Hyderabad residential housing demand stable

Property consultancy Knight Frank expects customer demand in the residential realty market of Hyderabad in 2016 to remain stable amid fewer project launches.

Such a scenario, Director-Hyderabad Vasudevan Iyer says, could push up the property prices.

According to the India Real Estate report (July-December 2015) released by the consultancy, on which he addressed presspersons here on Thursday, the prolonged consolidation witnessed in the market is expected to persist in the first half of 2016 as well. Developers would wait for further inventory unwinding to continue.

In 2015, “while the sales volumes fell marginally, by one per cent compared to the previous year, new launches dropped by a more pronounced 14 per cent.” The year ended on a flat note with no show of definite signs of recovery in market activity. The demand, however, remained virtually the same as in 2014.

End of 2015 “did show some promise in terms of supply as the H2 saw 11 per cent growth in the number of units launched, the report said. The demand on a half-yearly basis is around 7,000-7,500 units, he said, adding that unsold inventory level stood at 31,500 units.

“The situation in the residential market is not as positive though unsold inventories are at their lowest level since 2010. The steady demand in the last 18 months does point at a possible improvement in residential market fundamentals in the months to come,” Mr.Iyer said.

Hyderabad office market, Director (Occupier Solutions Group) Arpit Mehrotra said the demand increased, while the reducing vacancy levels is causing a surge in rental growth. In the second half of 2015, 3.1 million sq. ft. was absorbed, the strongest half-yearly absorption numbers.

Office space absorption in Hyderabad at record level: Knight Frank

After a long spell of lower growth the real estate market in the city of Hyderabad is on the roll again, this time led by the commercial property space.

The property consultancy firm Knight Frank, which has released its half-yearly report covering residential and commercial space for top seven cities of India, said Hyderabad had recorded the highest ever office space absorption of 3.1 million square feet in the second half of the calendar year 2015.

These are the strongest half yearly office space absorption numbers in Hyderabad history. A spurt in demand for office space is very much evident as the absorption levels in the preceding six month period was just half of what has been recorded in the second half of the year.

"With good infrastructure, talented work force and lower rentals and property prices compared to other cities, Hyderabad has been fast emerging as a second base for many Indian and global players in South India after Bangalore city. The spurt in demand for office space in Hyderabad is also marked by a new trend where builders and the users of office space coming together for a custom made development ," Arpit Mehrotra, director, Occupier Solutions Group of Knight Frank India said on Thursday.

The new completions in commercial space remained lower at 2.4 million square feet during the same period helping the rentals go up a little and this could encourage more investments into the commercial real estate development in the coming days, according to him.

On the other hand, the residential market in Hyderabad remained more or less steady with the volume of sales hovering above 7000 units for the past two years. However, the dip in new launches since the second half of the calendar year 2014, way below the sales volumes, continued in the second half of 2015 as well. This has also contributed to a gradual rise in average property prices, which rose to Rs 3,620 per square feet in the latest 6 month period from Rs 3,390 in the first half of 2014, according to the report.

"While demand holds steady in the housing segment, both supply and unsold inventory stood at their 5 year lows," the report said in respect of the Hyderabad market.

Hyderabad Real Estate Market Poised for a Correction

HYDERABAD:  The Hyderabad real estate market is finally seeing a correction, leaving behind the bad times, reveals reputed real estate consultancy Knight Frank India’s latest report.

Knight Frank India has recently released the report on real estate sector in 2015. The report was prepared after studying the realty scenario in major cities in India. Good thing for Hyderabad is that the sector is poised for a correction.

“The demand for housing segment outstripped supply in Hyderabad in the second half of 2015. As a result, the unsold inventory has decreased. Even office market is in a consolidation mode as the demand for office space also rose in the city. As a whole, the unsold inventory in Hyderabad market has been unwinding, which shows the city realty is on a path of correction,” said Vasudevan Iyer, director of Knight Frank, Hyderabad.

Due to the correction, Hyderabad market’s unsold inventory was at its lowest at the beginning of year 2016 when compared to the situation in the past five years.

According to the report, Hyderabad office market shifted gears in second half of 2015 by absorbing 3.1 million sq. ft, posting the strongest half-yearly absorption numbers in its history. The reason for growth in office space absorption is that many MNCs see Hyderabad as a commercial and IT office space hub which provides quality space at cheaper prices.

Many reputed MNCs like Google, Qualcomm, Salesforce and JP Morgan have acquired large chunks of office space here.

Though the situation in the residential market is not as positive as in office space segment, steady demand during last 18 months does point to a possible improvement in residential market fundamentals in coming months.

A correction has to occur in any market which sees a sudden rise or fall or rush. Hyderabad realty has been picking up over the past six months and we hope that a correction in the market will benefit it, says Gummi Rami Reddy, president of Confederation of Real Estate Developers Association, Hyderabad chapter.

