Realty sector may appear to be bullish and project that downside is over with rosy forecast ahead, yet the decline in fortune is far from being over. As a matter of fact, the learning in the last four years has made most of the leading players to restructure their project portfolio and shed the flab.
Revenues of top-25 realty companies declined 9.30% in Q4FY12, mainly on account of low sales off-take due to higher prices and higher mortgage rates, says a Knight Frank India Research on Economy and Realty at glance. The study says the Realty Index on Bombay Stock Exchange (BSE) has dropped by more than 26% during the last one year compared to a 10% fall in the Sensex during the last fiscal year.
Indian realty firm Synergy Property Development Services Ltd bagged, through international bidding, a $153-million township development project in the central African country of Rwanda.
Below the line marketing company Theme Ventures has signed a group of well-known real estate companies in Mumbai to sell the residential properties directly to the corporate employees by setting up shops inside the large work premises, the news reports said.
With growing urbanisation in India, nearly 85 crore people are estimated to live in cities across the country by 2050, a latest report by industry chamber CII and realty consultant Jones Lang LaSalle said.
Disney Consumer Products India, the licensing & merchandising arm of The Walt Disney Company India, has done its first licensing deal in the real estate sector with Mumbai-based real estate company Sunteck Realty to launch Disney Inspired Homes in Goregaon, the Northern suburb of Mumbai.
Various issues plaguing the real estate sector will be discussed at a conclave to be organised here on Friday by Confederation of Indian Industries (CII). The Real Estate Conclave 2012 will be inaugurated by Maharashtra Minister for Housing Sachin Ahir, CII said in a statement.
Indian real estate companies, which borrowed heavily during the peak of the economic cycle and rosy business forecast, are now caught in the vortex of piling debt post-slowdown. Most of the realtors who went on a land bank acquisition with borrowed money are struggling to repay even the interest and banks look reluctant to restructure the debt any more.
Over the last year, there has been an unequivocal crystallization of Indian cities that continue to attract serious investment into real estate. This is directly correlated to the economic dynamics now working in the country. If India is to achieve even a conservative GDP growth of 6% per year, it emerges that only three cities – Mumbai, Delhi and Bangalore – have the potential to deliver. The reason for this is that close to 2/3rd of the overall development of office space in the country is now taking place in Mumbai, Delhi and Bangalore.
The Indian banks have been hit the worst with the downturn of the real estate sector. Even after restructuring the loans to the developers, they have a collective deficit of Rs. 7 lakh crore. With spiraling input costs & property prices, demand in the real estate sector has been on a steady downfall. Given the declining demand, it is is unlikely that the real estate companies will be able to repay their bank loans, especially since banks are the only source of funds for the sector.