Jones Lang LaSalle Meghraj Research conducted an analysis of residential markets across India to help identify investment hotspots for retail investors. While abnormally large returns can be found in specific projects throughout the country, the analysis was limited to India’s seven largest cities due to high residential demand from their large populations, relatively higher transparency levels and presence of premium regional and national developers.
The top ten cities were Gurgaon, Mumbai, Noida, Pune, Bangalore, Chennai, Hyderabad, Kolkata, Ahmedabad and Kochi.
MONEY VERSUS METRO
Hindustan Times (Delhi edition)
One among many factors Real estate experts point out that the Metro could have led to the increased base rate of Gurgaon as accessibility to the micro market has improved manifold, but it is not the only factor leading to the more than 30 per cent increase in property prices in the area. The other reasons could include investors’ confidence/appetite, overall affordability of projects, improvement in the job market and the overall economic environment. The impact of the Metro on the prices of properties located near or around its route is not more than 10-15 per cent, they say.
Property prices have increased by 30 per cent in Gurgaon this year. The Metro is an important factor but not the only driver, says Anshuman Magazine, chairman and managing director of CB Richard Ellis.
NCR RECORD JOB CREATOR IN METROS
New Delhi, September 20, 2010
The Economic Times
The National Capital Region (NCR) has emerged as the highest job-generating city among the four major metros in India in April-August 2010, industry body Assocham said. According to a survey by the chamber, NCR has created 34.2 percent employment followed by Mumbai (12.70 percent), Chennai (6.12 percent) and Kolkata (4.19 percent) in a sample of 2,40,314 employment opportunities generated in 60 cities during the period.
“The job creation is happening at all levels including senior, middle and junior management and executives,” Assocham general secretary DS Rawat said, adding the growth is expected to continue for the next six months. The sectors, which created most jobs included IT, engineering, textile, real estate, infrastructure, aviation and education.
The IT and IT-enabled services accounted for 57.07 percent of the total job openings, it said, adding healthy recovery in the export and import activities also helped in creating employment. However, telecom, FMCG, banking and logistics sectors recorded marginal decline in job creation during the period.
REAL ESTATE FUNDS PROVIDE A DIVERSIFIED PORTFOLIO
Vidya Bala, September 19, 2010
The Hindu Business Line
Coming from multifunctional areas, a team of six professionals decided to tap the opportunity in Indian real estate. Venture capital fund Azure Capital Advisors was the result of this. Their first fund, India Real Estate Fund I, seeks to invest in redevelopment projects in Mumbai besides mid-sized residential projects in Tier II and Tier II cities. Chinnu Senthilkumar, Executive Director & Chief Operating Officer, Azure Capital Advisors, explains how the fund could offer an opportunity for individuals who wish to take limited exposure to real estate.
Edited excerpts from an interview
What made you choose the realty space now for investment?
There are enough opportunities in the sector. One, there is a shortage of two crore homes in India. Besides, to sustain the current GDP growth, the Tier II and Tier III cities too have to grow. So we see a big market there. Companies that tapped the primary markets mostly operate in big cities. While we will invest in such cities too, we would be focussing on places such as Baroda, Surat, Ahmedabad, Salem and Coimbatore.
NEW METRO PROJECT EXPECTED TO BE CLEARED AFTER CWG
Megha Suri Singh, New Delhi, September 19, 2010
The Times of India (Delhi edition)
The good news is that a new Delhi Metro link from Central Secretariat to Red Fort via Mandi House will be coming up soon, making life simpler for people commuting between the east and south of the Capital. Sources said construction work will begin before the rest of Phase III and will be ready much before the 2015 deadline. The 6.80-km line, which will be fully underground, will have six stations, starting with Central Secretariat — Ferozeshah Road crossing, Mandi House, Delhi Gate, Daryaganj and Red Fort. The link will provide a fast connect between Line 3 (Dwarka to Anand Vihar/Noida) and Line 2 (Jehangirpuri to Huda City Centre) and Line 3 and Line 6 (Central Secretariat to Badarpur).
WE ARE SCOUTING FOR PARTNERS TO OPEN W, ST REGIS IN INDIA
Vishakha Talreja, September 20, 2010
The Financial Express
Starwood Hotels & Resorts Worldwide is expanding its presence in India. The $16-billion hotel chain has nine brands and 1,000 properties in almost 100 countries. Starwood Hotels and Resorts Worldwide executive vice-president & chief brand officer Phil McAveety tells about the group’s expansion plans.
What are your expansion plans in India?
At present, we have 29 properties operational and around 16 properties are under various stages of development. By 2012, we will have 45 properties operational. Of the 16 properties that are in the pipeline, 11 are management contracts and the remaining are franchisees—four Aloft, 2 Four Points, three Westin, two Le Meridien and five Sheraton hotels. We are bullish on mid-market brands- Aloft and Four Points which we are expanding in non-metros such as Jaipur, Chandigarh, Pune and Vizag. We are constantly in talks with developers to sign new contracts.
