Tag: Buy-Sell-Rent Properties

Average size of Bangalore apartment highest in India

Bangalore tops in many things like weather, good, high-end schools and quality of life notwithstanding the traffic cribs. But there’s one not-so-well-known parameter of which the city can be justifiably proud: large apartments.

On an average, a typical apartment across major metros in the country is roughly 1,100 sqft to 1,200 sqft. In Bangalore, that size is 1,750 sqft making it 45% higher than the national average. The average size of apartments in Bangalore is the highest in India, 60% larger than those in Mumbai and 20% larger than those in the National Capital Region (NCR).

Data shared by global consultancy firm LJ Hooker states that the only other Indian city to match Bangalore in apartment sizes is its old IT rival Hyderabad, which also has apartments measuring approximately 1,750 sqft on an average.

Elaborating on the reasons why Bangalore has large dwellings, Alexander Moore, CEO, LJ Hooker India, says the primary reason is land cost. “The higher the cost of land, the greater efficiency you have to make of it, and that’s by building smaller apartments,” says Moore. Land prices in Mumbai and Delhi, says Moore, are 10 times higher than those in Bangalore.

The demographics of buyers in Silicon Plateau, who are primarily end-users located in tech hubs on the periphery, is another important factor. “This takes pressure off city areas and allows greater size. In Bangalore, you can travel 10kms to get access to land which is not the case in other cities, more so in Mumbai,” adds Moore. Mumbai and NCR have large investor populations who prefer smaller units close to city locations.

In Mumbai, the availability of developable land is so scarce that developers need to go vertical and keep the size of apartments units small to maximize land yield. As per data shared by LJ Hooker, the average apartment size in Mumbai is around 1,100 sqft. While average apartment size in NCR is 1,500 sqft, in Chennai it’s 1,300 sqft. “Affordability is the key to Bangalore’s real estate success,” says Jackbastian K Nazareth, group CEO, Puravankara Projects Ltd. PropEquity, a real estate data analytics and research firm in New Delhi, rated Bangalore as one of the most affordable real estate markets in the country.

Bangalore-based real estate major Sobha Developers sells 3-BHK units ranging from 1,850 sqft to 2,000 sqft, which account for 90% of its total apartment sales. At Puravankara Projects, sales of 3-BHK units contribute approximately 70% of its sales.

Prashanth Sambargi, partner, Mars Realty, points out that the city always had a culture of large bungalows with gardens, which is why people look for large apartments. That buyer mindset is visible in the real estate market as many Bangalore-based developers offer terrace/balcony spaces ranging between 600 sqft and 2,000 sqft per apartment.

Developer speak

Most of the demand for 3-BHK apartmens comes from the migratory population which wants to have one room for kids, one room for parents/in-laws and another for guests.

Source: GharaBari

India realty space to see $4-5 billion foreign inflows in 2 years

India’s realty sector is set for robust inflows of USD 4-5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourites, global real estate consultancy giant Jones Lang LaSalle has said.

“The early foreign investors in India, who came in around 2006-07, did not have very good experience, partly because of their inexperience in doing business in India and partly because of global financial crisis,” JLL Asia Pacific CEO Alastair Hughes said here.

“However, foreign investors are now looking with a renewed interest at India, given its still robust economic growth rate as that bodes well for good returns to their investments,” Hughes told PTI in an interview here.

Hughes, who was here to participate in the World Economic Forum Annual Meeting, said foreign fund inflows were expected to pick up in the Indian realty sector going forward.

He added: “They (investors) are now looking much more closely at India to put in their funds into Indian real estate sector. They had come in between 2006-2007 and first half of 2008, but they completely went away in 2009 and have been mostly away since then.

“The overseas investors are now looking to come back and what they are looking for right now is good partners in India, because it is a difficult place to do real estate business because of various reasons.”

Right now, many Indian developers and fund managers are seeking to get international money and that is much more likely to come in, Hughes said, adding that there is more international money today waiting to be invested in India than any of the last five years.

Overseas investors have invested USD 14 billion into the Indian real estate sector over the period from 2006 to 2012. In the last two years, foreign investment into Indian real estate has been around USD 1.2 billion per annum.

Around half of all transactions were invested in residential property, a quarter in the offices sector and the remaining quarter was split among the other sectors. Regionally, half these investment come from US with rest coming from the Middle East, Singapore, the UK, Hong Kong and Germany, Hughes said.

