Bangalore Turned Out to be Second Largest Real Estate Market

Bangalore : In 2013, Bangalore turned out to be the second largest real estate market with the launch of 1.23 Lakh new units, a figure tad less than the 1.25 Lakh units launched in the Mumbai Metropolitan Region (MMR). Despite a deluge of supply, inventory levels in Bangalore at 80,000 units are much lower compared to 1.1 Lakh in MMR, signifying an inherent demand. Unlike other national markets, prices in Bangalore are stable and affordable in the range of 4,300 per sq ft. All this is good news for investors and home buyers in Bangalore as they get ample affordable options to choose from.

The choice of location to buy a home in is driven by multiple factors but primary amongst them is a buyer's current work location and budget constraints. The Bangalore real estate market is divided into four geographical markets
- North, East, South and West. Exhibit 1 shows the average BSP in these four markets.

North Bangalore :

Key micro markets contributing to residential supply in North Bangalore are Hebbal, Hennur, Thanisandra Road, Jakkur, Sahkar Nagar, Kalyan Nagar, Sanjay Nagar, Yelahanka and Devanahalli. Average prices in these markets range from 4,300 per sq ft in Thanisandra to 7,400 per sq ft in Hebbal. There are currently two business parks in Hebbal, North Bangalore- Manyata Embassy Business Park and Kirloskar Business Park, with many more in the pipeline. Some of the key upcoming commercial centres in North Bangalore are Bhartiya City on Thanisandra Road,Karle Town Centre in Hebbal, Aerospace Park in Devanahalli, IT and Hardware Park in Devanahalli. Multiple infrastructure projects such as widening of Bellary roads, completion of an expressway and the extension of Namma Metro will give North Bangalore an added edge. Buyers looking to invest in North.

Bangalore can consider the following projects -

1. Purva Palm Beach Located on Hennur Main
Road, this beach themed residential project launched by Purvankara sits on 19+ acres of land. The project is available at an attractive price of 4,644 per sq ft with a 2 BHK area starting at 1232 sq ft.

2. Bhartiya Nikoo Homes This 125 acre township
being developed by Bhartiya Group will be ideal for people who prefer walking to their offices everyday. The township will have a SEZ, 5 star hotel as well as a big brand retailer, catering to every need of the residents. Properties are available at a basic sale price of 4,770 per sq ft.

3. Sobha City Sobha City on Thanisandra Main
Road is a 36 acre township based on a Mediterranean concept. It boasts of a 60,000 sq ft club and other high class amenities. Properties in Sobha City are available at a BSP of 5,455 per sq ft.

East Bangalore :
Key micro markets in East Bangalore include K R Puram, Marathahalli, Whitefield, Outer Ring Road stretch from Marathahalli to Sarjapur Main Road, Varthur- Sarjapur Link Road and Sarjapur Main Road. The Average prices in these micro markets are 3,840 per sq ft in K.R. Puram, 4,200 per sq ft in Whitefield, 5,200 per sq ft in Marathahalli and 5,131 per sq ft for Sarjapur Road. Though North Bangalore is the most talked about real estate market, most new real estate projects are being launched in East Bangalore. Multiple large business parks including ITPL in Whitefield, Wipro Headquarters in Sarjapur, RMZ Infinity in K R Puram, Bagmane IT Park in CV Raman Nagar,Prestige Tech Park and Vrindavan Tech Park on ORR are setting up shop in East Bangalore. The presence of many key corporates lends itself to rising demand and prices. Peripheral Ring Road and STRR are a few of the key noticeable infrastructure projects in East Bangalore. Once completed, the connectivity of East Bangalore with North Bangalore will improve significantly. Buyers looking to invest in quality projects in East Bangalore can consider-

1. VBHC Serene Town Located on Whitefield road
after Sai Baba Ashram and close to Old Madras Road, this latest offering by VBHC is very affordable. The project will offer basic amenities such as a gymnasium, swimming pool and a children's play area in a small land
parcel of 2.2 acres.

