Top cities in India which are offering houses in your budget

It seems like, years 2016 is positive for real estate developers as well as end users because there are several affordable housing projects in all over India which are ready for launch. Due to active and optimized urban planning schemes in Indian states and cities now the budgets for properties is somewhere affordable for specific segment, however; its still true that there are not much number of cities where you will find affordable property and in India its far-fetched dream common man to own a property in most of the metro cities.

With the boom in commercial real estate sector, now budget for personal housing is also shooting on high levels. In past few years, the real estate landscape has witnessed spatial transition and due to that it has led towards the consistent rise in the budget of the properties. According to recent report of JLL India, which is global property consultant firm, there are still some cities in India where housing is still affordable. As per the statement of Anuj Puri, Country Head of JLL India, “It is expected that 2016 will be good year for investment activities that were seen in 2007; the previous peak year which saw investments of more than $8 billion into Indian real estate”. The names of cities are following where you can grab your dream property in the budget of Rs. 30 to 50 Lakh;

• Hyderabad, Telangana:  Hyderabad is the combined capital of Andhra Pradesh and Telangana and it is also the centre of dynamic workforce and now again its trending the buyer’s market. In Hyderabad, there are many well-developed residential localities such as; Sainikpuri, Kukatpally¸ Miyapur and Manikonda where you can buy house in the budget of Rs 30-50 lakh. In simple words we can say that Hyderabad is perhaps one of the most affordable cities among all tier 1 cities of India.
• Pune, Maharashtra: In last two years, Pune has recorded good growth in terms of economy and growth in the affordable housing segment. Here you can buy affordable property of 1 BHK and 2 BHK in different areas. Apart from that people from high-end segment are buying 3BHK and 4 BHK budget homes. Pune offers better standards of living than any most other metros
• Jaipur, Rajasthan: Jaipur is one of the fastest developing city with many influencing growth drivers and due to that it has progressed tremendously in last three years. In Jaipur, there are some regions such as; Malviya Nagar, Tonk Road and Ajmer Road, which is good for investment deals. Currently, with annual capital appreciation of 12 to 17 percent, Jaipur holds great potential and promises good returns on investment.
• Ghaziabad, NCR: Ghaziabad is perfect destination for those who wish to buy property near Delhi, Noida and Gurgoan because here the supply of property is very high and its easy to find the budget home of Rs 30-50 lakh. Infrastructural developments such as the extension of the Metro Rail and the widening of the NH 24 will further boost Ghaziabad’s realty market.
• Nagpur, Maharashtra: We all know that Nagpur is city with extreme climatic conditions and in present Nagpur is one of the fastest-growing cities in our country. Apart from that now even state government is taking interest in turning Nagpur into the next IT hub of Maharashtra, the city is set for a major transition in its real estate profile.
• Kochi, Kerala: Now days builders are not focusing on affluent buyers, they are focusing on the affordable housing because in present there are huge demand of affordable housing and its accounts more than 60 percent of the total housing projects in the city. The increasing land prices have made it difficult real estate developers to build independent houses, and due to that now there is increasing demand from the emerging mid-income segment that wants homes packed with amenities at affordable prices.
• Coimbatore, Tamil Nadu: Currently, Coimbatore is a market which is responsible for the 40 percent real estate investments including cities Bangalore, Cochin and Chennai and apart from that professionals are also looking for property in Coimbatore because its emerging as a retirement destination and people are interested to buy 2 BHK homes in Coimbatore.
• Ahmedabad, Gujarat: In present, Ahmedabad is witnessing rapid infrastructural development in the form of GIFT Smart City¸ bullet trains and entrepreneurial nature of the population. The gas, oil and energy industries, petro-chemical industries and automobile manufacturing industries are some of the major factors driving perennial demand for real estate in the city. Currently, there are high demands of affordable property and due to that you can easily find properties within the range of Rs 30-50 lakh.

Image credits : DNA

Two major Indian cities; Mumbai and Delhi have made their entry into the top 30 list of the world’s most productive, powerful and well connected cities.

Global Top 30 List:

According to research report of JLL India, the international real estate consultancy, Mumbai which is also the financial capital of country has been ranked 22^nd whereas; our national capital Delhi has been ranked on the 24^th spot in the list of 30 super cities of the world. However; in the list the top five cities were; Tokyo, New York, London and Paris. The Tokyo, New York, London and Paris are the cities which are the destination of more than 50 per cent of all foreign capital investment, says Global Top 30 list of JLL India. According to JLL, “All top 30 cities account for 64 per cent of the total cross-border investment as their common interest are commercial attraction or economic attraction and real estate power and status.

