Tag Archive | "India"

Commercial Real Estate Office Sector in India Will Struggle in 2012

Commercial real estate analysts are not particularly hopeful regarding the prospects for India’s office market over the next year. They believe that India’s commercial office market will continue to struggle in 2012, with demand dropping and lending standards tightening even further than their current state.

Reduced demand cause by the uncertain global environment will most certainly play a major role in the difficulties faced by India’s office market. Employment growth is expected to drop, and thus, the need for commercial office space will follow suit.

The expected declines in the commercial office real estate sector will benefit tenants, as they will likely have access to more location options. The increase in potential office space options will lead to a reduction in rents in most areas.

The first half of 2012 will likely present the greatest struggles, leading to increased vacancies. The commercial real estate situation in India may improve in the second half of 2012 if the global economy begins to stabilize and show signs of modest growth.

Some commercial real estate sectors will struggle more than others in the first half of 2012. Large offices will likely experience greater declines, though smaller offices will show signs of growth. Older shopping malls will likely falter, particularly those in unfavorable locations. Many of the shopping malls will either have to be redesigned, or will face pending closure.

The potential declines in the retail office real estate market has landlords thinking outside the box with respect to how the generate revenue. Some are considering moving away from standard rentals, and instead using a revenue-sharing agreement as a means of payment from their tenants.

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Wyndham Hotel Group Set to Expand into India

Wyndham Hotel Group, the largest hotel company in the world, has announced that they have a team traveling throughout India to look for potential areas for the development of new hotels. The hotel group is looking to launch both Howard Johnson and Ramada hotels all across the country by 2017 and 2014 respectively.

There are currently fourteen Wyndham Hotel Group hotels in India, and fifteen others in development. The company would like to greatly expand their current presence, as they believe that there are plenty of opportunities in India due to the increase in tourism in the nation.

The announcement of further expansion into India by the Wyndham Hotel Group comes almost immediately after the opening of the luxurious Wyndham Grand Agra resort in India. The Grand Agra is just five minutes away from the Taj Mahal, and has received rave reviews due to its incredibly lavish design.

With over 7,190 hotels worldwide, the Wyndham Hotel Group is easily the largest hotel corporation around the world. They hope to expand their presence even further in 2012, and starting to plan further development in India is very much a part of process.

The hotel group is looking to build a combination of resorts, and standard hotels to meet the needs of tourists, and those simply looking for hospitality while traveling for leisure or business. Wyndham Hotel Group recently announced an agreement with Unique Mercantile Private Limited to increase their hotel portfolio in the region. The agreement is set to help expedite the development of the Howard Johnson and Ramada brands in India.

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Housing Market in India Continues to Falter

Residential real estate markets across the globe continue to struggle, particularly as fears of another global recession grow. India has joined the ranks of various world powers that are reporting a slowdown in overall housing sales.

The most recent reports indicate that housing prices dropped across the board in India, including in some of the country’s prime cities. As sales and prices drop in nearly every city, new construction in India has also grown sluggish.

The general decline in sales and values can be attributed to reduced buyer confidence. Buyer confidence has been one of leading causes of the housing slowdown around the globe, largely due in part to concerns with global debt. In the case of India, buyer confidence has declined as interest rates continue to rise and inflation grows at a rapid pace. Despite declines in housing prices, rising interest rates are making home ownership unaffordable for many prospective buyers.

Interest rates have been increased twelve times in the past year and a half in India. The rising interest rates not only impact the decision of buyers, but also the bottom line of construction companies and developers. Rising costs have made new construction unfeasible, and both groups are carefully evaluating their target markets.

There is no indication as to whether or not the residential real estate market will turn around in the next year. Many believe that international investors may take particular interest in India’s housing market, as price drops will make the country more affordable for those looking to move into India.

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Residential Real Estate Market in India Battles Uncertainty

India’s real estate market continues to face similar struggles to that of the United States. Many potential buyers remain hesitant to purchase a home due to uncertainty in the economy and real estate market. As such, construction companies are struggling, and have been forced to downsize causing major projects across the nation to be delayed.