2. Shriram Chirping Woods Located in Harlur on
Sarajpur Road, Shriram Chirping Woods is a 16 acre development. Priced at R.s 5,200 per sq ft, it offers 820 apartments with luxuries like laminated wooden flooring in the master bedroom and Italian marble in living/dining room.

3. Sterling Ascentia Located on ORR near
Bellandur Lake, Sterling Ascnetia is a 6 acre premium development. Priced at 5,900 per sq ft, the project will have luxury amenities and specifications.

South Bangalore :

Key micro markets in South Bangalore are Electronic City, Bannerghatta Road, Hosur Road, Kanakpura road, JP Nagar, BTM Layout and Begur Road. Prices in South Bangalore range from 3,600 per sq ft in Electronic City to 5,900 per sq ft on Kanakpura Road. South Bangalore is a hub of IT companies such as Infosys, Wipro in Electronic City Phase-1, TCS in Electronic City Phase-2, Oracle near Dairy Circle on Bannerghatta Road, Accenture and many more. A key infrastructure project in South Bangalore will be the operationalization of Phase 2 of Namma Metro that will connect it to West and North Bangalore. Buyers looking to invest in South Bangalore have options such as -

1. Sobha Silicon Oasis Sobha launched Silicon Oasis on Hosa Road near Bosch Campus in December
2013. Silicon Oasis will have 918 units in 11 towers across 15 acres of land. This super luxury project is priced at 5,300 per sq ft.

2. Purva Westend Located close to Kudlu gate
junction on Hosur Road, Purva Westend is being
developed on 8 acres of land. With 700 units, the project will have an open air cinema, swimming pool, walk of fame film reel paving and a children's musical outdoor play ground. The project is currently priced at 5,184 per sq ft.

3. Queensgate by Hiranandani Queensgate by
Hiranandani is part of its larger township containing projects like Edenhall, Kingston and Club Meadows. With 400 flats that include a 1 BHK option of 525 sq ft, BSP prices are 5,200 per sq ft.

West Bangalore :

Key micro markets in West Bangalore are Rajaji Nagar, Yeshwantpur, Peenya and Malleswaram. Amongst the four geographic segments, West Bangalore has the least number of new units launched. Prices in West Bangalore markets are relatively high compared to other markets. The average price of a new project in Rajaji Nagar is 10,300 per sq ft and Yeshwantpur is 7,080 per sq ft. ParkWest by Shapoorji in Chamarajpet near Kempegowda Nagar is the most recent launch in West Bangalore priced at 6,450 per sq ft.

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Chennai in list of top 12 realty investment destinations

CHENNAI: Strong English speaking skills and a wide mix of industries that promotes cross pollination of work culture has made Chennai one of the top 12 cities in the world for real estate investments. This is the first global recognition the city has received; it is also the lone Indian city on the list.

The Candy GPS Report, published on Friday, identifies 12 cities around the globe with the potential to show strong residential property price growth in the next few years. The report — produced by Candy & Candy, Savills World Research and Deutsche Asset & Wealth Management — said, "Prices in these rising cities are generally much lower than in the world cities, which make them more accessible and attractive to yield seeking real estate investors." The list ranges from well established cities such as Melbourne, Australia, to centres in developing economies such as Jakarta and Chennai, that have a high number of ultra-high-net-worth residents, it said.

"While all of us acknowledge Chennai as an English speaking work zone, it is also a traditional banking domain speciality location driving inbound BFSI (banking financial services and insurance) businesses, which is a key differentiator to Bangalore and Hyderabad. Apart from these, Chennai has tremendous strengths in high quality healthcare and education systems, a key ingredient for future growth," S Ramaswamy, chief consultant RECS Group, a real estate consultancy said.

Yolande Barnes, Director, Savills World Research, who conducted the analysis said: "As prime real estate in many premier cities has become more fully valued, emboldened investors are now spreading their wings and looking for high yielding secondary properties in those cities and (properties) in second-tier cities in countries with strengthening economies."

For example, a two bedroom apartment in prime selling areas is priced at $1.60 lakh or Rs 96 lakh and in secondary ones they sell at $40,000 or nearly Rs 24 lakh."This more adventurous approach is likely to not only provide higher income returns but also an opportunity for significant capital growth. Real estate values will grow as new cities all over the globe rise on fortune's wheel. Property rents and values will rise in line with new and growing economic strength," the report said.

