Decline in office space demand

The Real estate sector in India is gripped by slowdown fear. In year 2011 the supply of fresh office space declined by 40 per cent. Delay in project completion, Weak economic cues and vacant stock piling up also private equity investment has risen very sharply in this period of time. According to a property consultant, in year 2011 around 30 million square feet of office space had entered to the key property a market which was 55 million square feet down last year. The high cost of interest rates, uncertain demand and tight liquidity situation were the hurdles that came between constructions of developers.

Till the economic conditions in India and global economy stabilize it is not wrong to say that these sentiments will prevail. Negligible supply was witnessed by leading office hubs in metro cities Mumbai and Bangalore. Developers were forced to delay completion of projects in 2012 as the pressure is increasing. Last year office space absorption declined by 12 per cent from year 2010. When the price of commercial property is low, it is the best time to invest in Private Equity funds even in the phase of slowdown, this worked out quite well for the investors.

Good opportunities for home buyers

Real estate projects which were launched nationally in year 2007-2008 scheduled to be delivered in year 2011 are not running in time for completion, the percentage of these residential projects is 70 per cent. A further delay of 18 to 24 can be anticipated due to the liquidity crunch faced by the real estate developers in the industry. It is expected that this trend will continue there is ease in liquidity and banks in India again start real estate projects lending. Home buyers are aware of these delays hence they have started preferring projects that are already built and ready to occupy against the newly launched ones.

The rate of delay is low in sold out projects and high in segments receiving fewer bookings. Due to this there is less pressure on developers. There will be delay in execution of project if it has been launched in luxury segment and has got only 30 to 40 per cent booking. Buyers who have already invested in projects that are being delayed the scope of correction is very little. For buyers the move will be to pressurise the developers by forming a group. Many such groups can be seen on Google, Yahoo etc. who have been successful in pressuring developers.

Liquidity crunch faced by builders

In India’s biggest metro cities the demand for property has slumped, the increasing borrowing cost and hike by central bank has led to this situation. The adverse effect of which is slow economic growth. According to Prabhudas Lidhar in Mumbai the home sales has dropped to 20 per cent in the month of November from previous year 31 months low. The statements and conflicts in negotiations between the real estate builders and buyers is the main reason behind drop in sales, this was wrote by the research head of Knight Frank LLP India unit, Samanthak das who is based in Mumbai.

The profits of Indian developers have fallen to 23 per cent from a year earlier in last quarter. It fell to 20 per cent since the last three months which ended on 30th June. IN the last quarter
ended this 30th September, DLF’s net income slid to 3.72 billion that is 11 per cent. The challenge which still prevails for the developer sis liquidity concerns said Samir Jasuja, CEO of Propequity . A Gurgaon based real estate analytic and data provider aid that on realty ending there is already a slow phases which is being experienced by the Banks.

Indian developers worried about debt repayment

Realty firms are cutting or withdrawing on their assessments as in the next three years debt of Rs1.8 trillion will be maturing for India's biggest developers. India's largest builder DLF Ltd is being downgraded by Crisil Ltd. On December 27, Indian unit of standard and poor's climbed to its highest of Rs242.7 billion after its liabilities minus cash. For Unitech limited Fitch rating withdrew its ratings last month. Unitech is the second largest developer to face funding crunch in year 2008 during the credit crises. In last two years the central bank’s monetary tightening record displays the risk of rising defaults in real estate industry of India.

The economic growth has been slowest in year 2009. In a weak economic environment cash flow becomes weak. The financial status of Indian developers can be undermined by high rising debts. Due to delay in reduction of debts ratings remain under threat. It will be difficult to expect development in near future. The rate of central bank was increased to 3.75 per cent made the Indian real estate’s debts costs to rise. Currently the central bank’s repurchase rate is 8.5 per cent which is highest since previous two years.

CREDAI trying to increase transparency in the system

The Confederation on Real Estate Developers Association of India (CREDAI), Karnataka chapter in collaboration with the central wing of the confederation, the national body CREDAI- India has initiated a “Mission Transparency”. The main objective of the mission is primarily to bring clarity, speed and transparency in the dealings of the body.

