Raja aristos news - Real Estate Growth to increase by Second-half

Post general election; cuts in interest rates; and corporate expenses are likely to enhance the real estate growth.

Real estate veterans are sure about their anticipation in the growth of the real estate sector in the second half of 2014, after the general election, which may bring transparency in the new government and attract more international and domestic investments.

The real estate sector failed to see the anticipated growth in the year 2013 as all asset segments like residential, office and retail properties witnessed a sturdy drop in absorption sparing some cities like Bangalore.

Mr. Anuj Puri, Chairman and Country Head of Realty Consultant Jones Lang LaSalle India (JLL) says, the year 2013 didn’t turned to be so good for the Indian economy because of the deprived macroeconomic situations, sluggish income growth, continued failing in the rupee, increased inflation and high interest rates made the consumers to diverge from spending.

While stepping into the New Year – 2014, let us look back and take a glance of things that was confronted by the real estate sector in 2013:

Residential Segment
The residential segment went down in the first three quarters of 2013 with the sluggish absorption of residential units in most of the cities like Delhi-NCR, Mumbai, and Pune.

A report by Jones Lang LaSalle India (JLL) shows that during the first three quarters of 2013, the weighted average prices of homes in pan India increased by 10 per cent over year-on-year (y-o-y).  The growth in this segment was seen in the peripheral regions and emerging locations, as against the city sub-markets and the rental values increased by 8 per cent in this period.

Mr. Puri also told ‘it is anticipated that the end-users and buyers optimism will remain down in the first two quarters of 2014 due to qualms of general elections and macro-conditions’.  But, the undecided investors are likely come into form post elections and the piled up inventories will be reduced with the increase in absorption of residential units that will raise residential prices by 10-12 per cent in 2014.

About 45 per cent of under construction properties that are vacant in the Mumbai market shows the pressure in the real estate sector, says a recent report of Knight Frank a UK-based firm.

Mr. Sunil Rohokale, Managing Director of ASK Group and an investment manager also stated that during the first half of 2014 interest rates will be high and will drop in the second half, which will improve the sales and absorption.

Mr. Shishir Baijal, Chairman and Managing Director of Knight Frank, India also said that in the beginning of the second half of 2014 the sales volume and launches in residential to get a hold and the prices may see an upward pressure. 

Office Segment
During 2013, the office realty segment lagged the most, as the end-users delayed in rental activity owing to the largely slowdown and ambiguity.

The office segment is driven more by economic grounds, hence the growth in this segment is likely to take place with a quarter lag.

The office space absorption in the major seven cities of India fell by 14 per cent on q-o-q analysis in Q3 of 2013 that accounted to 6 million sq. ft. against the 7 million sq. ft. of Q2 of 2013, says a report released by CBRE a US based firm titled India Office Market View Q3 2013.

Rajeev Talwar - Executive Director at DLF, the country’s largest developer stated as the commercial real estate will grow only when the individual and corporate earnings rises.  He also added that to see growth in office segment many banks should be allowed to support the sector.

 
It is also anticipated that the vacancy rates in office properties will raise from 18.2 per cent (2013) to 19.2 per cent (2014) as the supply is increasing and the absorption is restrained and with government allowing tax relief for real estate investment trusts, commercial sector will grow, says a report of JLL.

Retail Segment
It is anticipated that the entry of multi-brand retailers will boost the retail sector in 2014.

According to a study by global consultant Cushman & Wakefield (C&W), in 2013 the retail segment observed a 39 per cent rise in mall spaces, though18 malls were delayed by the developers, said

C&W further added that the total vacancy in malls in this segment has reduced by 2 per cent due to the improved rental activities in the newly launched malls that began with a high proportion in possession and the average occupancy of new mall space in 2013 was over 94 per cent.

Raja Aristos case studies - Investing in Marathahalli of Rs 40 lakh Gains a Rent of 16K Every Month

Investing in an apartment in Marathahalli of Rs 40 lakh can gain a rent of Rs 16,000 to 17,000 each month. The locality is the top grosser at 4.94 percent in terms of per annum yield in Bangalore.

Investors benefit is not just a high rental returns, but the locality will also be able to manage a 9 percent of growth rate during July-September 2013 quarter.

Let us check why Marathahalli stands on the top in high performing localities in the city. First of all Marathahalli is located close to Outer Ring Road. When you move to Outer Ring Road, you can come across the entire major cities. As Outer Ring Road is a Signal free road it is the biggest advantage for this locality. It is hardly 1-2 km from Marathahalli.

The 6 lane railway over bridge begins from Marthahalli Junction and enters to Kundalahalli area and HAL Airport Road. The closeness to areas such as HSR Layout, Whitefield and KR Puram drives through property values in the locality.

Sometimes it would be reasonable to purchase an apartment in Marthahalli than Whitefield. Whereas a size of 1,000 sq.ft. Apartment is available at Rs 40-45 lakh in Marathahalli but the same size apartment shall be sold at Rs 40-45 lakh. Now it’s left to an investor whether he chooses big apartment in Marathahalli for the same cost or save 10% of his funds.

But the question is whether the locality has enough number of properties. Yes in this case Marathahalli is a purchasers market. In this area there are 20 new projects under progress. There are many real estate developers who are going to start up with multi-storey projects.

 As Marathahalli is one of the well know locality in Bangalore and it is surrounded with IT hubs, hospitals, shopping complex schools and engineering colleges for the benefit of the residents. Anyone who has a dream of buying or constructing a house in Bangalore sure will buy a plot in Marathahalli for his benefits.

Many promoters are coming to construct houses in this area with salient features. As there are many IT companies around Marathahalli, due to which there is a high demand for rented house in the locality. The locality also sees hike in rental prices.

Marathahalli has developed towards concrete locale due to which margin for rental and sale value has increased significantly. The benefit to invest in Marathahalli is due the unparalled connectivity of Outer Ring Road.

Marathahalli is the central location in Bangalore where there is ever demand for the land for the features it contains. Compared to other areas of the city Marathahalli stands top most of the localities. People who invest in Marathahalli for buying a plot or constructing an apartment gains good profit.

Plots in Marathahalli are almost of A Katha type, this will help the buyer to get easy loans from banks. It would be a good idea to invest in a place like Marathahalli which offers decent living in a best house. Because investing in Prime location can double the amount in short period of time and can gain high profit without no loss.

Most people prefer Marathahalli to build or buy their dream home, as it is near to IT companies, Super markets, Shopping Complex, Restaurants, Multiplex etc. Due to which the demand for rented house has also increased in this locality. Due to Outer Ring Road people reach to their place very fast without any traffic signal.

Rental value in Marathahalli has increased by 20 percent and expected to rise more in future due to demand that exceeds supply. As this area is calm, quiet and near to IT companies many individuals prefer to live in this locale. As it is near to Tech parks and IT hubs, the location has become famous for IT population.

This area is outstanding as it is just 5 Km from Tech Park and Ring Road is just a Kilometer away. The rental value of 2 BHK and 3 BHK apartments will be approximately Rs 25,000 to 30,000 per month, with all basic facilities. The rental values are appreciating in this area.