More than 15 Sr. executives from the real estate firms of Mumbai have moved to Bengaluru

We all know that Mumbai is the financial capital of the country and it is the city where most of the leading real estate developers have their head offices. According to recent survey Bengaluru based real estate firms are well impressed with the skills of those who are working in the Mumbai based real estate firms and due to that most of the Bengaluru based leading real estate are approaching to Sr. Executives and consultants for the top position who are working for Mumbai’s developers.

In last, one year more than 15 Sr. executives from the real estate firms of Mumbai have moved to Bengaluru, yet it is true that currently the sale of residential property and apartments in the financial capital of country is slow. In the latest moves, Om Ahuja, CEO of residential services at Jones Lang LaSalle in Mumbai head office, joined Brigade group as the CEO of residential services in Bengaluru. However; 8 months before Ozone group hired the Srinivasan Gopalan on the position of CEO whereas; earlier he was the COO and CFO of Wadhwa group, a Mumbai based real estate firm. Bhavesh Kamdar was earlier with L&T Realty, but recently he joined Embassy group as the head of leasing department.

Om Ahuja, who recently joined Brigade group, stated that in Bengaluru the prospect of joining new company as CEO in the largest division of Brigade group has credible track record and I think that experience in building the best quality integrated townships is responsible to list it in stock exchanges and it has been also rated as the great place to work from last few years and due to that the decision to move to Bengaluru was easy for me even after spending 20 years in Mumbai.

Why real estate market of Bengaluru is attracting real estate professional?

On the issue of moving to Bengaluru, the experts are saying that the real estate market in Mumbai getting saturated and due to that now it’s difficult to move the prices up. In Mumbai real estate investors have made just little money in past two to three years, but these days Bengaluru is witnessing the huge growth in terms of property development as well as price of real estate market and due to that in past eight months of duration the city has witness the sales of more than nine million square feet of commercial space. In Mumbai the property prices has been decline from 7 to 12 per cent from October 2014, with the total drop of 15 per cent on its peak level, as per the reports of Edelweiss Securities.

Current real estate market of Bengaluru:

These days Mumbai based real estate developers are battling high on the residential and commercial inventories.  However; the number of unsold residential and commercial units in the city was highest in India which was approx. 200,000 till December 2014. But it was expected that this quarter Mumbai will take more than 11. 5 quarters to sale its unsold inventory and NCR (National Capital Region) 13.8 quarters, while Bengaluru will take only 7 quarters. Still there is boom for office space and it is fuelled the demand for homes buyers in Bengaluru, however; the city has accounted more than 49 per cent office space absorption in 2014, according to the reports of Colliers International Bengaluru has absorbed 13.77 million sq ft of office space in 2014.

The Gopalan added that Bengaluru based real estate developers are more transparent, professionals and they willing to share project ownership with other private equity firms however; these are not the case with Mumbai based real estate developers. In Mumbai, CFO’s of the organizations run the whole show, but in Bengaluru it is the CEO who is responsible to call the shots with the focused operation.

Supertech to raise Rs 500 crore

The leading real estate firm Supertech is planning to list its six of the rented as well as operational malls with REIT (real estate investment trust) to raise Rs 500 crore in the duration of next two years which is the year 2015 and 2016. As per one of the latest survey Supertech has more than 2 million sq ft of retail space in its six malls out of which two are in Ghaziabad and one each is in Noida, Rudrapur, Haridwar, Rudrapur, and Meerut.

However there are few products under construction by Supertech. Currently Supertech is in discussion with one of the Singaporean company which has experience in setting up the real estate investment trust in various real estate markets. As per the statement of officials we are in the starting stage for the listing of our assets and REITs own the properties to get the rental income and distribute it among investors. For real estate investors they provides high dividend with a liquid option where one can invest in the real estate sector.

Most of the real estate firm in the country and as well as some of the private-equity funds are showing interest to set up the REITs because stock market regulator SEBI (Securities and Exchange Board of India) notified its rules to list the trusts in September 2014 with a aim to view and attract more and more funds in a transparent manner, so that real estate developers can pool the money for the development of new projects. But till now no REIT is listed in India and it’s just because the lack of clarity in taxation process. With a aim to encourage local listing, central government is decided to do some capital gains in the favor of sponsors in the Union budget of 2015 at the time of listing of REITs on rental income.