Real estate developers in Chennai offer around 20% internal rate of return or IRR for equity investments in residential projects. While, commercial properties yield about 8-10% rental returns. Residential rental returns are 3 to 5% in the city.

"Chennai is typically an end user market which has a great mix of businesses. Its top tier medical facilities add zing to the city as an investment destination. More importantly, it is not seen as a luxury market like Mumbai, which means there exists tremendous scope for improvement of city skyline," S Neelakantan, senior partner, CNGSN, a firm which has actively structured real estate investments said.

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Top localities in Bangalore for best rental returns

Every landlord expects to have good rental returns from their investment. This holds good for landlords all over the country and also NRIs. Especially when it comes to Bangalore, the landlord expect much more due to the booming IT sector and the increasing demand for rental houses or apartments.

Locations such as Sarjapur Road, Electronic city and Whitefield can attract healthy rental returns for you. Let us look at what these respective locations have to say for you in terms of rental returns:

Sarjapur Road

 

Located towards the eastern direction of Bangalore, the locality yields the top rental returns. property in Sarjapur road happens to be the most wanted locality to meet the rental demands due to the strategic location. It is well connected to Koramangala which is at the centre of city at a distance of 6 to 7 km. Upon this, it is very much accessible to the IT companies at Electronic city and Whitefield.

The locality has recorded a gross yield range of 4.13 to 5.13 per cent quarter-on-quarter with an average of 4.50 per cent. The average capital values in the locality ranges from Rs 4,100 to 5,700 per square feet. Therefore, a 1000 square feet apartment priced roughly between Rs 41-57 lakhs would yield a healthy annual return of 4.50 per cent which is around Rs 1.80 to 2.50 lakhs. This directly means that as the landlord you can earn anywhere between Rs 15,000-20,000 as the monthly rent.

 

Whitefield

Another IT hub at Bangalore, Whitefield property, recorded a gross rental yield of 4.48-5.13 per cent during January- September 2013. On an average, an apartment in this particular locality is priced between Rs 3,800-5,200 per square feet. Therefore, you can earn around Rs 1.80-2.50 lakhs as the annual rental income from these apartments.

The average rental value of a 2 BHK apartment varies from Rs 15,000-20,000 which is expected to increase to the level of Rs 30,000 per month in a few cases.

Electronic City

On an overview, the average capital value for an apartment at Electronic city varies between Rs 3,100 to 4,100 per square feet and thus a 1,000 square feet apartment which is priced anywhere between Rs 31-41 lakhs will yield an annual rental income of about Rs 1.60-2.10 lakhs. To be specific, the monthly rental returns will be around Rs 13,000-17,500 per month.

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Chennai and Pune Record Positive Growth

