Track2Realty: Concerns over cost reduction and a cautious approach by occupiers had a negative impact on leasing activity across key markets in India. With major corporates continuing to review expansion plans and focusing on improving existing space utilization to control costs; key markets across India witnessed almost 26% decline in absorption of prime office space during 2012.
Track2Realty: New real estate launches in 2012 declined by 30% in 2012, versus a 7% decline seen in 2011. Slowdown in bank credit to real estate amid economic slowdown was attributed to the stagnancy in new ventures, a Knight Frank report said.
Track2Realty-Agencies: CCI’s decision to modify realty major DLF’s apartment buyers agreement in relation to a case involving Rs 630 crore penalty on the firm has sparked a debate about the fair-trade regulator’s jurisdiction and other matters concerning the real estate sector.
Track2Realty: The year 2012 witnessed subdued interest in real estate due to inflationary pressures and rising interest rates in the country, coupled with the on-going economic crisis in the Eurozone and US.
Track2Realty: The Competition Commission of India (CCI) has modified the agreement between DLF group and apartment owners in its two projects in Gurgaon for abuse of dominance, sending a strong message to realtors indulging in such practices.
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 Exclusive-Yearly Analysis: Many of these cash-strapped developers may find it difficult to get bank loans as well. Bank lending is the single largest source of funding for developers, who require funds primarily for construction finance but also to service debt.
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: Opposing the Maharashtra government’s decision to hike stamp duty and other taxes related to property, CREDAI has cautioned against capital flight from the State to neighbouring Gujarat and even to Jakarta.
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.