Dubai based NRIs rush to invest in Indian real estate market

Square Yards Consulting, one of India’s fastest growing real estate consulting firms, introduced India’s leading property developer, Ozonegroup, to NRIs in Dubai, at the Dubai Realty Revelry. The two-day event was held on February 13-14, 2015 at Hotel Four Points by Sheraton in Downtown Dubai, with Square Yards showcasing the top properties developed by Ozonegroup in Bangalore, Chennai and Goa.

Catering to a niche target, the expo witnessed Square Yards generating transactions worth Rs 250 million and a business of more than 50,000 square feet in two days for a single developer. The Dubai Realty Revelry provided a platform for NRIs to invest in Indian real estate market to avail the opportunity to translate their investments of Rs. 17 lakhs to up to Rs 42 lakhs in a span of about two years. Ozonegroup presented its prime upcoming properties at the show and the floor was open for the audience to invest in their homeland.

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India amongst top 20 highest property investment market

India is amongst the top 20 investment destinations for 2014 with total of USD 5,000 million (mn). This was noted in the latest report by global real estate consultants Cushman & Wakefield entitled ‘International Investment Atlas 2015’. India also recorded the third highest growth in investments recording an increase of over 140% in total investment volumes in 2014 over the same time last year. The report however noted that global real estate investments fell in 2014 for the first time in five years, dropping 6.3% to US$1.21 trillion.
The India real estate investment scenario saw a high point in 2014 reaching highest investment levels in the last five years. In 2014 real estate investments registering a growth of over 140% over 2013, which was recorded at USD 2,100 mn.  There has been a sharp increase in corporate investment, which has seen a rise of over 280% over last year. Corporate investments were recorded at USD 2,550 mn in 2014 as against USD 900 mn in 2013.
Residential emerged as the sector to receive the highest amount of investment totally upto USD 2,600 mn while office sector followed closely at approximately USD 2,000 mn. Of the total investment volume the domestic investments were recorded at USD 3,120 mn (62%)   and foreign at USD 1,930 mn (38%).

 

Two mega lease deals in Mumbai warm up slow market

Two recent big ticket deals show the city’s commercial lease market seems to be firming up after last year’s slowdown.

In perhaps the first large office lease deal of 2015, real estate portal Housing.com has taken on lease 1.5 lakh sqft spread over two buildings in Hiranandani Complex, Powai. In the other transaction, Trafigura, a global commodity trading and logistics firm, will expand its presence in the Bandra-Kurla Complex (BKC). It will occupy 1 lakh sq ft on the 10th and 11th floors of One BKC, a commercial tower owned by Radius Developers.

Trafigura’s 10-year lease agreement works out to Rs 240 per sqft a month with rent increase of 15% every three years. Trafigura already has a presence in Maker Max City building in BKC and a Godrej commercial building in Vikhroli.

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India’s Super Rich Heavily Investing In Global Real Estate; Their Count To Double In 5yrs

As per the recent wealth report created by London based real estate consultants Knight Frank, India’s high net worth individuals (UHNWI) are heavily investing in real estate in other countries; and their numbers have grown 166% in the last 10 years. Almost 50% of all India’s UHNWI have foreign real estate in their portfolios, which is highest in the world. At 42%, Australia’s UHNWI come second followed by Russia.

As per Samantak Das, chief economist and director, research, Knight Frank India, a quarter of all India’s UHNWI are buying global real estate which has nothing to do with investments; and almost 87% are purchasing foreign properties for purely investment purposes.

As per Wikipedia, an Ultra High Net Worth Individual is a person having net worth of atleast $30 million (Rs 180 crore) or more; and a High Net Worth Individual is a person having net worth of atleast $1 million (Rs 6 crore)

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Global picture: Mumbai is costlier than Dubai for owning a luxury house

The world’s richest are lapping up properties in the world’s most expensive cities, pushing up prices of luxury homes, so much so that $1 million (roughly Rs 6 crore) will buy you only 1,033 square feet of prime property in Mumbai.

One can buy 96 square metres of prime property in Mumbai for $1 million compared with just 17 square metres in Monaco, 20 in Hong Kong, 39 in Singapore and 21 in London, according to data provided by real estate consulting firm Knight Frank. For the same investment, one gets  gets 41 square metres in Sydney, 50 square metres in Paris, 79 square metres in Moscow, 48 square metres in Shanghai and 96 square metres in Mumbai.

Among the list of 20 cities surveyed, Mumbai is placed 17th with Cape Town taking the last slot, where a $1 million buys 284 square metres.