One of the sectors hit the worst by market uncertainty in India is that of luxury homes. There are a number of different reasons for the abysmal luxury home sales figures, though one of the primary reasons has been the general overpricing that exists within that market. Many potential buyers are reluctant to pay more than a home’s actual sale value considering the overall state of the nation’s economy. Furthermore, with the glut of affordable homes on the market, luxury homes often tend to be overlooked due to their enormous prices.

The slowdown of the construction industry due to the poor residential real estate numbers will surely affect multiple areas of the nation’s economy. Residential real estate makes up roughly seventy percent of the construction industry, and now with a dwindled workforce, projects across the board are expected to face serious slowdowns. That means that office buildings and retail centers will likely have their completion dates pushed back.

There is hope that the real estate, and construction industries will see improvement in the coming months, though many developers are planning significant discounts on their services to make sure that they can achieve increased sales. As to whether the price discounts will be effective has yet to be seen, but both sectors are incredibly hopeful that there will be some kind of positive growth.

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Increased Home Loan Interest Rates in India

Increased Home Loan Interest Rates in India

If you have freshly invested in property this year then you are in the beat of increased interest rates over home loans in India. Major Banks and housing finance companies here have decided to increase the mortgage rates with effect from mid April. Even the government banks like State Bank of India have planned to go by the wind of increasing interest rates. If you compare the data from last 3 years, the interest rate has gone up by more that 3 percent which is a real heat on pockets of buyers. These increased rates will ultimately affect the monthly installments paid by consumers over home loan.

Experts from real estate sector believe that this hike is happening due to the turn of events which are experienced by people in this country that finally forced the Banks to increase their rates. The effect will be primarily seen on particularly diffident cities rather than affecting metro cities of India. They also suggest calculating the equated monthly installments (EMI) considering approximately one percent hike in total interest. The best possible solution for fresh buyers from this crisis is to gather private sponsorship or funding in order to decrease the total loan amount.

This inflation will die down in due time but for now fresh investors have to face the heat of the dramatically increased interest rates. According to experts, it is advisable to purchase property as early as possible because soon all the other housing finance institutions will go down the path of increasing interest rates.


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New Star Ranking of Developers In India

New Star Ranking of Developers In India

Purchasing real estate is always a tricky task that has many dark corners inside waiting for the victim and at this stage if you fall prey to some con builder then you can imagine what follows next. If you are planning to invest in property around India then you may want to see the recent builder ratings determining his qualities. Many people have fallen prey to builders that promise to build the house according to your needs but the end result is no way similar to what you have expected. Secondly, they use low quality material for the construction and make delays in possession. These problems are on rise in various parts of this country and to tackle it better, builder rating systems are evolved. The builder rating is increasingly becoming popular due to the authenticity it governs on certain builder or developer.

Primarily, rating was used to conduct on the environment friendly aspect of the building in question. Now the ratings are gone much further with testing of several aspects of builder by conducting third party inspection of all the properties in question. With the help of these ratings, the customer will be able to go for quality or authentic properties only. The rating will be done on 8 point scale where aspects like builder’s legal record, construction quality characteristics, transparency on agreements, finance availability and innovation capacity in designs will be checked. As these ratings are conducted by third party they offer unbiased credibility to the builders and offer clear review on its services. Even though the concept is in its budding stage in the country, once it gets fully developed all the land buyers are expected to get huge benefits

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India Real Estate In Smaller Towns Gaining Popularity

India Real Estate In Smaller Towns Gaining Popularity

Nowadays, large real-estate developers are searching for the towns and villages which are showing stability in the price and growth prospects. Keeping in view the future growth of such cities, the developers are diversifying their attention from urban areas to the rural ones.

To judge the situation clearly, a survey report which has been arranged by CRISIL titled as “’Real (i)ty Next: Beyond the Top 10 Cities of India” says that more than 10 smaller apartments in such cities in India are going to be counted in the properties which will be included in the selling list of 2012 and they will provide the profit of more than 180 billion rupees to the investors.

