 between Byappanahalli and M G Road and between Peenya and Sampige Road are operational. Reach I is expected to be operational next year. The planned Peripheral Ring Road (PRR) will free up city roads and also the ORR by connecting key arte rial roads seamlessly.
Areas benefitting from seamless connectivity
The elevated expressway to the airport, the signal-free ORR, the elevated expressway to Electronics City and the Metro Rail are recent examples of seamless connectivity being increasingly promoted in the city. Srinivasa Reddy points out, “The areas benefiting from seamless connectivity are the ORR and surrounding locations, Bellary Road, Electronics City, Hosur Road and Tumkur Road.“
Naveen says, “Bengaluru requires seamless connectivity among city roads, highways and Metro services. Partial integration of different modes of transport can be witnessed in Hebbal, which is well-connected to the rest of the city through the ORR as well as to the airport through the expressway and frequent bus service.“
Pockets of growth
Partial integration has enhanced the development activity in and around Hebbal.Naveen shares some statistics of the growth the area is witnessing thanks to good connectivity . “Today, this location has nearly 10.30 million sqft of operational office space and another 4.60 million sqft is under-construction. Currently, 0.13 million sqft of retail space caters to the inhabitants of Hebbal as well as other locations in the vicinity. The residential activity has kept pace with the burgeoning commercial and retail activity , and nearly 3,000 residential units are under construction in Hebbal as of now.“
Srinivasa Reddy cites examples of how connectivity has benefitted locations around the city . “Office, retail and residential activity improved after the ORR become operational. In and around Bellary Road, residential and commercial activity improved and increased after the elevated expressway was ready, since the international airport was already operational.Tumkur Road is witnessing significant improvement in residential activity and improvement in demand for residential units due to the Metro connectivity. Hosur Road is witnessing improved residential and commercial activity due to the elevated expressway from Silk Board junction to Electronics City.“
Source: Magicbricks.com
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How to ensure good returns on your investment?
02-Dec-2014
After residential development the next buzz in Bengaluru is the spurt of infrastructure development projects. “Gone are the days when investments in real estate depended on new residential development, today’s buyer prefers to invest in that part of the city where infrastructure development is coming up, as it ensures good returns on investment and upgradation of the area as well,” says Akhilesh Singh, lead consultant, Plan B Capital.
Buyers are more optimistic about investing in and around areas where infrastructure development is proposed. The Mumbai-Bangalore Industrial Corridor (MBIC), the economic corridor between Mumbai and Bengaluru, Satellite Town on the Ring Road, Peripheral Ring Road, Devanahalli Business Park, extension of Phase 1 and 2 of the Metro Rail Project, announcement to lay several new roads connecting the suburbs to the Central Business District (CBD) are a few proposed developments across Bengalure which are driving buyers and developers interest in the area.
Infrastructure Development
ITIR in Devanhalli is expected to lift the real estate of Doddaballapura: With the development of multiple industries and IT parks under the Information Technology Investment Region (ITIR), Devanhalli is going to transform into a major IT hub, generating lot of job opportunities. “Progress in the construction work can be seen and completion of development is expected by 2017,” adds Singh.
A 2BHK apartment in the area is priced between Rs 35-65 lakh with sizes of 1000-1500 sq ft. One can buy a 3BHK unit at a starting price of Rs 50 lakh with size 1300 sq ft which goes above Rs 1 crore for a 3500 sq ft covered area.
Electronic City Elevated Expressway: Currently, the travel time between Silk Board Junction and Electronic City Junction is one hour which is expected to reduce to 10 minutes through the Elevated Toll Road. It is a 9 km long 4-lane Elevated Divided Carriageway ensuring smooth connectivity to Electronic City with different parts of Bengaluru.
Units of 2 and 3BHK are in demand in Electronic City. The price for a 2BHK unit starts from Rs 12 lakh for an 800 sq ft covered area and goes up to above Rs 1 crore for a 1400 sq ft covered area. A 3BHK unit commands between Rs 16 lakh to Rs 2 crore with covered area of 900-3000 sq ft.
Second phase of Namma Metro: The second phase of the metro which is under fast construction is expected to lift several areas of the city such as Hesaraghatta Cross, BIEC, Puttenahalli, Anjanapura, Bommasandra, RV Road and Nagavara, among others. These are areas that will be included in the metro stretch. “A lot of traction of buyers can be seen as they prefer to invest in areas near the proposed metro stations.
Increasing demand for both commercial and residential space in Bengaluru is due to the growth of IT sector and increasing infrastructure development. Investing in and around planned infra-development helps in reaping healthy returns on investment.
Source: Magicbricks.com
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IT Investment Region near Bengaluru to attract $20 bn
12-Nov-2014
India's first Information Technology Investment Region (ITIR) on the city's outskirts would attract $20 billion (Rs.1.2 trillion) investment and create millions of jobs, Karnataka Chief Minister Siddaramaiah said Wednesday.
"The upcoming ITIR project at Devanahalli near the airport is expected to bring in $20-billion investment, create four million direct and indirect jobs and generate $40 billion revenue annually when developed," Siddaramaiah asserted at an ICT event here.
The mega project, a joint venture of the central and state governments with the private sector, will be developed over a whopping 10,500 acres of land in two phases by 2032, overtaking the IT cluster in Silicon Valley in the US in terms of size and scale.
"I have reviewed the project and directed the nodal agency (KIADB) to acquire 2,072 acres of land for developing the first phase," the chief minister said, inaugurating the Bangalore ITE.biz and CeBIT India event at Bangalore International Exhibition Centre (BIEC) on the city's outskirts.
The Karnataka Industrial Areas Development Board (KIADB) has already issued preliminary notification to owners and farmers of the lands to be acquired around Devanahalli, about 40km from Bengaluru, for the mega project.
"Owners of the lands to be acquired will be paid compensation under the new land acquisition law enacted by the central government. The nodal agency can raise loan from Hudco for compensating land owners," Siddaramaiah said on the occasion.
The central government, which has approved the project, will provide funds to build world-class infrastructure, including road and rail connectivity, telecom and power.
As a joint initiative of the central and state governments to attract major investments in the IT sector, a part of the integrated project will be demarcated for the development of IT/IT-enabled services and electronic hardware manufacturing units.
Noting that Bengaluru has also emerged as the start-ups capital, next only to the US Silicon Valley, Siddaramaiah said many of them have started operating in data analytics, cloud computing and mobility space, auguring well for the digital economy.
"The outcome of the start-ups initiative of the state government in association with the IT industry representative body Nasccom has been positive and encouraging," the chief minister noted.
Referring to the 'Karnataka i-4' policy announced by the state government last year, Siddaramaiah said the novel initiative was aimed at giving a thrust to the growth of the IT sector in the tier-two and tier-three cities across the state.
The Vision Group on IT, headed by Infosys co-founder Kris Gopalakrishnan, has been providing valuable inputs to the state government in taking up initiatives for the growth of IT in tier-2 and tier-3 cities across the state.
The IT growth story of India is led by Karnataka, thanks to skilled professionals, dynamic entrepreneurs, a vibrant eco-system, and industry-friendly policies of the state, which accounts for 30 percent of the country's IT exports.
The state has contributed IT exports valued at Rs.1.80 lakh crore in 2013-14 fiscal.
Of the three million (30 lakh) software professionals in the IT sector across the country, about one million (10 lakh) are in Karnataka alone.
The IT industry contributes about 20 percent to the state's gross domestic product.
Source: Yahoo News
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Karnataka initiates process to acquire 10,000 acres for ITIR project
16-Oct-2014
Chief minister Siddaramaiah on Thursday directed Karnataka Industrial areas Development Board (KIADB) to issue final notification for acquisition of 2,072 acres of land towards developing Information Technology Investment Region (ITIR).
In a meeting with IT and industries department held at Krishna, CM's home office, Siddaramaiah reportedly told KIADB and IT officials that the project was one of UPA's flagship scheme and should be implemented in time bound manner.
The KIADB has already issued preliminary notification under Section 28 (1) of KIAD Act. When the board pointed out that it was facing financial crunch for land acquisition process, the CM said approach banks and government financial institution like Hudco for finance assistance for which government would stand guarantee.
The ITIR will is integrated investment region housing IT, ITeS and hardware parks, supported by residential townships, a mini airport, high-speed railway network, shopping malls, hospitals and educational institutions among others.
The project commenced in 2013 and will cover 40 square kilometres for which 10,500 acres of land is required. ITIR will come up in Devanahalli and Doddaballapur region. "The projected will be developed in two phases. The first phase will be developed between 2012 and 2020, and the second phase would be taken up between 2020 and 2032," IT minister SR Patil told TOI after the meeting.
The total cost of the entire project is said to be Rs 1 lakh crore. "The Centre is expected to provide Rs 7,000 crore towards infrastructure facilities like rail network, roads and telecommunication for the proposed ITIR project," Patil said. The minister also said the project would create 40 lakh job opportunities.
Soon after the project took off, over 55 software and hardware companies including leading names like Infosys, TCS and Wipro have evinced interest to establish their presence at the ITIR.
Source: Times of India
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Guidance value to shoot up by 20-30% from November
16-Oct-2014
Planning to buy a plot or flat? Hurry up, for the Karnataka government is set to increase guidance values by 20-30% from November. The revision will push up the minimum price at which a property is sold; consequently, transactions will attract a higher stamp duty and registration charge.
"We have had one round of meetings with stakeholders and are planning to hold two more. We are likely to finalize the new values by the month-end, " said N Prakash, inspector-general of registration and commission er of stamps, Karnataka. Guidance values, an indicator of the government's assessment of the market value of properties, were last revised in August 2013 by around 40%.
On Wednesday , the government issued a gazette notification to revise guidance vilification to revise guidance values. It published the draft of the revised guidance values and said people can give suggestions and feed back within 15 days. "Henceforth, guidance values will be revised annually as we have a permanent central valuation committee comprising officials of key government departments and representatives of industry bodies, "Prakash said. Registration of proper ties is among the top three revenue generators for the state, and the government is keen to tap this revenue source," a senior revenue official said, justifying the hike.
The state treasury received Rs 6,100 crore from stamp duty and registration charges during the last fiscal, and two-third of this came from registration of properties. With new guidance values in place, the government expects to raise an additional Rs 2,000 crore.
Realtors unhappy:
The real estate industry is obviously not amused. Realtors said increasing guidance values to bring them on par with market values in one go would scare away prospective buyers, especially from the middle-income group, as properties will become unaffordable.
"This revision is uncalled for. The market is still recovering from last year's sluggish growth. We thought the new government would offer some solace, but it's only coming up with a deterrent," said Vishwa Pratap Desu, vice-president, Brigade Group.
"I am not against increasing guidance values, but am concerned about how it is evaluated. The government doesn't have a scientific way to fix guidance value as it simply goes by the thumb rule of satisfying the state treasury .It would be wise to take the current market situation and bank rates and other factors into consideration, before deriving the guidance value for each area,'' said Prashanth Sambargi of Mars Realty .
However, revenue officials said current market values are about 30-60% higher than guidance values in Bangalore. "We are aiming to bring it to a standard 30%, "a senior officer maintained.
Realty primer:
There's a huge difference between the guidance value and market value of property in several areas of Bangalore, as also in other major cities and towns of the state. The central valuation committee has been continuously working to bridge the gap.
On paper, most properties are transacted at the guidance value, while money changes hands at the higher market value.
The guidance value for the stretch from Trinity Circle to CMH Road in Indiranagar is Rs 7,000 per sqft, but the market value is around Rs 22,000 per sqft. Similarly, a square foot of land in Jayamahal Extension remains Rs 10,000, while it is Rs 16,666 in the market.
Source: Times of India
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Infrastructure pushes commercial activity around Bangalore Airport
03-Oct-2014
Commercial realty activity is catching up in the northern locations of the city where the international airport is located. This along with plans for major upgradations is pushing growth in this region.
“Historically, this city originated from Yelahanka. Over a period of time, it shifted southwards and consolidated around the current fort located at K R Market area and parts of Basavanagudi,“ says Girish K S, Local Director Strategic Consulting, JLL India. While Yelahanka New Township was developed during 1970s, developments were largely confined closer to the city up to Hebbal Lake, with a few government defense establishments located between Mekhri Circle and Hebbal Lake.
With the finalisation of the location of the international airport at Devanahalli, 40 km from the city, this quadrant of the city came into the limelight with the announcement of a series of infrastructure initiatives supporting this project. “The new Kempegowda International Airport gets the highest credit for channelising development towards the north. The new airport being a large piece of regional infrastructure, the gov ernment has announced several other infrastructure initiatives as part of its support agreement. The major ones included the widening of Bellary Road, the expressway connecting Bangalore city to the airport, and rail link,“ explains Girish.
The Kempegowda International Airport has about 600 acres earmarked for landside development. In addition, The Karnataka Industrial Areas Development Board (KIADB) is developing Devanahalli Industrial Area over 3,000 acres, comprising an IT Park, Hardware Park and Aerospace Park, behind the airport.
“Post the relocation of the airport to the north, areas in this sub-market have been witnessing notable real estate activity. This region is anticipated to be the new upcoming commercial hub with infrastructure initiatives like seamless Outer Ring Road, Hebbal-Airport Expressway and broadening of Bellary Road enhancing the connectivity of this sub-market. Currently, this region houses over 10 million sqft of office space with a total vacancy of around eight percent and a further 5.30 million sqft of space is currently under construction. Areas with current and upcoming commercial developments in the north include Bellary Road, Thanisandra Road, Tumkur Road and the northern parts of the Outer Ring Road,“ says Naveen Nandwani, Executive Director, Cushman and Wakefield.
“Bangalore being the hub of knowledge-based industries in India, the key knowledge sub-sectors which dominate the city’s economy are IT-ITeS and biotech. Most of the occupiers of business parks in this region represent these two sectors. Some of the occupier categories like ITITeS, hardware and aerospace have also secured land allotment within the Devanahalli Industrial Area,“ adds Girish.
