Investors are increasingly putting in more capital into commercial real estate, particularly in the Asia Pacific region and direct investments in this segment are likely to more than double to $1 trillion by 2030, says a Jones Lang LaSalle report. Investors are already responding to shifting economic conditions by funneling more capital into commercial real estate, particularly in the Asia Pacific region, it said. The report estimates that direct commercial real estate transactional market will exceed $1 trillion per annum by 2030, compared with nearly $450 billion in 2012. Asia Pacific has outpaced other regions in real estate activity since the global financial crisis, achieving commercial real estate investment volume in 2012 equal to 77 percent of the previous peak reached in 2007. The Americas have only reached 62 percent of that level, while Europe’s investment volume is 46 percent of its peak amount. “While real estate asset values have shown no immunity to the financial shocks of recent years, real estate nevertheless is emerging as a preferred option for many investors,” Jones Lang LaSalle president and CEO Colin Dyer said.
The report — The Advancement of Real Estate as a Global Asset Class — said that since 2008, strong economic growth in the Asia Pacific region contrasted with recessionary contraction in Europe and North America has fuelled real estate activity. The Asia Pacific region is emerging as the long-term winner in the global contest for investment capital, boosted by the rise of domestic pension funds and private wealth, the report said. Higher returns are convincing many investors to increase exposure to real estate and increased allocations to real estate also reflect investor efforts to reduce risk by diversifying away from the traditional portfolio mainstays of bonds and equities, the JLL report said. However there are some operational challenges like low levels of liquidity and in some cases undeveloped capital markets currently constrain institutional investment in the region.
Read more: Financial Chronicle
Homebuyers are still laggards. Across major cities, the mood in the property market continues to be subdued. With economy yet to wake up from the long slumber and interest rates still perched high, builders and banks are now looking at new ways and strategies to create a buzz around their inventory and kindle interest among homebuyers. Take the case of Chennai-based Akshaya. It recently launched a residential project to be developed over 20 acres at Thaiyur, near Kelambakkam, the city’s peripheral area on OMR. The launch price of Rs 2,850 per sq ft, for the first three days, for a green project attracted enough attention. Besides the price, the company ran a 360-degree campaign covering all forms of media to generate hype around the launch. Starting with the launch day, it organized a booking marathon, and by the end of the campaign, about 1,021 people had booked an apartment. From the fourth day, the price increased to Rs 3,000, and at present, it is ruling at Rs 3,250 per sq ft. A total of 1,260 bookings have been received so far. Akshaya’s managing director and chief executive officer, T Chitty Babu, is a happy man. “More than aspiring for records, we wanted to thank our customers and create a sense of oneness, and what better way than to invite them all for puja,” he said, while refuting that this was a brand building exercise. “Akshaya as a brand is already established over the years and that is why over 1,000 people booked nearly one million sq ft of space in three days,” he points out.
Read more: Financial Chronicle
New industrial policy unlikely to increase housing stock
The new industrial policy unveiled by the state government earmarking 40 percent of land for special economic zones (SEZs) might not see substantial land being used for housing purposes in Pune district. While officers from the Maharshtra Industrial Development Corporation (MIDC) admit that majority of the notified SEZs in Pune district will not have excess land to implement the schemes, realtors point out lack of basic civic infrastructure as one of the major hindrances in setting up affordable houses in SEZs. The new industrial policy, which was approved by the state cabinet amongst other things, has set aside 40 percent land for real estate development in SEZs. The policy states this would help in setting up special townships centered on major industrial zones and also help in de-congestion of cities. The policy, modalities of which are yet to be chalked out, has been welcomed by realtors across the state, especially in Mumbai and Nashik, where it would have unlocked large parcels of land in the SEZs.
Read more: The Indian Express
Investors can expect big biz in NCR realty
Real estate in 2013 will be far better in results in sales compared to previous two years, as the project, launched in 2009 and 2010 would be in a verge of possession. Also, with the entrance of new financial institutions and mid-term policy of the Reserve Bank of India related to CRR (Cash Reserve Ratio—the portion, expressed as a percent, of depositors’ balances bank must have on hand as cash) and rate of interest on home loans is set to come down by approximately 200 basic pts, which will make it more attractive for end users to invest in real estate.
From: The Times of India (Delhi edition), (Financial Times, Page 2)
Higher chances of home loan nod for women borrowers
If you are applying for a home loan the chances of it getting approved are higher if there is a co-borrower. For one, the repaying capacity of two people will be higher than one, which will put your lender at ease about the loan getting repaid on time. If the co-applicant is a lady and she is the first applicant, then chances of the loan getting approved are even higher. Reason: women are seen as more responsible when it comes to repaying loans.
Recently, the director and chief executive of LIC Housing Finance, V K Sharma, said at a property fair that loans given to women or where the woman is the first applicant, are regular and disciplined in repayment. The housing finance company is also offering loans to women at 25 basis points lower than normal rates, under the Bhagya Lakshmi scheme, till March 31.