However the capital gain will be applicable for all the direct transfer of same or different assets to any kind of these trusts. But still the budget is not offering any clarity on dividend distribution t as. The major real estate developers such as; RMZ, DLF, Embassy Office Parks, Ambience and many others with PE firms such as; Kotak Realty Fund, Red Fort Capital and Blackstone is known for listing their assets as REITs. They have develop the acquired rent producing assets in past few years as it could attract more than $1 billion or Rs 6,280 crore in 2015 witht eh additional tax benefits announced in the union budget of 2015, said the property consultant from JLL India. However most of the property experts said that in near future more exemptions can be made by the state as well as central government to make its segment more attractive for real estate players.

But it’s clear that the Capital gains taxes will exempted on the transfer of any SPV (special purpose vehicles set up to carry new real estate projects) share by different or same sponsors but at the MAT ( minimum alternate tax) is still applicable. If the minimum alternate tax will be so it will make REITs more attractive for real estate developer, says Shweta Aggarwal, Director of BMR & Associates.

CREDAI showcased 500 projects in Real estate Exhibition at Nashik

In December, 2014, the real estate expo- Shelter 2014 was organized by the Confederation of Real Estate Developers Association of India (CREDAI) at Nashik. It has showcased around 500 residential projects with close to around 5,000 apartments. Municipal commissioner, Praveen Gedam and City Mayor, Ashok Murtadak have inaugurated the four-day exhibition at Dongre Hostel Ground along the Gangapur Road area.

Naresh Karda, the secretary of CREDAI, Nashik, stated that, “The response in the real estate exhibition was excellent and more than 100 real estate builders or developers from across the city have participated in the exhibition. The exhibition has showcased more than 500 residential projects where each projects were having the flats ranging from five to 100 flats or more. The more he added that, “Our main aim was to bring the different projects of city at one platform to facilitate and help buyers. This exhibition has saved the time and it has provided various options for properties at every location. It has helped the buyers or end users or investors to know property prices in all over the city and country.

It was the seventh edition of Shelter 2014, and one of the largest real estate exhibition in north Maharashtra as it have a total of 328 stalls. Different properties such as; flats, row houses, twin bungalows, farm houses and other properties were showcased at the expo. Apart from real estate builders, financial institutions and banks have also participated at the expo to help the consumers in home loaning process.

Indian real estate

In the absence of due diligence the Indian real estate market can loss basic fundamentals and get drive by the positive news stories. However there are no analytical techniques are available to support those stories. The market intelligence of the prospective buyers is only reflective in macro level market which often goes off track. Most of the buyers are agree that due diligence is the way for to manage the risk and returns in terms of property evolution. More than that, it can give the much needed facelift to real estate sector. Due diligence is probably the most important aspect of a transaction involving real estate immediately following a broad understanding of the commercials.

According to Bilateral business body of India and America and economics experts “when market is fulfill with potential of growth and debt price is higher than equity so it demands for a greater common sense”.  In the eco-system of Indian real estate market there is financial disorder, as investors are getting the higher interest rate in market, which is giving the best ROI. The problems with these investments are that, high returns are available in market with high risk with the absence of reliable data. The answer to the dilemma of the investors and funding of the serious developers lies in creating a plain and simple mechanism of due diligence.

A section of the analysts mention that due diligence has always been done in the Indian real estate, but the Bull Run made some of the developers a bit over ambitious to ignore the fundamental in order to get the higher profits with far higher risk. However the slowdown has taught  everyone a lesson and now developers are over cautious at the each level, but the fact remains that in the absence of scientific and industry accepted mechanism of due diligence the challenges and risk exposure are as much for the realtors as for the investors. According analysts the developers and independent property consultants should focus more on micro markets than general trends which could be misleading. Whenever there are many grey areas where in the absence of proper research and search and reliable data even assessment of ground realties is not feasible.