Mr. Sushil Mantri, President, CREDAI Karnataka was of the opinion that our country is now at such a footing that it is gathering the attention of variety of investors from all places and it becomes almost mandatory to hold enough transparency in the system. Our country has the best suited environment for the inflow of investments. However it is largely required in the current scenario to strengthen the transparency position in India for help the investments inflow. For this very purpose CREDAI- Karnataka and CREDAI- India has initiated the mission to achieve transparency of greatest degree possible and this step would be greatest value addition to all.
While discussing more about the mission Mr. Mantri added that first they would be creating a comprehensive list of documents required for getting the plans sanctioned and for receiving various NOC’s.

Bangalore retains rank 10th in investment in property

Bangalore was successful in retaining its 10th rank in the category of most favoured real estate investment destinations in the Asia pacific region. Pricewaterhousecoopers (PwC) and Urban Land Institute in its study has ranked the city as tenth in the same category last year too. According to the report Bangalore’s’ organic, growth driven market and its markets’ ability to buck mega trends has helped the city retain the position on the list.

The survey includes advices and recommendations from over 360 internationally known real estate professionals which include investors, developers, lenders, consultants, brokers and property company representatives. Due to rising inflationary and economic pressures Mumbai and Delhi fell from their positions from third and fifth to fifteenth and twelfth position respectively. According to the researchers in Delhi inflation has continued to increase the costs in the city and due to it developing in the capital city is not economically feasible. The problems with funding provide an opportunity for private equity investments.

According to Mr. Jai Mavani, Leader of Infrastructural and Real estate, PwC India even in 2009 when the real estate markets were bottoming in India, there were huge demands at every price correction. So there is a hidden demand which cannot be foreseen unless there are certain regulatory processes and improval in the liquidity and interest rates.

Singapore property funds in talks to invest $100 million in a SEZ in India

A Singapore property funds Ascendas Real Estate Investment Trust and Mapletree Investments Pvt. Ltd. are planning to invest about $100 million in a Special Economic Zone (SEZ) near Pune, an Indian city. According to sources, funds are negotiating with Indiareit Fund Advisors, a property fund managed by an Indian billionaire, Ajay Piramal and real estate developer Paranjape Schemes to buy a major portion of the Blue Ridge Special Economic Zone (SEZ).

Special economic zones are export oriented zones wherein there is significant exemption from tax to generate employment. Indiareit is a unit of Piramil Healthcare which has assets of $1 billion. It had invested in the 130 acre Blue Ridge project between the years 2006 and 2008. Last year the deal was to be finalized relating to a majority stake in the SEZ project with Tata Realty Fund, but it was unsuccessful.

Indiareit has sold off properties amounting to 7 billion rupees as shown by its website. DLF, an Indian developer has said last month that it along with a joint venture partner had sold another SEZ in Pune for an amount of 8.1 billion rupees to a unit of Blackstone Group. Real estate firms in India are facing severe decrease in sales after the central bank; Reserve Bank of India (RBI) had raised its interest rates 13 times since March 2010.

Private equity investments soar at 75% in realty

It has been observed that private equity funds in India’s real estate projects have increased by more than 75% over the past year, whereas at the same time mutual funds and other investments have decreased in this sector because of falling revenues and rising interests. The developers approach the private equity players because they are more open to negotiations.

According to accountancy and advisory firm, Grant Thornton, this is the main reason why private equity funds have soared rising to $1656 million in the year 2011 as compared to $944.7 million in the previous year while mutual funds reduced their exposure to the real estate sector during this period. The total investments in the sector due to mutual funds declined by 63.6% to Rs. 691.55 crore at the end of September whereas in the previous year it was Rs. 1900.83 crore according to the stats of Value Research, a Delhi based investment research firm.

