Track2Realty: India Ratings has revised its outlook for the Indian real estate sector to negative to stable for 2013, from negative in 2012. Demand remains subdued and EBITDA margins low, leading to weak credit metrics for companies in the sector. The agency however sees signs of improvement, in terms of stability of margins and the easing of liquidity pressures, with free cash flows turning positive since H2FY12.
Track2Realty Exclusive-Yearly Analysis: The biggest question for the realty sector today is whether 2013 will help them get out of the vicious circle, which came disguised as the pipeline visibility over the years. Many believe everyone is getting ready with own respective strategy and the year ahead holds promise. Some of the leading companies are already selling their land bank at discounted prices to turn the tide.
Track2Realty Exclusive Yearly Analysis: Experts say there are liquidity concerns…
Track2Realty Exclusive-Yearly Analysis: Indian banks lending to real estate sector grew by 10.4% in the fiscal year ended March 2010 to Rs.5.8 trillion, contributing nearly 17% of their loan book, according to RBI data. Since then it has nosedived and now the government also wants public sector banks to focus more on home loans and to streamline lending norms to the real estate sector.
Track2Realty Exclusive Yearly Analysis: Residential real estate is defying the conventional wisdom of economics where a constant price hike is not benefitting the real estate companies either. Track2Realty finds with pressure on both the demand and supply side, residential real estate has gone into a vicious cycle of ever increasing cost, falling demand, liquidity crunch and last, but not the least, delay in approvals adding to the woes of the developers.
Track2Realty-Agencies: Competition Commission of India (CCI) is working on a model framework for commercial agreements between real estate developer and the property buyer, which it expects to serve as a benchmark for the industry.
Track2Realty Exclusive: Most of the real estate analysts believe the year 2012 has been pretty disappointing and actually a waste. Anshuman Magazine, CMD of CB Richard Ellis (South Asia), however, feels it was better than expected. He asserts when the global economy is down and the Indian GDP continuously nose diving, any movement is a positive indicator. In an Exclusive Interview with Track2Realty Magazine talks about the learning of the year and sounds cautious with the prospects of the year ahead.
Track2Realty Exclusive-Yearly Analysis: Leading developers are resorting to desperate measures like selling their land banks, half finished projects and other noncore assets to reduce the burgeoning debt burden. The situation is set to become worse as land banks have already started shrinking.
Track2Realty: Real estate sentiment remained fragile through a major part of 2012, as the global economy continued to face strong and persistent headwinds. Economic activity in Europe is seen to be contracting, while growth in the US has been modest.
Track2Realty: Across micro-markets, investor sentiment has been impacted due to inflationary pressures and rising interest rates through the course of 2012, which have only come down marginally with a few policy revisions by the apex bank in the second half of the year.