Key operational Grade-A commercial options in the commercial real estate segment are located at Hebbal and Outer Ring Road Junction. A Special Economic Zone (SEZ) here covers an area of 300 acres, of which about 107 acres have currently been used. The amenities offered within the business park include a day-care centre, fitness facilities, serviced apartments, hotel, food court and retail outlets. Another business park spread across 26 acres near the Hebbal Lake with a total built-up area of about 2.60 lakh sqft comprises mixed-use development. The park has commercial office space, a concentration of biotech industries and a hospital as part of the campus.
Yet another business centre at Nagawara is an integrated development over 80 acres, of which 26 acres are under SEZ and the remaining land is planned for commercial, retail and residential.The office precinct of this establishment is planned to have four million sqft of IT SEZ, and planned commercial office space is about 1.10 million sqft. Work on the project commenced in December 2010, and about half a million sqft of SEZ space is planned under the first phase. Another SEZ is set to develop over six lakh sqft of commercial office space under the first phase.
Thus, the total available commercial office space within this micro-market is around 6.76 million sqft and the proposed space is around 14.33 million sqft.
Source: Magicbricks
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Godrej Properties– M S Ramaiah Group to build 100-acre township in Bangalore
08-Apr-2014
Mumbai-based Godrej Properties has partnered family members from the M S Ramaiah Group to develop a 100-acre township in North Bangalore, sources privy to the development said.
Based on a 50:50 profit share agreement, the project will see the development of approximately 10 million sqft of residential space, including apartments, villas, and plotted developments.
Bellary Road, especially the Devanahalli suburb, has emerged as a hotspot for township developments given the availability of large land parcels. While Brigade Enterprises has launched a 130-acre township project in the area, Ozone Group is developing a 158-acre township.
The M S Ramaiah Group, founded by industrialist M S Ramaiah, owns over 400 acres of land very close to the Kempegowda International Airport, Bengaluru, in Devanahalli.
"One or two family members of the 10-member M S Ramaiah family have joined hands with Godrej," said a person aware of the deal. He added that the family is talking with other developers as well to monetize their land holdings in the area.
Pirojsha Godrej, MD of Godrej Properties, said this would be the company's third township project; the others are the ones in Ahmedabad and Mumbai.
Godrej is currently developing 95 million sqft of residential and commercial space across 12 cities in India.
In Bangalore, Godrej has a 1-million sqft apartment project in the city's IT hub of Electronics City under development, as well as a niche villa project, Godrej Gold County, on Tumkur Road, being developed along with film star Fardeen Khan.
Source: Times of India
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Commercial belts push premium housing in North Bangalore
04-Mar-2014
The international airport being located near Devanahalli pushed the city’s northern border from just before Mekhri Circle ahead by more than 30 km in a span of less than 10 years. The setting up of the international airport near Devanahalli was a turning point for this part of the city, with infrastructure initiatives taken up to ensure smooth, seamless connectivity.
The expressway commissioned and completed by the National Highways Authority of India (NHAI), the planned Phase II of the Metro Rail leading up to Nagavara and the proposed extension up to the airport in Phase III, along with the proposed three-laning of the Hebbal flyover, will connect prime locations around the north with key locations in other areas. The establishment of the Devanahalli Business Park, Airport City, IT and Hardware Parks has also given an impetus to the region. This has spurred hectic residential activity in localities around with several premium housing options.
Ram Chandnani, Deputy Managing Director – South India, CBRE South Asia, explains, “Land acquisitions and investments started happening in the north immediately after the announcement of the relocation of the airport and setting up of the IT, hardware, and aerospace parks. Connectivity through the Outer Ring Road (ORR), the signal free corridor up to Hebbal, construction of the elevated flyover and job creation through the establishment of a tech park brought locations in north Bangalore closer to the city.”
Factors pushing growth
According to Sanjay Chugh, Head – Residential Services (Bangalore and Chennai) Jones Lang LaSalle India, IT has been the major growth driver responsible for aggressive real estate development in the city. He elaborates, “Bangalore has been the fastest growing city in India over the past few decades. The IT hub of India, it has a multicultural population, good social infrastructure, excellent educational institutes and an improving physical infrastructure. Currently, the most promising residential micro-markets are ORR, Sarjapur Road, Whitefield and north Bangalore.”
He adds, “The city is also the third-largest real estate investment hub for high net worth individuals (HNIs) and tops the list in terms of investments from NRIs looking at settling down in India in the future. Home to over 10,000 individual dollar millionaires, the city has a large base of expatriates living and employed here. This has led to increased demand for high-end residences in the city, particularly in the Central Business District (CBD), Secondary Business District (SBD), Whitefield, north Bangalore and ORR submarkets.”
Demand for high-end options
Research by CBRE indicates that the major areas which have witnessed high-end housing demand include Hebbal, Yelahanka, Jakkur, Devanahalli and Hennur Road. Ram states, “Due to relatively cheaper land cost, developers acquired large tracts of land and offer high-end villas within gated layouts starting at Rs 2 crores. Numerous villa projects have sprung up across north Bangalore beginning at Rs 1.50 crores”.
Chugh explains, “Bangalore is one of the most promising markets for villa projects in India. Demand for high-end residential projects is expected to be steady over the next 12 months. Villa and row house developments are most active in the micromarkets of north Bangalore, Whitefield, ORR and Sarjapur Road.”
Source: Magicbricks.com
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Chikkaballapur to be made satellite city
09-Nov-2013
To reduce congestion in Bangalore, the government has decided to develop Chikkaballapur as a satellite city, chief minister Siddaramaiah said on Friday. Steps will be taken to improve road connectivity, sanitation and water facilities in the town, he said.
The CM was speaking at the inauguration of the rail service between Chikkaballapur and Kolar. Saying that all pending railway projects in the state will be cleared on a priority basis, he hoped that Karnataka will occupy a prime slot in railway transport in the coming years.
Railway minister Mallikarjun Kharge said the railway coach factory to be set up near Srinivasapur in Kolar district will provide jobs to over 5,000 people. The government has agreed to provide land for the factory, slated to come up for Rs 1,400 crore. Adequate funds will be allocated for the project in the supplementary railway budget, the minister said.
Chikkaballapur-Kolar link
The Chikkaballapur-Kolar rail line is part of the Yelahanka-Bangarpet narrow gauge line introduced by the Mysore maharajas. It was taken up for gauge conversion under the government's uni-gauge policy. Though the stretch between Yelahanka and Chikkaballapur was completed way back in 1996, the one between Kolar and Bangarpet was ready in 1998. Since then, there had been a persistent demand to complete the 85km-stretch between Kolar and Chikkaballapur. The project, which was delayed owing to fund crunch, has now been completed for Rs 440 crore. At present, only one trip each from Bangalore and Kolar has been planned.
Source: Times of India
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Coorg, a green escape in Karnataka
02-Oct-2013
If you find Ooty, Kodaikanal or Munnar a bit too touristy and crowded a destination in southern India, Coorg is that perfect holiday spot in Karnataka that is sure to please toddlers, youth and the old alike.
Not that this hill station needs to be chosen for a sojourn by eliminating other similar destinations in the vicinity. Just a three-hour drive from Mysore, 150 km away, Coorg district on its own has much to offer, beyond its coffee, cardamom, pepper and beetelnut estates.
There is much to see, admire and soak in at this hill station, which the locals call Kodagu, on the slopes of the Western Ghats, what with some pristine trekking trails, picnic spots, waterfalls, wildlife, woods, forests, valleys and some mouth-watering cuisine.
Situated at a height of 1,525 metres, Madikeri or Mercara is the capital of Coorg, with a nice bazaar, quaint houses with red-roofs and liberal use of teakwood reapers for doors and furniture, so common among homes and clubhouses in Indian hill stations.
It may come as a surprise to some that Coorg has one of the largest settlements of Buddhists in India, just about 30 km away from Madikeri, with their own Namdroling Monastery built in 1963, which the locals call the Golden Temple.
Once you enter the monastery, you feel transported into some other world in the Orient, packed as it is with some 5,000 monks in bright yellow and red robes, with some soothing Buddhist chants, smell of incense and breathtaking sights of pagodas.
After seeing those large golden statues of the Buddha and Tara, the intricate murals and Tangkha paintings, don't forget to taste some authentic Tibetan food here, especially the delectable momos and the subtle thugkpa, their noodle soup.
One is told it is the largest teaching centre of Nyingmapa - a major lineage of Tibetan Buddhism in the world - and the present Dalai Lama gave its shorter name, as opposed to Thegchog Namdrol Shedrub Dargyeling that this mesmerising place was called originally.
As far as the season goes, October to March -- like most places in India -- are the best months. The weather is pleasant with that welcome nip in the air. But Coorg during monsoons can be equally mesmerising and enchanting.
There are also plenty of places one can go to. There is Abbey Falls, not far, where one has to make his or her way through some dense woods, dotted with coffee bushes, trees and creepers, to suddenly find a cascading gush of water.
Then about 80 km away is the Iruppu Falls, right next to the Rajiv Gandhi National Park, also called Nagarhole, which is famous for its elephants, with a lot of other game and some 50 species of birds.
Children, especially, are certain to enjoy a visit to Dubare Forest, around an hour and a half from Medikeri. A ferry there takes you across to an elephant camp where one can see the pachyderms being bathed and fed, after which they are ready for a joy ride.
Talacauvery, around an hour away, is the source of the river Cauvery, with a temple to pay homage to this main source of water for some parts of Karnataka and Tamil Nadu. Not far is Bhagamandala, the confluence of three rivers: Cauvery, Kanika, and Sujyothi.
Another must-see is Tadiyendamol, which is the tallest peak in Kodagu and gives a breathtaking view of the entire Coorg, apart from the distant Arabian Sea. There is also the Naalkunaadu Palace built by Kodagu king Dodda Raja Veerendra in 1792.
After all this exploring, a bungalow at the plantation is perhaps the best place to retire. Toddlers can chase butterflies, and a hammock and freshly brewed coffee are sure to be at hand!
Source: Times of India
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North Bangalore – Emerging residential destination
27-Sep-2013
Bangalore north has become the epicentre of the city with the presence of the international airport in Devanahalli. A host of civic infrastructure projects to upgrade connectivity and promote seamless travel are further enhancing the dynamics of this region.
Analysts say with the completion of projects such as the six-lane elevated expressway and the widening of the NH-7 to an eight-lane highway in the long term, this region, with Hebbal as the nerve centre, will be seamlessly connected to every part of the city. Along with the planned high-speed rail link, the Metro and the Peripheral Ring Road, this will further augment connectivity and impact residential and commercial development in the region.
Impact on residential development
The focus on the peripheral locations in the north has led to increased residential development. Apart from improved connectivity, the comparatively lower land cost, availability of large land parcels, and potential for growth and therefore, capital appreciation, have led to the rise of a wide range of options for endusers and investors.
Swati Bakshi, an advertising and marketing consultant, who bought her first home last month opposite Iskcon Temple, feels that the city is becoming oriented towards the north. “We decided on this location as it is centrally located with good connectivity to the airport, railway station and to the Central Business District (CBD). It doesn’t feel like they’re isolated. Another reason to pick this location was the proximity to the upcoming Metro.”Obviously, connectivity is a major factor here.
“I have lived in Jayanagar since my birth so from my perspective, while the south has witnessed significant development, the north is better developed with wider roads. Rentals heading upwards and procedures such as the 10-month deposit led to our decision to move into our own home.”
Satish B N, Executive Director – South, Knight Frank India, elaborates, “The establishment of the international airport led to the anticipation of opportunities in the region, and the focus of real estate development turned towards north Bangalore. The interest of government agencies, corporate houses and the general public also picked up considerably.
The existence and the new IT parks in and around the Hebbal region coupled with active leasing by large IT/ITeS firms for consolidations/expansions has also led to a large demand for residential options here. Improved infrastructure and better connectivity is an added advantage.”
“Besides numerous infrastructure projects being planned by the government such as High Speed Rail Link and Metro, announcement of mega projects such as KIADB Park, the Information Technology Information Region and Devanahalli Business Park also triggered the rush to the north. Further, the Karnataka government has invited a number of corporates to set up their units/offices in north Bangalore, which will further provide an impetus to residential growth in the region,” he adds.
Localities in the spotlight
Research by Knight Frank shows that after the commencement of the airport and the subsequent improved connectivity, the Hebbal-Devanahalli stretch has turned out to be one of the fast-emerging residential hubs. Residential localities that will benefit owing to civic projects are Sahakaranagar, Amruthahalli, Jakkur, Yelahanka, Kogilu Cross, Bagalur Cross as well as the tangential Doddaballapur Road.
Satish adds, “Hebbal, and Thanisandra, in particular, have gained much importance as a residential destination with the launch of several high profile projects. The presence of a large operational tech park and business park has also made the northern markets preferred residential destinations, primarily for the employees engaged in the IT/ITeS sector.”
Other northern areas that have seen recent residential developments due to improved connectivity include Hennur Road and the Yelahanka-Doddaballapur belt. The launch of high profile IT parks/mixed use developments is a significant value-add for further growth of residential sector in the region. Yelahanka has also come up as a preferred residential market owing to its good connectivity with the airport as well as the city centre through NH-7.
Range of options
According to Knight Frank, the residential development in Hebbal largely consists of apartment projects while Yelahanka has both apartment projects as well as villas.
Hebbal has apartments in the range of Rs 4,250-10,000 per sqft. Yelahanka has apartments in the range of Rs 3,000-5,000 per sqft and villas are in the range of Rs 5,000-8,000 per sqft. The capital appreciation envisaged for Hebbal and Yelahanka is in the range of 15-18 percent per annum.
Source: Magicbricks.com
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High-powered panel to expedite land acquisition for ITIR
26-Sep-2013
As part of the next steps in the development of the Information Technology Investment Region (ITIR) in Devanahalli, Bangalore, the state government will be setting up a high-powered committee to expedite land acquisition and compensation modalities, according to informed sources.
The committee will be headed by Karnataka minister for IT, BT and S&T, S R Patil and comprise chief secretary S V Ranganath and senior bureaucrats. “The committee will look at ways and means to enable KIADB to acquire 2,072 acres of land including compensation to farmers, develop the land to facilitate to come up,” the sources said, adding that the committee's recommendations would be submitted to the Cabinet for formal approval.
