India can Face Housing Shortage by 2012- Ernst and Young

Indian Realty News

September 17th, 2010

India will face shortage of over 26 million houses by 2012, which would lead to spurt in housing prices as demand-supply gap widens amid rising purchasing power of the middle class people, a consultancy firm has said. “With India back on a high growth trajectory, demand for commercial and residential space is likely to witness an upward trend,” consultancy firm Ernst and Young said in a report.

Demand for residential property is rising sharply because of growing young working population, increasing urbanisation, declining household size resulting in more nuclear families with growing household income and improved availability of loans. Co-chairman of FICCI Real Estate Committee Pranay Vakil said over $1.2 trillion investment was needed to meet the rising demand for urban development.

India Ranked as the 5th Most Attractive Destination for Future Real Estate Investment

Indian Realty News

September 17th, 2010

Picture taken from here

India is ranked as the fifth most attractive destination for future real estate investments in a list topped by China, according to a latest report of FCCI and Ernst and Young. In the list of top nine attractive destination for real estate investments, China is followed by the US, UK and Singapore. “India ranks fifth on the overall index, as it scores better on the country economy development index and the real estate market index, but fairly low on the regulatory index,” the report released here said.

As per the report, there is no single clearance system for approval of investment in real estate sector in India. “In addition, the approval system is not time-bound and take up to two years,” it said. On China, it said: “Even amid cautious market sentiments and tightening of government policy, China remains attractive as an investment destination primarily due to its impressive economic growth record and favourable demographics.”

India’s Organised Sector Expected to generate over 3 Lakh New Jobs

Indian Realty News

September 17, 2010

India’s organised sector is expected to generate over 3 lakh new jobs across sectors in the September quarter, a survey said on Wednesday. The country’s organised sector is set to create about 3,20,400 jobs between July and September 2010, according to the findings study on the employment trend by staffing services firm Ma Foi Randstad. “There is optimism in the economic scenario across all sectors and services sector has created most of the new jobs in the country,” it noted.

Around 650 companies across 13 industry segments were surveyed. According to the report, 4,18,564 new jobs were generated between January and June this year, with health care sector alone seeing over 121,000 jobs. Hospitality industry added 63,000 jobs during the same period. “The top five sectors leading the boom are health care, hospitality, real estate & construction, IT & ITeS and education, training & consulting,” it said.

When it comes to cities, Ma Foi noted that New Delhi, Mumbai and Chennai were the leading job generators. The three cities, together, saw the creation of 1,12,987 jobs for the period of January to September 2010. “Kolkata, Bangalore and Hyderabad follow closely creating 30,000 plus jobs during the same period,” the report added. Ma Foi Randstad’s Managing Director and CEO K Pandia Rajan said that there is increased optimism in hiring spread across all sectors.

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.

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.

T E Narasimhan, Chennai, September 20, 2010
Business Standard

Azure Capital Advisors, a Bangalore-based venture capital firm, has launched a new realty fund, which would invest in Mumbai re-development projects and other mid-sized real estate projects in the country.

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).

Deepika Mital
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”.

Vandana Ramnani
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.

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