Tata Housing forms joint venture for 3-acre project in Kolkata

Realty firm Tata Housing today announced a joint venture with Keventer group for a 3-acre luxury residential property in Kolkata.Tata Housing, a subsidiary of Tata Sons Ltd, has 70 million sq ft under various stages of planning and execution and an additional 19 million sq.ft in the pipeline. Keventer group has diverse interests in dairy, beverages, real estate and infrastructure. Tata Housing has enhanced its land bank of premium locations through JV with Keventer group for a 3 acre (approx) land parcel at New Alipore in Kolkata. With realty sector facing slowdown, Tata Housing said it has been utilising this opportunity to strengthen land bank to create ultra-luxury flats in kolkata projects across prime locations in major metros across the country. It has also sought an order declaring the conduct of Ministry of Civil Aviation as “arbitrary, unjust and violative of articles 14 and 19 of the Constitution” for “failing” to decide its application for security clearance to Bhasin till date.
Residential Property in Kolkata. In its plea, Kingfisher has also sought directions to SEBI, NSE and BSE restraining them from taking any action against it under the Securities Contracts (Regulation) Act, 1956 and as per SEBI circular.
The airline has contended that it has not been able to constitute a Board of Directors or submit its quarterly financial results for the quarter which ended on March 31, 2014, as its application seeking clearance to Bhasin has been pending and claimed that it should not be punished/penalised for the same.

Residential Property in Kolkata
Source: articles.economictimes.indiatimes.com

Is the Real Estate Bubble Big Enough to Naturally Burst in 2014?

Political uncertainty, liquidity issues, high interest rates and cautious sentiments are expected to underpin the real estate sector during the year.

One of the primary concerns for the real estate sector in the coming year is very clearly this: Will the much talked-about asset bubble inflate further or will it burst?

2013 was mired in existing challenges such as subdued sales, piles of unsold inventory and builders going bankrupt. These problems will continue in 2014 as well, and, given economic instability, matters could become worse. However, it is very difficult to forecast anything in India as the real estate market is not subject to a fixed pattern. A great degree of political uncertainty, liquidity issues, high interest rates and cautious sentiments are expected to underpin the real estate sector in 2014 too. The only positive energy in this sluggish sector springs from the fact that the sales, though slow, are not stagnant.

Residential Flat in Kolkata
Residential Flat in Kolkata
India’s real estate kolkata market has been faltering for quite some time as the economy remains under stress. Realty prices have been surging in an unprecedented manner unlike income levels which are not rising. The price increase is mostly speculative and can be attributed to the predominantly capital-driven nature of the sector.

It is an established fact that the real estate bubble in the developed world is a creation of the central banks strategy of keeping interest rates at a very low level. This excess money has also trickled into the real estate markets of emerging economies as overseas investors began to look for alternate investment avenues.

While the cause might be the same at home, the movement of capital across the various geographies in India needs serious analysis. Let us look at each of the significant markets to understand the creation of the asset bubble.

The MMR (Mumbai Metropolitan Region) market has a characteristic of its own (see MMR graph). There is huge latent demand but exorbitant prices make property unaffordable for most buyers. The price level here is way above the average price level of India but the annual acceleration is not very steep; in fact, it has been almost stagnant for quite some time. The realty cycle in MMR follows a long drawn pattern and has a low theta (angle of correction). The graph illustrates that the annual price growth post the 2008 meltdown touched 48 percent owing to substantial money coming into the MMR markets and then, after peaking at 54 percent in the second quarter of financial year (FY) 2010-11, the bubble started deflating.

After that, the MMR market with sky-high price levels and declining sales velocity was considered an unproductive arena and the funds inflow reduced. By sales velocity, we mean the ratio between monthly sales and total supply. The price rise after this, though persistent, has been comparatively slow. It is also interesting to note that even after a slow growth rate of prices, the pace of offtake has been slowing.

NCR (National Capital Region, which includes New Delhi), on the other hand, is an entirely investor-driven market. A lot of property in kolkata is being sold in sectors which may remain uninhabitable for a long time. The price rise post FY 2010-11 continued to be sharp and persists even today. After touching the threshold of 27 percent year-on-year in the second quarter of FY 2012-13, the growth rate has started to peter out. One can already see the correction in the secondary market in NCR. The situation indicates that the existing bubble in tier-I markets like NCR and MMR are at the threshold of bursting. Owing to the high level of unsold stock in these markets, the prices might soon begin to tip off.

Source: forbesindia.com

Tata Avenida, Rajarhat– Kolkata’s Special Residential Property From Tata Housing

The long awaited Tata Avenida is the new residential complex launched by Tata Housing in the busy locality of Rajarhat, New Town in Kolkata.

Location Advantage

Tata Avenida was designed to provide a contemporary living with complete satisfaction for the residents of this project. It is located in the popular Rajarhat Newtown area which is filled with shopping malls, hotels and educational intuitions. The strategic location of this project is to provide all the facilities to the residents within their reach. The fast developing locality has emerged as the hub for residential and IT complexes which provides better appreciation for the properties in Tata Avenida.

Project Details

The project is developed in a vast land area of 13 acres and the details were as follows:

The project stretches to 13 acres of land with 4 phase of construction.
Tata Avenida has 4 towers offering 2 and 3 BHK apartments in varying sizes.
The 2 BHK apartment units vary in size from 1080 sq ft to 1255 sq ft of area.
The 3 BHK units measure 1500 sq ft of living space.
The cost of the apartment starts at Rs. 65 lakhs and vary according to the size of the apartments.
The possession date for the project is given as Feb 2017.
Special Amenities

The project offers all the amenities present in a luxury home such as the art gallery, festival pavilion, tea bar, cycle track, novelty store, book club, pet park, jogging track, chemist shop, vegetable store, ATM, stationery shop, cricket area, crèche, kids’ play area, laundry and many more.

