The eastern corridor of Pune has witnessed rapid growth in commercial sector as Grade A developers have ample stock to lease in the area which enjoys an advantage in terms of social infrastructure, connectivity to other parts of the city, abundant residential options, proximity to airport and railway station among host of other advantages.
The Confederation of Real Estate Developers’ Associations of India has expressed displeasure about the proposed Model Real Estate (Regulation of Development) Act in its present form, saying it could lead to an escalation of prices of housing stock in the country by Rs 300 per sq ft.
With the economy giving indications of recovery and real estate companies putting up a brave face, the question as to whether this is the right time to buy property has yet again been raking up. If the industry figure is to be believed, it seems many of the prospective home buyers who had put their plans on shelf due to the threat of job loss & inability to pay the EMIS borne out of recession are back in the property hunt.
Kolkata is fundamentally a Tier II city, and its real estate market is not as volatile as those of the primary cities. Because of this, Kolkata’s residential property sector was not as seriously impacted by the nationwide slump in the real estate market as cities like Mumbai, Delhi, Pune or Hyderabad.
With the return of confidence in the sector, Indian real estate players are now once again looking at private equity funding. That said, the industry still depends heavily on bank debt, NBFC funding and end-user advances. This is because bank debt is a cheaper option, and also because it offers flexible tenures.
With the provision of more entertainment options in malls, Indian retailers now have vastly enhanced their ability to increase sales. Until recently, street markets and bazaars were the top performers in the retail space, and they were cornering a huge chunk of the overall sales.
Faced with the prospect of new transactions, corporate real estate (CRE) managers have been analyzing the options of leasing versus buying a real estate space. In the recent slowdown, distinct trends have emerged among industry verticals while strategically choosing either to lease or buy real estate space. While the IT/ITES sector has been the front runner in terms of lease transactions recorded during 2H08-1H10, accounting for 41% of the total lease transactions, BFSI and Manufacturing / Industrial sectors have been dominant purchasers of office space during the same period.
Real estate markets are inherently vulnerable to prolonged periods where prices deviate from their fundamental value. The features that contribute to this deviation are imperfect information, suboptimal financial markets and supply rigidities. Imperfect information causes buyers to either overestimate or underestimate the fundamental value of real estate assets.
Taking action on India’s environmental crisis is no longer an option – it is a necessity. Sustainable real estate presents India with an unique and enormous opportunity to make concrete progress in the country’s effort to improve its environment.
The final 2010 edition of Global Market Perspective provides our view on the likely shape of commercial real estate markets across the globe in 2011. Over the next 12 months we expect to see a much greater divergence in real estate activity and performance.