Read more: Business Standard
RBI panel favors 30 year fixed rate loans
Seeking to encourage housing activity, an RBI committee has pitched for introduction of fixed rate loans for up to 30 years and also asked banks to explore the possibility of levying “reasonable” pre-payment penalty on the outstanding amount only. The banks, the RBI report said, should also look at introducing fixed rate long-term loan with an option of resetting interest rates after every 7 to 10 years. This could be in addition to plain vanilla fixed rate loan products. The report has also recommended that the banks popularize the fixed deposit schemes with tenure of above five years, which are eligible for tax exemption.
IMF pegs India economic growth rate at 5.9% in 2013
The International Monetary Fund (IMF) today pegged India’s economic growth rate in 2013 at 5.9 per cent and projected a higher growth of 6.4 per cent next year in line with the gradual strengthening of global expansion.
IMF in its update to the World Economic Outlook (WEO) also said the global growth is expected to reach 3.5 per cent this year, higher than the estimated 3.2 per cent.
For China, the IMF report has projected a growth rate of 7.8 per cent in 2012, 8.2 per cent in 2013 and 8.5 per cent in 2014.
In 2011, China had achieved a growth rate of 9.3 per cent while India grew by 7.9 per cent in the same year.
“Growth in emerging market and developing economies is on track to build to 5.5 per cent in 2013. Nevertheless, growth is not projected to rebound to the high rates recorded in 2010-11. Supportive policies have underpinned much of the recent acceleration in activity in many economies,” the IMF said.
Read more: The Financial Express
Engineering roles see biggest salary increase in 2012-13
Engineering roles are at the top of the pay scale for fresh hires in India, and saw the highest salary increase this financial year, outperforming other jobs like sales, HR, administration and support services.
The median monthly salary of graduate engineers in engineering roles has increased to Rs 25,000 in the current fiscal, from Rs 22,500 last year, a 11% increase, says a survey by global management consultancy Hay Group.
Median salaries for HR professionals went up 10.1% to Rs 20,923, while those for administration and support roles increased 8.2% to Rs 18,500.
Read more: The Times of India
India 4th largest in steel output, logs highest growth in 2012
India’s rank in the world order of steel production remained unchanged at fourth slot with an output of 76.7 million tonnes, despite logging the highest growth of 4.2 per cent among major producing nations in 2012.
There was no change in the top three steel producing nations with China, Japan and the US retaining their slots in the respective order in 2012, World Steel Association (WSA) data revealed.
India was world’s fourth largest steel maker in 2011 and 2010 as well with a total production of 73.6 MT steel and 69 MT respectively. It had clinched the third spot in 2009, but the US grabbed the slot since 2010.
Read more: The Financial Express
Keys Hotels to use franchises for expansion
Keys Hotels, the main brand of Berggruen Hotels Pvt. Ltd, will use franchises to expand the number of properties in its portfolio to 100 in the next five years. At least 20 franchise properties will be added in the next financial year, said Sanjay Sethi, managing director and chief executive officer. The company also plans to enter markets such as Sri Lanka, Bangladesh and elsewhere in South Asia. Keys Hotels currently has 12 properties across India—six of which it owns, with the others being managed by the company. Keys Hotels will have nine more properties—two owned and seven managed—by the end of this financial year.
Read more: Mint
NHAI hopes to build 2900km in 2012-13, highest ever
National Highways Authority of India (NHAI) expects to build at least 2,800-2,900 km highways under the NH Development Programme during 2012-13, which will be the highest ever completion in the authority’s history. The maximum NH construction record so far has been 2,693 km in 2009-10, sources said.
According to officials, the highways minister C P Joshi has asked the authority to achieve its internal target of 3,000 km by March-end and to expedite construction on small pending stretches so that large corridors can be brought under “completion” category. “Issues relating to every under construction stretch was discussed on Tuesday and Wednesday at the highest level where top NHAI and highway ministry officials were present,” said a source.
Till December, NHAI has constructed around 1,650 km. Officials claimed that the pace of construction usually increase during this period and the fresh target can be achieved. This could be a little compensation for the authority, which has failed to meet the target for awarding projects due to poor response from bidders.
Read more: The Times of India
Railway freight traffic to grow 5.5% in 2013-14: Report
Despite all its problems Indian Railways is expected a clock a healthy 5.5% growth in freight traffic in 2013-14 compared to a 4.8% growth estimated for 2012-13, says the Centre for Monitoring Indian Economy (CMIE). According to a latest report by CMIE, this growth is likely to come “on the back of a healthy growth in the freight traffic of commodities like coal, cement, iron ore for steel plants and fertilizers with the railways likely to carry 1,071.9 million tonne of freight traffic as compared to 1,015.6 million tonne in 2012-13”.
According to the report, coal freight traffic is expected to grow 7% to 530.9 million tonne in 2013-14. “An increase in coal offtake backed by a healthy demand from thermal power plant, public users and steel plants is expected to increase coal freight traffic,” says the report. With a share of half its freight traffic, coal is expected to be the largest commodity to be carried by the railways in 2013-14.
Read more: The Times of India