Lack of affordability in the larger cities is the primary hurdle to the largest investor base, and property investors are now looking at smaller towns and cities. However, their increasing bullishness on Tier 2 & 3 cities as against their tier 1 counterparts is not just on account of their relatively more affordable property prices, but also because of their better growth prospects.
Multiple Challenges for HFCs Still in Play: The housing finance sector has been facing challenges, which have led to a contraction in spreads, a rise in funding cost and an increased spotlight on their asset-liability mismatches. Such mismatches have resulted in constrained financing from both market-based sources (CPs and NCDs) and banks for many players.
Further liberalization in FDI policies – 51% FDI in multi-brand retail and 100% FDI in single-brand retail under the automatic route (against the previous 49%) – has attracted major global PE funds to double their investments in the Indian retail sector.
Most of the analysts who track the local property market maintain that the emerging market realities and the economy of the region has changed the way people look at the housing. This change has been pretty fast in the last over a decade. It is a paradigm shift in the housing market of the city.
Entity-level investment is an efficient strategy to get a firmer foothold in the real estate market. It allows a private equity investment firm to not only deploy its capital but also gain synergetic skills in the real estate marketplace. PE firms invariably look for high levels of corporate governance in a real estate development company before deciding to invest in it at an entity level.
JLL India has announced key leadership appointments at strategic positions in its Chennai business. Siva Krishnan has been appointed Managing Director, Chennai; Kanchana Krishnan has joined as Head – Markets and Retail, Chennai and Jerry Kingsley has stepped up as Head – Capital Markets, South India and Head – Sri Lanka.
According to a World Bank report, India received USD 79 billion in remittances in 2018 – with a sizeable portion going into real estate. NRI investments into Indian real estate are led Indian expatriates from UAE, USA, UK, and Canada. In terms of Indian cities, Bengaluru, Mumbai, Pune, Hyderabad, Chennai and Delhi-NCR currently attract the lion’s share of NRI investments.
Once completed, Jewar International Airport will not only ease traffic at Delhi’s IGI Airport but also create multiple job opportunities and give decent impetus to the property market in Noida, Greater Noida and Yamuna Expressway. These markets have been reeling under tremendous pressure over the last three to four years, and require a fresh injection of opportunity and intent to overcome this slump.
Delhi-NCR has until now witnessed a similar trend, Bangalore and Hyderabad are fast catching up on this trend as well The study also indicates that tenants are moving from traditional Central Business Districts (CBDs) like Connaught Place in Delhi and Nariman Point in Mumbai to emerging alternate new business districts in Gurgaon and Bandra Kurla Complex, respectively. As a result, with rising vacancies, rentals across CBDs have been witnessing a decline.
The country’s housing market has also seen the highest impact of policy-induced disruptions. Given the fact that the housing market was tainted by malpractices and lack of customer-centricity by developers, the Government had to step in with policy interventions squarely aimed at cleaning up the sector.