List of Improvers:

Apart from that Mumbai is also ranked in the top 10 list of “Improvers” that needs more development and past one year has increased the commercial attraction. However; the other cities which have increased the commercial attraction includes; Tehran (Iran), Madrid (Spain), Riyadh (Saudi Arabia), Milan (Italy), Jeddah (Saudi Arabia), Lagos (Nigeria), Cairo (Egypt), Jeddah (Saudi Arabia), Istanbul (Turkey) and Jakarta (Indonesia).

.According to the reports of JLL India, with growth of more than 7 percent in the cities over past three years, it is no wonder that Mumbai and Delhi has made its entry into the Global Top 30 list with strong presence. The more they added that these reforms are undertaken by the government and it is boosting the confidence in the economy of nation. According to reports, the Mumbai is making its strong presence into the hub for global corporations with the help of firms which are among the world’s 2,000 largest companies and they all have headquartered in the city by rising 50 per cent over the last 10 years. The index of commercial attraction is the primary benchmark of JLL in terms of size and strength of the city’s real estate market and economy development.  As per the statement of Anuj Puri, Chairman and Country Head of JLL, “In Mumbai construction levels are high and it is increasing the Grade-A stock by 26 percent in last three years and it is expected that in next three years it will add more 22 percent. Apart from that Mumbai is also enhancing its position as a hub of global corporations because here you can easily find the headquarters of world’s 2,000 largest companies.

List of Global 300 Cities:

In context of the Global 300 cities, Mr. Puri stated that cities which make up the Global 300 are the world’s most productive¸ connected and powerful. Their 1.3 billion citizen’s account for nearly 40 percent of global economic activity, more than Europe and North America combined. These cities have hosted that more than 88 percent of the headquarters of the world’s 2,000 largest listed companies, which are able to generate the 40 percent of the world’s finance as well as business employment. In this list you can see the overwhelming focus of international corporations, hotel brands, real estate investors and retailers. The Global 300 cities are representing the bulk of commercial real estate market activity.

Real Estate Sector

Real estate experts believe that the 2016 will start with the positive note for real estate sector and in coming year it may witness pickup in the sales with improvement in the number of unsold inventories. In simple words we can say that year 2015 was little bit good for realty sector as it has witness some  regulatory changes, which will do the big impact in year 2016 as regulatory changes have relaxed the foreign direct investment laws, after the direct approval of Union Cabinet and it was much awaited Real Estate Bill. On Real Estate Bill there were mixed reactions from real estate experts, but broadly everyone sees it as a positive move as currently real estate sector is in sluggish mood.

As per real estate experts, In September the rate cut of 50 basis points by the RBI under monetary policy review will also increase the demand and supply in the real estate sector as well as government panel is also planning to bring seventh pay commission. As per the reports of Financial Express, “Investment in the real estate sector in 2015 was about $ 8 billion or Rs 53,000 crore and it was even year high even when the sector is not in a good shape. However; BSE Real Estate index also plunged by more than 16 percent on a year to date basis at the December 18. According to reports of Cushman and Wakefield private equity players have invested about $ 2.8 billion or Rs 18,700 crore in the real estate market till end September 2015. Add to that estimation $ 4.5 billion, or Rs 30,500 crore was of NCDs till the end of November 2015 and due to that the overall tally was up by 74 percent in comparison of last year which was about Rs 17,600 crore.

As per the statement of Anuj Puri, Chairman and Country Head of JLL India, “In past two years the real estate market is seeing some improvement and it has been adjusted to new trends in terms of aligning supply for relevant demand. The more he added that now real estate developers are paying more attention to the requirements of buyers and they are developing more property as per need of middle class which is in the price range of Rs 75 lakhs to Rs 90 lakhs in tier-I cities”.  According to Vikas Malpani, co-founder and Head of CommonFloor Groups, “The real estate bill approval is positive sign for real sector, which along with other trends could shape the real estate sector in 2016”. There are many experts, who are giving thumps up to the recently approved Real Estate Regulatory Bill as it can be helpful to clear the unsold inventory. We all know that whenever any new bill or law comes in the existence, the real estate developers tend to adopt a wait and watch approach. And due to that in present, the completions of existing projects are the prime focus of developers for some more months.

On the other side at the positive note the developers are focusing more on completing their existing projects as well as clearing the inventories and according to JLL India listed that following regions as the best bet for real estate sector in 2016; Noida & Greater Noida, Thane – Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Nagar Road – Pune, Whitefield – Bangalore, Navi Mumbai – Mumbai Metropolitan Region ( MMR), Viman Nagar and Kochi.

JLL India – “India Desk” in Dubai

Recently, JLL, the leading real estate advisory and investment firm, has launched its own “India Desk” in Dubai, which aims to facilitate the cross boarder investment between the GCC and Indian market. It is expected that JLL’s new initiative will support and help the GCC investors to manage their real estate investments and properties in India, apart from that JLL will also advise the investors and real estate developers about real estate investment on the matter of entering the UAE and wider GCC markets.