The state government hinted at increasing recruitment of more locals in the thriving information technology (IT) sector in Bangalore by prodding IT companies by way of mutual agreements and commissioning a study by Nasscom.
This was informed by Patil on the sidelines of an event organised here on Thursday to discuss the problems of industries located in Whitefield Export Promotion Park.
He said, “We want to see more locals being employed by IT/ITeS companies and are looking at arriving at agreements with the companies, though I can't say more at this stage. We are also planning a study by Nasscom to assess the percentage of locals working in these companies at present.”
Patil also reiterated that the state's export of IT services would touch Rs 1,50,000 crore this fiscal.
Source: Deccan Herald
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It’s in North Bangalore where all the action is
16-Sep-2013
Smart growth is the buzzword for cities struggling to overcome the horrors of urban sprawl. 'New guard' urban planners at the Rio de Janeiro United Nations Conference on Environment and Development while accepting that growth and development would continue to occur, sought to put in place sustainable communities that are good places to live, to do business, to work, and to raise families. The aim was to facilitate residents' access to quality education to livable, safe and healthy places and stimulate economic activity.
Remarkably, these are the very parameters that are powering North Bangalore. Not since the introduction of software industry and the resultant emergence of Electronics City has any economic activity so recharged Bangalore as the new international airport at Devanahalli.
But what's working for North Bangalore is that the social infrastructure - good schools and hospitals - had started emerging in this area even before the airport came up. The main draw was the availability of large parcels of land at cheap rates. Many of these schools now top national lists and are, in many cases, the first choice preference of even third and fourth-generation Bangaloreans.
"The decisive difference is that in all other areas, including Electronics City, the localities sprung up first and the connectivity to the localities came limping along much later," said V S Surendar, joint MD of Standard Brick and Tiles Company which has entered into a joint development with RMZ Corp to convert a major part of their sprawling facility off the Bangalore International Airport road in Yelahanka into a bouquet of mall, multiplex, hotel, office space and residential complex.
Arjun Menda, group chairman of RMZ Corp was emphatic when he said that in five years the centre of the city would gravitate towards North Bangalore. "We saw this happening in Mumbai when the focus of activity shifted from Central Mumbai to the Kurla-Bandra region. In Bangalore too, far flung areas like Whitefield and Banashankari are bound to lose out. They are far from the airport and road connectivity is choked," he says.
Source: Times of India
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Land Acquisition Bill passed by Rajya Sabha
04-Sep-2013
The historic Land Acquisition Bill today moved another step closer to becoming a law with Rajya Sabha approving the legislation which seeks to provide fair and just compensation to farmers and to those who lose livelihood on account of acquisition.
The new law will apply to all Special Economic Zones to be set up from now onwards, the government said while rejecting apprehensions over it, saying states were free to improve upon it by even raising the requirement of consent from 80 per cent to 100 per cent.
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012, which got the nod of Lok Sabha last week, was passed by the Upper House by 131-10 votes with four new official amendments, proposed by opposition parties, including BJP.
The bill will go back to Lok Sabha for approval of the new amendments, which include dilution of retrospective clause with regard to acquisition of land for irrigation projects.
The bill, which will replace over a century-old law, stipulates mandatory consent of at least 70 per cent for acquiring land for Public Private Partnership (PPP) projects and 80 per cent for acquiring land for private companies.
It proposes compensation upto four times the market value in rural areas and two times the market value in urban areas.
Replying to a six-hour debate, Rural Development Minister Jairam Ramesh sought to address the concerns over the "urgency clause" in the bill, saying it is for use only in case of natural calamities and national security and cannot be invoked in case of land acquisition for private parties.
Compensation in this case will be higher, he said. Ramesh the government would not like multi-crop land to be acquired to the extent possible but it has been left to the states to decide the ceiling in this regard.
Responding to a host of issues raised by members and concerns expressed, he promised to accommodate the maximum possible the suggestions in the rules to be notified for the new law.
At the same time, he said the new law may be amended after three-four years if the next government wishes. "I don't think there is any room for amending this law," he said.
Giving details about the bill pushed by Rahul Gandhi, the Rural Development Minister said the new law provides for compensation not only to the farmers but also to the landless people who may lose their livelihood.
There is a separate clause for dalits and tribals, he said about the law which will replace the Act of 1894.
He underlined that under the earlier law, land could be acquired after "consulting" Gram Sabhas while the new legislation provides for "consent" of Gram Sabhas.
Source: Economic Times
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Karnataka government accepts group report on ICT
01-Sep-2013
The State government has accepted the report submitted by the Karnataka Information and Communication Technology Group-2020. Headed by T.V. Mohandas Pai, the group has recommended establishment of IT satellite towns in and around Bangalore, and improving infrastructure in Tier II and III cities to meet the needs of the IT industry.
Minister for Information and Technology S.R. Patil on Saturday said that the government had constituted the group to study and recommend to the government a strategy to be evolved for the comprehensive growth of the IT industry in the State.
PHASED IMPLEMENTATION
“The government is committed to implementing the recommendation of the group in phased manner,” the Minister said.
FOCUS ON TIER-II CITIES
The government would accord priority for the development of the IT sector in the Tier-II cities, including Mysore, Mangalore, Hubli-Dharwad, Belgaum, Shimoga and Gulbarga, besides Bangalore. Incubation centres would be established to help setting up of the new IT-based industries.
TRAINING ABROAD
In a related move, the State government would send 25 young entrepreneurs abroad every year to undergo training to establish IT companies. “The government will spend Rs. 1 crore on each entrepreneur who will be sent abroad for training,” he added.
PERFORMANCE LAUDED
Appreciating the performance of the IT companies in the State at the time of global recession, Mr. Patil said that the total exports of the IT companies had touched Rs. 1.36 lakh crore, which was 36 per cent of the country’s total exports in the IT sector. He said that all support would be extended to the stakeholders of the industry to ensure its further growth, and he added that the exports are likely to touch Rs. 4 lakh crore by 2020.
Minister for Information and Technology S.R. Patil said that the Union government has given its nod for setting up of the Information Technology Investment Region (ITIR) on 1,500 acres of land between Devanahalli and Doddaballapur. He added that the government had issued the preliminary notification to acquire 2,072 acres in the first phase.
The government was considering offering a portion of the developed area to land owners and the extent would be decided in the next Cabinet meeting.
A sum of Rs. 7,000 crore would be spent on providing basic infrastructure, and rail, road and communication network in the ITIR.
“Once the project is implemented, over 38 lakh people would directly and indirectly be employed. The ITIR would accord priority for hardware production,” he said.
Source: The Hindu
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Karnataka expediting setting up of Information Technology Investment Region near Bangalore International Airport
31-Aug-2013
Following the green signal from the Centre, the state is expediting the process of setting up country's first Information Technology Investment Region (ITIR) near the Bangalore International Airport (BIA), Devanahalli. IT and BT minister S R Patil said that notification has been issued to acquire 2070 acres of land for the project which will run in to several phases over 18 years. Claiming that the ITIR to set up in 10,500 acres of land will generate 12 lakh direct employments and 28 lakh indirectly, will attract investment worth Rs 1 lakh crore.
He was speaking after inaugurating conference on 'Mangalore, the emerging ITE destination' a satellite event of State's flagship ICT (Information and Communication Technologies) event Bangalore ITE.biz here on Friday.
There is already resentment from farmers as the land, which is spread over 40 sq km area falls in the catchment area of Arkavathy in Devanahalli and Doddaballapur taluks. Adding to it is the passage of Land Acquisition Bill.
Patil downplayed the effect of Land Acquisition Bill which may delay land acquisition, saying that land losers will be paid market value rates for the lands acquired. We will not have any problem in this regard,'' he expressed confidence.
Replying to a query, Patil said electronics manufacturing capabilities will also be added in ITIR since this aspect is a huge drain on nation's exchequer, offsetting country's exports. He said the IT exports in 2012-13 were Rs 1.35 lakh crore of which Rs 2,680 crore came from Tier II cities like Mangalore, Mysore and Hubli-Dharwad. I'm hopeful that exports from tier II cities would touch Rs 4,000 crore and state Exports would touch Rs 1.50 lakh crore in 2013-14,'' he said.
Source: Times of India
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Bangalore realty sailing smooth
23-Aug-2013
When the real estate market of other big cities such as Delhi NCR and Mumbai are moving at snail pace, the Bangalore’s real estate is going great guns in terms of demand and supply. According to Citi Report, Over 10,500 residential units were launched in Bangalore in the second quarter of 2013, accounting for 21% of the total launches.
The notable ones include Prestige IVY Terraces by Prestige Group, Sobha Santorini by Sobha Developers and DNR Atmosphere by DNR Corp.
So what are the factors driving demand in the city? The easy connectivity to other metros and the upcoming infrastructure are two major factors. “Bangalore is connected to Hyderabad through Bellary Road, the proposed Mumbai-Bangalore Industrial Corridor is expected to connect Bangalore City in the north-western side of the city along Tumkur Road; Hosur Road and Old Madras Road connects the city to Chennai, makes it viable as it has massive growth potential on all sides”, says JC Sharma, Vice Chairman & MD, Sobha Developers Ltd.
The cost advantage over other cities and return on investments is another factor contributing to growth of the real estate market of the city. M.K.K Durani, CMD, ND Developers Pvt. Ltd says, “The average increase in the capital investments in Bangalore is between 18-24 per cent depending on the location of the property.”
“The Bangalore market, still remains affordable compared to the rest of India. Additionally, there are a large number of developers who are offering good low cost homes.
In addition, progress of the Metro Rail Phase 1 and 2, development of the outer ring road, six laning of Bellary Road, the Hosur Road expressway, the proposed signal free corridor between Silk Board and Hebbal and the new airport are making the future of the city more promising.
So who are buyers? Bangalore has typically been an end user driven market with a moderate price appreciation. Stability in the market as well as minimal speculation has been driving the end users.
Experts say that from an investment point of view as well, real estate in Bangalore is the best bet. Buying a home has bright prospects as it is an appreciating asset which can be passed on for generations, one’s capital is well protected in it and the rental yield is also good.
Source: Magicbricks.com
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Real returns from realty services, say money managers
09-Aug-2013
With the ongoing market fluctuations at the stock market, several money managers and financial players who had expanded their offerings to include real estate investment services have reported significant growth in the last couple of months. Although mostly offered by individual consultants, a few corporate houses that had jumped into the real estate sector have gained significantly.
Take the case of RealWorld, a recently floated JGI ventures company, for instance. What began as a one-off service for a few of their clients in buying property, proved to be so profitable that today it has been spun-off as an independent company. Today RealWorld Pvt Ltd offers a wide spectrum of services ranging from site identification, evaluation, getting funding at best rates, with industry-best interest rates and follows it up with registrations as even a part of a group of registered investors with limited investment.
“As our parent company is primarily a Financial Management firm, we have well established relationships with numerous banks, through whom we provide the best of funding and the best Industry Interest rates. This factor combined with professional land evaluation services, and tie-ups with developers, we are able to provide the best possible solution as per requirement,” states Fayaz Mohammed, Corporate Head, RealWorld.
What has triggered the growth in this service sector is the rapid inroads it has made into the Bangalore residential sector.
“With the community-homes concept catching on in Bangalore, we have had several unique requirements coming to us, in the last couple of months,” states Shubodh Lal, a freelance land management consultant. “We have settled deals for ‘NRI-Andhra-community-from Ohio’, who wanted to buy a four acres property in a prime area in South Bangalore close to E-city; another for a group of Tamil-NRI-Brahmin community who in addition to help in buying wanted us to indentify a reliable architect-cum-developer who would build condos for their aging parents in India within a specified timeframe.”
A similar service provided for absentee land owners has also gained ground. NRIs with property in and around Bangalore avail the services of these players in developing resorts, budget hotels, even colleges and other educational institutions.
Source: Magicbricks.com
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Foundation stone for India’s first MSME Technology Centre laid at Devanahalli
05-Aug-2013
The Ministry of Micro, Small & Medium Enterprises, Government of India, yesterday laid the foundation stone for the 140 crores MSME Technology Centre at Devanahalli Aerospace Park, Bengaluru.
The ground breaking ceremony was done by M. Veerappa Moily, Union Minister for Petroleum & Natural Gas, Government of India, K. H. Muniyappa, Union Minister of State for MSME (Independent Charge), Government of India, Prakash B Hukkeri, Minister for SSI, Muzrai, Sugar, Govt. of Karnataka, Amarendra Sinha, IAS, Addl. Secretary & Development Commissioner (MSME), Govt. of India, and M N Vidyashankar, IAS, Principal Secretary, Industries & Commerce, Govt. of Karnataka.
Addressing the gathering, Moily said: “The small scale sector has to be helped and boosted to aid the country’s growth. In fact the Aerospace Industry starts from the MSME sector. We are set to revolutionise the small scale sector and Bangalore will soon become the Aerospace hub of India and has the potential to be the global aerospace hub”.
Hukkeri requested Muniyappa to begin a similar Tool Room in Belgaum to increase employability of youth from north Karnataka region as well.
Muniyappa said: “The Government of Karnataka (through KIADB) has given 10 acres of land, in front of SEZ, free of cost. This will provide technological and technical support to MSME sectors in the region especially for those in the aerospace and electronics systems and designs sectors.”
This Centre will be in tune with Karnataka’s Aerospace Policy. This centre will boost Karnataka’s stature as one of the most advanced states in the aerospace sectors. The proposal to establish this Technology centre is based on the fact that KarnatakaState has some of the best aerospace and electronics industries and also is the home to advanced R&D institutions like HAL, NAL, etc. handling prestigious strategic projects and this would be right time to support their activities by promoting the small-scale sectors. A very high-tech Technology Centre, with testing and calibration facility, will facilitate development of sophisticated tools required for the aerospace industry ESDM Sector.
“The Technology Centres (TCs) are expected to train about 10,000 trainees per year in the 3rd year of its establishment through various long term and short term training programmes in the area of precision tooling and assist around 1000 MSMEs by way of design & development of sophisticated moulds, dies, tools and equipment as well as consultancy in the related fields.” said Union Ministry officials.
