KCR assures to provide 24X7 power supply

Chief Minister K Chandrasekhar Rao who is currently on a tour in Warangal district, launched the second phase of Bhoopalapally and Kakatiya thermal power. Dedicating these projects to the entire country, KCR said that the irrigation officials are carrying out plans in the district to ensure that the farmers are able to cultivate two crops in two seasons.

The Chief Minister gave an assurance that the Telangana government is committed to provide uninterrupted 24 hours power supply for the state and is making continuous efforts regarding the same

Hyderabad realty gets a leg-up

 

TS government has come up with various sops to enthuse the housing sector by removing bottlenecks in the existing building rules thus giving opportunity for fresh investment into the sector

Hyderabad: The recent auction price of the land in Raidurg village is seen as an indication that the real estate activity in Hyderabad is revived, according to P Dasharath Reddy, President, Telangana Real Estate Developers Association (TREDA).

"The higher auction price is a positive signal, even as Aurobindo has bought land for their industry needs," Reddy told The Hans India, adding that the price movement will give enough thrust to the real estate activity in Hyderabad in particular and in Telangana in general.

The pharma major, Aurobindo Pharma had purchased about 5 acres land at a price of Rs 29.28 crore an acre and 3.65 acres of land at a price of Rs 24.88 crore at Raidurg.

Reddy said that the real estate development activity was not stopped even earlier, though it was slow. "I do not like make any futuristic statements, now, but rest assured we are confident the activity is picking up in Hyderabad."

Meanwhile, the state government has come up with various sops to enthuse the housing sector by removing bottlenecks in the existing building rules thus giving opportunity for fresh investment into the sector.

Welcoming the decision, Reddy said, “Government acted proactive and accepted most of our suggestions.” He felt the new norms would benefit the sector and help the builders to complete project quickly. Recently, the Chief Minister K Chandrasekhar Rao stated that the land price at the TSIIC auction at Raidurg, Kokapet and Manikonda reveals that the real estate market is once again booming.

However, the analysts are of the opinion that the prices are high and they cite it as a reason for not participating by the major real estate developers in the country.
They feel that the prices must be realistic and on the lines of rental values, which will help to attract global investors including private equity firms to invest in Hyderabad.

However, the state officials said there are enough enquiries even from big developers and firms, and most of them are expected to participate in the next round of land auctions. According to the industry data at national level, about $3 billion has been invested in the realty business by funds and private equity firms and one more $1 billion is expected to be raised in the next three month in 2016.  

To substantiate the opinions of the developer community, the 2016 report of the 'Buy Vs Rent Report' from ArthaYantra reveals that that buying a house will be better option than renting in the Telangana capital, Hyderabad.

For instance, a buyer who is earning Rs 8 lakh a year will borrow 80 per cent of the property price, where the prices have fallen by about 10 per cent in last 4 years, while the rents are up by just 1 per cent. Instead of paying rent, the home buyer will pay EMI.

Housing for poor gets a new fillip in Hyderabad

 

The Modi government is set to bring changes to the Indira Awaas Yojana scheme, right from the name of the scheme to the design specifications. The scheme which aims to provide housing for the poor will include bigger kitchen space, increasing the overall area from 22 sq m to 25 sq m. Also there is a proposal to infuse this scheme with other relevant rural schemes. With all the changes, what remains unchanged is the schemes linkage to the 'Swachch Bharat Abhiyan', ensuring toilets to these houses.

Realty hopes in 2016

Real estate market across the country in 2015 was marked by sluggishness. Abundant supply and declining sales of housing units were witnessed in the year gone by. Multiple rate cuts by RBI did little to boost home sales. Recovery is most anticipated this year after a prolonged sluggishness. With the office space realty faring better and Hyderabad market outperforming some major metros, developers are hopeful that 2016 will be different than its immediate predecessor years. The passage of Real Estate Regulation Bill is also eagerly being awaited. The laws proposed to be brought forth will change the real estate dynamics of the country, opine experts.

Chandrababu's Amravati project hits green hurdle

The Chandrababu Naidu government's dream plans for a greenfield capital city at Amravati have hit a green hurdle, this time with the Union environment ministry. While a petition has already been filed before the National Green Tribunal questioning the environmental clearance to the project by state environment authorities, the Union environment ministry has now raised questions and sought elaborate details about the massive forest land diversion sought for the project.

The Andhra Pradesh government has sought permission for diversion of over 19,000 hectares of forest land to build its capital city in Amravati. The Forest Advisory Committee - the apex body in the environment minis try that approves or rejects proposals for diversion of forest land has now raised queries about the project seeking complete details about it.