The cities that are included in this report are Bhopal, Bhubaneswar, Indore, Jaipur, Lucknow, Coimbatore, Nagpur, Surat, Visakhapatnam and Vadodara. The report also includes the plan which is going to be applied to these cities in which the expected demand and the outlook price of sixty five submarkets are included as well. It has also been planned that the cities will be supplied by 354 million sq ft of the area for three years.

According to the study and survey report, these smaller areas are showing much more stability rather than the developed areas. The prices are increased by 10-12 percent and it would be better for the investors to invest in smaller areas because these are much more affordable than developed areas. Over the two years, the increase in the price from ten to twelve percent was found which is considered as a biggest achievement.


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A Fraud of 100 Crore with the People of Kerala

A Fraud of 100 Crore with the People of Kerala

One of the biggest real estate fraud that was happened to the non-residents of Kerala, India is about the fraud of 100 crore rupees and they are now looking for the help of chief Minister of Kerala Mr. Oommen Chandy to bring them out from this situation. The fraud is about a company which is known as “Apple-A-Day” Kochi-based company which collected almost 100 crore rupees from different people and also showing the 125 Indian expatriates of Middle East.

According to the company they had attractive flats, bungalows and villas at the most busiest place of the city where no one can imagine to invest. For this, they took the help of clever fraud companies and gathered money from innocent citizens and when they failed to complete their recent 11 projects, people claimed them as a fraud.

According to a victim Abdul Hameed, it is almost everyone’s biggest wish to get a dream property where he/she can avail all facilities of life and for this he invested 45 lakh rupees just like others but even after 5 years he got nothing from that company.

Soon after this news revealed on a local TV channel the famous film and drama directors went underground and up till now more than 160 FIRs have been registered by different claimers against that fraud. According to the latest update, the cheaters have also withdrawn the whole money from their bank accounts so that no body can reach them easily. For this, the court of India has passed a look out notice as well.

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The Real Estate Industry Report of Delhi, India

The Real Estate Industry Report of Delhi, India

An industry report of India, New Delhi is showing the rise in the price of real estate from 20 percent to 27 percent during the first quarter of 2011. The value seems to be skyrocketed when compared with the index value of the last year which is showing an escalation in the properties of New Delhi.

As the housing prices are still rising, the same will continue with the growth ratio of 15%. According to the business head of 99 acres Mr. Vineet Singh, the same trend will most probably bring the stability in the price of the properties in Delhi. Till now, nothing special has been noticed in the real estate market of Delhi.

The report is also showing the increase in the price of Sanita Vihar’s PSF which is known as the South Delhi locality. The increase in the price has been noticed by 27.60 percent as compared to the price of 2010 which was around 25 percent. The total amount in rupees increased from 6,356 to 8,110.

Whereas when you compare this ratio with the price of north-Delhi based housing schemes you will find an increase of 25 percent as compared to the price of 2010. The two sectors of southwest Delhi are also showing the increase in the ratio by 28% which is considering as a good improvement for the growth of real estate market of India. The introduction of new metro rail service has also increased the property value of the capital regions of India such as ‘Noida’ and ‘Gurgaon’.

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India’s Growth in Real Estate Investment

India’s Growth in Real Estate Investment

A huge investment which can be made in real estate and property is buying an office or retail space. This is the main reason for which institutional investors and heavyweight HNI’s hesitate to invest money in commercial real estate and count it in an asset class which can only be imagined. However, the concept has been changed a little bit nowadays and investors are trying to get into the game of real estate gradually. The consideration can be made from the perspective of the chances found in Indian commercial estate. Only in New York City, Manhattans possess 450 million sq feet of Grade A stock whereas they have 200 million sq feet in London. When the ratio is compared with India, you will see that the collective office space stock explains only 270 million sq feet. This also shows that India has a potential for office space at all levels.

India has made this growth in a very short time span and still the commercial real estate markets of the world have seen only a few dramatic and rapid changes. Now, people of India are expecting a quantum spurt in almost every major field like knowledge sector and retail investors will be going to have tremendous opportunities in real estate market. The investors from India have suggested three ways to invest in commercial real estate. Either you can buy space for your office directly from a developer or buy shares from stock market. Another possibility is to do some investments in real estate funds.


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