Slow economic growth has adversely affected India’s office real estate across major cities. Companies have been skeptical about new launches and expansion plans over the last six months and this has resulted in a downward trend in absorption. However, Chennai and Pune alone have shown positive growth in net office space absorption in the first half of the current fiscal.
According to Cushman & Wakefield, the leading global real estate consultant, net absorption across top eight cities- Chennai, Delhi NCR, Mumbai, Pune, Bengaluru, Hyderabad, Kolkata and Ahmedabad- in the first half (H1) of 2013 was recorded at 10.9 million square feet (msf). This denotes a decline of 15% compared to the corresponding period last year.
Attributing the low absorption rate to the decline in expansion by companies in the first quarter, the realty consultant said that this trend has adversely affected the overall absorption level in H12013. However, the second quarter (April-June) saw a marked improvement in the office space absorption level.
According to the report, the second quarter of 2013 recorded a total absorption of about 7.2 million sq ft, which was marginally higher than the same quarter last year. Due to the dismal performance of Q1 2013, which showed absorption levels going down by over 36 percent, the total absorption declined for the first half of the year.
Even in Mumbai, the commercial capital of India, the net absorption level has gone down to 10% at 2.4 msf compared to last year. Pune and Bengaluru too recorded a low net absorption in H1 2013 with 1.7 msf and 1.8 msf, respectively. Though Bengaluru witnessed a seven-fold increase in absorption in Q2 2013 when compared to the last quarter, it could not improve the total net absorption for the first half of 2013, which showed a decline of 22%, compared to the first half of 2012.
The only two cities, according to Cushman & Wakefield’s survey, which recorded positive growth in the net absorption level, were Chennai and Pune, with 6% and 37%, respectively. Kolkata was at its negative peak with -52% of 0.49 msf while Delhi NCR was at -42% (1.42msf), followed by Ahmedabad at -21% (0.27msf) that showed the largest decline.
As a result of sluggish growth and pessimism amongst developers in launching new projects, fresh supply during H1 2013 declined by 3% at 17.6 msf. Vacancy rates too got affected at the end of Q2 2013, which were noted at 19.6%- a rise of 1.7 % from the corresponding period last year.
“Amidst negative market sentiments, which include the depreciating value of the rupee against the dollar, poor GDP growth projections, political volatility and unrest in global economic conditions, office real estate markets in India have been able to maintain their level. Even though the absorption registered a 15% decline in the first half of the current fiscal, the positive growth during the second quarter of 2013 is being viewed with some hope. Though there has been a cautious attitude among corporates in their expansion plans, the trend has been positive, but slow. By the end of March 2014, the office space absorption is expected to be at about 30 msf with key markets such as Mumbai, Bangalore and Pune leading the way,” Sanjay Dutt, Executive MD, South Asia, Cushman and Wakefield, commente
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Bangalore No. 1 market in India for luxury homes

"Luxury properties in Bangalore are 20% to 30% cheaper. While luxury apartments that cost between Rs 6 crore and Rs 30 crore may seem exorbitant, they are in fact very reasonable when compared to the rates going in premium locations of established cities like Delhi and Mumbai," notes Om Ahuja, CEO-residential services, JLL India.

Citing research data, Ahuja adds: "A luxury apartment in Indiranagar or Koramangala is still an attainable reality with prices ranging from Rs 9,000 to Rs 12,000 per square foot. No other premium locations of other major Indian cities offer such prices in the luxury segment."

While Bangalore reports sales of close to 100 luxury units — including villas — on a quarterly basis, Mumbai and NCR, in comparison, see only around a dozen such sales.

Data shared by the consultancy firm LJ Hooker shows that Bangalore has around 5,400 luxury units under various stages of construction and planning.

After Mumbai and NCR, Bangalore is the third largest market for luxury property sales and product offerings. It is also the third largest real estate investment hub for high net-worth individuals (HNIs), but tops the list in terms of investments from NRIs looking at settling down in India.

While much of the city's luxury homes demand is fuelled by millionaires from the IT/ ITeS sectors, the demand is also being driven by Kolkata and Chennai-based HNIs. JLL estimates Bangalore to have over 10,000 dollar millionaires.

In terms of product, JLL reported that luxury residential offerings in Mumbai and NCR fall more or less in the vanilla category when compared to products in Bangalore. "In Mumbai and NCR, location aspects such as sea view or PIN code tend to define the flair and profile of a property far more than the positioning of the product in terms of luxury and design parameters," says Ahuja.

Demand across all metros for luxury residential products was subdued over three to four financial quarters, but has picked up in the past 60 days, say analysts tracking the real estate sector.

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Returns from real estate - Pune

The summer heat's at its peak and adding to the general discomfort is the noise of a long-drawn out election. Despite the noise or perhaps because of the noise, we, the general electorate, get a brief insight into the assets of those seeking our votes.

Our traditional penchant for investing surpluses in land has not changed: despite other avenues available for investment, politicians and their wannabe avatars all admit to some landholding. Investment in land or any form of real estate is easier said than done.

Everything connected with land, from change of land use to building permissions, water and electricity connections is under administrative control hence is regarded as perhaps the biggest generator of black money and corruption.

Investment under such circumstances for the average citizen is tough if not impossible. In addition to these obvious hurdles, in today's real estate scenario it is often hard to invest in land because, one, it is finite (there's just so much land going around and no new land is being manufactured) and two because clear titles to land are hard to get.