According to Rohit Gera, MD of Gera properties, agrees over the need of proper due diligence across the real-estate sector of country. Unfortunately the home buyers still do not undertake the requisite amount of due diligence especially when buying the homes from fly by night operations. The cost of reliable due diligence often is less than one month’s EMI and this offers peace of mind through 240 months of loan payment. Sometimes customers blindly believe that they will not be the victims and they can go forth without proper due diligence. There are number of reasons for the absence of due diligence in real estate sector.  The growth of real estate transaction combined with the growing participation of the organized sector in real estate, which resulted in heightened awareness of the risks involved and, consequently, the need for ensuring that the risks are identified and minimized in such transactions

Minimal drop in property sale in Mumbai

Even as Delhi and its surrounding region witnessed a 20% drop in sale, Mumbai saw marginal drop at just 2 per cent while Chennai and Hyderabad and Mumbai saw 18% and 13%, according to the 2014-15 real estate research survey by Liases Foras. Liases Foras, a non-brokerage firm, is into real estate researches. The survey was released on Thursday. It says that property sales across tier I cities in the country have dropped.  Proving that change in guard at the Centre has not changed the property market scenario.

The survey says that construction activity has increased in affordable and ultra-luxury segments in Mumbai. Flats that cost less than Rs50 lakh are selling more. Besides, the average prices have gone up in Greater Mumbai and Mumbai metropolitan region. In Greater Mumbai, this year a 2BHK costs Rs2.30 crore. Last year it was Rs2.14 crore… in MMR, a 2BHK flat cost is Rs1.32 crore while it was Rs1.20 crore last year, according to the report.

According to Pankaj Kapoor, MD, Liases Foras, “Currently, property market has been quite inflated and over-stretched. No one, including end-users and investors, wants to invest his/her money… and that has resulted in decline in property sales” . “Besides, there is a huge gulf between the current rates and expectations of end-users. They are still waiting for price correction. All things are attributed to the stagnant sales in Mumbai and other cities,” he told a newspaper. “Buyers cannot afford such costly houses. But developers have little choice. The land cost is already high and buyers have to pay various government taxes. If we meticulously calculate, buyers are forced to spend almost 10-15% of total flat cost on stamp duty, registration, valued added tax, service tax etc. To make houses affordable, the government should slash taxes,” Manohar Shroff, general secretary of the Maharahstra Chamber of Housing Industry (MCHI) demanded.

The Narendra Modi-led government cannot increase peoples’ income overnight. The current property market is beyond the reach of common man. An ineffective market will continue for some time. Despite low sales, developers are not bringing down prices. But they are offering sops such as waiving off stamp duty and registration charges to lure buyers.

Potential investors considering investing in the Mumbai Metropolitan region are in for a shock as the realty market around the MMR is competing with that of California, in the U.S. Added to the existing rush is the proposed metro rail project which is all set to catapult the market price further.

The illogical rise in prices of land — residential and office spaces — may act as a stumbling block for the growth according to the industry bodies and NRIs. Bankers too opine that such a scenario would prove to be counter-productive to the expected industrial eco-system.

The California-based NRI are put off by the mad realty rush. “This is a never-before-price and there is no logic behind it. When I make a realistic comparison, land around California is cheaper than the eastern Mumbai region. Investing here doesn’t make any business sense” they say.

While an acre near Livemore in California costs about Rs. 5.5 crore, the same stretch is priced at Rs.24 crore on the outskirts of Thane.

The Confederation of Indian Industries (CII) is of the opinion that the development is definitely a setback for the potential investors. “Not a happy situation. Industrialists are expected to invest on machinery and other aspects besides land. The break-even period will be delayed significantly which may discourage potential investors,” he felt. On the other hand, the present situation is seen as once-in-a-lifetime opportunity for the small and big real estate firms to make a quick buck. The government has banned conversion of agricultural land and named hundreds of illegal layouts to prevent price rise but it did not yield any result. Market experts say that it’s realty bubble in the making.