"The project came to us and we have sent it back as of now seeking all details -exactly how much forest land will be used at what locations and for building what structures. In our view the project proposal sent by the state government is incomplete and we will need more information before considering it as this involves a very large forest area," highly placed officials from the environment ministry confirmed to ET. Andhra Pradesh government officials also confirmed that several queries have been raised by the Centre.

"The state government will comply with whatever the Centre has said. The details sought by the environment ministry are now being collected and we will then send the proposal with all these details to the ministry," senior AP government officials told ET.

The foundation stone for the state capital was recently laid by the PM. The TDP government is an ally and partner in the ruling NDA.

To be spread across 217 sqkm, the proposed capital city will spill into 25 villages in the mandals of Thulluru, Tadepally and Mangalagiri of Guntur district. While the proposal before the environment ministry for forest clearance for Amravati is for about 19,000 hectares of forest land, associated infrastructure could take the total forest area affected to as high as 50,000 hectares, the AP government sources confirmed. The state has been seeking denotification of 44,000 hectares of forest land.

Social activist and ex-bureaucrat EAS Sharma has filed a petition in the NGT challenging the environmental clearance to the capital city project by the State Environmental Impact Assessment Authority (SEIAA), arguing the fertile land from an ecologically sensitive area is being sought for the project. The SEIAA had accorded environment clearance in October. In October itself, the NGT had stayed construction of the capital city.

Hyderabad is most affordable to buy and rent

A few years back, Hyderabad was offering the likes of Bangalore stiff competition for attracting office space investments. Today, the formation of a new state, a new government and a stabilized political environment are yet to instill the confidence that is needed to revive Hyderabad’s real estate fortunes. With the Telengana movement picking up pace, other cities emerged as destinations for IT and ITES players and Hyderabad lagged behind in the race. Hyderabad’s superior infrastructure, affordability and cosmopolitan ethos could have helped it score over many other cities which lack these attributes. However, the city is still caught in a slump caused by the partition of two states, and accompanying bifurcation of resources. The bureaucratic machinery is still trying to sort out domicile issues, roles and postings of the involved IAS/IPS officers, and proactive decision-making is visibly lacking. 

he Political Effect: Basis the prolonged uncertainty over the last few years, it was expected that the creation of Telengana would usher a stable policy regime into Hyderabad. However, it is evident that the kind of clarity that is needed to fully revive sentiments is still to come. However, it is not practical to expect overnight results – the successful creation of a new state and the revision of administrative machinery takes time. It makes no sense to harbor unrealistic expectations and come to any premature conclusions at this point. On the plus side, the new state has a new party with a dynamic chief minister who is very conversant and involved with the ground realities. Both the party and the government are determined to make Hyderabad a crown jewel for Telengana in terms of new initiatives and developments. This involves building confidence, providing stability – and, obviously, attracting investments. If this determination is followed through upon, it is not unlikely that Hyderabad will once again offer direct competition to other key IT/ITeS destinations in early 2015.

The Telangana government’s budget is expected to provide more clarity on new initiatives and the status of many infrastructure related developments. Corporates currently invested in Hyderabad are looking forward to this clarity, which will help them take decisions on their expansion plans and investments into the city over the coming months.

Commercial Real Estate – Positive Prospects On analyzing commercial leasing and absorption in Hyderabad over the last few years, it emerges that Grade A commercial leasing picked up from 6.8% in 2011 to 8.6% in 2014. In spite of the uncertain political environment, Hyderabad still held a 9% share of total Indian office leasing. It is quite possible that Hyderabad’s share could move into double digits over the next few months. 


Factoring in that Hyderabad will see approximately 2.4 million square feet of Grade A office space leasing in 2014, and using the rule of thumb that every 100 square feet generates one job, Hyderabad will be generating 24,000 jobs or more in 2014. This is not a bad run-rate by any yardstick. There are firm indications that this trend will increase in the near future, leading to faster and sustained job creation in Hyderabad to boost demand for housing.   