In starting “India Desk” will advise the real estate investors in Dubai to fund a development project in Mumbai and it will also shortlist the premium and most profitable land acquisition opportunities in India for those investors who are living in Abu Dhabi. In Dubai, the India Desk will be led by the Swati Shanker, who is Dubai based whereas; in Mumbai Amit Pande Head of Private Wealth for India & Middle East region will led the India Desk.

According to the statement of the Anuj Puri, Chairman and Country Head, JLL India, “We are continue seeing a significant interest from real estate developers and investors from GCC for India and vice versa and due to that we decided to establish the proper channel to make sure that clients are receive the same high quality of services in all around globe as per their need and requirement”. Commenting on the new initiative of JLL, Gaurav Shivpuri, Head of Capital Markets JLL MENA stated that India has very long stand as well as strong partnership with the UAE and due to that it continues to play a huge role in the region’s economic success. For growth of business it’s need of time and opportunity to set up a cross border platform to facilitate cross-border investments between these two countries”.

commercial real estate

In most recent realty news, southern real estate developer, RMZ Corp is in the advanced stages of negotiations to acquire Equinox business park in Mumbai from the Ruias of Essar Group. Sources familiar with the development confirmed that the transaction has been concluded for a monstrous Rs. 2400 crore. While billionaire brothers Shashi and Ravi Ruia are divesting non-core assets to pare Essar’s debt burden, this is by far the largest real estate deals of Mumbai and one of the biggest in India.

Bangaluru  based RMZ, backed by Qatar Investment Authority (QIA), will pay around Rs 19,000 per sqft for Essar’s 1.2 million sqft biz park, located adjacent to Bandra Kurla Complex which houses lessees like IDFC, Tata Communications, Crompton Greaves, Nissan and Lafarge among other Essar companies. RMZ manages about 20 million sqft of commercial office space across multiple cities and is currently on the prowl for large acquisitions to build an 80 million sqft portfolio in the next five years.

Anshuman Magazine, chairman and managing director, CBRE South Asia, notes that The Essar – RMZ deal shows an improvement of interest in commercial real estate. Such core rental yielding assets have lower risks associated as there is no pressure of development and leasing.

Anuj Puri, JLL India chairman and country head,  said in spite of the various influences that shape up real estate markets across India, Mumbai’s intrinsic equity as India’s financial capital remains undiminished and continues to drive major decisions by corporate and investment houses.

In some of the other large transactions, GIC of Singapore acquired 69% stake in Nirlon, which manages a 2 million sqft office park in Goregaon suburb, for 1300 crore in December 2014.

About two months ago, pharmaceutical conglomerate Abbott acquired 4.35 lakh sqft of commercial space in a tower developed by Godrej Properties in Bandra-Kurla Complex for Rs 1,479 crore.

In another massive multi-layered deal in office real estate market, Brookfield purchased Unitech’s Corporate Park for Rs 2050 crore  for majority control of six parks in NCR and Kolkata. Furthermore, Embassy Office Parks, backed by Blackstone, acquired Vrindavan Tech Village in Bangalore for Rs 1950 crore.

India’s large grade office buildings, riding on a robust services economy, have returned stable yields to investors in an otherwise volatile real estate market. Assets worth nearly $3 billion have together been acquired by global investors like Canadian Pension Plan Investment Board, Brookfield Asset Management, Blackstone  and Middle East sovereign funds among others during the last calendar year.

RMZ Corporation Banglore

Essar is in initial negotiation stage with real estate developer RMZ Corp to sell its Equinox Business Park, which is located in Mumbai. According to sources the price of deal will be about Rs 2,400 crore, or $ 360 million. In recent years, this could be the biggest commercial real estate deal in the MMR region as billionaire brothers Ravi Ruia and Shashi Ruia are divesting their noncore assets to repay the debt of Essar.

Equinox Business Park, which owned by Ruia family is located adjacent to Bandra Kurla Complex and it is the house of leading market players such as; Nissan, Tata Communications, IDFC, Crompton Greaves and Lafarge and of course Essar companies as well. However; Bangalore based real estate developer RMZ Corp is backed by the QIA (Qatar Investment Authorit) and it is expected that it will pay about Rs 19,000 per sqft for Equinox Business Park, which is spread on an area of 1.2 million sqft. It is expected that RMZ will conclude the deal in tow equal stages over the period of six months. It will be 100 percent acquisition from both parties as both parties will meet certain milestones in their business. According to Manoj Menda, Vice Chairman of RMZ, “We confirmed the rumors of deal, but at this point of stage we cannot comment”, however; on the other side Essar declined any comment. According to statement of Anshuman Magazine, Chairman and Managing Director of CBRE for South Asia division, “This deal shows that how commercial real estate is generating interest among real estate developer, especially when it comes to core rental yielding assets. The risk associated with these kinds of properties is much lower than the fully constructed properties where there is no pressure of development and rentals”.

