India’s residential market has seen a rise in capital values in most micro markets across major cities. While there was an average price increase of 10% (y-o-y) in mid-end properties, high-end properties grew by 12% in the same period, according to Cushman & Wakefield India’s latest report.
Chennai, saw highest increase in prices in the mid-end segment at 16% followed by National Capital Region (NCR) at 15% and Mumbai at 14%. As most of the mid-end projects are located in the suburbs and peripheral areas, where the ticket sizes are smaller, demand from end-users and investors alike has been more consistent thereby pushing the values north.
Additionally, since input costs have been rising, new projects are being launched at higher rates per sft, though albeit overall ticket sizes may be smaller. Overall for all the cities mentioned in the report, the economic base is broader and not solely dependent on the IT/ITeS sector, giving them stability against adverse economic conditions affecting any particular sector that could affect the demand-supply situation.
Amongst the individual locations, in the high-end segment, Baner in Pune witnessed highest year-on-year price appreciation of 57% followed by Central Bengaluru (44%) and Gurgaon (35%). In the mid-end segment, Gurgaon witnessed maximum appreciation of 31% followed by Aundh in Pune (30%) and South in Bengaluru (30%). Kompalli in Hyderabad saw the highest annual correction of minus 4%.
Read more: Indian Realty News
Housing prices to go up after land acquisition bill approval
Land prices will escalate leading to rise in housing price if the Land Acquisition Bill is passed by Parliament, real estate developers and property consultants have said.
“It is not a good development for the industry. This will definitely increase land cost and housing prices,” Confederation of Real Estate Developers’ Associations of India (CREDAI) National President Lalit Kumar Jain said when asked about his comments on Cabinet’s nod to the bill.
If the Bill gets Parliament’s nod, developers will also hesitate to go for big projects, he added.
The Land Acquisition Bill was cleared by the Union Cabinet yesterday, making the consent of 80 per cent of owners mandatory for private projects.
In the case of public-private-partnership (PPP) projects, the bill makes mandatory obtaining of consent of 70 per cent of the land owners. Besides consent, the bill proposes higher compensation and rehabilitation package to land owners.
Expressing similar sentiments, National Real Estate Development Council (NAREDCO) President Navin M Raheja said the bill is not an industry friendly one.
“While farmers’ compensation issue is taken care of, the government should have looked at the overall growth of the country. Unfortunately, that is not the case here,” he added.
Read more: Business Line
Right Realty, Right Place, Right Times
Investors and speculators feel that buying a property cheap and selling it high is an ideal strategy. End users say buying value end taking a call on selling in the long term – if at all – is the way to go. From either perspective, there seems to be a consensus on buying cheap. Identifying the right markets becomes easier if one looks for certain key market triggers. The critical ones that highlight the potential of any property markets are: existing infrastructure readiness, execution/implementation timelines for new infrastructure initiatives, demand for commercial space in the market (job creation), social infrastructure and price trends.
Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India.
Business Standard (Page 2)
PepsiCo leases office space in Gurgaon’s Golf Course Road Extension
Food and beverage major PepsiCo has leased 150,000 square feet of office space in Gurgaon’s Golf Course Road Extension, a signal that it is preparing for a consumption boom in the Walmart era.
PepsiCo, which was one of India’s first MNCs in the post-liberalisation era and among the first few companies that moved into Gurgaon, has five offices in the city spread over 70,000 sq ft.
The company plans to move workforce from all these locations to the new built-to-suit office when the developer Pioneer Urban delivers it in the next two-three years.
“We have signed a lease agreement with Pioneer Urban for office space in Gurgaon,” a PepsiCo India spokesperson said in response to an e-mail query. “Currently, we operate out of five offices in Gurgaon and plan to consolidate our operations under one roof. India continues to be a key market for PepsiCo, and this agreement affirms of our long-term commitment.”
PepsiCo recently said that it has sustained double-digit growth in the country over the past few years and is expected to double headcount in Gurgaon after it moves to the new office there.
“This move to consolidate all the five offices will bring in efficiencies The company has also factored in future expansion in the new lease,” a person close to the development said on condition of anonymity.