With vacancy levels reducing, even the rental segment is set to witness a growth, much to the relief of property owners and investors in the city.

growth Highlights

■ Hyderabad realty sector poised for correction

■ Unsold inventory decreased in second half of 2015

■ Prices to remain stable due to this decrease

■ Rental segment is set to grow in 2016

7 Easy Ways to Get Relief from EveryDay Computer Eye Strain

Hyderabad realty set for revival; Brigade, Mantri launched projects recently

HYDERABAD: The Hyderabad real estate market, which has been in limbo for years mainly due to the Telangana statehood agitation, is beginning to see green shoots, thanks to renewed interest from realty players outside the city who find land here cheaper.

While Bengaluru-based realty players such as Brigade, Mantri, Embassy and Prestige are among those who either launched their projects recently or are firming up land deals, many other non-local realtors are in the process of doing so, says property consultants.

"The entry of outstation players into the Hyderabad real estate market, both for residential and commercial projects, is an indication of the improving market scenario here," said Sandip Patnaik, Hyderabad managing director of property consultant Jones Lang LaSalle (JLL). Barring one or two non-local players, no new player entered the Hyderabad market owing to the sluggishness in 2009-14, he said.

A majority of the non-local property developers prefers to enter into joint development pacts with the land owners, while only a fourth goes for land purchases. Prestige, Mantri, Brigade and DLF are among the key players who entered the Hyderabad market through joint development agreements.

Apple now plans tech centre in Hyderabad

After applying for a single-brand retail licence in India, Apple is now looking at setting up its first large technology development centre and backoffice operations in Hyderabad.
Apple is in talks with real estate firm Tishman Speyer for long-term lease of around 2.5 lakh sq ft of office space in the city's outskirts, which could accommodate around 2,500 employees, sources with knowledge of the matter said.

"Apple has evinced interest to lease the space at Tishman Speyer's WaveRock facility for a period of ten years to begin with, involving a total expenditure of around Rs 150 crore," said a property consultant privy to the development. "Apple may at a later date consider asking the Telangana government to allot space for it to build own campus," the consultant added.

AP govt mulls new land acquisition Act

The Andhra Pradesh government has proposed to enact a new legislation on land acquisition arming it with powers to take advance possession of land from private parties pending completion of legal formalities. The task of preparing the proposed legislation has been entrusted to Nalsar to avoid legal shortcomings. The proposed legislation will dilute the tough provisions and lengthy procedures enshrined in the Land Acquisition Act 2013 enacted by the Union government.

The AP government has decided to come up with its own Land Acquisition Act taking shelter under Section 107 of the Central Act that empowers states to make their own legislation as the subject of land falls under the Concurrent List.

Officials, however, point out that the AP government will ensure that the broad framework of the central Act is not affected. Officials said the new Act will be a 'win-win' situation for land owners as well as the state government. Under the new legislation, the AP government wants to concentrate on four major provisions to ensure that acquisition of land becomes easier.

First, the central legislation makes a provision of six months to complete the social impact assessment study before acquiring land. The state proposes to reduce the time period for speedy acquisition. Secondly, though there is no provision for advance possession of land in the central Act, the state wants to incorporate it so that it can acquire land even before the completion of the mandatory legal process.

Thirdly, it will introduce the ‘urgency clause’ under which the state government can acquire land for infrastructure projects too. Under the central Act, land can be acquired without following the mandated procedure only for defence projects and those taken up during natural calamities. Fourthly, the government can acquire land through ‘consent award’. Once the land owner gives the consent, he cannot challenge the acquisition in a court of law. The proposed legislation will enable the government to take possession of the land while the process is still on.

Rajasthan and Tamil Nadu governments have unsuccessfully attempted to formulate their own land acquisition laws.

Realty demand to touch 1.35 b sq ft by 2020

Realty demand to touch 1.35 b sq ft by 2020

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Demand for organised real estate in India will reach around 1.35 billion sq ft by 2020, up from around 880 million sq ft currently, and 85% of this will be for residential real estate, according to a report by consulting firm Bain & Company.

The report--Residential Real Estate in India: A new paradigm for success--finds that while home sales have slowed in recent years because of low consumer demand at current prices, leading to inventory overhang in major cities, upfront and discreet discounts by builders have increased, indicating some improvement in the condition of the sector.

However, going forward, businesses in the real estate sector will have to do things very differently to be successful.

"The business model of real estate itself has seen a change and will continue to change more rapidly over the next few years. Traditionally, all the value that was attributable to a real estate firm was in land acquisition, agglomeration and managing approvals," said Parijat Jain, principal infrastructure and real estate practice at Bain and co-author of the report. "Now people are building concrete businesses, sustainable and value creating businesses around very good execution skills and very good process managed real estate," he said.

The industry is seeing a shift in dynamics with competitive forces giving rise to distinct business models, the market and regulatory environment becoming more complex, a shift in profit pools and increasing awareness among consumers and customer activism. And with high levels of inventory, selling properties has become increasingly challenging.

While there are challenges in selling older inventory, a lot of the newer inventory is coming into the market but those projects are doing reasonably well.