Foreign financial institutions have also decreased their lending substantially in the real estate sector. At such a time, private equity heads of HDFC and Kotak Mahindra, have brought value to their business by investing in real estate projects. According to Mr. S Sriniwasan, CEO, Kotak Realty Fund much of the private equity money in 2011 came from domestic private equity funds with high debts and fixed returns ensuring lower risks

Debt repayment major concern for Indian developers

Concerns like decreasing real estate sales and ever rising interest rates are forcing the real estate companies to shell off their assets to repay their debts. According to a data compiled by Bloomberg show, on December 27 DLF India Ltd., the nations’ largest builder was downgraded by Crisil Ltd., the Indian unit of Standard & Poor’s after its liabilities minus cash increased to an all time high of Rs. 242.7 billion in the three months ended in September.

The risk of defaults has been rising in the Indian real estate industry as the central bank monetary tightening policies have increased the burden over the already overburdened with the slowest economic growth. According to Mr. Kejal Mehta, an analyst at a Mumbai based brokerage Prabhudas Lilladher Pvt. The financial status of the Indian developers may worsen due to slowing cash flows and high levels of debt. Considering the high rates of interest, it is difficult to expect an improvement in the situation.

The amount of debt have been increasing by day due to central bank’s policies due to which the benchmark rate has risen about 3.75% points in the last two years to raise inflation. The central bank repurchase rate is highest right now at 8.5% since 2008. The mortgage rate at HDFC, India’s biggest mortgage lender is 16.5% according to the company’s website.

Real estate market will remain cautious over short term: Ravi Saund

In an interview of Mr. Ravi Saund, Chief Operating Officer, CHD Developers he clearly states that the real estate sector has become a lucrative investment for the Non- Resident Indians. He attributes the major cause for this was the depreciating value of Rupee. Also he pointed out a several aspects which a buyer in the real estate market shall consider before making his decision.
He also mentioned that these aspects would be the same fundamentally for residential as well as commercial properties. The property buyers of the day shall be aware of the fly-by-night companies as also the several commitments of the company especially the time constraints. One shall also take interest in the legal aspects of the company and directors to be aware that the developers are not involved in any legal hassles.

The real estate development in the areas or cities adjoining the one where the NRI’s are willing to invest and also the accessibility of the project are major factors which one should consider before finalizing a deal.
The primary moving factor behind investing in the real estate sector by the NRI’s is the returns. Cities like Mumbai, Delhi, Noida, Bangalore, Gurgaon and Pune are the most favoured cities when it comes to favourable returns are these cities have shown hikes in prices and rent over the past few years.

Major changes in realty sector this year

Last year was full of events for the real estate sector. With Unitech entering in the 2G second spectrum allocation mess created discomfort for the industry. In 210 industry experienced slowdown in sales but in 2011 the sales ratio of the realty sector turned out to be worse than previous year. Due to high inflation, economy struggled hard to be stable. The non performance of government and so much confusion rolling over the industry, 2011 turned out to be a year of mishaps for the realty sector. In year 2011 customers ran out of patience. This led the realty sector to make promise or at least try for to fix the mess.

It is estimated by majority of experts that this is going to bring many new changes in the real estate sector. The significant change amongst will be setting up of real estate regulator. This draft of real estate regulation and development will be going to be the most awaited piece of regulation of recent times. This bill was scheduled to be presented in the assembly in this winter session but due to debate over Lokpal bill in Rajya sabha , the draft of regulation bill has been postponed.

Decorating your house with leather sofas

Leather sofas are the most comfortable ones for the living room. They are the most expensive items used in decorating the room. Leather sofas add elegance to your room. But while you have decorated the room with soft and comfortable leather sofas, you must also learn about taking proper care of the sofas. Leather sofas are the most stylish, fresh and graceful among all furnishing that can be used to decorate the home interior.

They can be used to enhance both the modern and the traditional look, as per your preference. But only decorating should not be your forte, you must know about maintaining the leather sofa properly at your home or else it will be damaged in sometime.
You may place a leather sofa set in your living room and enjoy relaxing on it after a stressful day. These sofas are very comfortable to relax on, but needs to be taken care properly. Leather is a tender material which is damaged very quickly, if not maintained well. Therefore to use it for decades make sure you take care of the sofas properly. Since leather sofas itself add a special look to your living room, try and add minimal furniture into your room, or else it will look like a clutter.