Property advisory firm CBRE was the advisor for the transaction. Its chairman and managing director for South Asia, Anshuman Magazine, declined to comment.
Read more: The Economic Times
After reforms in FDI, government accelerates approvals for mega projects, land bill
The government swung into action with steps to accelerate approvals for mega projects, and approved a new law for land acquisition, acting decisively to spur investment and growth that have been marred by inter-ministerial tussles.
To kick-start investments, it has decided to set up a cabinet panel headed by the prime minister to speed up clearances of projects of over Rs 1,000 crore. The Cabinet Committee on Investments will be a “game changer” that will cut red tape, Commerce Minister Anand Sharma told ET NOW.
The cabinet also approved a 30% cut in the base price of airwaves that found no buyers in the recent auctions, and a urea policy that is expected to bring in projects of Rs 35,000 crore and make India self-sufficient in fertilisers. The measures follow a wave of business-friendly decisions in recent months such as liberalisation of foreign investment in multi-brand retail and airlines apart from approval for a bill to open up banking and insurance.
The latest steps aim to help industry cross major hurdles such as uncertainty over land acquisition and delays in approvals, which have blocked investments of Rs 1.30 lakh crore in a wide spectrum of sectors including power, mines, steel, energy and roads.
Read more: The Economic Times
7.24% inflation may prompt RBI to cut interest rates
Inflation declined to 7.24 per cent in November mainly on account of lower prices of some vegetables, giving a cue to RBI to consider interest rate cut next week to promote the sagging growth.
Vegetables prices decreased 1.19 per cent in November this year compared to 10.68 per cent jump in the same month a year-ago.
Inflation, as measured by the Wholesale Price Index (WPI), came down to 7.24 per cent in November from 9.46 per cent in the same month a year-ago and 7.45 per cent in the previous month.
However, prices of some food items like potato, wheat, cereals, rice, pulses, edible oil and sugar went up during the period.
“It is a welcome trend if inflation rate has come down… We should work towards more comfortable level of inflation which is 5-6 per cent,” Prime Minister’s Economic Advisory Council Chairman C. Rangarajan said.
Planning Commission Deputy Chairman Montek Singh Ahluwalia termed moderation in inflation as a “very good signal’’.
“The time has come to recognise that inflation is clearly softening and growth is weak and I am sure that RBI knows what to do,” he added.
Yesterday, RBI Deputy Governor K.C. Chakrabarty had said cutting the repo rate (at which RBI lends to banks) will be possible only when inflation comes down. However, he expected inflation to come down in about 2-3 months.
Meanwhile, retail inflation in November moved up to 9.90 per cent mainly on account of higher prices of sugar, vegetables, edible oil and clothing.
Read more: Business Line
Investment panel for fast-tracking projects gets green signal
The contentious National Board on Investment ( NIB) got the Cabinet nod today, albeit in a new avatar-Cabinet Committee on Investment.
With this body, the Cabinet Committee on Infrastructure will be wound up, officials said. The Cabinet Committee on Investment will be chaired by Prime Minister Manmohan Singh, and will fast-track approval to projects of over Rs 1,000 crore, initially infrastructure ones.
The committee assumes importance as India’s economic growth slipped sub-six per cent for three quarters in a row till the second quarter of the financial year. Stepping up investment rate assumes importance to make the economy grow faster. The Planning Commission has set a target of 8.2 per cent growth for the economy in the 12th Five-Year Plan (2012-13-2016-17). The first half of the first Plan year yielded just 5.4 per cent growth.
The idea of having a body for giving speedy clearance to infrastructure projects was initially mooted by finance minister P Chidamabram, who suggested the body be called National Investment Board.
The investment rate in the economy has fallen from the peak of 38.1 per cent of gross domestic product in the pre-crisis period of 2007-08 to 34.7 per cent in 2011-12. In the current financial year, the investment rate is projected to grow to 35.3 per cent.
According to official data, about 47 per cent of the 183 central projects, costing over Rs 1,000 crore, were delayed by up to five years, while 37 per cent reported cost overruns by up to 200 per cent as on March 31, 2012.
