Developers focusing on NRIs to give sales a push

Paul Sharma, 46, a portfolio manager with a hedge fund in London, plans to apply for an overseas Indian citizenship that would let him buy real estate in one of the fastest appreciating real estate markets in Asia.

Sharma, who is partly of Indian origin, left India in 1968 and has since been living in the UK. And he is not eyeing India for sentimental reasons alone.

“I am basically from Himachal Pradesh and I would like to buy a property somewhere around my native place,” Sharma says. Though he has property in the UK, he isn’t buying more there.

“I think one of the issues in the UK real estate market is that it is really difficult to track the market. The last time there was a softening in the UK property market, it was for six years—from 1989 to 1995.”

Developers say that even as sales in the real estate India market are declining, demand from overseas and non-resident Indians (NRIs), especially in the luxury housing segment, is on an upswing.

The real estate sector in the country has been growing at 30-35% a year to touch $12 billion (Rs47,760 crore) this year, according to consultancy firm Ernst & Young’s report.

In the last six months or so, the real estate market has seen a drop of 60% in sales in the top cities as higher interest rates crimp buying. But demand from the overseas Indian community continues to be strong because it is not facing a similar sharp rate hike in those countries, where the real estate market is more mature and the returns less assured.

“There is a lot of interest in the Indian property market among the Indian diaspora, especially for high-end houses,” says Kunal Banerji, head, international marketing, Ansal API Ltd said.

NRIs account for 20-25% of the company’s sales in the premium housing segment, which consists of houses above the Rs45 lakh mark. The demand is mostly from the West Asia, UK and US regions.

“The housing markets in the US and even in West Asia have hit a low,” Banerji said. “So, buyers cannot expect a good return on investment there.”

In the US in particular, home prices are starting to soften sharply after a series of bad loans to home owners, who had a high risk profile and failed to repay their mortgages on time. Home values have fallen and are now worth less than they were a year ago.

On the other hand, the Indian property market offers a minimum of 15% return on investment a year, even though that is a climb down from a doubling of values seen two years ago.
Source://livemint.com

India Offers Enormous Opportunity for Commercial Retail

Real estate in India is soaring high with people reaping profits from this sector. In the last 2-3 years real estate has plummeted to new highs with around 100 % to even 600% increase in the rates of both commercial and residential sector.

The shift today is and expected in the future will be towards the commercial segment with retail giving a strong impetus to it. The international retail giants have keenly set their eyes on government of India for granting them entry into this enormous demand generating country with huge potential. At present only single brand retailers can own upto 51% of the equity. All the international players are anxious to have their share of this pie in an attempt to raise the company’s profit graphs northwards touching new peaks. The retail wave which is waiting to come into its full swing will sweep the real estate sector to further highs.

Not only the global retail giants are eager to foray into Indian markets but big and well established companies back home are mapping out plans to explore new expansions into retail. Wal-Mart recently entered into a JV with Bharti and will soon be setting shop in India. Other retailers waiting on the wings are: TESCO, Carrefour, IKEA, Target, VF brands, etc.

According to AT Kerney’s report, India is the most favored destination for global retailers. AT Kerney’s Global Retail Development Index 2005 puts India at the top.

The retail outlets opening up in tier II and tier III cities exemplifies the company’s strategies to target the middle class, rural and semi urban category of more than 70% of the population living in villages and non-metros who do not have access to quality retail markets; with assumptions of this segment worth more than $350 billion. With companies like Reliance on the verge of opening their retail store, Fresh in cities like Yamunanagar, Ambala in Haryana. Chandigarh tri city including Panchkula and Mohali is also soon going to witness the mall culture in the next 10-14 months with around 8-10 malls ready to offer a new world of organized retail to the local residents. Places like Ludhiana and Amritsar have already followed this league.

Not only the retail sector is making waves in the country but also IT and ITES is turning to be a boon for real estate. With a vast number of global IT companies foraying into India, the demand for quality office space is increasing and thus are the prices. Real estate companies are vying to fill this gap between demand and supply by offering standardized office space. Even the state and central government is coming up with IT parks in tier II cities anticipating the demand and the availability of quality human resource. For instance Chandigarh and Mohali both have their own IT parks within a distance of about15 kms.

This upward trajectory in organized retailing and IT sector will certainly boost the commercial retail sector with demand expected to increase manifold.

Source://sbwire.com

It's changing India that greets NRIs coming home

When Surya 'Sue' Patel landed at Mumbai airport, she stepped out like many confident NRIs.

Wearing the latest Nike sneakers, a designer pair of jeans and her Rolex watch, she thought she would make her presence felt among her relatives in Mumbai before going on to Gujarat to celebrate Navratri and, later, Diwali.

She trundled her Samsonite bags to be welcomed and hugged by her cousin, Meera. Her cousin fished out a mobile and asked the driver to pick them up. Soon the car arrived - a big, gleaming Mercedes Benz. Sue also noted the Gucci bag she was carrying and her Cartier watch. Sue swallowed hard. Ten years ago, Meera and her husband had a Maruti Esteem and now they have certainly moved up in life, she mused.