“The local people are becoming millionaires overnight, purchasing swanky cars and blowing up money on luxuries. Now you see the bubble bursting as the economy is slowing down and the people have stopped making much inquiries about investing in the region. Illogical rise in prices of land may act as a stumbling block for growth.

Now builders are targeting the existing structures in Mumbai, which are either in bad condition or dilapidated because centers of Mumbai is running out as there is no more space for residential development. But still it’s a big question, is it better idea to invest in these properties for redevelopment as down payment is very high in these areas (Approx. 50 per cent).

As per the research on seller or buyer sentiments, who belongs from west and south India most of the people raise their query about investment prospects in existing buildings or re-developed projects. Redeveloped projects are in the good flow of demand as they are like modernization of the area with new infrastructure. Before investing in existing buildings buyer should check the background of the developers as these properties comes with several risks in respect to FSI such as; government approvals and conversion regulations.

On side, where investment in re-developed infrastructure can be beneficial for buyer or end user, the same can be risky for investors, who are looking for capital appreciation. The opportunities for capital appreciation much less in established localities in comparison of areas where there is huge potential for new infrastructure planning. Some areas in Mumbai like; Khar, Bandra and Santacruz are already saturated and developed with property cost in a range of Rs 18,000-44,000 per sq ft whereas, other areas like; Navi Mumbai and Vashi is still in the development stage in terms of re-development, infrastructure and connectivity .

CIDCO (City and Industrial Development Corporation) has allowed FSI up to 2.5 for new affordable housing buildings and it is expected that these buildings will be able to get a better scope of appreciation for those investors, who are looking for capital gains as well as the base value. In general re-developed infrastructures require more investment from consumers as builders, who are involved in re-development projects can ask for more down payment and it can range up-to 60 per cent of the total value. Most of the matured commercial and residential areas are undergoing for re-development in Mumbai to bring new supply of buildings for catering the needs of people, now end user can find multiple way to invest in these properties to earn maximum profits.

If you want to own a home, so this festive season is great time to buy your dream home and save money to celebrate this festive season in best way. Real estate developer and builders are offering the great discount and offers more rampant as Q3 of the year draws to an end and Q4 is about to start. Few buyers are  positive with real estate investment but others still thinking, is it right time for investment and own a dream home? In India the festive season has always been the special period for real estate sector, as builders and developers offers the great discount and deals with various freebies on the time of purchase. And this time investors or buyers are also looking for best deal.

This time festive season is expected to be much positive than previous three years. In market there are a lot of unsold inventory due to low buyer sentiments, thus some areas with the significant of unsold inventory such as; exteriors of Gurgaon, Greater Noida, Noida, NCR, Navi Mumbai and Thane are expecting to witness lucrative deals and witness various. Many builders are concentrating on positive number games by offering various offers such as; promotional schemes during the launch time and early bird discount and more. If you are one of the buyer so you should expect the following offer or incentives in this season:

•    Free club membership
•    International or national travel vouchers
•    Cash discount
•    Brokerage discounts
•    Free car parking space
•    Discount on registration fees and stamp duty
•    Gold coins or cash back
•    Free car
•    Free appliances or home amenities such as; modular kitchen, air conditioners and more

But is also expected that, this time developers may not offer above mentioned deals and discounts, as this time developers seems to be more focused on  the fundamentals, and they can negotiate on the pricing rather than providing free gifts and offers. It is amply clear from the other festive offers that presently positive current is floating in the market. In Delhi or NCR, most of the developers are offering Possession Linked Plans (PLPs) as the part of a festive deals wherein, multiple schemes (30:30:30, 30:70, 25:75, 10:90) are 10:90. Many developers are also planning to let go the EMIs till possession, and some of the developers are offering booking at a very low prices starting from Rs 1-2 lakh.

This time real estate developers seem to hit the bull’s eye with deals and discount on the cash component as it is obvious that buyers are more inclined towards cash components instead of free gifts and other offers. In one of the survey, more than 60 % of respondents said that they are looking for cash discount in this festive season rather than gifts and freebies. So, is this the perfect time to buy property? Well, it seems to be positive time for buyers to buy the property and developers to sale the property and they are willing to negotiate.

