Steady economic growth, favourable policy environment, growing preference of global occupiers for Indian offices and listing of first Real Estate Investment Trust (REIT) in the country have put the India office market on a growth path, according to the half yearly update (H1 2019 – January to June 2019) by JLL India.
As anticipated, residential real estate activity remained largely tepid during the second quarter of 2019 in the backdrop of the general elections during the period but the recent Union Budget sops for the affordable sector may give the much-needed push to the segment henceforth. ANAROCK research indicates that housing sales in Q2 2019 fell by 13% q-o-q and stood at 68,600 units across the top 7 cities.
Only a paltry number of developers have built housing that meets the Government’s criteria for incentivized affordable housing in 2019. ANAROCK data reveals that of the total housing supply of 1,39,490 units in the top 7 cities H1 2019, merely 39,840 units meet these criteria. The Government’s recent Budget ‘bonanza’ of an additional INR 1.5 lakh tax deduction on interest repayment of home loans availed till March 2020 will benefit very few people in urban India.
The slowdown in Indian residential real estate over the last few years caused most high net-worth individuals (HNIs) to shun luxury housing and look at other investments within or outside real estate. However, ANAROCK’s latest study indicates that HNIs are now using the tail end of the slowdown in India’s luxury residential market to their advantage.
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.
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.
The Axis RERA Fund has invested in Akshaya’s ‘Orlando’, a unique township project. The upcoming project is located in Kelambakkam, on the Old Mahabalipuram Road (‘OMR’) – Chennai’s famed IT corridor, which is home to some of India’s biggest IT campuses.
Rising transparency levels, progressive regulations, and a robust commercial real estate market in the country have made the segment a favorite among institutional investors, it says. Investors have allocated nearly USD 17 bn in the form of direct investments as well as through entity level investments from 2006 to 2019 in the office space.
In an effort towards “Homes for All”, the twin projects – adjacent to each other – will feature 1&2BHK homes in the price range of INR 10.99 lakhs – INR 23.71 Lakhs, making it a very attractive proposition for customers. Accommodating 130 and 312 homes respectively, Vaan Megam & Mann Vaasanai offer single and double bedroom homes ranging from 461 sq. ft. to 778 sq. ft super built-up area.
Various Government-driven policies including ease of doing business in India are attracting both Indian and global companies, squarely benefiting commercial real estate. Big-bang boosters like the start-up revolution and the Make in India and Smart Cities missions have created a very lucrative environment for businesses to work and expand in India.