 

Residential Supply When compared to other Indian cities, Hyderabad is the only city which has displayed a less-than-robust trend in terms of new residential launches over the past few years. In light of the anticipated pick-up in office absorption and job creation, this effectively means that the supply of quality residential projects will become a challenge in the coming months. Also, unlike other cities, Hyderabad’s residential capital values have not yet breached the 2008-2009 levels. In other words, price appreciation has at best been moderate in Hyderabad. However, the prospects of an improving market environment make Hyderabad an excellent mid-to-long term property investment destination, especially factoring in the relatively low 

Residential zones – end-users and investors Hyderabad can be divided into five broad zones for evaluating residential real estate investments:

1. Hitech City–Gachibowli: The most lucrative and well-established zone. With maximum office supply absorption in this zone, it has the maximum potential for capital appreciation and growth for investors with a 5-7 years investment horizon. 2. Uppal-Pocharam: The execution of the Hyderabad Metro will bring Uppal, the Infosys campus and the Raheja IT campus in Pocharam closer to the city, and therefore attract more home buyers. Capital values are currently as low as Rs. 2500/sq.ft., and the prospects of substantial capital appreciation over a 8-10 year horizon are considerable. 3. Miyapur-Chandanaga: Being closest to Hitech City and just 8 km away from the well-established zone, this corridor attracts budget segment home buyers who cannot afford the rates in the Hitech City-Gachibowli belt. An emerging location with good roads and social infrastructure, it has potential to grow with well-established gated communities in a specific budget range. 4. North-West Corridor - The Pharma industry is doing well in East Hyderabad, and this will fuel growth of investments into villa projects on Outer Ring Road. Capital values for such units currently range in between Rs. 1.50-2. 5 crore; again, there is attractive growth potential.   5. Jubilee Hills-Banjara Hills: Residential prices in these areas, which are Hyderabad’s most premium locations, are still significantly lower than those being quoted in the suburbs of Mumbai and Delhi. Here are some of the existing projects where high-profile residents currently or aspire to live in these locations, which also see the highest demand from expatriate HNIs. In terms of affordability, the price range for most of these projects is very attractive:   Top identified established & emerging projects: Like every other Indian city, Hyderabad has multiple projects which people aspire to buy into and become part of a distinctly upgraded lifestyle. Basis the demand and potential, here are the top six high-profile projects with robust demand from buyers looking for the ideal address and a property that has notable grow potential in terms of capital appreciation:


Hyderabad is most affordable to buy and rent

 

 

The real estate sector may be in a state of flux right now in Hyderabad! However, on the brighter side, the Capital continues to remain the most affordable to buy and rent, when compared to eight other top metros in India. A survey carried out Arthyantra Corporation in Delhi, Mumbai, Bangalore, Chennai, Ahmedabad, Pune and Kolkata, said the common capital of Telangana State and Andhra Pradesh has emerged as the most cost-effective alternative to metros.

As a cost-effective alternative, Hyderabad and Ahmedabad continue to be the most sought after cities for both renting and buying for people having annual earnings of Rs. 10 lakh and more, the survey said. Cities like Hyderabad today are offering good alternatives for Mumbai and Delhi-NCR based professionals earning similar annual salaries, the Arthyantra survey said. Even the purchasable area per Rs. 1 lakh has also increased for cities like Hyderabad, making it an attractive destination for buying a residential property. “Rest of the metros in India have seen decrease in purchasable area per Rs. 1 lakh, which indicates that the real estate market, by and large hasn’t seen significant growth despite interest rate cut by RBI and tax slab changes in the recent past,” the Annual Buy Vs Rent Report (ABRS) survey of Arthyantra said.

Apart from the market potential of metro cities, the survey has also made some interesting observations on the need for price correction in the sector because the sales are declining and leading to pile up of inventories. “Builders do not pass on the benefits of lower interest rates to the end user and are holding on to their prices while developers continue to launch spacious units, which has caused a mismatch in what the market wants and what is being developed and offered. It discourages price-sensitive individuals from taking a ‘buy’ decision on residential properties,” the experts said.

Some of residential and commercial areas that were included in the comprehensive survey included Banjara Hills, Begumpet, Kondapur, Tellapur, Kukatpally, Miyapur, Rajendranagar, L B Nagar, Tolichowki, Himayathnagar, Tarnaka, Uppal and Srinagar Colony. The report said that in a way stagnant real estate market has proved positive for Hyderabad.

“Since 2012, Hyderabad has been rated as the most affordable city both in terms of renting and buying a residential property. With a relatively stagnant real estate market, Hyderabad has become an attractive destination for purchasing a residential property. Over the past four years, the property prices have declined by 10.46 per cent while the rental values have increased just by 6.3 per cent during the same period. People belonging to any income groups can lead a comfortable lifestyle Hyderabad,” the ABRS report said.

To an extent, the bifurcation of Andhra Pradesh and formation of Telangana State hasn’t positively impacted the real estate market in Hyderabad.

“Nonetheless, Hyderabad keeps its first position for affordability to rent and buy. Also, on an average, an individual will take 3.4 years to accumulate the initial down payment, the lowest among the 8 metro cities.