Which could jeopardise your investment if someone emerges from the woodwork and lays claim to it. So, flats. Pune is an attractive destination, both from the point of employment prospects and later on, living the retired life.

What kind of returns can one expect for one's real estate investments in this city? Sanjay Bajaj, managing director, JLL, Pune, a real estate consultancy, said historically there has been a minimum of 15-20 per cent appreciation across the city although some areas have performed better than others.

The caveat here is that you have to take a long term view. Real estate is a micro market which means that it is very location-specific. Look at rates across the city: they are higher in some areas and much lower in others. Hence, even one city cannot give you uniform returns, so micro markets.

The real estate consultancy's view on return on investment in the Pune market is that it could "increase over the next five years in areas with superior growth prospects on account of upcoming infrastructure and better planning."

To which a developer who shall remain unnamed clarified that this is where the convergence between politics and business occurs: those developers close to politicians get the civic body to create the public infrastructure (roads, etc) making the location a popular, in demand area. This leads to areas on the outskirts commanding a premium, thanks mainly to the infrastructure.

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Pune real estate market overview 2014

New Delhi: Pune Residential Real Estate Market

It is no secret that 2013 was not a very good one for the Indian real estate sector. The economic slowdown, coupled with political uncertainty, led to a downward trend on the property market. On the residential property front, high property prices and home loan interest rates kept a large number of buyers waiting on the side-lines across most Indian markets.

However, despite the overall slowdown in the sector, the property in Pune maintained the steady momentum that tends to define all stable real estate markets.

At this point in 2014, anticipation rides high on the outcome of the general elections. Considering the current political scenario in the country, the arrival of a new Government could spell a positive change in country’s economic scenario. Any significant rectification of the status quo would help in stabilizing the stock market, which in turn has relevance to the growth parameters of real estate development.

Meanwhile, Pune’s real estate market is showing healthy growth across most asset segments.

Mid-Income Housing – Demand Crystallizing And Expanding

Considering the concentration of population that is professionally active in the IT and manufacturing industries, there is now a greater demand for multi-storey apartments. Residential micro-markets like Kharadi and Wagholi in East Pune and Pimple Nilakh, Pimple Saudagar and Wakad in West Pune are seeing a lot of residential development, driven by good connectivity with the key centres of the city and the presence of good social infrastructure like schools, hospitals, malls and entertainment centres.

LOCALITY                        PRICE (Rs. / sq.ft.)
 Property in Kharadi                    5500 - 6000

Property in Wagholi                    3500 - 4500

Pimple Nilakh                           5500 - 6500

Pimple Saudagar                        5500 - 6500

Wakad                                          5500 - 6500

All these areas have demonstrated a steady increase in customer inquiries and are poised to grow exponentially in the future.

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Source:http://www.indiatvnews.com/business/india/pune-real-estate-market-overview--11859.html
 

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House of lax: Supertech Noida issue not one-off, 5 such cases with Allahabad HC

The Allahabad High Court’s recent order asking real estate major Supertech to demolish two towers in Noida for violating building laws has left the residents in the lurch even as the developer grapples to refund their money with 14% interest.

Supertech may be the first developer in recent times to get the high court’s rap, but there are several others in Noida and Ghaziabad against whom cases have been filed in the Allahabad HC by resident welfare associations (RWAs) for alleged violation of laws and agreements. At least five cases, against three developers, have been filed in the HC and the common thread running through these complaints is the modification of the original, approved plan without the RWA’s consent.

Earlier, in Gurgaon, real estate developer DLF was penalised by the Competition Commission of India for violation of a similar nature. The matter is currently before the appellate tribunal.
According to the Uttar Pradesh Apartments Act, 2010, developers cannot make alterations in the original, approved plan without the consent of regulatory authorities such as the project engineer, architect and the RWAs.

In case of Omaxe, against which two cases are pending in the Allahabad HC, the alleged violation is creation of stores in the basement area, building apartments in the area reserved for parking, and building villas in the common green area.

Similarly, in the case against Assotech Realty’s Windsor Park project, the allegation is that the developer has prohibited the RWA from the management of common areas and facilities.

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