“The Ministry of MSME, through the O/o Development Commissioner (MSME), has taken an initiative to set up a Programme Management Unit (PMU) that will design and establish 15 new Technology Centres (TC), Including the Bangalore technology center and upgrade the existing facilities under the Mission-mode Programme namely Technology Centre Systems Programme (TCSP). These facilities will focus on improving access to technology, providing skill up-gradation and offering advocacy support for specific industries with high growth potential.” the officials added.
Source: enarada.com
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Bangalore sees high demand from NRIs
05-Aug-2013
With value of the rupee touching the new lows, homes in India are increasingly becoming affordable in dollar price terms. In a bid to capitalise on the rupee depreciation, non-resident Indians (NRIs) are showing keen interest in buying a property in India to make the best use their hefty remittances. Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India says, “Over the past few years, we have noted that NRIs are investing into residential real estate specifically in large Indian cities to build a back-up base in the country. This particularly applies to NRIs with professional/entrepreneurial ambitions who intend to set up businesses in these cities in the future.”
One city that is seeing the surge in enquiries from NRIs is Bangalore. Due to IT establishments, cosmopolitan lifestyle and culture the city has become the preferred destination for NRIs for return on investment in terms of appreciation and rental values. However, NRIs are often confused where to buy and which type of property is best to invest in.
“The demand is specifically coming from European countries, America, Dubai and other middle-east countries. From European countries, the buyers are IT professionals who want to create safety zones for themselves if they ever have to return or re-locate to India. The NRIs from these countries buy residential space in and around areas such as Hosur Road, Whitefield, Sarjapur Road, Yelahanka, or around Hebbal due its close proximity to IT hub in Bangalore, good schools and social infrastructure,” said Fahim Saleem of Property Excel Advisors.
So what type of property is the best for investment? NRIs want gated communities with all amenities, with large rooms, huge windows and luxury fittings and servant quarters. “There has been a steady increase of 25-30% in demand from NRIs across Bangalore. NRIs mainly lookout for premium properties worth over Rs 1 crore such as high-end apartments, villas etc,” Saleem adds.
“As a long-term investment option, NRIs should look into apartments as that will also fetch you more returns in the long-term. You can look at Eastern Bangalore for villas and northern Bangalore for apartments,” says Omar Sheriff, Director, Skylark Mansions Pvt Ltd
“The maintenance and renting would be easier for apartments than plots,” says Ravindra Pai, MD, Century Real Estate Holdings Pvt Ltd.
Plots are also a good investment for NRI. “NRI also look for plots and villa as the potential for appreciation is high in plotted development and there is no maintenance required. It also gives you more flexibility,” says Pai.
Source: Magicbricks.com
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New home sales fall in Delhi NCR, Pune, Chennai, Mumbai; sales picked up in Bangalore
26-Jul-2013
New home sales fell in Mumbai, Pune, Chennai and Delhi-National Capital Region in the June quarter but picked up in Bangalore, according to data from property research firm Liases Foras.
In spite of attractive home purchase schemes, sales in Delhi-NCR were down 13% from the January-March period, while that in Mumbai, Pune and Chennai were lower by 12%, 15% and 7%, respectively. The worst hit segment was that of luxury homes.
However, Bangalore, which witnessed a spurt in NRI demand for homes and new launches in the affordable housing segment, bucked the trend with a 25% rise.
"When markets are down, nothing works as buyer sentiment is extremely low," said Lalit Kumar Jain, chairman of Confederation of Real Estate Developers Associations of India. "A home loan rate cut could be the trigger to get back sales."
Liases Foras' data for the April-June period show that property prices have stagnated across the top markets in the country and inventory of unsold homes has touched a new high of 669.95 million sq ft. Experts say such an inventory level could take up to 32 months to be sold.
With market sluggishness tending to aggravate the funding problem for several developers, and the RBI's liquidity tightening measures this week set to increase borrowing costs, experts say a price cut could be round the corner.
According to Ask Group's managing director Sunil Rohokale, developers would want to focus on cash flows rather than margins. "With sales going down, they are scared their cash flows will not be enough even to cover their loan servicing. We expect a reduction in prices to push sales," he said.
There are already some signals. In the June quarter, prices in Bangalore, Chennai and Mumbai increased just 1%. The rise was 3% in Delhi-NCR and 9% in Pune.
"We are very close to the bottom now and price cuts could be round the corner," said Pankaj Kapoor, managing director of Liases Foras, a non-brokerage real estate research and rating firm, which services clients like HDFC, Deutsche Bank and Standard Chartered Bank.
Some real estate brokers say that hard negotiating homebuyers could even manage a bargain as developers are keen to push up sales.
"They might not reduce price officially but they are giving offers like bank subvention and possessionlinked plans," said Abhay Khemka of Khemka Investments & Properties, a real estate brokerage firm in Gurgaon.
"This means a discount of 7%-10% for the buyer. Also prices have not been increased, which is another saving for the buyer."
In Mumbai, some high-end projects launched by developers like Lodha and Indiabulls Real Estate have been priced 10%-15% lower and come with offers like an 80:20 financing scheme, where the customer pays 20% at the time of booking and the rest at the time of possession. Unsold inventory levels in most large cities have been alarming high in the June quarter. In Mumbai, unsold inventory is up from 139. 33 million sq ft in the January-March period to 146.10 million sq ft, could take 48 months to clear.
In Delhi-NCR, it is 277.31 million sq ft, which could take 38 months to reach a healthy level. Even Bangalore has seen unsold inventory levels rise to 88.68 million sq ft, from 62.56 million sq ft in the previous quarter.
"Fewer and fewer developers can hold on to such high inventory levels. Cost of finance is becoming unaffordable. PE funds are pressurizing developers to hasten sales. The only way to improve cash flow situation is to moderate pricing," said Ashutosh Limaye, head of research at Jones Lang LaSalle.
Source: Economic Times
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Improved connectivity to Bangalore North fuels growth
05-Jul-2013
If someone who has lived here a long time were to tread beyond the boundaries of ‘his city’ as it was in the early 90s, he would actually end up discovering an entirely new Bangalore. Localities which he had never heard of or known existed would be just a Metro ride away or at the end of an expressway.
North Bangalore came into focus with the international airport. This was accompanied by upgraded connectivity to facilitate quick transit to an airport which had moved from the confines of the city to almost 33-km away. The Hebbal-Yelahanka elevated expressway is part of the 22-km highway improvement project taken up by the National Highways Authority of India (NHAI). Greater connectivity has led to announcements of industrial and commercial development, leading to residential catchments emerging in this region.
Hebbal-Yelahanka elevated expressway
The northern parts of Bangalore came into prominence with the establishment of the Bangalore International Airport (BIA) in Devanahalli in 2008. This led to the anticipation of opportunities in the region and the focus of real estate development turned towards north Bangalore.
Dr Samantak Das, Chief Economist, Director – Research and Advisory Services, Knight Frank India, elaborates on how connectivity will transform the landscape of the north. “The upcoming six-lane Hebbal-Yelahanka elevated expressway is expected to cut the time taken to reach the airport considerably. While at present the estimated time between Hebbal and the airport is around 45 minutes, after the completion of the elevated expressway, it will be reduced to 20 minutes.
As a result, the region will witness more commercial and residential real estate developments owing to the reduction in commuting time and access-controlled traffic. Hebbal, in particular, has gained much importance as a residential destination. Of late, it has come to be recognised as an upmarket residential market.”
Shrinivas Rao, CEO – Asia Pacific, Vestian Global Workplace Services, seconds this view. “This ambitious project is still under construction. The full impact of this development is still to be seen. The future of north Bangalore surely looks promising after 2014, when connectivity will no longer be an issue. This project will seamlessly connect Hebbal and Yelahanka to the airport and reduce travel time. Towards the end of 2014, Hebbal will grow to become one of the most vital junctions supporting an 18-lane highway till the airport, therein connecting all parts of the city.”
Localities served
Knight Frank’s study highlights Sahakaranagar, Amruthahalli, Jakkur, Yelahanka, Kogilu Cross, Bagalur Cross as well as the tangential Doddaballapur Road as some of the residential locations that will benefit from this project.
Shrinivas Rao states, “With improved connectivity comes residential development. Till now, the most vibrant residential micro markets were located in the southeastern quadrant. But now, micro markets in the north-eastern quadrant are set to witness high residential activity too. Initial largescale projects have been launched in key neighbourhoods of Yelahanka, Hebbal and Devanahalli, since these are the nodal points. But over time, the intermediate areas will host spacious housing options such as villaments, villas, duplex apartments etc in the budget as well as luxury categories.”
Moreover, with the Government promoting this region aggressively by announcing the establishment of the Information Technology Investment Region (ITIR), Aerospace SEZ, and Hardware Park, this area is poised to become Bangalore’s next economic epicentre. Efforts to improve the overall social infrastructure with suitable entertainment, hospitality and easily accessible healthcare options will attract buyers to invest in this region.
Regarding benefits accruing to the region, Dr Das says, “There are numerous infrastructure projects being planned by the government such as High Speed Rail Link (HSRL), Metro, monorail and the Peripheral Ring Road. On completion, these projects will further enhance the connectivity from the city center with the airport. Also, a commuter rail system has been planned to connect Devanahalli with Yeshwantpur via Yelahanka. Additionally, widening of the NH-7 up to the airport from the existing six lanes to eight lanes is under process. This will sustain higher traffic due to the airport’s expansion and expected real estate developments along the way.”
Potential for appreciation
The key advantage for residential catchments as a result of this and other infrastructure projects lies in enhanced connectivity. Also, investors can be assured of achieving better price appreciation within a shorter period of time.
Knight Frank’s research indicates the capital appreciation envisaged in the region is about 15-18 percent per annum. “Capital appreciation potential for this region is high. The rental returns will improve when economic activity develops in terms of office spaces, industries etc.,” Shrinivas Rao adds.
Source: Magicbricks.com
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Hebbal-Yelahanka-Devanahalli stretch – a good option for investment
01-Jul-2013
If you are looking to invest in property in Bangalore, the Hebbal-Yelahanka-Devanahalli stretch offers a gamut of 2, 3 and 4BHK options by a mix of developers within a wide price bracket. The stretch is considered a growth corridor which has seen substantial development in the past five-six years, fuelled by projects around the airport encompassing an aerospace park, a financial district and an IT park.
Take Hebbal for instance. The Bangalore international airport has made Hebbal an important destination. It has also emerged as an IT hub with several technology parks and companies. Hebbal has good infrastructure to support residential growth. New monorail and high-speed rail networks along with the Bangalore Metro will boost its connectivity. Property values here range between Rs 4,000-7,000 per sq ft.
Yelahanka, on the other hand, is a suburb of Bangalore, originally envisaged as a satellite town of the city, but today a part of the Bruhat Bangalore Mahanagara Palike (BBMP). “Over the last few years, developers have built projects in the area. The reason for this is the existing and proposed infrastructure and availability of large land banks. Also, people are buying property in the Yelahanka-Devanahalli stretch for long-term investment as prices are expected to appreciate,” says Augustine Joseph of Network Ventures. Demand for housing mostly comes from those employed in North Bangalore, especially employees at business parks like Kirloskar Business Park and Manyata Tech Park. This area is more affordable compared to Hebbal with property prices between Rs 3,000-4,000 per sq ft.
Devanahalli, is close to the international airport and is well connected to North Bangalore. Large scale infrastructure development is proposed around this stretch that would further enhance its appeal as an investors’ destination. These include projects such as three proposed IT parks in and around this region and a proposed four-lane state highway that would connect this stretch to major parts of the city. Property prices are in the range of Rs 3,000-4,000 per sq ft, with a few developments also priced at Rs 2,500 per sq ft. “An annual appreciation of about Rs 100-150 per sq ft has already been witnessed and considering the proposed infrastructure, this trend is expected to continue in the future as well,” stated N Krishna, Marketing Executive, Kadam Group.
Source: Magicbricks.com
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ITIR project to generate more than three million jobs
06-Jun-2013
The Information Technology Investment Region (ITIR), planned to be set up near the Bangalore International Airport (BIA), Devanahalli, at a cost of Rs 1.06 lakh crore, is expected to generate more than 3 additional million jobs.
Making a suo moto statement in the Legislative Council on Wednesday, IT and BT minister S R Patil said the Union Cabinet cleared the much awaited mega ITIR project in its meeting on Tuesday.
Stating that the ITIR project is expected to generate an annual business turnover of over `2 lakh crore, the minister said that it would also attract an investment of over `1.06 lakh crore, which is going to be implemented in two phases. “The project is expected to provide 1.2 million of direct jobs and another 2.8 million indirect jobs,” the minister told the House.
Patil said the project is expected to boost the growth of IT and ITES and electronic hardware manufacturing sectors in a big way.
Stating that the state-owned KIADB will be asked to speed up the necessary processes to realise the project, including land acquisition and handing over it to the developers, he said the state government has already issued a preliminary notification for the acquisition of about 2,072 acres of land located near Doddaballapur and Devanahalli taluk for the first phase.
While internal infrastructure would be developed by the master developer or a consortium of developers, the Union government would assist in external infrastructure and providing linkages like rail, road and telecom connectivity.
He said the project would be governed by a separate legislation passed in the Legislature. The Karnataka ITIR Act 2010 was envisaged to set up a state-level empowered committee chaired by chief minister and the management board headed by the IT minister. The mega IT infrastructure project has been proposed to be developed in two phases: the first phase would be implemented between 2012 and 2020 and the second phase would be executed between 2020 and 2032.
“The project will be spread over 40 sq kms to the north of BIA,” he added.
“The ITIR project is yet another feather in the cap of Bangalore, the IT capital of the country,” he told the house.
Source: New Indian Express
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Budget 2013: Luxury homes for the rich to become more expensive
28-Feb-2013
Luxury homes for the rich would become more expensive after the finance minister today reduced the abatement on service tax availed by real estate developers for homes and flats above 2,000 sq ft or costing Rs 1 crore and above to 70% from 75% earlier.
