Anyone who has had a look into this sector
over the past decade will predict almost the same as what we say here because
real estate has grown in leaps and bounds when comes to costs, purchases, sales
and prices. The trend has not withered over time and has in fact become
stronger.
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| Real Estate Business |
Land acquisition and real estate regulation
bills are expected to be passed during the year, while there is a likelihood of
the Reserve Bank of India (RBI) bringing down the interest rates. The passage of FDI in multi-brand retail by
the government shows its seriousness on introducing reforms. RBI can be
expected to lower interest rates in the coming months which will benefit
developers as well as consumers.
Residential
prices, which have been increasing over the past few years, are likely to
witness subdued growth in most markets in a short to medium term till the
pressures of unsold inventory are eased out.
Finance minister P Chidambaram had recently
asked the developers to sell their unsold inventory at a lower price. Besides, infrastructure initiatives such as
Greater Noida metro rail network and proposed metro link in north-west
Bangalore are likely to have a positive impact on the residential market of
these cities.
FDI
in multi-brand retail will also boost the demand for commercial real estate. Apart from the international brands, several
domestic brands are also exploring opportunities to increase their foot prints
across the country. According to Jones
Lang LaSalle (JLL), major cities like Mumbai, NCR-Delhi, Bangalore, Chennai,
Pune, Hyderabad and Kolkata, will see the addition of close to 9.5 million sq
ft of mall space in 2013.
The
primary reason is that a sizable amount of supply that was expected to reach
completion in 2012 has been being pushed to 2013. While Mumbai, NCR-Delhi,
Bangalore and Chennai will together contribute 70 per cent of the total retail
space absorption, cities like Pune, Hyderabad and Kolkata will account for the
remaining 30 per cent.
Further, the ongoing policy reforms are expected
to provide some cushion to corporates who are likely to execute their expansion
plans in near future. Demand for officespace is expected to be broad-based and not restricted to IT-ITeS and banking
sectors. However, even as leasing activity performs relatively well, rentals
are expected to remain stable.
According to JLL, cities including Mumbai,
Bangalore, Delhi NCR, Chennai, Hyderabad and Pune will witness commercial
corporate property transactions focused on their own occupancy needs.
On the whole, we can expect 2013 to bring a
larger-than-usual number of NRI investors into the commercial space arena. This
is because NRIs are currently enthused by the prevailing exchange rate benefits
and the fact that commercial real estate capital values are still 15-25 per
cent under their 2007-08 peak levels.
So, if you are to make some investments
this year then get real estate on your list cause this is better than gold,
it’s a gold mine. Prices are set to rise and so are the benefits to the early
birds.
