Indian real estate sector 2016

In present, the rest of the world is considering our country as the land of opportunity for investment and business.  If we are talking about the real estate scenario for 2016, so no doubt it could be great year for residential as well as commercial projects.

1. Residential Properties:

It is expected that year 2016 will not bring some great hope for the residential sector as demand will remain constant. However; we can expect that silver lining will shine more and bad days of the real estate segment will be bottomed out; as according to reports in some cities sales have picked up and these cities are; Mumbai, Hyderabad and Bangalore. However; you can expect less launch in the cities such as; Mumbai as inventory level is already high. Real estate developers initiatives such as; attractive schemes, freebies, deal terms and heavy discounts with lower interest rates by RBI have activated fence-sitters. It is expected that year 2016 will end the long and painful journey of real estate market and signal an upward growth trajectory. It will definitely mature further into an organized industry in which some lesser- organized players become casualties.

2. Office or Commercial Properties:

The absorption rate of commercial properties as well as office spaces are still at 35 million sq ft and it is second highest figure in the history of country after the year 2011. However; the PAN India vacancy is still at the 16 percent, whereas; the realistic vacancy actually stands about 8 to 9 percent. It is expected that in the year 2016 the demand will remain consistent as occupiers are showing a positive bias. The years 2016 will bring more demand for leased spaces however; the quality supply will be lower. It means in year 2016 we can expect higher occupancy for Grade-B office spaces.

3. Retail Properties:

In 2015, there were no launch for the quality retail space and the major trend which we observed in the year 2015 were; the consolidation of retail real estate by retailers and big brands are focusing on the profit making stores and they are closing down the loss making stores. These days there are more institutional investors and all credit goes to relaxation of sourcing norms as single-brand retail companies are able to explore the Indian market. It is expected that years 2016 will be good year for the retail investors as there are many ecommerce companies which are planning to set up their retail stores in near future. Retailers will have to revisit their real estate strategy and have a flexible approach, customized to different micro-markets.

Capital Markets:

The year 2015 was the interesting year for capital market activities in the real estate market as PE focus continued to remain high for the office and residential projects. The platform-level deals and entity-level investments are also came into the limelight as the level of confidence are increasing among the investors.  The income yield of the office projects are attracting the majority of equity investments and when it comes to the geographical spread, so we can say that tier I and tier II cities are good for the investment in the offices spaces because over there you can earn more rent.

Image Credits : DNA

If you are property holder in Delhi, so here is great news for you because Delhi High Court has buyers and sellers to register properties below circle rate, according to reports of ToI (Times of India).

It is expected that with this decision of Delhi High Court, thousands of property buyers and sellers will get benefit because now they will be able to register their properties below circle rate. Circle rate is the minimum rate below which no seller or buyer are allowed to sale or transfer a commercial property or a residential property. The Delhi High Court stated that “If property owner will be able to convince the Collector of Stamps and he will give the reasonable reasons that why asset should be valued below the circle rate in that region, so they will be allowed to register their property at the rate prescribed below the circle rate”

The Delhi High Court relying on the “Provisions of the Indian Stamp Act in an order to revive discretionary powers vested with the State Government under the Section 47A to register and sale of the property below the local circle rate in that region”. We all know that sometimes properties which are in bad locality or disputed carry a low valuation. So owner of these kinds of property holders can cite these reasons in front of Collector of Stamps.