The impact will be amplified in Mumbai for almost every buyer of under-construction apartments as the city no more offers any decent size apartment at less than Rs 1 crore, the criteria used for applying the measure.
The rate of abatement or deduction is used in calculation of service tax to be paid by the developer. Reduction in abatement will result in higher input cost that will be considered for calculation of service tax.
"Buyers in tier II and III cities will not be affected much as there are not many projects falling in category and therefore the definition of luxury housing is apt for those cities. However, for metros like Mumbai and Delhi, even the basic housing cost is Rs 1 crore and this proposal will affect almost every buyer here," said Anuj Puri, chairman, Jones Lang LaSalle India.
The total value of luxury homes, in 182 luxury residential projects offering 25,570 units across the top seven cities of NCR-Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata, launched between 2008-2012 was around $30 billion, said a recent Jones Lang LaSalle India report.
Developers also seem to be ready to pass on the impact of higher service tax onto consumers who will in turn pay more to buyer these houses.
"Reduction in the rate of abatement will make homes upward of Rs 1 core more expensive for home buyers as the tax out go will go up. But the number of people who will be affected will be few as there are not many home buyers in this segment. These higher tax out go will be passed on to the home buyers," said Venkat K Narayana, CFO of Bangalore-based real estate firm Prestige Estates Projects
Source: Economic Times
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Karnataka seeks to revive Knowledge City plan
19-Feb-2013
Six years after DLF Ltd walked out of the 9,000-acre Knowledge City township project on the outskirts of Bangalore, the Karnataka government is trying to revive it, albeit on a much smaller scale.
Under a new plan reviewed by Mint, the state is considering establishing a scaled-down version of the proposed Knowledge City through the public-private partnership (PPP) route. According to a pre-feasibility report prepared by ICRA Management Consulting Services, the new version is projected to cost Rs.2,789 crore, a far cry from the original Rs.50,000 crore estimate.
While the report does not mention the quantum of land required for the project, or the location, it projects the land acquisition cost to be close to Rs.800 crore, around one-fourth the estimate for the earlier version.
For Bangalore, the down-scaling represents the difficulties in managing growth and congestion in a city that grew 80% between 2001 and 2011, according to Census data. The proposed Knowledge City at Bidadi would have been one of the largest private township projects in the country, and the basis for the creation of a New Bangalore city that would have allowed the city to grow in a planned manner.
The project was conceived by the H.D. Kumaraswamy government in 2006 at Bidadi, around 50km from Bangalore, as a hub for educational institutions and information technology and biotechnology firms, along with housing projects.
Following a global tender that attracted bids from 32 consortia, DLF was awarded the project. But in 2007, DLF walked out after blaming the government for delays in acquiring land. This time, the state is more cautious: “It’s not a realty project. But there may be realty developments. It is not a university campus—but varsities play a key role,” the government says in its report.
“The earlier project was located in well-irrigated, fertile land, and we had to face protests from farmers. We felt this would take off only after jettisoning much of the real estate component,” said a government official working on PPP projects in the state, on condition of anonymity. The state wants to build the Knowledge City with much smaller land requirements, he added.
Higher education minister C.T. Ravi, whose department is overseeing the project, said the government will decide on the new project after the cabinet discusses the pre-feasibility report. “It’s too early,” he said.
Farook Mohammed, chairman and managing director of Bangalore-based Silverline Realty, said it’s easier to execute small-sized projects across multiple zones than build a single, large one, such as the Bidadi project. “With land acquisition very difficult, smaller-sized projects will be a win-win approach for landowners and developers,” he said.
The new project, too, will have housing and commercial facilities catering to students and faculty members, and hospitality facilities for visitors to the city.
Karun Varma, managing director, Jones Lang LaSalle, a property advisory, said the key issue in such projects is the capacity of governments to infuse equity. “Given the economic situation and the time that such projects need to take off, this is crucial,” he said, adding there aren’t many investors who have the appetite for such projects, unless there is clarity on development of transportation networks, payback periods, and collaterals for the projects.
The pre-feasibility report envisages the formation of a special purpose vehicle, jointly by the state and a private partner.
The project will comprise institutes in higher and tertiary education, with particular focus on institutes for design and skill development. An institute for innovation and incubation is also being planned in partnership with global institutions in fields such as nano technology, cryptography, aerospace, neural networks, network security and robotics.
One key component retained from the original proposal is the establishment of a biotechnology research centre. “Biotechnology is a strong point of Karnataka, especially as Bangalore is considered the biotech capital,” the report says. This research institute will focus on fields such as stem cell research.
The report studied similar projects in Dubai (UAE), Kuala Lumpur (Malaysia), Doha (Qatar), Singapore, Doncaster (UK), Panama City (Panama), and Barcelona (Spain). Barring Dubai and Singapore, the rest follow a private-sector promoted model. The report suggests following the Dubai Knowledge Village model, promoted by Dubai Holding—owned by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.
Source: Live Mint
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The Navi Mumbai of Bangalore – Neo Bangalore
08-Feb-2013
When Navi Mumbai was developed in 1972, no one imagined, even in their wildest dreams, that it would become such a bustling place. Aimed at decongesting Mumbai, Navi Mumbai became a hot property with the land rates doubling more than ten-folds. Similarly, today, the city of Bangalore is looking out for a similar satellite township that will take on its multitudes. Enter Neo Bangalore aka Hoskote. The promise of Hoskote makes it another Navi Mumbai in making. A planned township, upcoming to established industries and worldclass connectivity that’s what Neo Bangalore is all about.
The Promise of Hoskote – Satellite Township
With Bangalore being one of the fastest growing cities of India, several new developments have happened. Among them is the emerging of Neo Bangalore or Hoskote, an area of great promises and expectations. It is not a place where time will stand still. It is about a great ambiance, good infrastructure and fantastic connectivity.
Infrastructure
The government recently inaugurated a BMTC bus depot built at the cost of Rs. 4.70 Crs. A new integrated satellite township with proper infrastructure has been put in place. Good road planning has taken a precedent over here. The proposed Satellite Township Ring Road (STRR) covering 284 km will connect Hoskote with important satellite towns around Bangalore. The Intermediate Ring Road (IRR) covering 188 km, also connects Hoskote to the rest of Bangalore. The tremendous growth experienced the last three years has led to an increase in property prices, if reliable industry sources are to be believed. The year-on-year increase of prices is said to be about 30%.
Auto Growth
In case of Navi Mumbai, its various software and infotech parks did lure in people in droves. In case of Neo Bangalore, the government of Karnataka has revealed great plans for the place, including an exclusively designed Special Economic Zone, SEZ, for electronics hardware and IT at Bagur. The Aero IT SEZ is already under development at Budigere and promises to create employment for almost 98,000 people.
Industrial Development
The Karnataka Industrial Areas Development Board is seeing a high demand for the 685 acre industrial belt of Narsapur in Hoskote. This area is already home to Volvo and Honda factories and many more big industrial heavyweights are said to be getting their new address here. About 468 Japanese companies have set up shop along the Bangalore-Chennai belt and Hoskote is the starting point of this corridor.
Connectivity
The 6-lane Super-highway to Chennai starts at Hoskote. It is being developed all the way to Sri Perambudur and that would reduce the travelling time between the two cities considerably. Locally, Hoskote has good connection to important parts of Bangalore. It is a quick drive from the Bangalore International Airport, Byappanahalli Metro Station and the K.R. Puram Railway Station. Budigere road connects Hoskote to the BIAL in 30 minutes. The railway station is 20 minutes away. Time taken to reach the Central Business District is shortened by taking the metro from Byappanahalli which will reach M.G. Road within 25 minutes without any traffic issues.
Source: Magicbricks
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A dream factory not too far in the distant future
03-Feb-2013
Have you dreamt of a magic gizmo that would make the garbage heap outside your house vanish? Of a smartphone that runs on without needing a charger? Or perhaps a vehicle that can rapidly wheel you home through Bangalore’s traffic maze every day?
Not too far in the distant future, you may be able to trade those zany ideas into usable products at a place near Bangalore. You name it, and a research institute, modelled like Taiwan’s Industrial Technology Research Institute, will convert such incredible ideas into tangible products. The Karnataka Innovation Council says it plans to create its local version on 250 acres of land at Muddenahalli, the birthplace of the industrialisation icon, Sir. M. Visvesvaraya.
It is still early days yet for the local ITRI-like plan, but the State is serious about having an ideas-to-products entity near Bangalore and to make it among the world’s innovation zones, according to M.N. Vidyashankar, Principal Secretary, Department of Commerce and Industries. A committee, headed by C.N.R. Rao, is crafting the details of the plan while Mr. Vidyashankar has led a team of technopreneurs from the State to Taiwan four times in the past year.
“Soon, there will be a day when we will need innovation on demand. At ITRI in Taiwan, you can get prototypes of an idea in six months and churn out products [almost at will]. We are trying to replicate the ITRI model and make Bangalore and Karnataka the innovation hub of the country,” Mr. Vidyashankar told The Hindu on Saturday on the sidelines of a patent awards event of the Innovation Council. No other city in the country has the kind of R&D lab density — 376 labs — as the city has, he said, adding Pune and the National Capital Region, each with around 100 labs, come in next.
Bangalore also needs to emulate Taiwan’s art and pace of patenting — almost five U.S. patents a day, he said. The scientist-rich ITRI describes itself as a non-profit, applied research and technology services organisation that has spawned a few names in semiconductor and IT products space.
The Innovation Council, a part of the Karnataka Jnana Ayoga (Knowledge Commission), gave away Amulya 2012 awards to 36 ‘ideators’ from the State, including individuals and small and medium enterprises.
Five of them got a cash award each of Rs. 25,000 for getting an Indian patent post-January 2011; 31 others received Rs. 15,000 each for filing a patent.
Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw gave away the awards.
Source: The Hindu
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Real estate: North Bangalore, Whitefield to shine this year
09-Jan-2013
2013 OUTLOOK FOR RESIDENTIAL REAL ESTATE
In 2013, North Bangalore will continue to grow thanks to its massive potential for capital appreciation. On Outer Ring Road, projects under construction on Sarjapur Road will reach the completion stage and will see incremental sales because of the preference for ready-to-occupy projects by end users. This area’s advantageous proximity to the IT growth corridor will also be a contributing factor. This area will thrive on the back of increasing Information technology investments and the Aerospace SEZ being planned by the Government over the coming 3–5 years.
Whitefield will continue to yield considerable residential sales, thanks to its affordable prices, proximity to important workplace centres and the enhanced retail and social infrastructure in this location.
2013 OUTLOOK FOR COMMERCIAL REAL ESTATE
In terms of commercial property absorption, Outer Ring Road will work exceedingly well in 2013. Thanks to its proximity to employee catchments, the enhanced connectivity via signal-free flyovers and availability of SEZ as well as non–SEZ office spaces will ensure that ORR continues to build up its already dense corporate presence in 2013.
Meanwhile, Whitefield will not lose any of its sheen in 2013. The office space market drivers there will continue to be its economic rentals, sufficient Grade A spaces ready for occupation and Whitefield’s on-going evolution as a self-sustained micro market with generous residential and retail developments, backed by good social infrastructure.
In North Bangalore, infrastructure development, the controlled office space supply coming up and this region’s proximity to Bangalore International Airport will provide continuing impetus in 2013. North Bangalore will ramify its status as the Business Continuity location of choice.
2013 OUTLOOK FOR RETAIL REAL ESTATE
In 2013, North and East Bangalore are definitely the areas to watch for retailers, mall developers and retail space investors. The rapidly developing infrastructure and expanding residential catchments in these locations are harbingers of vastly increased retail activity over the mid-to-long term.
ADVICE TO SMALL REAL ESTATE INVESTORS IN 2013
Go for residential projects in which units are priced between Rs 80 lakh to 1 crore. 3 BHK units are going to be the fastest-moving and appreciating products in 2013. Consider only established locations which have significant Grade A commercial real estate development by Grade A developers.
Source: Daily Bhaskar.com
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Year 2013 will bring a paradigm shift in the real estate sector
05-Jan-2013
The passage of two crucial bills, Real Estate Regulation Bill and Land Acquisition Bill, in particular, sometime in the next few quarters this year will boost the sentiment of all stakeholders and herald a new order in the country's Real Estate , Pranab Datta, chairman of Knight Frank India, says.
The recent approval of FDI in multi-brand retail by Parliament will attract foreign investment , which will not only benefit the retail industry but also boost the demand for commercial real estate. It also showcases the government's seriousness in introducing reforms in India — and this is just a preview of things to come, Datta says.
Additionally, the RBI can be expected to lower interest rates in the coming months which will benefit developers as well as consumers. The change in sentiment on account of the above measures will have a positive impact on all the segments of real estate — whether it is retail, office or residential and will certainly make 2013 a much better year in comparison to last year.
Against this, 2012 has been disappointing for real estate as falling sales and rising construction costs dampened the market sentiment. This is reflected in the financial performance of real estate companies, which have taken a hit in their revenues and profit during the year.
Jones Lang LaSalle (JLL) in its report also said that the outlook for the real estate sector in the New Year looks promising in the NCR. However, all the stakeholders like consultants and developers feel that those areas where the prices have not peaked and world-class infrastructure like roads, parks sports complexes are being developed by the authorities concerned and developers will see the maximum appreciation.
Om Ahuja, the CEO of Residential Services of JLL, says that the supply trends in real estate indicate that it is in a state of flux. The supply of products priced below Rs 3,000 per sq ft is reducing markedly. From 43% in the fourth quarter of 2009, supply in this segment will come down to 8% in the same period of 2013. At the same time, supply in the price range of Rs 5,000-10 ,000 per sq ft is expanding. He said aspirational and affordability levels are driving such trends.
However, smart residential property investors will identify the right products priced below Rs 4,000 per sq ft in key growth cities as best options. In cities like Bangalore, Hyderabad, Chennai, Pune, Noida and Gurgaon, one can still find good projects in this price range for long-term investments, which would yield good appreciation .
JLL in its report on the NCR region says that areas like Dwarka Expressway, New Gurgaon-Manesar , Noida Extension and Noida Expressway show huge potential for investors as well as end users. It says that Dwarka Expressway, because of its infrastructural advantages and locational benefits, enjoys huge upside.