So only Dubai, CapeTown and Sao Paulo are cheaper than India’s financial capital for prime real estate in the residential space.

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Real estate Industry seeking Few Tax Incentives under REITS

Bangalore: To draw Non resident Indians, long term foreign and domestic investors in a translucent manner the Securities and Exchange Board of India had notified new real estate investment trust, for the purpose of taxation as REITS will attract more investors into realty sector. To make sure the success of new business trust structure property developers required more tax incentives in the upcoming budget on investment.

Last year, the SEBI had notified the regulations after Finance Minister Arun Jaitley, in the 2014-15 budget and bestowed Real Estate Investment Trusts (REITS) the Pass through status for the purpose of taxation to help the product category pick up.

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Hiranandani Group Bags the Top Real Estate Developers Awards by Bloomberg TV

hir1Bloomberg TV India along with knowledge partner JLL, announced the top real estate developers for both residential and commercial projects across in major cities.

The list of ‘Top Ten real estate companies in Mumbai’ in the residential segment was headed by Hiranandani Developers. In a ‘double-win’, the ‘top ten’ in the office spaces segment for Mumbai was also lead by Hiranandani Developers.

Niranjan Hiranandani, MD, Hiranandani Developers said, “We are delighted to top both segments, residential and office spaces, in Mumbai. It enhances our commitment to the company’s philosophy of “creating tomorrow” for “today’s property users”. From the globalised thought process that goes into planning projects at Hiranandani Developers to sensitivity to local issues from the end-user’s perspective, it is an effort to ‘set benchmarks’ while ‘creating landmarks’ – the recognition in form of being listed at number one in Mumbai by Bloomberg TV India, with JLL as the knowledge partner, effectively places Hiranandani Developers as the top real estate developer in Mumbai, in residential as also office spaces.

The top real estate developers as declared by Bloomberg TV India, with JLL as the knowledge partner, are for both residential and commercial projects in major cities like Mumbai, Delhi NCR, Bangalore, Chennai, Pune, Hyderabad and Kolkata, and Hiranandani Developers is proud to lead in both categories for Mumbai.”

The comprehensive analysis was done based on various parameters like (i) Value of Projects which indicated the total units launched by the company;  Launch Price (INR psf) and Average size of units in each project by the company, (ii) Sales Velocity; which shows how fast units in a project have been selling; (iii) Construction Delays, which shows the quantum of delays that has hit various projects and higher the delays, lower will be the scoring given to the company; (iv) Price Appreciation to annualize the pace at which price in a particular project is rising, faster the rise in prices of the property the scoring has been given to the company, etc.

The secondary factors for evaluating the companies are Price benchmarking, Rental benchmarking; the total space built by the company and vacancy levels for commercial projects by the company.

Prime Residential Rental Growth Weakest in World’s Top Financial Cities

Knight Frank Asia Pacific, the independent global property consultancy, today launches the Knight Frank Prime Global Rental Index.

realty1Key Highlights – Results for Q1 2014:

  • Prime Global Rental Index rose by 4.7% in the year to March 2014
  • Nairobi topped the annual rankings for the fourth consecutive quarter
  • Prime rents declined in Singapore, London and Hong Kong in the year to March 2014
  • Dubai and Tokyo recorded the strongest rise in prime rents in the first quarter of 2014
  • Rising interest rates could push would-be buyers into prime rental markets in cities such as London and New York in 2015

Kate Everett-Allen, Partner, International Residential Research at Knight Frank, said, “The key risks for the world’s sales markets could emerge as catalysts for growth in terms of prime rents.”

Key Findings:

  • Prime rents in the Kenyan capital, Nairobi, increased by almost 26% in the year to March but there are signs the market is cooling with growth of only 2.1% recorded in Q1 of this year.
  • Some of the world’s top financial centres – Singapore, London and Hong Kong – are positioned at the bottom of the rankings with annual falls of -0.3%, -2.0% and -6.3% respectively. However, we expect prime rental growth in these key cities to strengthen over the remainder of 2014.
  • In London, the rental recovery looks to be taking hold as price growth starts to slow. New registrations are up 17% year-on-year and tenant demand is coming from a diverse set of industries – oil and gas, mining and IT.
  • In Hong Kong, although there has been a relaxation of the Double Stamp Duty rule, a number of stringent cooling measures remain in place. With foreign buyers facing purchase costs of 25% of the sales price, the luxury rental market is attracting those deterred from buying, which should help support future rental growth.