Normally, it is difficult to save the healthy amount of your savings, but this time it is easy and simple to save the cash and as well as get the luxury from various options due to more supply and less demand in market. Now the developers are planning to pick up the buyer sentiments for selling their buyer sentiments. After the festive season price is expected to show up word trend, so it’s a right time for buyers to choose the and buy dream property.

Most part of Mumbai in terms of residential investment will fetch the investor good returns. Everybody waits for the best possible investment opportunities in metropolitan cities of the country and when it comes to a city like Mumbai, opportunities are endless. Property in Mumbai and Property in Thane are among the top ten best investments that can be done by any person.

With the REIT passed by the new finance minister, investment has taken a boost in parts of the country and the price of the property has increased. With the current stable stock market, equity market is expecting involvement from retail estate investor and now will be the right time to probably to invest in finest Property in Mumbai and that of Property in Thane.

Investing in property is a combination of investment as well as intelligence. As per the reports published by JLL India, there has been a considerable change in terms of best affordable properties. Property in Thane, especially in the west of Thane is becoming a chosen area for most of the investors. The price of property per/sq ft has been showing an upward trend due to its closeness to many primary parts of Mumbai. The infrastructure in terms of connectivity and other basic amenities have added to the attraction quotient of the Property in Thane.

Availability of the residential Property in Mumbai has increased the property sale in the recent couple of months. Even though there are still quite a section of people in Mumbai who are unable to afford a residential property in the heart of Mumbai, the recent change recommended by the finance ministry will probably come to the aid of many looking for investment in other options like Property in Thane.

Investment options in Property in Thane or Property in Mumbai:
Thane being one of the well developed sub-urban of Mumbai has been gaining lot of attention from potential investors. There has been 34% of premium launches in the first six months. If one is looking for a low budget investment rather than investing in Property in Mumbai, then Property in Thane is the go to option.

Best investment localities or Property in Thane can be found in areas such as; Palghar, Dombivali, Vasai, Virar. With the increasing quality and number of builders/investors, there are increasing numbers of housing projects like Riverdable Vista, Mayureshwar Park , Falco World etc which are currently in hotspot.

Real estate in Navi Mumbai is all set to witness yet another boom with the prime minister Narendra Modi laying the foundation stone for the Rs 4,000 crore special economic zone at Jawaharlal Nehru Port Trust (JNPT).

Navi Mumbai where the property prices are as high as those in Thane is all set to witness a surge in prices, says Arvind Goel, president of Maharashtra Chamber of Housing Industry (MCHI), Navi Mumbai unit.

According to Goel, the inauguration of government-owned SEZ holds a lot of significance for Navi Mumbai. Currently, a 2BHK in Navi Mumbai costs Rs 70-90 lakh. A 20-30% rise is expected. Arvind Goel, says demand for commercial property will also go up. “There are 250 supplementary industries, directly and indirectly dependent on real-estate sector. A real-estate boom will develop them as well,” he said.

In three years, the SEZ will start. Since land for the 277-hectare zone is already acquired and in possession of the central government, no delay is feared. Widening existing road network to 6-8 lanes and development of service are also proposed to facilitate the vehicular traffic movement within the city.

The Thane-Belapur belt, known as an industrial belt, is slowly turning into a realty belt with the swanky residential and commercial complexes replacing the smoke stacks. “Just as the property market in Pune developed immensely, thanks to the IT industry. Employment is main factor for the growth of the housing industry and cities. Similarly, Navi Mumbai will grow in the next five years as there will be lots of employment opportunities with new start-ups, BPOs, KPOs and other new age industries coming up in the satellite township,” a realty watcher explained.

“Now developers will buy huge tracts of land in Panvel and other locations to develop townships. It’s a good sign that Navi Mumbai is developing. It will become another developed city in the near future,” says Manohar Shroff, chairman of Shivam Developers, adding that housing and real-estate will attract lots of investors to Navi Mumbai.

Some developers have added a note of caution for their colleagues who are gung-ho about the development of real estate on the back of SEZ planning. They say that the builder fraternity should not create a false euphoria about the housing project or it might turn out to be another bubble burst.