The survey advised that persons having an average annual income of Rs. 9 lakh and above per year can plan to buy a residential property across most of the real estate development areas in and around Hyderabad.

Creation of Jobs to Boost Realty in New Year

The growth of employment opportunities in 2016 is expected to contribute to the growth of the real estate sector in Hyderabad, observe realtors.

Many multinational companies (MNCs) had announced launch or expansion of their operations or expanding the present operations in 2015. All those announcements will translate into execution this year, leading to creation of thousands of new jobs.

“Many MNCs like Google, Amazon and Infosys have initiated steps to expand their operations in Hyderabad in a big way. About 50,000 to 60,000 jobs are expected to be created in the IT sector alone. Besides IT, new jobs will be created in pharmaceutical, manufacturing and other sectors too as many companies are acquiring space in Hyderabad to scale up their operations this year,” says K.Sreedhar Reddy, vice-president of Telangana Real Estate Developers Association (TREDA).

According to industry estimates, one new job will create a demand for 100 square feet (sq ft) of office space and 1,000 sq ft of residential space. Therefore, growth of jobs in the new year is expected to bring good times for the real estate sector.

While Google has decided to develop office space of about 2 million sq ft and already started work, Deloitte has acquired about 2.4 million sq ft. Pharma companies like Novartis and Aurobindo have also signed agreements on acquiring office space of more than a million sq ft each.

Procter & Gamble has acquired a commercial space of 2.6 million sq ft. These are just a few acquisitions made by reputed companies and realtors are pinning their hopes on the jobs to be created by these companies for revival of the realty sector.

“Growth of home sales is greatly dependent on the growth of jobs. Telangana government’s initiatives like TS-iPASS are yielding results now. Many national and international companies are eyeing Hyderabad for making investments. The ease of doing business here is catching the attention of investors. More than 250 small-scale industries will also start operations this year. Many MNCs are grounding their projects now, creating demand for office space. If these companies start functioning, then the market for residential space will also improve a lot,” explains P.Dasharath Reddy, president of Telangana Real Estate Developers Association (TREDA).

According to the Residential Investment Advisory Report-2016 released by global property consultancy firm Knight Frank, more than 1.25 lakh jobs are estimated to be created in Hyderabad over the next two to three years. This positive projection about job market in Hyderabad is giving new hope to realtors who are just coming out of the prolonged slump.

Positive OUTCOME

·         Over 1.25 lakh jobs are likely to be created in Hyderabad in three years.

·         Of those, about 50,000 new jobs are expected to be in the IT sector.

·         According to realty experts, one new job will create a demand for 100 sq ft of office space and 1,000 sq ft of residential space.

Reputed MNCs like Google, Amazon, Infosys and Procter & Gamble to scale up their operations in a big way.

State govt firm on relocation of Chanchalguda jail

Telangana Rashtra Samithi (TRS) government has reiterated its resolve to relocate the over 100-year-old Chanchalguda jail for setting up educational institutions for minorities even as the prison authorities advised the government against such move in view of the `security threat'. As of now, the Chanchalguda central jail houses nearly 1,000 prisoners, including dreaded terror suspects and other criminals.

 


Prison officials, in a report to the home department, said it was not advisable to relocate the Chanchalguda jail to the suburbs as bringing criminalsunder-trials to attend the Nampally court would be security nightmare. The officials said the distance between Chanchalguda jail and the Nampally complex was around 6 kilometres and the shuttling of prisoners was being done easily .


"The longer the distance between the jail and court, the higher will be the security risk.Now, we have several terror suspects at the Chanchalguda jail.With lack of special cells to lodge terror elements, we have been keeping them at other jails and, with great difficulty , we are transporting them to the respective courts. By taking advantage of the distance, the criminals might attempt to escape. If 1,000 prisoners are shifted and made to attend court hearings regularly, it is not be a good decision,'' a senior prison official told TOI.

 

Sometime back the home department had sought remarks from the prison officials over the relocation of the Chanchalguda jail,. Apart from security risk, the officials said that the Cherlapally jail was already full to capacity and it has no space to accommodate inmates of the Chanchalguda prison. At Cherlapally, there is also acute water problem too. If the government is determined to set up education hub, then a new prison should be constructed with full infrastructure before relocation of Chanchalguda jail. In the last several months, the government has spent nearly Rs 30 crores for renovation works at Chanchalguda jail . To set up a massive jail like Chanchalguda, it reportedly takes over Rs 300 crores apart from identifying nearly 100 acres land situated strategically .Some officials felt that the Printing Press land at Chanchalguda, which has been defunct for a long time, could be used for the proposed hub instead of the jail.