As they were negotiating the chaotic traffic towards Bandra and Sion, she saw the same ill-kept, dilapidated buildings and hordes of people all over. Later, they went through the Dharavi, the mother of all slums where the huts had encroached footpaths. She noticed how the lamp posts had been engulfed by hutments with signboards of almost every business from groceries to construction materials. Parked on the road was a long line of handcarts pulled by sweating labourers to transport the merchandise. She thought, "Ugh! Mumbai will never change!"

After an endless half an hour of this depressing travel through the squalor of this slum, they came to a toll bridge. Paying the toll, they entered a new world - open, green and wide. "This is Navi Mumbai," said Meera. "We moved here four years ago from our flat in Dadar." Climbing a flyover, they saw new, high-rise buildings, banks, smart restaurants and spanking shopping malls ahead.

Gliding over a four-lane Palm Beach Road, lined with date palms in the centre and verdant plants around them, they came to a high-rise complex called NRI Colony. A gated estate, it had a small smart shopping complex. The watchman waved them in and they went up to the penthouse where Meera's husband, Rasik, and her children, Ela and Vipul, greeted her. The luxuriously decorated penthouse boasted of original paintings and Swaroski crystal. As she took it all in and swallowed hard.

She thought, "Umm, making money was India's first challenge, now it's how to spend it. Seems they are getting plenty of help in this direction as the super luxury goods manufacturers are moving in quickly to get a slice of the market."

Wearing trendy Swatches, the children were soon playing with the latest Sony PlayStation on a huge Samsung plasma screen. Rasik was getting out his Callaway golf set for the weekend round of golf. It seems Meera was spoilt for choice of designer wear, both Western and Indian - Armani, Escada, Moschino, Hermes, Prada, Fendi et all was here. It was the same story for Western designer men's wear and jewellery.

After luxury brands rented outlets in the shopping arcades of five star hotels, they spawned a demand for luxury shopping malls that are due to be opened soon in Delhi and Mumbai. Super luxury cars like Bentley, Rolls Royce and Ferrari are available in India.

On observing the general affluence, Sue said she was happy Rasik was doing well and wondered what the secret of his success was. "Simple," he answered, "I invested in stocks, mutual funds and real estate and all these have gone up many times in the last seven-eight years. The stock market has shot up from 6,000 to almost 18,000 points now; and the real estate is also up by over four times. So after I cashed in on some profits and sold my Dadar flat, I moved here for a better quality of life." But how come they moved into this NRI Colony? Not a problem as they paid the going rates and many Indians had moved in, replied Rasik.

The hi-tech industries and the back office operations of major companies and big banks are located here, an airport is being planned at New Panvel and a bridge linking Navi Mumbai to the city centre is being built. New export processing zones are due to come up and going to the city centre takes 60-90 minutes depending on the traffic and Pune is just three hours away by the super highway.

Sue cringed inside thinking about the 'presents' she had brought for Meera and her family: a perfume bottle she got as a freebie from the store for buying something else, a cut price pair of jeans for Rasik and digital watches from Hong Kong and Chinese toys from Wal-Mart for the children. After this reality check, she decided to let her presents remain in her suitcases.

Source://sify.com

India offers enormous opportunity for commercial retail

Real estate India is soaring high with people reaping profits from this sector. In the last 2-3 years real estate has plummeted to new highs with around 100 % to even 600% increase in the rates of both commercial and residential sector.

The shift today is and expected in the future will be towards the commercial segment with retail giving a strong impetus to it. The international retail giants have keenly set their eyes on government of India for granting them entry into this enormous demand generating country with huge potential. At present only single brand retailers can own upto 51% of the equity. All the international players are anxious to have their share of this pie in an attempt to raise the company’s profit graphs northwards touching new peaks. The retail wave which is waiting to come into its full swing will sweep the real estate sector to further highs.

Not only the global retail giants are eager to foray into Indian markets but big and well established companies back home are mapping out plans to explore new expansions into retail. Wal-Mart recently entered into a JV with Bharti and will soon be setting shop in India. Other retailers waiting on the wings are: TESCO, Carrefour, IKEA, Target, VF brands, etc.

According to AT Kerney’s report, India is the most favored destination for global retailers. AT Kerney’s Global Retail Development Index 2005 puts India at the top.

The retail outlets opening up in tier II and tier III cities exemplifies the company’s strategies to target the middle class, rural and semi urban category of more than 70% of the population living in villages and non-metros who do not have access to quality retail markets; with assumptions of this segment worth more than $350 billion. With companies like Reliance on the verge of opening their retail store, Fresh in cities like Yamunanagar, Ambala in Haryana. Chandigarh tri city including Panchkula and Mohali is also soon going to witness the mall culture in the next 10-14 months with around 8-10 malls ready to offer a new world of organized retail to the local residents. Places like Ludhiana and Amritsar have already followed this league.

Not only the retail sector is making waves in the country but also IT and ITES is turning to be a boon for real estate. With a vast number of global IT companies foraying into India, the demand for quality office space is increasing and thus are the prices. Real estate companies are vying to fill this gap between demand and supply by offering standardized office space. Even the state and central government is coming up with IT parks in tier II cities anticipating the demand and the availability of quality human resource. For instance Chandigarh and Mohali both have their own IT parks within a distance of about15 kms.

Source://prminds.com