NRI interest in Gurgaon realty goes up as Rupee touches historical low

The Corridors by Ireo – Gurgaon’s Sector 67A

The Corridors by Ireo – Gurgaon’s Sector 67A

The fall of Rupee has raised speculations of increased NRI investments in the reality sector. Builders and analysts say that Gurgaon continues to be a popular destination for NRIs buying property mainly for the purpose of investment.

The Indian Rupee (INR) has seen 12.0% depreciation against the US dollar since the start of May till June, thereby forcing its value go down against all other currencies pegged to US dollar, including the UAE Dirham (AED). As a result, the Rupee has also depreciated against the AED by 12.0% during the same period.

Builders maintain that this slip might prove a good opportunity to tap the potential offered by the NRIs.

According to Ravi Saund, COO, CHD Developers Ltd, most developers are taking cue from this situation and coming up with products primarily targeted at the NRI segment. “We, at the CHD, are coming up with high-end studio apartments in our upcoming commercial tower CHD Sky One. This will majorly be targeted at our NRI customers,” he said.

Gurgaon has emerged to be one of the most lucrative investment options for NRIs since it ensures a good return on investment. The areas most preferred by the NRI segment are Golf Course Extension, Sohna Road and the upcoming Dwarka Expressway. “If the rupee maintains its current levels, real estate developers could see more NRI investments during the period. On the downside, cost of construction may marginally go up as we will have to pay more in rupee in order to procure raw materials,” Saund added.

Read more: The Economic Times

Rupee hits historic low of 68.82 against dollar, Sensex crashes 473 points

The rupee slumped past the 68 per dollar mark on Wednesday, hitting a record low of 68.82, as concerns weighed heavily in the financial markets on the expected increase in government’s subsidy burden following the passage of the food security bill and uncertainty over a possible US led military strike against Syria.

The S&P BSE benchmark Sensex also plunged by 473 points in the late morning trade following persistent selling pressure, triggered by the sharp rupee fall coupled with sustained capital outflows by foreign funds.

The rupee and the benchmark index recovered during the mid-session trade, however both remained volatile. Where Sensex regained the 17,800-level, rupee continued to hover around the 68 a dollar mark.

Continuing its free-fall, the rupee recorded a steep fall of 3.13% (258 paise) on Wednesday, after opening the session at 67.06, sharply below its Tuesday’s close of 66.24.

Equity benchmark Sensex was trading at 17,494.80 points, down 473.14 points and Nifty was trading at the 5,138 level down 200 points from its Tuesday’s close in the morning trade.

Read more: Hindustan Times

Asia Pacific Office Index sees two Indian cities in rankings

Jones Lang LaSalle’s Asia Pacific Office Index Q2 2013 reveals that Mumbai and Delhi NCR’s most active secondary business districts (SBDs) stand at 6th and 13th rank respectively among business districts of top cities in Asia Pacific region. The secondary business districts (SBDs) of Bangalore and Chennai barely make it into the top 30 districts, occupying 26th and 27th place respectively.

The indices show that cities in India still offer competitive real estate prices. This factor provides a compelling incentive for international companies to choose India over other countries for setting up their offices, provided that other business requirements such as availability of talent, location, the size of market they serve and infrastructure are met.

Ashutosh Limaye, head of research and REIS, Jones Lang LaSalle India says, “While this is good news for occupiers, it does not bring cheer to landlords and developers. Mumbai’s Bandra Kurla SBD was ranked 3rd on this index in 3Q CY 2009, while Delhi SBD ranked 6th then. Both have slipped to 7th and 13th places respectively in 2Q CY 2013. SBDs in Bangalore and Chennai have slipped by one place each during the same period. This means that after the Global Financial Crisis of 2008-09, Indian cities have not recovered from the rental and price correction of between 20-40% from the peak values of 3Q CY 2008. Other business districts in Asia Pacific have performed better.”

Read more: The Times of India

NRI property interest swells as rupee falls

Now the rupee has broken the landmark barrier of 60 to the dollar, experts are left wondering whether it will fall to 65 to 70 or more. Many are now questioning how long it will continue to fall, and what the effects will be on India’s economy.