The area has been able to successfully withstand the heat that many other areas and pockets of the NCR faced. The price sustainability and appreciation trends of the recent past, and also its relative affordability, will continue to maintain investor interest and confidence . Other important areas to watch out for in 2013 for residential realty, the report says, will be New Gurgaon and Manesar.
The increase in commercial developments, its developing infrastructure, continuing affordability and the proposed connectivity via Metro and the expressway will put this region on the radar in 2013.
Source: Economic Times
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Bright future for real estate
05-Jan-2013
The real estate market is set to continue to grow this year thanks to the ever-increasing demand for residential as well as commercial space in Bangalore. Though the real estate segment expected a lot from the state government, there was nothing to revel about the latter's proactive attitude towards the former due to political instability.
Real estate magnates expect political stability after state assembly elections that are slated to be held in April or May. They attribute political instability as the main reason for the lack of support or encouragement to the real estate segment in the last few years. They opine that stable government is a must for not only to take policy decisions but also to implement them.
If the rumours on reduction of home loan rates become a reality, the real estate will have no hassles to register a decent growth and bring cheers to investors in this segment. "I foresee a bright future for real estate. I expect banks to reduce home loan rates and a steady demand for residential as well as commercial space to help the real estate to grow,'' said Nagaraja Reddy, president, Confederation of Real Estate and Developers' Association of India (CREDAI), Karnataka.
Echoing similar opinion, Bijay Agarwal, managing director, Salarpuria Sattva Group, said the real estate market would continue to grow in 2013. "We expect a rise in prices of up to 15 per cent, however, it is in 2014 that we expect the market to be bullish,'' says Agarwal.
Salarpuria Sattva has up to 30 million sft spaces in different stages of development in Bangalore, Hyderabad, Vizag, Pune, Kolkata, Jaipur, Goa and Chennai. " In Bangalore we have three new residential projects that will be launched in 2013. We are also focused on Hyderabad where we have just launched a 1.6 million sft mixed-use development with the work, live and play concept,'' he says.
Many say that Bangalore has the good potential for investors in terms of appreciation. They said Hebbal will see at least 20 per cent to 30 per cent appreciation in property value. Another area to watch for is Old Madras Road where lot of projects are lined up. "Similarly, Sarjapur Road and Whitefield too would see good appreciation and growth thanks to their proximity to the IT hub. Over the next three years, we can expect a 100 per cent growth in capital appreciation. The mid-scale apartment projects will continue to be the driver in 2013 too,'' says Preenand Premachandran, CEO, Hebron properties.
Meanwhile, Suraj H Asrani, COO, Cornerstone Properties, expects Bangalore to retain its preferred choice title.
"This will be due to a host of positive factors like reduced interest rates, policy changes and improved infrastructure. The Cabinet approval of the PRR would be a game changer as access and connectivity to outlying/fringe areas would be rapid and easier.
“In terms of infrastructure development the projects slated to progress include the PRR, Elevated Expressway to BIAL, the High Speed Rail Link to BIAL and the Signal Free ORR Corridor.,'' says Asrani.
According to him, 2013 will be an exciting year for retail development. The announcement of FDI in this space will result in MNC retailers evincing closer interest in India. ''Bangalore has remained a preferred destination for retailers and with more brands entering the fray, we expect developers to launch larger malls with more interesting tenant mixes and as the infrastructure (Metro and PRR) expands footprints, concepts like strip malls and large format malls would find favour,'' he says.
The commercial real estate outlook for 2013 seems to be optimistic with Whitefield, Varthur, Sarjapur Road and the ORR being the preferred options for occupiers.
"The long-awaited go- ahead to the PRR will be a defining factor in further accelerating growth in commercial realty. In terms of residential projects, an interesting array of projects ranging from integrated townships, condominiums, villas/villaments, affordable housing etc., have been announced with higher anticipated demand across geographies. Prices are on an upswing and the customer has access to a wider array of offerings. Another encouraging trend is the vibrant end user market. This trend would continue in 2013, and with the RBI easing liquidity norms, we expect the real estate sector to enjoy an exciting year ahead,'' he adds.
Source: DNA
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Bangalore, Hyderabad, Pune, Chennai emerging real estate propositions
02-Jan-2013
Cities with a high level of job creation continue to see high volumes of real estate supply and absorption. Cities with few or no economic drivers to spur the growth of employment fall behind, no matter what other factors seem to work in their favour. Earlier, Mumbai and Delhi attracted the most talent from rural areas. Today, cities like Bangalore, Hyderabad, Chennai, Pune and Gurgaon have taken lead positions and are all set to overtake Mumbai and Delhi, says Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India.
IT-centric cities like Bangalore, Hyderabad, Pune and Chennai to some extent are now emerging as whole new real estate propositions. IT companies there are expanding their campuses dramatically. Recently, Wipro announced the imminent launch of their new facility and headquarters of approximately 2.5 million square feet in Bangalore. This facility will augment their existing campus, which already employs over 31,000 people. Trends and data points suggest that dynamics in these cities will be very different in the next few years
"With inflation and construction costs moving northwards, the price trends are changing dramatically.
The graph clearly indicates that supply trends in real estate are in a state of flux. The supply of products priced below Rs 3,000 per square feet is reducing markedly. From 43% in Q4 of 2009, supply in this segment will come down to 8% in Q4 2013. Meanwhile, supply in the price range of Rs 5,000-10,000 per square feet is expanding," says Ahuja.
On the surface, aspirational and affordability levels are driving such trends. However, smart residential property investors will identify the right products priced below Rs 4,000 per square feet in key growth cities as a best options. In cities like Bangalore, Hyderabad, Chennai, Pune and Gurgaon, one can still find good projects in this price segment for long-term investments and appreciation, Ahuja adds.
The time-related value of money and inflation are two key parameters that one needs to take into consideration.
Source: Business Standard.com
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North Bangalore sees maximum launches in 2012
21-Dec-2012
In the past one year Bangalore has witnessed maximum launches by all big builders for High Rise Apartment projects. Focussed primarily in the North and North East, these launches have mostly been around Hebbal, Tanisandra, Jalahalli, Sarjapur road and Whitefield areas. Though a large portion of the projects launched have targeted the mid-segment projects ranging between Rs 40 – 60 lakhs; a significant amount of developers have also announced launches around Rs 1 Crore and above around Hebbal.
Areas such as Hebbal and Whitefield in the last 12 months have witnessed increase in price, to the tune of around 7 per cent to 9 per cent respectively, on a quarter-on-quarter basis.
“The promotion of this location can be largely attributed to the on-going and planned infrastructure development in the northern region, with the establishment of Bangalore International Airport being one of the primary catalysts,” states Avinash Rao, Regional Director – South, Knight Frank India Pvt. Ltd.
Hebbal has increasingly come to be recognized as a high-end residential market off late, with the launch of projects such as Equinox Water’s Edge, Embassy Lake Terraces, Prestige Misty Waters and RMZ Latitude. There have been a number of other significant launches like G Corp ICON and Bharatiya Integrated Township who have started construction in the same vicinity.
“Hebbal may well be the new CBD of Bangalore in North in the future,” observes Umang Badjatya, GM – South, Kumar Properties. “With better roads, the upcoming Metro, scope of organised developments to builders due to vacant or clear title land parcels, the Govt. announcing major SEZ’s Aerozones, hard ware and software zones, Hebbal has made its way for this status.”
On the other hand, Whitefield is still considered one of the most preferred destinations by the IT/ITeS employees, as it is close to the IT developed social infrastructure like several IT MNC Campuses, international schools, hospitals, shopping malls and a well-organized retail market outside the Malls. Moreover, this region is expected to have smooth accessibility to the airport with the proposed 116 km. Peripheral Ring Road (PRR), in the near future.
Source: Magicbricks.com
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Rupee depreciation helping UAE NRIs buy properties in India
14-Nov-2012
The decline in value of rupee over the last one year is luring NRIs living in the UAE to buy property in India even if the price stretched up to Rs 1 crore or more, according to a survey.
According to the survey conducted here by Sumansa Exhibitions who are organisers of Indian Property Show, 89 per cent of NRIs (non-resident Indians) in the UAE are planning to leverage the power of their additional income by investing in properties worth up to Rs 1 crore and beyond.
The weakening rupee gives more power to dirham currency that they have and current sluggish market enables them to buy properties at a cheaper rate in India, it said.
It added that 26.7 per cent NRIs are looking to buy properties as additional investment, a sharp rise of 6 per cent in one year.
NRIs in the UAE mostly prefer investing in property as it is one of the safest option and gives good return as the capital value of any property appreciates, Sumansa Exhibition CEO Sunil Jaiswal said.
"Plus, there is always feeling of returning home since NRIs don't get citizenship in this region, so property investment becomes natural choice. We can support this further as the survey also reveals that Mumbai, Bengaluru and Delhi feature in the top five destinations list," he said.
This shows that they are looking for cities which will give them good returns, he said. "Even if the NRI takes home- loan, his payouts are much cheaper as compared to last year. Hence, overall investing in this sector when rupee is low, makes sense," Jaiswal added.
Honey Katiyal, CEO of Dubai-based Indian real estate consultancy Investors Clinic, said over the last year, his company has witnessed demand for properties which are higher in value as the NRIs want to cash in on this situation and invest more to get better returns in future.
The trend is to invest in additional property in metro cities and enjoy the capital appreciation in 4-5 years time, he added.
A representative of Indiabulls said with rupee depreciating in the past couple of years, there has been a good amount of remittance going back to India.
Additionally, the bank deposits have also started yielding good returns making that as a good investment alternative.
"However properties continue to be a preferred choice for expat Indians for investment and asset creation. What they look for is a good brand to invest and a price point which is good to enter. For NRIs, a reputed developer with good track record, quality and possible price appreciation is an important factor," he said.
Source: Times of India
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Devanahalli offers good capital, rental returns
02-Nov-2012
From a quiet, far-flung area, Devanahalli is turning into a hub of real estate. Local Bangaloreans who have lived in Devanahalli almost all their lives have witnessed at least 10-8 per cent increase in rental as well as property prices. “In the last five years we have witnessed developments such as upcoming luxury star hotels, villa projects, fine-dining restaurants in addition to offices. This has had a cascading effect on the price of residences,” said P. Navaneetha, a retired lecturer, who shifted to Devanahalli to live near her aging parents in 1999. “When I bought land here it was only a revenue site and in 12 years it has appreciated remarkably. I bought the entire acre for about Rs 12 Lakhs and it is today worth around Rs 1 crore, with builders competing with each other to buy it.”
Devanahalli is very strategically located on NH-7 linking it to Hyderabad. Its close proximity to the International Airport and Devanahalli business park has led to higher return on investment. Close to the BMRDA Nandagudi Township there are also several SEZs coming up there.
Thus areas around Devanahalli like Kohira, Anneshwara, Bychapura and Kempalinganapura have recorded significant development in the last five to six years.
“Two key factors make the development in and around Devanahalli different. One is the interest shown by the government in this area by setting up many government projects such as Kiadb Industries acquisition/KHB proposal and IT & BT Parks, coming up in the area,” states E Nanaiya, Proprietor of ShriKrishna Real Estate Agency, a local resident turned real estate agent. “As per the Outline Development Plan notified by the BIAAPA, which is the primary land-use sanctioning authority for this area, development here will not be allowed to destroy the natural river valley network in Doddaballapur, Devanahalli and Vijayayapura in the outskirts of the city. These two factors have enabled a near inclusive growth for all.”
The average price in this area for apartments is currently around Rs 2934 to Rs 3,455 per sq ft. Residential land prices are estimated to be around Rs 10,600 per sq yard.
Source: Magicbricks.com
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Bangalore property market surpasses Mumbai, Delhi and Chennai with 140 per cent growth
16-Oct-2012
Bangalore has outpaced bigger property markets such as Mumbai, Delhi and Chennai with 140% growth in the quarter to June over the year-ago period, even as sales in most other cities stagnated or even plummeted.
In the first quarter of the current fiscal, 15.58 million sq ft of residential space was sold in the city, giving it a total market share of 13.9% and beating other domestic markets in homes sales, property research firm PropEquity said.
In comparison, property sales in the bigger markets of Mumbai Metropolitan Region and National Capital region fell by 60% and 57%, at 15.98 mn sq ft and 28.86 mn sq ft respectively. The trend continued into the second quarter.
"Bangalore is witnessing higher off take as compared to other bigger realty markets in the country despite challenging times," said Pirojsha Godrej, managing director and chief executive officer of Godrej Properties,which is in the process of launching projects totalling 4 mn sq ft over the next few months.
Experts say Bangalore's real estate market is growing due to a combination of factors such as a greater percentage of end users among buyers than in the other cities and a relatively moderate price escalation.
"Land is not priced out in the south as compared to other cities. The property market in the city has performed even during the slowdown,"said Prashanth Sambargi, partner at Mars Realty. The company is looking at mid-sized residential sector and standalone retail for luxury projects as its revenue drivers this fiscal.
"Bangalore property market is leading both in terms of loan disbursement and sanction.. There is a turnaround in the real estate market in Bangalore, which is mainly due to slower growth as compared to markets like Mumbai, Delhi and Chennai," said VK Sharma, CEO of LIC Housing Finance.
Delhi-NCR and Mumbai witnessed a sharp drop of over 40% in property sales in 2012, compared with the previous year, mainly due to multiple increases in home loan rates and inflated property prices. The southern cities, including Bangalore, did not see such a sharp downturn partly due to the turnaround in the IT sector.
Source: Economic Times
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Real estate preferred choice for investments in India: Survey
12-Oct-2012
The preferred asset for Indian investors is real estate sector, followed by gold and silver.
"The investment pattern in the country suggests that investment flow have been highest in the traditional modes of investments such as in real estate market followed by gold and silver," the survey of PHDCCI said.
It said that due to the uncertain economic environment and sluggish growth in financial markets, investors are pumping money towards safe and less risky investments as compared with highly volatile investment avenues such as stock market.