STARS PUSH SALE OF BRICKS AND MORTAR
The Times of India (Delhi edition)
Can Bollywood stars and cricketers push the sale of housing projects? The answer seems to be ‘Yes’, as far as the perception of the realty firms is concerned with many of them hiring these stars as brand ambassadors of their firms. The latest to join the race is none other than Bollywood actor Sushmita Sen. The former Miss Universe has become the brand ambassador of Assotech group. And if you talk about the first Bollywod star pushing the cause of a realty firm, it was perhaps Amitabh Bachchan, who has endorsed every possible product – from hair oil to cement and from cold drinks to chyawanprash. He was the brand ambassdor of Sahara Homes.
According to Anil Sharma, CMD of Amprapali group, they decided to take on the duo as their brand ambassadors as both MSD and Singh are dashing players and they command a lot of respect due to their performance on the cricket pitch. “I am pretty sure that they would make a difference in making the brand of the company even more visible and strong.” “I think that while stars make your brand popular among the possible buyers, it is highly debatable whether they can affect the final decision that customers make, either in housing or in commercial property,” Sunil Jindal, CEO of SVP group, says.
Explaining the reason for roping in Sen, the affable MD of Assotech, Sanjeev Shrivastava said that she is a symbol of modernity, and has a lot of grace – and since this is also the hallmark of Assotech Group, they roped her in. Sanjay Khanna, director of Kailashnath Projects Pvt Ltd, gives a sane suggestion to all those who are looking for a property – while there is nothing wrong in watching well-made advertisements featuring big-ticket stars endorsing some project or product, when it comes to buying, you must use your brains.
The Times of India (Mumbai edition)
The market is flooded with reports of homes that cost a cool couple of crore and above being snapped up with monotonous regularity. It is clear that the recession is well and truly over – and thank the lord Ganpati for that! With Indian GDP expected to clock 7-8% + growth in 2010-11 and probable double digit growth starting 2012, international property consultants Jones Lang Lasalle India believe India is ready for the next wave of wealth creation – especially in tier I cities. The developer community senses this and has launched more luxury projects in the recent past and Mumbai city leads the pack with more launches of taller, high specs and luxurious projects in the future.
The first thing to do would get an expert rendition of what exactly constitutes luxury. Anand Narayanan, National Director – Residential Agency, Knight Frank India says, “The luxury product is present across all segments. For instance in a single location there could be a price variation of around 3,000 psf or more – this can be explained by the product which has better brand value, specifications and amenities – thus constituting a luxury product in that particular price band”.
PE & VC-FUNDED COS LINE UP PUBLIC OFFERS
Paramita Chatterjee, New Delhi
The Economic Times
More private equity and venture capital-funded companies will float initial public offers in the coming weeks as valuations soar and investors look to rake in profits. After a lull last year when valuations were low, private equity (PE) investors are now lining up mass exits as the recovery in the domestic economy leads to increased valuation of companies, say analysts tracking the sector. So far, this calendar year PE firms encashed over $3.8 billion from 77 investment exits, more than double of $1.7 billion collected over 44 exits in the same period last year, according to data collated by Venture Intelligence, a research firm.
Some of the companies that are ripe for exits include Ashoka Buildcon, a company engaged in construction business of roads and bridges, local search engine JustDial and healthcare firm Arch Pharmalabs, according to investment bankers who are familiar with the companies’ plans. All three of these companies are expected to float initial public offers. ET could not independently verify these plans. An email sent to executives of Arch Pharmalabs did not elicit any response.
“Many companies in our portfolio have accrued value and with public market window opening up, we are sure to get good returns from them.” said Sandeep Singhal, MD at Sequoia Capital. He, however, refused to divulge the names of companies, which they are looking to exit. Sequoia Capital is an investor in JustDial.
THE PROPERTY MARKET IS SHOWING SIGNS OF MATURITY
The Economic Times
Anshuman Magazine, Chairman & MD, CB Richard Ellis, South Asia
A key difference in the residential real estate market of today and that of 2006-07 (when the market was at its peak) is that buyers are being more selective now. During the boom time, property prices were going up everywhere – whether it was an A-grade property or a C-grade one, whether in a tier-2 town or in a tier-3 town. It was only the euphoric sentiment that was driving prices higher. Now things are a little different. You see each property market responding to local factors also and there is no one direction in which prices or rents are moving.
There are pockets where prices are rising, others where they are stable and some where a correction may still happen. That, according to me, is a very positive sign and shows that the real estate markets are maturing and so are buyers. Because of the variation, now there seems to be logic in the price rise or decline in a market. Another encouraging sign is that buyers have now also started looking at factors like infrastructure, and connectivity instead of just buying what they could afford.