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Commercial space provides better opportunity for investment

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The return on investment (ROI) on housing assets was quite satisfactory in the past. In some cases, it was even doing amazing good business, depending on the locations, amenities and etc.

In India, historically the rental yields for residential assets have always been low; capital appreciation alone was sufficiently dynamic prospects for most real estate investors.

However, in the last two-three years the hype relating to the residential property investment has faded out with a prolonged slowdown. This has affected the capital appreciation overall.

The continuing sluggishness on the residential property market, coupled with the associated re-investment cycle risks, will also pay a significant role in driving more investments towards various categories of commercial real estate.

In the present scenario, the demand for the office space is growing faster: its demand is higher than the residential space.

Vineet Taing, president of Vatika Business Centre, says: “After RERA and GST came into force, the residential market saw a slow down with limited new launches and tepid sales. However, the commercial realty has remained robust with sustained demand. There is an increasing demand for office space which has led to the growth of business centre, virtual offices, as well as the co-working spaces. In the Delhi/NCR, the New Gurugram region and Dwarka Expressway are set to get a boost both in terms of office spaces as well as retail.”

Developers are with the view that the demand for commercial real estate has increased in the recent time with the sale of its properties like shops, malls and office space has swelled. The reason for this is the higher rental returns.

“The purchasing of commercial properties such as shops, malls, offices and storage facilities, has grown in recent years. The rental returns in commercial real estate is higher than in residential sector especially in a place like NCR, which is inviting more number of investors in this sector. The Indian commercial real estate is also attracting realty players from all over the world. This is increasing the need and competition in this sector; as a result the buyers are getting the best,” said Ravish Kapoor, Director Elan Group.

“Necessity for office spaces is rapidly increasing largely due to massive upsurge of startup landscape, M&A deals, favorability towards manufacturing in India and emergence of our country as a major investment destination. Businesses today are expanding and creating a demand of larger commercial space to accommodate their increasing employee base. Additionally, there is a surge in demand of under construct commercial projects due to higher rental values and scarcity of ready- to- move in office space. Therefore, the sector is witnessing and will continue to see an upswing trend in office spaces. 

 Investing in a commercial property has always been considered more profitable as commercial investments yield higher rental values than that of residential. Further Reforms like RERA offers broader and safer investment options to small investors ensuring more and more investment swing towards commercial,” said Ashish Arora, Director Distribution, Viridian RED

BDI Ambaram

Premium 1 BHKs in the contemporary time

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A recent observation of NCR’s residential market highlighted that the cost of 1 BHKs remain costlier in the area. As per the recent report of Anarock Property Consultants, NCR has the highest unsold inventory of 1BHKs.The area has an abundant supply of 1 BHKs, both in primary as well as for the secondary market. These are a part of new launches; some of them are built years ago and are available in resale.

It is seen that majority of these 1 BHKs lies in the secondary market are standalone apartments, with super built-up areas of 300-800 sqft. These units range from Rs 8 lakh to 92 lakh.

Here we look into the trend and present some suggestions by experts.

Some prime areas have seen corrections in prices. Gaurav Mittal, Chairman of CHD Groups, says: “Prices across segment saw a drop on account of the oversupply in the market. More-over, buyers have turned cautions. Sales are likely to improve and rates will increase and later firm up.”CHD is developing Restorico, a 1BHK serviced apartment project, in sector 34 in Gurgaon.”

Developers however pointed out that area with good growth potential have better demand for this unit provided with amenities. For instance, serviced apartments in an industrial town like Bhiwadi have a high demand for such apartments. BDI Group’s residential project, Ambaram offers 1BHK units along with 2BHK units in Bhiwadi.

Ssumit Berry, managing Director of BDI Group, says “Bhiwadi has good demand for one-bedroom units among the business operators and people coming to work in the big companies.”

Some realtors are with the view that the premium on 1-and 2BHKs is just a result of the high demand for such properties. Some of the developers suggested that the buyer should look for some other options like to go for a 2BHKs which has more demand in the market.

“Two-bedroom units are being sold easily and remain in demand.”said Mittal.

Some suggested that if a buyer is opting a 1BHK, then he should buy in premium place. Berry of BDI Group points out other fundamental checklist: “Other factors like developers track record of delivery, developer’s maintenance record within the project, sales in the project, and whether the project is RERA compliant also require close security.”

Green Park Affordable House Alwar

BDI in Line with Govt. Initiative to Boost Affordable Housing

If we talk about affordable houses, it typically denotes the housing needs of the lower or middle-income population. At present, the need for a better job opportunities and the higher living standard has resulted in increased urbanization. This has also increased demand for housing in India. People with low income are not able to fulfil the dream of owning a house.

“To overcome this need, the state schemes along with Centre’s PMAY (Pradhan Mantri Awas Yojna) are luring developers to launch more projects in the affordable housing sector. The increased thrust given by Government of India (GoI) towards affordable housing has given wings to the home buyers’ dream of owning a house,” said Mr. Ssumit Berry, Managing Director, BDI Group.

As per the ICRA report, the affordable housing segment is going to increase by 30% as compared to the other segment of the real estate.