Currently, RMZ is managing about more than 20 million sqft of office space in different cities and now this real estate developer is looking for some large deals to acquire more space in commercial segment as RMZ aims to build a 80 million sqft portfolio in the next three to five years. RMZ’s this acquisition is one of the largest and latest among the series of high profile office space deals because some global investors such as; Brookfield Asset Management, GIC of Singapore, Canadian Pension Plan Investment Board¸ Middle East and Blackstone are over sign a funds to down transaction opportunities in the India. In last calendar year these global investors have acquired assets worth $ 3 billion. In present all the major global real estate developers seeing Indian real estate market as a golden opportunity as in India “Grade A Office” buildings are riding on a robust services economy. Anuj Puri, Chairman and Country Head of JLL India stated that in spite of different influences which shape up real estate markets in India, inherent equity of Mumbai as India’s financial capital remains undiminished and it is expected that it will continue to drive major decisions by large corporates and investment houses.

In December 2014, GIC of Singapore was acquired 69 percent stake in Nirlon and currently it is managing 2 million sqft office space in Goregaon suburb and its cost is Rs. 1300 crore. Apart from that we all know that last month pharma MNC Abbott was acquired .35 lakh sqft in one of the commercial tower at BKC which was developed by the Godrej Properties and cost of deal was about Rs 1,479 crore. It was considered as the biggest transaction for any single user commercial real estate in India.

However; Brookfield’s Unitech Corporate Parks acquisition was seen as the biggest acquisition in Indian office space market. However; it paid Rs 2050 crore for majority control of six parks in Kolkata and NCR. Apart from that with undisclosed amount they also buy 40 percent holding in Unitech.

mumbai real estate

Mumbai’s real estate has always been in the limelight, be it expensive trophy properties in South Mumbai or basic 1 bedroom-hall-kitchen apartments in the suburbs. The country’s commercial capital is branded as the hub of expensive residential properties.

If you are wondering what makes homes in Mumbai so costly, Anuj Puri, Chairman & Country Head of JLL India has the answers. “Mumbai’s geography, government policies and heavy-inward migration makes property prices soar. “ Puri further adds that Mumbai’s geography allows only linear development whereas other cities have circular development. The city’s real estate therefore, has the scope of growing only from South towards North.

Factors like distance from the Prime South city centres to the suburbs coupled with lack of robust infrastructure connecting these places has led to prices surging in the Prime city centres and the immediate peripheries. According to Puri, another reason for costlier property is the government policies, with regards to its ready reckoner rates. In 2013-2015 itself, the Maharashtra government has increased ready reckoner rates by 15-20 percent across the city while in Gurgaon the rates were increased only about 10 – 12 % during the same period.

Slow infrastructural development has not allowed the city authorities to open up new land parcels. Moreover, major projects that can help in decongesting the city like the Mumbai Trans-Harbour Link (MTHL), coastal road network, the Navi Mumbai international airport & the various Metro links are struggling for completion.

In addition, high investor activity drives real estate prices immensely, and Non-Resident Indian investors comprise a significant chunk of residential real estate buyers in Mumbai. While most educated and skilled Indians choose to migrate to first world countries, the relatively low skilled see Mumbai as the best option even though the cost of living is high & the quality of life poor. This constant need-based migration encourages landlords to hold on to high prices.

In conclusion, Puri feels that the developers are well aware of the fundamentals that drive demand for homes in the city allowing them to keep residential prices so high. Nevertheless, these reasons drive property sales and will continue to do so in the future also.

Image Credits : DNA

Festival season is considered auspicious for real estate purchase and therefore developers gear up for boosting their sales. In a research report by JLL India, it was noted by its Chairman & Country Head Anuj Puri that traditionally real estate sales increased by up to 25-30 per cent during the festive season. However, this year it is anticipated that sales may not increase more than 15-20 per cent as the sentiment is still somewhat subdued and there is an affordability gap in larger cities.”

The real estate market, especially residential segment, has been experiencing a slowdown for last 2-3 years, leading to sluggish sales and long delays in the completion of projects.

JLL said that the property market is rich with options for prospective buyers with developers offering discounts in almost all the projects, particularly those which are ready-to-move-in. JLL also advised buyers to cautiously examine the offers and freebies to ascertain their true contribution in terms of the overall value of the property and the deal.

Puri added that buyers may perhaps consider the offers wherein stamp duty and registration fee is waved off, as this translates into an actual saving. He further stated that to improve the demand for housing, the government needs to review the taxes and duties that affect the pricing of any project. The process of granting approvals also requires swiftness to reduce the time taken from conception to actual delivery of homes.