Terming the next two years as much more promising, Hughes said that 2013 and 2014 will have a total of USD 4-5 billion come into the sector, mainly to buy income yielding SEZ assets at a capitalisation rate of 10.75 per cent.

“We expect interest from global and US investors to maintain. Favourite location foreigners will be Bangalore, New Delhi and Mumbai,” he added.

Globally, Hughes said, there was a big boom in 2007 and then a big bust in 2008 for the realty sector, while there has been a gradual recovery since the end of 2009.

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As per a report released by JLL here at Davos, global investment capital is leaning towards real estate and the commercial real estate direct investment volume is expected to more than double to USD 1 trillion by 2030 and Asia Pacific region is leading the investment growth since crisis.

Hughes said investments into Asia Pacific commercial real estate market fell by around 10 per cent in 2012, from USD 98 billion to about USD 92 billion.

“That was because of a sense of caution prevailing in different countries. But now we are seeing a change in the sentiments.

“One of the reasons for that is people looking to divert their investments from bonds to equities and other asset classes and that include real estate. Therefore more money is coming to real estate and a bigger proportion of that we see coming to Asia Pacific,” he added.

Hughes further said: “We believe that the volume of real estate investment deals would go up in 2013 to something close to USD 105 billion, from USD 92 billion last year.

“This would make 2013 the biggest investment year for real estate market since the global financial crisis hit the world, although it would still be below USD 120 billion figure recorded by Asia Pacific in 2007. We are not back to where we were in 2007, but the scenario is getting better and closer to that level.”

Hughes said that 2012 was very bad for the Indian real estate sector, as there were difficult market conditions and India was probably the only country in the world where conditions were even worse than 2009.

Going forward, he said, the growth in Indian office sector would depend on the economic growth.

In the retail sector, a very high growth is expected with the entry of foreign retailers, as they would need large space to set up shop in the country and most of the current developments are not designed for the international retailers.

Besides, manufacturing and industrial sector would also benefit a lot as these companies would need to set up logistics and other facilities.

Hughes said that robust activities are expected in residential space also.

Source: The Economic Times

Kolkata, Mumbai and Pune positioned top, by adding New Homes in 2012

At a time when the real-estate sector across the country is witnessing a slowdown, Kolkata, Mumbai and Pune recorded significant growth in new residential units, in 2012.

According to study released by real estate consultants Cushman & Wakefield, the total new units launched across eight cities went down by approximately 16 per cent (to 162,000 units) in 2012 when compared to 2011.

Mumbai, Pune and Kolkata were the exceptions with 72 per cent, 34 per cent and 19 per cent increase.

The study was carried out across eight cities — Delhi & NCR, Ahmedabad, Bangalore, Hyderabad, Chennai, Mumbai, Pune, and Kolkata.

While Bangalore saw the highest decline of nearly 50 per cent (16,543 units), Mumbai witnessed the maximum growth of 72 per cent (22,423 units).

Of the total number of units launched, majority were in the mid-end segment, which comprised approximately 83 per cent of the total launches.

According to the report, a total of 8,900 units were launched in Kolkata in 2012.

Nearly, 62 per cent of these units were in the mid-end segment (5,535 units) and priced between Rs 36 lakh and Rs 60 lakh. This was followed by the high-end segment, priced upwards Rs 60 lakh, which accounted for another 38 per cent of the launches.

On a year-on-year basis, supply of mid-level homes increased by 26 per cent to 5,535 (from 4,372). Similarly, high-end home launches too increased to 3,360 units – 17 per cent up from the 2,863 units launched in 2011.

Interestingly, supply of luxury homes dipped drastically in 2012. The number of units launched dipped from 280 (2011) to just 23 (2012) — a near 92 per cent fall.

“Cash-strapped developers were not willing to take up projects that may fall short in interest from end users, thereby keeping their risk exposure minimum,” Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield says.

According to the report, the short term outlook of the city suggests a cautious approach by end-users in the wake of high home loan rates coupled with inflation.

Harsh Patodia, President (Bengal), Confederation of Real Estate Developers Association of India (CREDAI), pointed out that over the last 18 to 24 months, launches in Kolkata were much lower than in other cities.

Source: The Hindu Business Line