The recent budget announcement of establishing a dedicated Affordable Housing Fund (AHF) in the National Housing Bank will boost the Affordable Housing sector.

“To bring transparency and accountability in the affordable housing segment of the real estate sector, RERA (Real Estate Regulatory Act) was introduced in the country. Its positive impact is being observed in the sector in streamlining the affordable housing segment.India entered a new era of single unified tax regime called Goods and Service Tax (GST) on July 1, 2017, which has replaced the multiple taxes, levied by the central and state governments and has subsumed of all the indirect taxes. It has eliminated the complex and ambiguous tax structure plaguing the country,” added Mr. Berry.

In the latest report from Cushman & Wakefield, the top 8 cities witnessed residential launches of approximately 74,000 units in 2017, mainly in the affordable housing. It also registered a 35% decline.

Prime Minister Narendra Modi’s plan of building homes for all by 2022 is set to boost the economy by $1.3 trillion, create 60 million new houses and over 2 million jobs annually.

In nutshell, it can be said that affordable housing sector, which is also called the ‘growth engine of Indian Realty Sector’, is surely going to witness the boom in the coming months.

Real Estate Pic

Navratra seems to bring opportunities for property buyers

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Developers have come up with many special offers to lure the property buyers during this Navratri

Navratra the glittering festival of nine days is associated with the purchase of some property, whether it is commercial or the residential. It is considered as the ideal time to make key investments because of the belief that it brings good luck and prosperity. With the onset of the Navratra, the real estate developers also gear up to come up with something special for buyers.

This time also developers have come up with special offer to its buyers.

Mr. Yash Miglani, Managing Director, Migsun, “Navratras are considered an extremely auspicious time to buy any new asset. We at Migsun have come up with some special schemes for our projects at Greater Noida. Now people can book a flat with a monthly installment of just Rs 5000, these loans also come with an extended repayment period of 40 years. We are also offering assured gifts on every spot booking. 

Mr. Ravish Kapoor, Director, Elan Group, “At Elan Group we are offering guaranteed price on every booking. With the support of our channel partner we are giving any of the three offerings like International trips, Gold Coins & I phone-8 to our buyers. Also during the 9 days of Navratras, we are serving goodies & refreshment to every customers and channel partners visiting Elan Miracle site at sector-84, Dwarka Expressway at Gurgaon. We are also distributing PVR Vouchers along with a Thank you letter. " 

Mr. Rahul Singla, Director, Mapsko Group, “The real estate fraternity remains quite upbeat about the festive season and looks forward to offer attractive freebies to home buyers. Likewise, a buyer also consider festivals as an auspicious time to purchase a house so, who wants to own a new house for them ready to move in apartment are the best option as the buyers need not to wait for the completion of the project; hence for this segment there is no need to undergo RERA registration and also there is no GST for them. This Navratras we organized a carnival for our home buyers on the weekends, at our site. Mapsko is also offering one- year free maintenance for on-spot booking. 

So, if you are looking to invest in a property, then this season is the apt time.

Demonitization

Real estate sector to make comeback

A cheerful moment could be there for real estate sector after a hope of more organized players will take the lead in the growth that leads more transparency and ease of doing business due to RERA and GST.

Accepting the facts, one of the developers, Harinder Dhillon , Vice President Sales of DLF Ltd. appreciated RERA and GST for boosting buyers confidence, “The real estate sector is indeed back to its recovery path. The markets of corrections in some popular housing sectors of Gurgaon and Noida and the sales value have increased in these markets in the wake of these price corrections.”

“Also legislation like GST and RERA has boosted the buyers’ confidence. With more clarity coming in on GST, sales are expected to improve further in the months to come.”

The developers also said that increase in confidence of buyers’ has backed the demolished market of realty sector.

It is noticed that the property sales are believed to be boosting up due to buyers are getting better deals in the market. "The implementation of various reforms has boosted buyer confidence. Also, in the current market situation homebuyers are in a better position to negotiate and grab better deals, leading to improvement in sales," Ravish Kapoor, director of Elan Group, said.

"During the past one year or so real estate has seen reforms like demonetization, GST and RERA. The realty market however,absorbed all reforms, which gavemuch confidence to home buyers. Now the sector is showing signs of recovery Clip Image001with sales improving in the wake of Correction in property prices. Both mid- and affordable housing segments are registering improvements in sales. Hopefully, it is only a matter of a few quarters for the market to be back on track," Gaurav Mittal, MD of CHD Developers, said.

Experts in the industry say that residential property market is gradually getting back to track but a lot of suppressed sentiment dynamics are still at play and the overly adventurous pricing developers indulged in over the past few years have had a part in this.

Anuj Puri, chairman of ANAROCK Property Consultants, also stood beside demonetisation, saying that it has been one of the prime reasons for the upliftment of the market, "If all the other fundamentals for a purchase decision such as good location, the credibility of the builder, available amenities, overall rational pricing, and RERA registration buyers feel confident to respond to the added incentives of discounts. Also, what is currently selling is affordable and mid-income housing in the primary sales segment Premium housing, as well as the resale market, took a big hit after demonetisation because they were traditionally targets for unaccounted funds. While the overall market is recovering, premium housing is taking longer to recuperate.”