Tips of painting your house

After purchasing a property, the next step is painting it in bright hues, so that it looks bright and attractive. Interior decoration is very important. You cannot stay in an empty room, you need furniture and basic belongings, so you need to decorate your rooms nicely so that it looks attractive and helps you relax after a stressful day. You home is your place where you wish to return after a heavy day, hence the first thing you must keep in mind, is the shades of the walls. Try and use bright and warm hues to set the mood and make your house look beautiful.
Follow the below mentioned tips to color your house;
• Start with priming. This is very important as it helps the color to stay properly on the wall
• Start with painting the ceiling of the room first and then follow downwards. Apply two coats of color properly. This will give a proper look.
• Wear a mask while painting, try and cover your hair and also keep the paints away from eyes.
• Choose shades as per the type of room. For e.g. if it is your kids room, you may select bright hues with wall occasional painting, but if it is your living room, you might select something elegant yet sober.

All about property maintenance

Purchasing a flat s just the beginning, once you have owned a flat or house you must work on its maintenance part. Maintenance of the property is very important. If you do not maintain it properly, it will experience damages very soon. Thus maintenance should be your priority once you own a property. Property maintenance is not an easy job and often people take experts suggestion to carry out this job.
Once you decide on the caring part, you can hire professionals for the particular job. Next allow them to go through a proper check up of;
• Air conditioning repair or setup
• Plumbing and winterization, windows and door maintenance
• Electrical repairs, wiring, and installment
• Roof repairs and maintenance
• Locks and its maintenance
• Boarding
• Renovation if any
To clean the property on regular basis, you must invest in
• Different types of cleaning materials like brooms and mops
• A handy lawn mower or push mower to clean the lawn
• Essential maintenance tools for urgent situation
• van for carrying the tools and supplies
As per the size of your house you must plan out a maintenance chart. Try and follow it as closely as possible and once in three months do a thorough maintenance activity. This will keep your house damage free for several years.

Success of Property website in India

Marketing style has undergone some serious changes since last decade. Today it is more about e communication than direct selling. Internet has changed our lives tremendously. Today buying or selling a property has become very easy and quick. All you must do is visit any property website and click on your expectation. The dealers give a proper explanation to any and every property they construct. They try to promote it correctly so as to allure customers. In the residential category, they even have introduced special furnished apartments for better service. Thus all these information is available on the website all you must do is serf the internet correctly and find out all about the property business in India.

Regarding the property sell, i.e. if you have a house or flat, you can decide on selling it through the property website. Those who are looking for properties, often visit through these websites and try find out the flat of their preference. Hence advertise through websites, or classified and get response within a short period.
As we all know, life is very busy nowadays, hence the best way to inform about any upcoming real estate is through internet. People do not have time to go through the morning paper and read the advertisements, hence develop interactive and informative website and inform everyone about your business or property.

Future of investing in real estate India

The rising interest rate in real estate has allured heavy investment in this sector. Due to the present global economic conditions, Indian real estate stocks are soaring high in the market. Since late nineties, the industrialization in Indian has grown like never before. Every one is investing in real estate. Since then Indian is experiencing growth of commercial and residential property.

Properties not only mean houses, offices, flats or hotels. The real estate promoters are coming up with many innovative projects, including, new age shopping malls, hotels, banquets, hospitals, entertainment and amusement parks, theaters, highways, roads, bridges and etc. The growth of population has provoked such developments. Today everyone prefers cozy apartments and then drive to some shopping mall for a relaxing evening. Thus lifestyle has changed. Thus, it paved way to huge scope of investment in the real estate sector.
The change in real estate scenario has provoked more and more investment in it. Today every company wishes to erect a lavish office. People enjoy living in beautiful apartments and visit to shopping malls. Thus many real estate promoters and companies have begun working on creating such amusement places for these people. Others have planned new stylish homes to encourage these service men to invest in properties. Thus the future of real estate in India is really bright and is continuously growing.