"It is a combination--there is a part of the sector that is doing extremely badly and there are pockets which are actually doing well," said Gopal Sarma, head of Bain India's real estate and infrastructure practice and the lead author of the report. "There has never been value attached to discipline, to process and to the customer."

Sarma said to be successful in the current market, builders should keep three key aspects in mind. Firstly, they should decide on the markets they want to play in, both geographically as well as market segment wise. "Ultimately real estate is a business of local scale. It is not a business of national or regional scale. When a customer wants to buy, you need to be able to give options in that market," he said.

Secondly, the builder needs to choose his business model and then get the right processes in place to deliver on that choice.

"Well-defined processes running throughout the value chain, from pre-construction through the construction cycle, handover and beyond, can create alignment and increase companies' ROI ( returns on investment)," said the report. The third important aspect Sarma wants builders to keep in mind is the customer. "Currently, for most businesses, the customer is not front and centre. We believe developers need to start thinking about customer as being at the centre of the business," he said.

Ravi Teja Sharma, Economic Times, Kolkata

The Rise and Rise of Andheri East

The Rise and Rise of Andheri East

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Andheri East is today a residential destination of choice for those who wish to experience the highs of living in the maximum city of Mumbai, and prefer to do so in a balanced yet vibrant environment.  The area has evolved considerably over the years, from being considered as a relatively poor cousin of Andheri West and a predominantly industrial location, to emerging as a landmark real estate destination that is home to both residential and business hubs. 

On the social infrastructure front, Andheri East has several well-known schools like St. Xavier's High School, St. Dominic Savio High School, Holy Family School and Canossa High School.  Some of the colleges in the area are Tolani College of Commerce, Shri Chinai College of Commerce & Economics and Rajasthani Sewa Sangh College of Arts & Commerce.  The area also houses reputed healthcare institutions like Seven Hills Hospital and Holy Spirit Hospital.  For those who value their entertainment quotient, Andheri East has several movie theatres; furthermore, restaurants in the area offer a multitude of cuisines for food connoisseurs.

The area enjoys proximity with prime commercial hubs like MIDC SEEPZ, Sahar Road and Andheri Kurla Road, home to the offices of several leading Indian and multinational companies.  Bordered by highways like Jogeshwari Vikhroli Link Road (JVLR) and NH8, it scores on account of its easy access to Mumbai’s domestic and international airports, as also the presence of Andheri Station.  Also, most of the area is logistically well connected to the arterial Western Express Highway (WEH), thereby providing easy and fast access to commercial hubs in Mumbai like Bandra Kurla Complex (BKC), Lower Parel and the Eastern suburbs of Powai, Vikhroli and Mulund.  The Mumbai Metro passes through Andheri East and its presence has exponentially increased the locality’s connectivity score; both residential and commercial rental rates have witnessed growth since the Metro became operational last year.  Nevertheless, Andheri East continues to remain relatively affordable for aspiring home buyers in Mumbai.

Residential options in Andheri were earlier limited, but the situation is now much improved.  Andheri East today offers residences in varied ticket sizes and categories, ranging from 1BHK apartments to premium and luxury homes.  2016 has witnessed the entry of the reputed Mahindra Group into the area, with the announcement of their latest residential project Vivante, located minutes away from Western Express Highway and the Metro.  One can consider this as a validation of sorts of the area’s potential.  (Mahindra Lifespaces is the real estate arm of the Mahindra Group, which has residential projects across the country; in Mumbai, Mahindra has completed projects in Goregaon, Bhandup and Kanjurmarg).   As hoardings across Mumbai announce the arrival of the concept of ‘Week-long Weekends’ at Andheri East (Mahindra’s tagline for its latest project), we are reminded of how location and connectivity can make all the difference to the quality of life when it comes to investing in a home in Mumbai.  

Lately, Andheri East has been in the news for the proposed Dahisar East-Andheri East Metro rail corridor, which is expected to further ensure fast track connectivity to Borivali and Kandivali (East) via Goregaon.  The Andheri Metro station has been planned to serve as a central hub in Mumbai’s Metro network, when it is completed.  When that happens, Andheri East’s status as one of Mumbai’s hottest property markets will be further reinforced.  The area is therefore well worth the investment today, for exponential returns tomorrow.

 

CIDCO to aid smart cities project in AP

CIDCO to aid smart cities project in AP

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Hyderabad

Andhra Pradesh will take the help of City Industrial Development Corporation of Maharashtra (CIDCO) in developing smart cities across the state. The state government is planning to develop one smart city each from district.

These smart cities will be built, in addition to the smart cities funded by the central government. AP will take up smart cities development on its own in Public Private Partnership (PPP) mode, sources said. P Narayana, municipal administration and urban development (MA&UD) minister who is on a visit of Maharashtra state, currently interacted with local officials on strategies for developing the smart cities.

CIDCO has previously aided in developing Navi Mumbai in 346 sqm. “It is very important to create basic amenities and infrastructure for smart cities, with the financial crunch in the state we need the experience like CIDCO,“ said the minister.

The AP team also interacted with officials from Essel group for strategies to develop smart cities.

Source: The Times of India, Hyderabad