Read more: Business Standard
The rising power of Hindi
Last month, Essel Group, the company that owns India’s largest media group, Zee, moved the Delhi High Court to restrain the shareholders of Amar Ujala Publications (it publishes Amar Ujala, the hugely popular Hindi newspaper) from entering into any agreement for the sale of the company till December 31. That is when Essel’s memorandum of understanding (MoU) to buy a majority stake in Amar Ujala expires. Acting on the plea, the court passed a restraining order about a month ago. So, the end of this year will determine who eventually controls one of India’s biggest Hindi dailies: Subhash Chandra’s Essel Group or Jagran Prakashan, the other reported bidder and publisher of Dainik Jagran, or some other publishing firm? There were, at last count, several in the fray.
Amar Ujala, the Hindi newspaper with editions in 12 states, is an asset that any media firm would like to own. With a readership of roughly 8.6 million, it leads in three states: Jammu & Kashmir, Uttarakhand and Himachal Pradesh. Dainik Jagran is the largest-read Hindi daily and is present in 15 states. However, it leads on readership only in Uttar Pradesh. Taking over Amar Ujala can give it leadership in five key states, including Delhi.
“The combination (of Amar Ujala and Dainik Jagran) will also ensure that rivals such as Dainik Bhaskar and Hindustan (published by HT Media) are miles behind in the national ranking,” says A S Raghunath, a media consultant. For Zee, the paper has synergies with its Hindi television news business and its English paper, DNA
Read more: Business Standard
Mobile, telecom user base falls in October
The total number of mobile phone users in the country fell 0.26 per cent to 904.23 million in October from 906.62 million a month ago.
“This decline is due to large-scale disconnections by some of the service providers,” said the Telecom Regulatory Authority of India (TRAI).
The total number of telecom subscribers fell to 935.18 million from 937.70 million users, down 0.27 per cent.
Mobile number portability
The mobile number portability requests rose to 75.14 million as of October-end from 69.78 million as of September-end, while the total broadband user base rose to 14.81 million (14.68 million).
Bharti Airtel, the country’s largest operator by subscribers, added 4,91,570 new users, taking the total subscriber base to 186.41 million by the end of the month. GSM operator Vodafone India added 4,80,336 new subscribers, increasing its total base to 153.14 million.
Bharat Sanchar Nigam Ltd (BSNL), the state-owned telecom operator, added 3,57,148 users and Idea Cellular added 2,39,348 new users. BSNL had a total of 99.99 million users, while that of Idea stood at 115.70 million.
Tata Teleservices lost more than 1.6 million users and Reliance Communications lost 844,735 users during the month.
See article: Business Line
Pharma exports grew over 23% in 2011-12: Pharmexcil
Indian pharma exports grew by 23.34 per cent in the last fiscal, Pharmaceuticals Export Promotion Council of India (Pharmexcil) said today.
“The exports growth story is one to be proud of. Total exports during the last five years have grown by 16 per cent CAGR. Growth during the last financial year 2011-12, was 23.34 per cent in dollar terms,” Pharmexcil Director General P V Appaji said here on the sidelines an event here.
He said North America continues to be India’s best export destination with a 33 per cent growth during the last fiscal.
“Exports to Oceania have also grown well with a growth of 43 per cent but the overall turnover is small and considering the fact that Australia and New Zealand are not yet fully tapped, higher growth rates can be expected,” Appaji said.
The Indian Pharmaceutical Industry is currently valued at $22 billion and stands third largest in terms of volume and 13th in terms of value.
In order to promote Indian pharma sector, Pharmexcil is organising a three-day show in Mumbai next year where over 400 Indian pharmaceuticals firms are expected to showcase their products.
The show ‘iPHEX 2013’ is being organised in Mumbai from April 24-26, 2013 under the support of Ministry of Commerce & Industry, Pharmexcil said in a statement.
iPHEX 2013 shall offer an opportunity for international buyers and regulators to come to India and evaluate Indian pharma industry, Pharmexcil said.
Read more: Business Line