"The extremely high preference real estate can be attributed to the recent sharp rise in rural incomes driven by implementation of several income generating flagship programmes of the government," it said.
The survey said fixed deposits have also been an important avenue of investments.
The occupation-wise investment pattern across rural, urban and metropolitan India suggests that the investment preferences are inclined towards safer options like real estate especially among the professionals.
"...salaried people and the agriculturists have shown very strong preferences towards gold & silver," it added.
Further, it said that there is need to alter the pattern of investment of the Indian economy.
"The government needs to promote the financial sector and increasing the size of the financial market is the need of the hour...There is an urgent need to address the problem of lack of investment in financial markets," the survey said.
Source: Economic Times
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North of Bangalore emerges as next commercial hub
28-Sep-2012
Bangalore suburbs continue to cater to the need for premium office spaces. This is because they are well-connected by road and have their own social infrastructure around them. The key micro markets for office spaces around the city include the Outer Ring Road (ORR) – Silk Board Junction to Hebbal, Whitefield, Electronics City and Hosur Road.
“The ORR, Whitefield and Electronics City have been the most preferred micro-markets of the IT/ITeS companies,” says Shrinivas Rao, CEO, Asia Pacific, Vestian Global Workplace Solutions. “Due to the proposed commercial developments along the ORR and Whitefield, these micro-markets will continue to be preferred by IT/ITeS companies in the short to medium terms. In addition, there are many new projects coming up around the ORR, along the Baglur Road and the development of Aero City by the Bangalore International Airport Limited (BIAL) will provide impetus to real estate activity in the north of the city. Hospitality-orientated spaces are likely to be the first phase of development followed by office spaces and other developments,” says Rao.
As far as rentals for Grade A spaces is concerned, according to a survey conducted by Vestian, the ORR commands the highest, followed by Whitefield and Hosur Road. “As of September 2012, Bangalore has witnessed absorption (including pre-committed spaces) of 8.66 million sqft. The absorption as of December 2012 is pegged at 11 million sqft,” says Rao.
Moderate construction activity is likely to retain the stable commercial activity in the Whitefield micro-market and the rentals there are likely to appreciate by 5-6 percent. “The high demand coupled with high construction activity is likely to push rental values by 6-8 percent per annum along the ORR. The rentals across Electronics City are likely to witness an increase of 3-4 percent per annum,” adds Rao.
Currently, most active micro-markets of the ORR and Whitefield are likely to support this demand for the next 3-5 years. Therefore, Bangalore north is likely to be the next office space hub in the near future. Already, development signs have started showing in this region and this micromarket is likely to witness significant commercial development by 2015-17.
According to a Knight Frank India Pvt Ltd report on office space outlook for the city, the Peripheral Business District micro-markets accounted for most of the office space transactions that took place in the city in both the halves of the financial year 2012. The share of office space absorption in this region increased from 72 percent in the first half of 2012 to 75 percent in the second half, altogether adding up to an area of around 8.8 million sqft. The peripheral locations like Whitefield, Electronic City, ORR and Bannerghatta Road were primarily responsible for the high take-up in the region.
In terms of market trends, smaller office sizes in the range of 8,000-12,000 sqft, mostly favored by non-IT companies, will continue to be in demand. Further, Whitefield and ORR will continue to be preferred office market destinations due to Grade A space availability and competitive values in the leasing market.
Source: Magicbricks.com
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North Bangalore, the new luxury destination
28-Sep-2012
Domestic buyers as well as non resident Indians are showing interest in North Bangalore’s luxury property market. Despite the fact that North Bangalore is away from central areas, it has emerged as an attractive investment destination. The area has witnessed a number of launches in the high end category.
Availability of land at cheaper rates is one of the main reasons developers have planned luxury projects in North Bangalore. “Not much land is available in the entire city except in the northern part. Land in other zones are scarce and whatever remains, come on a premium,” says Saquib Ilyas, Trend Shelters, a city based realty firm.
Being a newly developed area, property rates offered by developers are still lower when compared to those available in more central areas. This in particular is attracting a lot of overseas buyers. “Investors settled abroad find North Bangalore a lucrative option to invest in. Having seen an upmarket lifestyle outside the country they expect a similar environment back home. Thus, the area is serving their purpose well,” says Jaiwanth Gopalakrishnan, of Mainstay Group, a city based realty firm.
On offer are apartment and villa properties. While North Bangalore properties come in the range of Rs 5,000 to Rs 7,000 per sq ft Central Bangalore properties are available at a whopping rate of Rs 20,000-25,000 per sq ft, adds Gopalakrishnan.
Some of the localities in North Bangalore offering such projects include Devanahalli, Hebbal, Hennur Road, Doddaballapur and Yelahanka. “Devanahalli and Hebbal sub-markets are exhibiting an impressive scale of activity. This is primarily due to the on-going infrastructure development work in these areas. The already constructed Bangalore International Airport is also acting as a catalyst for the North Bangalore micro-market,” says Karun Verma, MD-Bangalore and Kochi, Jones Lang LaSalle India.
Some of the well-known builders having projects in the area are Prestige Group, Godrej Properties, Legacy Builders and Salarpuria.
Source: Magicbricks.com
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5 urban settlements to boost realty development in Bangalore
13-Sep-2012
The government is getting its act together to get the pressure off Bangalore by developing towns on the city’s periphery and connecting them via expressways. The Karnataka Urban Infrastructure Development Finance Corporation ( KIUDFC) has proposed to develop about 8,005 sq km area coming under the jurisdiction of Bangalore Metropolitan Region Development Authority (BMRDA) as a “city cluster development project”.
“BMRDA has planned to set up five satellite townships and develop them as self-sustainable cities. The state government had approved a BMRDA proposal in this regard in June 2006,” said Suresh Kumar, minister of law and urban development department.
The proposal is now before the Centre for its approval. Under the city cluster development project, Bidadi (in Ramnagara taluk) will be developed as Knowledge City. Ramanagara will be developed as Healthcare city, Sathanur in Kanakapura taluk will be developed as Textile/Apparel city, Solur in Magadi taluk will be a Manufacturing city and Nandagudi in Hoskote will come up as Hardware/Manufacturing city. These five towns around Bangalore will be connected to the Outer Ring Road (ORR) of Bangalore through four-lane expressways.
The minister also said that some of the key projects under this plan, especially the establishment of the international airport at Devanahalli and completion of the proposed peripheral road, will put a number of urban settlements such as Nelamangala, Doddaballapur, Vijayapura, Hoskote and Malur on the path of rapid development.
“The structure plan has identified the five development corridors as a measure of dispersed concentration. Some of the emerging spatial patterns in the BMR growth are Bangalore-Hosur Industrial Development Corridor, Bangalore-Whitefield Corridor, Bangalore-Nelamangala-Tumkur Corridor, New International Airport Corridor and Bangalore-Ramanagara-Bidadi Corridor. Asian Development Bank has also identified the Bangalore-Tumkur-Mysore City Cluster as one of the fastest growing urban regions in India,” said Kumar.
Source: Times of India
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Elevated road to Bangalore Airport to boost realty sector
17-Aug-2012
The construction of the elevated road over Bellary Road by the National Highways Authority of India (NHAI) has been on for some time now. According to a senior official at NHAI, the entire stretch will be ready by June 2013. This is due to certain delays at two junctions – Kogilu and Vidyanagar. Once the flyovers are ready at these two junctions, the entire stretch will be seamless and will facilitate a smooth flow of the traffic, making travel time from Hebbal to the airport a mere 30 minutes.
The elevated stretch, which starts from Kodigehalli gate will be six-lane and extends over 3.72 km. Once this is ready, the toll rates will be revised and the drive to the international airport will be hassle-free. This elevated road will have several underpasses and flyovers at many junctions. In addition to this ambitious project, another infrastructure project that will serve the region well is the Phase II of Metro Rail. The plans to make the Outer Ring Road (ORR) a signal-free seamless corridor will make the stretch from the Hebbal flyover to Beninganahalli a potential hotspot for commercial development too.
Residential Catchments
The areas around the elevated expressway are potential residential catchments due to the area being a Special Economic Zone (SEZ) with an aerospace, IT/BT and hardware park having been proposed. The residential catchments will be the Yelahanka satellite town, Bagalur Main Road, Doddaballapur Road, Hennur Road and Hebbal areas which are well-connected to the international airport road.
Commercial Development
The proposed Information Technology Investment Region (ITIR) with Special Economic Zones planned for an aerospace park, IT and BT parks will bring in a considerable amount of workforce. This gives immense scope for residential development in the region.
The connectivity from Old Madras Road to Devanahalli is another significant factor that has led to large-scale realty development in this corridor. Commercial spaces, retail outlets, hotels and residential projects are bound to draw high returns on investments due to their proximity to the international airport, and these ambitious civic infrastructure projects.
Upcoming Projects
The NHAI has recently drawn up a project to link Dabaspet to Hoskote. This will lead to the direct linking of the NH4 and those travelling from Tumkur and Pune and going towards Chennai can bypass the city, thus saving on precious travel time. This four-lane stretch will improve industrial growth in the region too. Dabaspet is a well-established industrial estate which has grown after Peenya became congested. The linking of this region to another upcoming industrial region and automobile hub – Hoskote – will give an impetus to further growth in the region. The residential catchments of Doddaballapur, Devanahalli and Hoskote too will get a shot in the arm with this major road connectivity project.
Source: Magicbricks.com
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Hardware tech park to open by Sept-end near the Bangalore International Airport in Devanahalli
09-Aug-2012
The hardware technology park planned by the State government near the Bangalore International Airport in Devanahalli is expected to start operations between September 24 and September 30 this year.
According to Industry & Commerce Principal Secretary M N Vidyashankar, the park is expected to host around 300 Taiwanese companies coming to Bangalore to set up shop as well as explore joint ventures with their counterparts in Karnataka.
The hardware technology park, styled Taiwan Hardware Technology Park, will come on a 300-acre plot and boast of an integrated township, industrial units and residential space among other amenities.
Investments to the tune of Rs 600-750 crore are envisaged for the project, which will be devoted exclusively to setting up manufacturing units for semiconductor chips, light emitting diodes (LED), computer hardware and telecommunication equipment, Vidyashankar said.
The state government will sign an agreement with Taitronic (Taiwan Electronics Manufacturers Association) and TCA (Taipei Computer Associates), who will lead a 75-member team to inspect the proposed site for the park, Vidyashankar said.
The proposed tech park is the outcome of several visits by Taiwanese delegations who were keen to get a number of small and medium Taiwanese enterprises to operate out of Karnataka, Vidyashankar said.
The State Electronics Hardware Policy, which seeks to facilitate, promote and develop the electronics hardware manufacturing sector, hopes to make Karnataka the world’s preferred destination for investments in high value-added electronics manufacturing.
Towards this end, the policy offers a slew of incentives for investors, along with a Electronics Innovation Fund set up at an initial corpus of Rs 25 crore. The Innovation Fund will provide funding to entrepreneurs to develop new products to be manufactured in the State.
Source: Deccan Herald
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RIL TO SET UP RS 3,300 CRORE UNIT IN DEVANAHALLI
11-Jun-2012
Karnataka ‘s GIM ( Global Investors Meet) ushered in investments worth Rs. 7.6 Lakh crore with the top notches nationally and internationally keen on investing here. Infotel Broadband Limited, a subsidiary of RIL (Reliance Industries Limited) signed a Memorandum of Understanding (MoU) with the government of Karnataka to set up a new unit in Devanahalli. The second day of the GIM’s meet witnessed the signing of the MoU between the two parties. This unit set by RIL will spread over 36 acres and involve an investment of Rs.3, 300 crore.
RIL’S Infotel Broadband had recently announced its plan to establish 1, 00,000 new towers for its 4G operations. At present, RIL is the only company with pan- India broadband wireless access to provide 4G facility. Pulling out from the asset light model, it announced its telecom project to be independent in nature, dismissing rumors regarding its collaborations with third parties. Mukesh Ambani led RIL won the auction that granted it the rights for 4G operations on a pan India basis for Rs. 12,848 crore. It acquired 95% stake from Himachal Futuristic Communications in Infotel Broadband for Rs. 4800 crore. RIL’s 4G launch is highly anticipated where it intends to introduce high-speed internet and data services across the country.
The GIM meeting also observed other leading companies signing their MoUs with the Karnataka Government including Infosys and Wipro who will set up SEZ there. Infosys will set up SEZ near the Bengaluru International Airport entailing to an area of 60 acres of land and propelling an investment of Rs. 595 crore. Wipro will set up SEZ in the Sarjapur area that will spread over 35 acres and demand an investment worth Rs. 461 crore.
The signing of around 750 MoUs in this meeting served as a testament to the fact that the Indian economy is buoyant at present. Deputy Chief of Mission at the US embassy, Donald Lu claimed that Bengaluru and Hyderabad are emerging as aerospace hubs internationally, paving way for a strong US- India hi-tech partnership. He also mentioned that Indian workforce is no longer associated with call centers. The image has been altered with them representing innovation and risk taking at present. The GIM meeting discussed and focused on varied sectors including economics, science, tourism, textile, infrastructure, energy, science and technology, etc.
Karnataka Government also announced its setting up of a high-class innovation center for entrepreneurs and start- ups that will run professionally, without the involvement of bureaucrats.
Source: Reliance-Industries.com
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Right time for NRIs to invest in Indian realty market
05-Jun-2012
With the current decline in rupee against dollar, do the NRIs see Indian realty market as a lucrative option for investment?
‘Yes!’ the NRIs, developers, promoters and property experts say. The reason: The Indian currency has fallen by around 20% against the US dollar. This has triggered a substantial rise in the volume of property-related enquiries from the NRIs, as this is a great opportunity for them to invest in Indian real estate. They can have very good returns on their investment; but to avail this opportunity they have to make their decisions faster because the price of real estate is also growing here.
Many NRIs are even buying multiple units for investment purposes. In the last six months, developers and promoters have sold more than 300 units to NRIs in the NCR markets like Gurgaon, Noida, and Kundli.