The project offers spacious residential apartments with all the amenities required for a luxury living in the heart of the Newtown. The location, infrastructural development, quality building specifications and luxurious amenities will offer better returns for the property.

Source: Sulekha.com

Sentiments still riding high, though investors remain cautiously optimistic

Knight Frank India in association with the Federation of Indian Chambers of Commerce & Industry (FICCI) today released the fourth set of findings of its flagship report – the Real Estate Sentiment Index for Q3 2014 (July – September). The latest edition of the report captures the sentiments of the supply side stakeholders on the current real estate market conditions and gives a view into the near future.

– The Union Budget 2014-15 has laid considerable emphasis on the real estate sector and this has infused a positive sentiment for the future

– Although the current sentiment score merely breached the 50 mark in Q2 2014 (April – June), results for this quarter (July – September) has risen to 63 which is attributable to the stakeholders’ positive perception regarding the economy, residential sales and price appreciation compared to six months back

– The future sentiment score of the developers has surged to 73 in Q3 2014, up by 4 points from the previous quarter

The above findings of the FICCI – Knight Frank Sentiment index specifically highlight the sentiments of the supply side stakeholders which may not have a direct impact on actual transactions.

Following is a Knight Frank India view on the present market scenario with regard to the residential and office markets.

In case of residential sector, the festive season has not brought in the expected cheer to the real estate sector, with markets reporting “not so-encouraging” sales over the past two weeks. Unlike the boom years, stakeholders this year had resisted the temptation to launch new projects in the season, focusing instead on reducing the inventory that has piled up over the past few quarters. Markets like NCR and Mumbai have not even seen regular investments coming their way and seem to be waiting for the new government to execute reforms which may help improve the situation. Keeping in view the current situation we expect at least 6-8 months before actual transactions begin picking up. Though stakeholders are hopeful that this will change before the said time period, but if the current signs in the market are anything to go by, it’s still a long way ahead.

The office market on other hand, performance has been in line with our expectations with uptake happening across all regions. Relocation and consolidation of office spaces has been the major drivers of this segment with majority of the contribution coming from the outsourcing industry. Unlike the residential segment, vacancy levels within premium office buildings across prime locations have been constantly reducing with chances of a further drop in the near future.

As per our first round of survey for the FICCI-Knight Frank sentiment index during October – December 2013 sentiments were slightly negative for the office market until June 2014, in reality this sector has performed better, both in terms of new office completion and leasing volumes during the same period.

It remains to be seen if the sentiments continue to show a positive outlook in the coming quarters as we begin to experience actual economic revival and the implementation of policies.

Source: Knight frank

Commercial real estate: The perfect choice for investment

Bangalore – Investment in real estate is considered to be the best form of investment for any asset. The returns are highest and it is an asset which cannot be stolen. With this view, Indian market has always been driven to buy property more than invest in deposits, gold or any other form. The Indian mind set of investment in real estate has been inclined more towards residential due to the fact that there is an option of second home for buyers. Although most reports, experts and statistics are against this fact. Developers and experts from the sector express that commercial property as an investment motive is way better than residential.

For any investor, there are two most important things; initial cost of acquisition and return on investment. A good residential property may be lesser in pricebut is unable to yield higher returns. For instance, an average cost of a good 2 BHK unit in a good project in NCR will be around 30 – 35 lakhs and would fetch a rental of 25 – 30 thousand. Whereas, a 600 sq. ft. commercial property at a good location will cost around 40 – 50 lakhs and will provide a return of around 75 thousand monthly. This goes to show that the returns are higher in commercial properties over residential properties, even if cost is taken proportionally to the return.

M. K. Gupta, Chairman, KPDK Buildtech says “In commercial real estate it is more common for investors to pool their capital together and syndicate deals, you will also find that smaller private equity firms and finance companies are more inclined to do joint venture projects and provide the needed capital to complete the deal if the deal makes sense. So as a commercial real estate investor you have the potential to raise capital for a deal from the same traditional sources as residential real estate i.e. Traditional Financing and Hard Money, but in addition to that you can have access to capital through smaller private equity firms, hedge funds, private REITs, investment groups, etc.”.

Today, the trend of development has also started to drift a bit. As more and more buyers are interested in buying commercial property for investment, development in NCR is gaining momentum for commercial projects. Almost every region in NCR today has several commercial projects located in key places and offers various commercial spaces, some with assured returns as well. The concept of assured returns began with commercial real estate which ensures a buyer to buy and start earning. Therefore, a buyer earns before possession and also multiplies through capital appreciation with time. KushagrAnsal, Director, Ansal Housing says “There are three very prominent things with commercial real estate. One, the commercial real estate is valued differently. The income that a piece of commercial real estate produces is directly related to its usable square footage.

This isn’t always the case with residential. Secondly, commercial property helps diversify risk. For example, if you own an apartment building and you lose one of your 10 tenants, you only lose one-tenth of the income for that property, instead of the entire rent as you would if you lost a tenant in a single-family house. Finally, the cash flow is often greater with commercial real estate. The yield is often higher per square foot and on an initial investment basis than it is in residential. If you lease or rent a multi-unit commercialproperty, you have more tenants to generate income than you do with a single-family dwelling.

Source: The Economic Times