Opportunity in calamity

Whilst there are many obvious downsides to the rupee’s depreciation, there are also inherent benefits.

One of these has been highlighted in the Associated Chamber of Commerce and Industry of India’s (ASSOCHAM) recent study, which details the opportunities for new property investors.

The survey polled nearly 1,250 Indian real estate developers. The main findings reported that buying a property in India is the primary goal of many non-resident Indians (NRIs), and that the weakening rupee has given a boost to these ambitions.

Mr D S Rawat, Secretary General at ASSOCHAM, notes “It’s definitely not good news for people back at home, but for a non-resident Indian (NRI), this is definitely the best time to invest. At the moment any NRI buying a property in India can save around 20-30% on his/her property value.”

The outlook

The fall in the rupee is a major problem for NRIs who have already invested in India’s property sector, who are reporting major losses in value. Many are having to make the tough decision of whether to sell, or try to weather out the storm.

Read more: iExpats

Infrastructure

Panel recommends unified transport authority for NCR

Multiplicity of authority, absence of a unified law governing urban transport and resistance to change – these are among the several issues facing the road transport system in the National Capital Region, according to a Parliamentary Standing Committee report on Transport, Tourism and Culture. In the report, which was tabled in the Rajya Sabha, the Committee has noted that the creation of NCR has posed newer challenges for a seamless, accessible, safe, affordable and comfortable transport in the region as a large number of non-destined vehicles, commercial and private, pass through Delhi every day to reach other States.

The Committee, which examined issues related to regulation and management of public transport system in Delhi after the gruesome gang-rape of a paramedic student in a moving bus on December 16 last has noted that there are as many as 27 agencies and authorities involved in operationalising transport in Delhi. “The bus in which the incident happened was able to move freely throughout the city that night without being noticed or stopped at several barriers put up by the Delhi Police. Subsequent investigations revealed that the bus was plying without the mandatory permit to carry passengers and had been challaned several times in the past, and let off each time. It was mainly due to fragmented authority and lack of coordination between various agencies involved in managing, regulating and implementing transport related Acts and Rules in the National Capital,” the report said.

Read more: The Hindu

India approves raft of projects to kick-start investment

The government said on Tuesday it had approved a raft of infrastructure projects worth 1.83 trillion rupees to revive economic growth and restore investor confidence after a crash in the rupee to record lows.

“The message that we are sending is that the investment cycle has restarted, and we are pushing it. It is gathering pace,” Finance Minister P. Chidambaram told a news conference to announce the kick-start for 36 stalled projects in sectors from oil, gas and power to roads and railways.

He said a cabinet panel had cleared 18 power projects, alone worth 830 billion rupees.

The announcement did not lift the rupee, which was trading at 65.39/41 per dollar at 1047 IST, close to the record low of 65.56 reached last week.

Dealers said it was partly depressed by concerns over parliament’s approval on Monday of a plan to provide cheap grain to the poor at a cost of nearly $20 billion.

“It’s not out of choice, but out of compulsion that the finance minister is announcing so many things,” said G. Chokkalingam, managing director and chief investment officer of Centrum Wealth Management in Mumbai.

Read more: Reuters

Energy

India May Beat U.S. in Wind Installations for First Time

India may install more wind capacity than the U.S. this year for the first time as a tax-benefit window extending to 2015 prompts U.S. developers to delay setting up new projects.

India is forecast to put up 2,050 megawatts of wind capacity in 2013, compared with the 2,000 megawatts expected in the U.S., according to the latest figures from Bloomberg New Energy Finance due to be published next week.

“The decline in the U.S. is mainly due to the complacency of the project developers,” which can claim federal tax benefits through 2015, said Shantanu Jaiswal, a New Delhi-based BNEF wind analyst.

While all major wind markets, including China, are expected to slow this year, the U.S. is set to experience the sharpest decline with annual installations plunging 85 percent. India’s lead could be short-lived with U.S. installations expected to surge again starting 2014, Jaiswal said.

India has installed 19,662 megawatts of wind power, according to the Ministry of New and Renewable Energy, about one-fifth of the nation’s estimated potential, he said.

“There exists a substantial upside potential for Indian wind installations in the coming years,” he said.

Read more: Bloomberg

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