When contacted, directorgeneral (Prisons) VK Singh confirmed that the department's opinion was sought and it was sent to the government sometime back to establish a full-fledged new jail before relocating the Chanchalguda central jail.

KCR plays to the GHMC gallery

The Telangana Rashtra Samithi is chomping at its bit to claim the big prize control of the Greater Hyderabad Municipal Corporation. And the evidence was there to see at the end of a marathon 11-hour state cabinet meeting on Saturday that was chaired by chief minister and TRS supremo K Chandrasekhar Rao. Though the CM more than once in his media brie ing on the decisions taken by the cabinet recounted how the bulk of the time was spent on discussing issues related to the next year's budget, the big ticket decisions that have an immediate impact on people, had to do with those residing in the GHMC area. The TRS, which has already pulled out all stops to win the GHMC elections to be held sometime soon, on Saturday was given more reasons to be cheerful about its prospects in the polls by the KCR government.

 

Such is the confidence in the TRS, at least the one on display that the chief minister, as part of the cabinet decisions briefing, declared that it will be his party's flag that will fly high on the GHMC after elections to its council.

 


Saturday's cabinet decisions that included a slew of sops, only point to the desperation with which the TRS government wants the prized GHMC. The waiver of drinking water bills from the poor totalling Rs 457 crore that have piled up over the past 15 years, promise of installing lifts in the two-bedroom houses for the poor and reduction of annual property tax to a nominal Rs 101 for those paying up to Rs 1,200 were meant solely to bolster the TRS' image in the city in the run up to the GHMC elections. Last but not the least was the promise of legal protection to street hawkers, a sizeable vote bank.

Investor activity in real estate sector finally set for uptick in 2016 riding on reforms

Investor activity in the real estate sector, which had reduced to a lull over the past three years, is finally set for an uptick in 2016 riding on regulatory reforms, say analysts. 

This year might also be a good time for prospective home buyers to lockin as prices stabilise, but delays in delivery and unaffordability are dampeners to the revival of consumer sentiment. 

"Real estate industry is cyclical and we anticipate that we are at the end of the cycle of slowdown. The wave of positive sentiments is quite evident and recovery is getting stronger. With the real estate regulatory amendments, credibility and positivity is building up confidence in the minds of investors who will sooner or later get drawn back into the market," said Mudassir Zaidi, national director, residential agency, Knight Frank India. 

He expects the property market to consolidate positively in terms of volumes over the next six months. Following this, prices are likely to see muted increase and developers will get confidence to increase prices as demand picks up and stabilises. "Therefore, this is the best time to buy," Zaidi said 

However, to revive the consumer sentiment, developers will have to improve delivery of incomplete projects and reduce prices. They also need to clean up their balance sheets by de-leveraging to foster more confidence among investors and allow more liquidity options. 2015 proved to be an exciting year for the industry with government starting the process of initiating policies that will sustain the growth of the sector 

The sector witnessed increased appetite among well-researched institutional investors betting big money on the revival and experts believe this is the precursor to an inflection point. 2015 has seen revival of interest from private equity investors in real estate with highest investment in the last eight years recorded at approximately $2.8 billion 

 

In 2016, we can expect to see the momentum continue and also anticipate the buoyancy already witnessed in the office sector to trickle down to the residential market in the medium-tolong term, visible in terms of an uptick in sale of units," Sanjay Dutt, India MD, Cushman & Wakefield. 

According to Dutt, this presents a promising opportunity for retail investors and end users to enter the market before we see an upward movement in prices. He also highlighted that there is an increasing trend of mid-sized investors and retail investors expanding their portfolio to pledge in asset classes other than residential, such as retail shops, office space, leased assets. 


In a recent advisory report, Knight Frank India ranked Mumbai Metropolitan Region's Madh-Marve and Ulwe as the top residential investment destinations in India, promising a price appreciation of 94% and 70% by 2020, respectively. 


Sectors 81-95 in Gurgaon, called New Gurgaon, is ranked as the eighth most attractive destination, promising a price appreciation of 47% by 2020, followed by Golf Course Extension Road in Gurgaon at 42% and Puppalguda-Narsingi in Hyderabad at 41%. 
Sandeep Madan, an HNI investor says this is a great time for end-users to buy with opportunities to get discounts. Buyers should focus on getting completed or close to possession properties and get the best discount possible. 

"For investors too deals are available but I feel developers' delivery capability is under question today," he said. "So, investors too are creating consortiums and picking up apartments in bulk from good builders at distressed prices." 

Buyers are preferring to buy projects nearing completion as there are good deals available from builders on pricing and payment plans as most builders are stressed for cash flows.