Anshuman Magazine, the chairman and managing director of CBRE South Asia Pvt Ltd, says: “With the rupee depreciating significantly and property prices remaining flat in the recent past, it is a good opportunity for the NRI’s to invest in the market. Although, overall investment sentiment is down, the long term growth fundamentals of the Indian real estate market are intact.”
Ravinder Taneja, the vice-chairman of TDI Group, says: “The returns on property investments are always higher, compared to other investments, due to its minimal volatility and stable appreciations. This is also a reason that developers, investors and end users keep augmenting the realty market. The current decline in rupee against dollar has further attracted NRIs to invest in property. This temporary phase of slowdown in the rupee will fetch more to realty from NRI’s who want to buy property in India.”
Rakesh Yadav, the managing director of Antriksh Group, says: “The fall of the rupee against the dollar has brought cheer to at least one section, the NRIs. This is the right time to buy property. We are getting a good response from Indian buyers who live abroad.”
Pranav Ansal, the vice-chairman of Ansal API, says that the unprecedented decline in the value of rupee has actually become an opportunity for NRIs to invest in the country. “The NRIs are cashing in on this deprecation and are making a beeline to buy property in India. The sluggish growth rate in the developed economies, especially in Europe, has only added to the keenness of the NRIs’ to invest in their homeland. Our company is offering attractive discounts to NRIs to buy or invest in its property in India.”
“We are actively participating in international exhibitions that are held in countries having sizable NRI population like the UK (London), Middle East (Dubai), Singapore, Bangkok, etc. Our endeavor is to reach out to the NRIs directly and convince them to invest in their homeland. We are happy that the response to our offers has been overwhelming,” Ansal says.
Navin Raheja, the chairman and managing director of Raheja Developers, says: “The depreciation in the value of rupee is effectively 20%. This is the right time for the NRIs to invest in the Indian real estate; we have received several inquiries and some of them have even bought into our projects like Raheja Revanta, Raheja Aranya, Raheja Oma, etc.”
“Undoubtedly, the current decline in rupee has made homes in India increasingly cheaper in dollar price terms. This is an attractive proposition, especially at a time the real estate sector in the developed markets remains depressed. Add the 8-10% discount that builders offer on down payment and the effective price for an NRI buyer drops by more than 30%,” Raheja says.
Anil Sharma, the chairman and managing director of Amrapali Group, says: “The NRIs are a huge segment of the potential buyers for realty-related inventory, particularly in the NCR. We believe that the appreciation of the dollar may catalyze the realty markets even in Tier I and II cities. Nearly 25% of the bookings in our projects has been by the NRIs, compared to just 10% in our earlier projects. Now, to leverage on the trend, we are marketing ourselves in the US and Canada, as this is just the right time to invest in India.”
Sanjeev Srivastva, the managing director of Assotech Limited, says that investment in real estate market is always profitable for investors. “This is one of the fastest growing sectors in India and it has very good prospects. Indian property is 20% cheaper if anyone buys in dollars, as the Indian currency has declined by nearly 20% against the dollar. This is a great opportunity for NRI who wants to invest in Indian real estate. They can make good returns on their investments. However, it will help if they make their decisions faster, as the price of real estate is also growing.”
“As luxury apartments have been a major attraction for the NRIs, they can invest in ready-tooccupy units or projects nearing completion for better returns. Investment in Tire II and Tire III cities can be more beneficial as these cities have seen more appreciation than the metro cities,” Srivastava says.
Manav Singh, the chairman of Imperial Holding Pvt Ltd, says that this is an opportune moment for the NRIs to get a bigger bang for their dollar.
Neeraj Gulati, the managing director of Assotech Realty, says: “Although the depreciating rupee will create a lot of trouble for our economy, and the developers too, at the same time, it is a boon for the NRIs as they will get nearly 15% benefit on property purchase from Indian developers. The RBI is supposed to take corrective measures to strengthen the rupee, so it makes good sense for the NRIs to take advantage of the situation and maximize their benefits now.”
Vikas Gupta, the joint managing director of Earth Infrastructure Ltd, says that this is the best time for investment in the Indian real estate market. “The 20% rise in the value of dollar vis-a-vis rupee, and the 10- 12% discount offered on down payment plan for the NRIs translates to a total of 32% discount on Indian property. Thus, the NRI’s get to buy property at two-thirds the actual price on a down payment plan. The impact of rupee depreciation has resulted in 10-15% rise in NRI remittance into the NCR properties in the last eight months,” Gupta says.
Source: Magicbricks.com
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Property value appreciates more in Bangalore's outskirts
26-May-2012
Bangalore has witnessed one of the most robust growth and higher price trajectory patterns in comparison to other cities in India.Real estate in Bangalore has been signified with robust growth, steadiness in prices and a positive purchasing pattern from customers who intend to purchase plots, flats and villas in and around Bangalore. Across the world, the phenomenon of price growth has a very unique pattern and the same pattern is seen to be followed in every city in India, including Bangalore.
Detailed studies by various real estate funds, managements and related research organisations have confirmed this pattern. This pattern, in simple terms, means, 'The real estate prices in the outskirts of the city (whichever city you are in) grow faster than in the inner city or CBD area'. The CBD stands for central business district of the city or metro concerned. The CBD area would consist largely of BBMP areas in Bangalore.
As far as Bangalore is concerned, the outskirts includes Sarjapur, Hoskote, Bidadi, and Devanahalli areas including the new international airport areas, and other areas covering Bangalore as a shell to the CBD area.
I have been in the real estate business for the last one and half decades and have known this phenomenon for the same number of years, and have been personally tracking the data in Bangalore and Kerala. All my favourite investments have been based on this principle and have always reaped rich dividends by the 'investments in outskirts strategy'. Those who have purchased flats, villas or plots in the outskirts have earned higher returns on investments, which in financial terms means 'ROI' or returns on investments.
Since the early 1990s, I have been tracking the price movement data of Bangalore south. In those times, Koramangala was considered to be outskirts of Bangalore. During that time, the price in Koramangala was just Rs 300 per sqft, whereas in the neighbouring CBD areas like Wilson Gardens or Shanthi Nagar the price was around Rs 1,000 per sqft.
Subsequently, in the early years of 2000, Koramangala slowly moved from the 'outskirts ' status to the 'CBD' status and the prices in Koramangala during this change-over from outskirts to CBD moved higher than Wilson Garden or Shanthi Nagar. The price in Koramangala was around Rs 2,000 per sqft. During the same time, the earlier CBD areas like Wilson Gardens and Shanthi Nagar moved up from the previous price of Rs 1,000 per sqft to Rs 1,750 per sqft. In real terms of ROI, if you had invested in Koramangala with the principle of 'higher ROI on outskirts investments' , you would have received a 566 percent returns. The then CBD investment would have given you just 75 percent returns.
As cited above, Koramangala moved from the outskirts status to the CBD status in the early years of 2000 and similarly areas like HSR Layout, Ring Road and other surrounding areas became the outskirts areas to Bangalore's CBD. When we do a similar price comparison to understand if the principle of 'outskirts prices grow faster than the CBD', we find these results
In the early 2000s the price in HSR Layout was Rs 650 per sqft, whereas Koramangala was Rs 2,000 per sqft (by this time Koramangala had moved firmly into the CBD area). If you compare the same prices today, in 2012, Koramangala has reached a healthy price of Rs 12,000 per sqft, whereas the outskirts locations of the early 2000s such as HSR Layout have reached a price of Rs 9,000 per sqft in the year 2012. This clearly shows that you would have received a ROI of 1,284 percent if you had invested in the then outskirts of HSR Layout, while you would have received a ROI of 500 percent if you had invested in the CBD location of Koramangala. Again, it is proved here that the principle of 'higher ROI on outskirts investments' is correct.
For the year 2012 and before, we will do a similar study of location like Sarjapur which is now a part of the outskirts of Bangalore's CBD. In the Year 2003, plots in BMRDA-approved townships were around Rs 200 per sqft. In the year 2012, they are Rs 2,800 per sqft, which means you would have received a ROI of 1,300 per cent.
This analysis has been made for legally approved properties of BDA, BBMP or BMRDA authorities. Believing in these city growth patterns, the present outskirts like Sarjapur, Hoskote, Bidadi and Devanahalli will be part of CBD areas in future and there is a huge price benefit and ROI to be made. At the same time, I would say firmly that this ROI can be made only by long-term investors and not by short-term speculators. At the same time, you should use your prudence and investment analysis to find the right investments in branded and reputed projects.
Similarly, you could make a price appreciation analysis for locations around your current residence. You will find that the prices in the outskirts have appreciated firmly and higher than in the CBD locations around your current residence.
Dr C J Roy
Economic Times
Source: Economic Times
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What do NRI investors prefer in real estate?
26-May-2012
An estimated 30 million non-resident Indians (NRIs) spread over 140 countries have an estimated combined wealth of USD 1.2 trillion. Expatriates constituted the highest remitters of foreign exchange consecutively for the years 2010 and 2011. Over 6-8 lakh resident Indians leave the country in search of greener pastures and an estimated one lakh NRIs return home every year.
Among the various investment options contemplated back home, real estate plays a key role as the rate of appreciation and periodical returns on investment are more in India . Moreover, a number of NRIs, particularly in West Asia, who cannot continue to stay there due to domicile restrictions will have to return home one day or the other. This is one major reason why they always look at various investment options including real estate back home for permanent settlement.
There are three kinds of investors in real estate - low, middle and high income groups. Within these categories there are end-users as well as investors. In the Association of Gulf Cooperation Council countries (comprising UAE, Saudi Arabia, Qatar, Oman, Bahrain and Kuwait), an estimated 55-60 lakh NRIs are working today including semiskilled and unskilled labourers.
Similarly, out of 1.6 million NRIs in Malaysia the preference is more towards southern cities here from where a majority of them come. In Canada, there are NRIs predominantly hailing from Delhi , Chandigarh and other regions . In the US, out of 2.5 million NRIs, southern cities of Bangalore, Chennai and Hyderabad dominate in terms of real estate requirements. The specific real estate needs of NRIs vary depending on the region, savings potential and a combination of other factors. The largest market for affordable housing in the price range of Rs 15-25 lakhs is the Gulf region where there are a large number of expatriates who are either semi-skilled or unskilled, and the salary levels are not too high. There are high net worth individuals and technically-qualified professionals who constitute 10 percent of the NRI population. Many of this segment are looking for apartments in the price range of Rs 50 lakhs to Rs 1 crore and villas in the price range of Rs 1.5 crores plus. There are also others keen on investing in commercial property .
According to banks in the Gulf, the average home loan size is Rs 30-70 lakhs and the predominant demand revolves around apartments. The overall home loan business in Dubai alone ranges from Rs 720-800 crores.
Among the cities that drive real estate demand overseas are Bangalore, Chennai, Jaipur, Kochi, Mumbai, NCR, Pune and some other smaller cities. Even some Tier II cities are in demand. A majority of the NRI buyers are end-users . There are buyers looking for a second home for use by their family members, to earn periodical returns on the investment , or even to retain as a buffer to meet contingencies.
Investing in land is quite popular among NRIs too as those who cannot buy an apartment immediately are keen to invest in a lesser value asset. Land value appreciates fast.
With the relocation of more skilled professionals to developed countries such as UK, USA, Japan, and Australia, there is a growing requirement of apartments in the price range of Rs 70 lakhs plus in metros. Villa developments are sought-after especially in the price range of Rs 1.50-Rs 2.50 crores.
A significant factor is that these days many high net worth individuals prefer income-yielding assets such as leased commercial property or opt for pre-launch offers which yield 18-25 percent during the project implementation stage. A section of NRIs are also keen on investing in project level entities on non-repatriation basis by forming a partnership firm or incorporating private limited companies.
Economic Times
Source: Economic Times
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Property is a potential investment option, especially in these market conditions
19-May-2012
The stock markets have been consolidating ever since they touched an all-time high a few quarters ago. The negative sentiments in the stock markets here are being fuelled by developments in the global markets as well as growing concerns over India's macro economic conditions and delays in certain key policy decisions. Since the conditions in the global markets are uncertain, investment in the equity markets come with higher risk, especially for investors with a low risk profile .
Therefore investors with a low risk profile should plan a strategy for a gradual reduction in their equity exposure and re balance the portfolio by investing in debt-based instruments and significantly in property.
Investments in property are good for long-term investors as their per capita incomes have been rising consistently over the last few years, especially in the urban areas. This rise in the per capita income has resulted in increased demand for property and as a result there has been a rise in prices in the property market.
Investment-led buying in the property market leads to more demand and also contributes to the price rise in the markets. In the last few quarters, there was some consolidation in the property investment market owing to the high home loan interest rates. However, as the interest rates have started coming down, there are expectations that property prices will move in an upward trend.
These are some significant aspects of a property investment:
Long-term view
In general, investments in property should be made for a long term. Investments in property require a higher upfront payment and the ticket size is generally larger. Therefore, it is important to analyse certain aspects while entering into a property investment - location of the property, clarity of title and entry price.These factors govern the returns from a property investment.
Income from property
Investments in property with good rental income ensure a short-term inflow for the investor. The rental returns from a property come in handy as they can be used to augment the monthly income.
Rental income, especially from a high value property bought with a home loan, is significant as it can be factored against the interest payments . And it will bring some income tax relief for the investor as well.
Capital gains
The appreciation in the value of a property is called capital gains. Expectations of high capital gains are the main reason for most investments in property. Property investments in the upcoming areas of growing cities give the best returns over time.
Therefore, investors looking at investing in a property should prepare a careful due diligence with respect to various aspects related to it. The property has to be owned for more than three years in order to categorise the capital gains as long-term capital gains for the tax benefit.
Some points to keep in mind:
Long time frame: Investors should look at a long-term horizon (more than five years) while investing in property. The tax benefits on capital gains accrue then.
Options: There are many options available in the property market. However, it is important to evaluate the investment with respect to the location of the property , clear title and entry price. The second sale property market also offers some good deals. There are many properties on offer in the second sale market by investors.
Finance: Financing a property is another significant factor. Since a property investment is a large financial commitment, it is important to plan for sufficient liquidity (especially those funding it with a loan) to service the debt as well as other major commitments .
Economic Times
Source: Economic Times
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