Real Estate Round Up – August 25 to 28, 2014

Knight Frank India launched its flagship half yearly analysis report - India Real Estate Outlook.

Aug 28, 2014 04:08 IST India Infoline News Service

Top News
 
India Real Estate Outlook: Top six metros is expected to growth rate of 26% in H2 2014
Knight Frank India launched its flagship half yearly analysis report - India Real Estate Outlook. It presents a comprehensive analysis of the residential and office market of the top six metros Mumbai, Pune, NCR, Bengaluru, Chennai & Hyderabad for the period between January June 2014.
 
Residential market takeaways:-
 
Mumbai and Bengaluru are expected to lead the recovery in sales volume, with 49% and 26% growth respectively from H2 2013 to H2 2014
 
The election results and incentives announced for the housing sector in the Union Budget have improved home buyer sentiments in the last three months
 
In contrast, we expect the number of new launches to show a subdued growth of 5% in the next six months owing to high unsold inventory and poor response to new launches
 
Prices in Bengaluru have appreciated at the fastest pace of 11% in H1 2014 compared to H1 2013. This was followed by Hyderabad, at 9% during the same period
 
Going forward, Mumbai is expected to lead in terms of price appreciation during H2 2014, at 10% on the back of a strong revival in absorption.
 
Office market takeaways:-
 
The office market of the top six cities have been recovering steadily, with vacancy levels falling from 21% in H2 2012 to less than 19% in H1 2014
 
The combined absorption of these cities has increased from 14.7 mn sq. ft. in H2 2012 to 17.9 mn sq. ft. in H1 2014, and we forecast this to rise even further to 18.7 mn sq. ft. during H2 2014.
 
The IT/ITeS sector continues to lead in terms of share in total absorption across all the cities, except for Mumbai.
 
During H1 2014, the office space market in each of the six cities has witnessed a substantial jump in the number of deals
 
Bengaluru market records highest average capital values appreciation
As per the latest report from global real estate consultants - Cushman & Wakefield, mid segment residential properties in Bengaluru market have seen the highest average capital values appreciation in the last 3 years (H1 2011 H1 2014) in the mid end category, while Pune recorded the highest average appreciation in the high-end properties in the same period.
 
The report analyses the performance of the residential segment across top seven cities to rank the average capital value appreciations across the cities. While all cities have seen capital values increase between 14% - 41% in mid segment, high- end properties recorded appreciation in the range of 16% - 39% in the same period.
 
In the mid segment, Bengaluru recorded the highest average appreciation of 41% in the period under consideration, followed by Pune which recorded an average appreciation of 28% in the period 2011 2014. Chennai (27%), Delhi-NCR (22%) and Kolkata (17%) also saw noteworthy increases. Mumbai which recorded an average capital values increase of 16% finished the second lowest followed by Hyderabad which recorded an average capital values increase of 14%.
 
In the high-end properties market, Pune recorded the highest increase in capital values of 39% while Bengaluru recorded 37% average increase in capital values in the period between 2011 and 2014. Chennai market recorded an average increase of 34% in capital values in the same period, while Mumbai and Delhi-NCR recorded identical average increase of 24%. Hyderabad remained at the last on the table for average increase in capital values over 3 years.
 
Shveta Jain, Executive Director, Residential Services Cushman & Wakefield said, Despite the disparity in levels of average appreciation in capital values in the past, it is heartening to see that against poorer economic sentiments, all markets have recorded capital appreciation. It is interesting to note that markets which are largely end user driven are also the ones to record highest average increases in capital values while investor driven markets such as Delhi-NCR and Mumbai have remained contained in appreciation received over the period. This is largely because of the fact that in the last few years due to factors such as slower economic growth, devaluation of the Indian rupee against dollar and general unrest on account of factors such as inflation, slower rate of real estate development etc. which has led more probable markets of Delhi-NCR and Mumbai to see a slower rate of appreciation.
 
News Infocus
 
Home Buyers expect property price hike: IIMB MB HIS
The latest Housing Sentiment Index (IIMB-MB HSI) by IIM Bangalore and Magicbricks forecasts that homebuyers across 9 of the 10 cities surveyed expect real estate prices to rise over the next six months. The aggregate Housing Sentiment Index (HSI) measured across 10 cities rose by 9% over the previous quarter and stood at 118. (An HSI score of 100 suggests prices are expected to remain static). The IIMB-MB buyer sentiment survey includes Ahmedabad, Bangalore, Chennai, Delhi, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune.
 
Introducing The IIMB-MB HSI Report, Jayashree Kurup, Research and Content Head, Magicbricks.com, explained, In line with the positive market sentiments, real estate buyers are upbeat about residential property. Most of the early seekers are end users, largely with a family income of upto Rs 10 lakh. While end users are actively scouring the market for property, the actual purchase decision may still be about 9 months away, marginally higher than the previous quarter. It is interesting to also note that premium buyers with an annual family income of Rs. 1 crore and above have posted significantly higher sentiment up by 13% over the previous quarter.
 
Hyderabad posted an HSI of 118, an increase of 22% as compared to the previous quarter. Sentiment has improved considerably after the division of the state. Specifically, Central Hyderabad witnessed a 54% increase in HSI this quarter.
 
Bangalore topped the list of cities once again with an HSI of 143, a marginal 2% increase from the previous quarter. Consistent demand from IT and manufacturing sectors, increasing job security coupled with Bangalore being the preferred destination for job seekers has ensured that the city remains at the top of the list.
 
Ahmedabad was the only city with negative sentiment of 86, a drop of 13% from the previous quarter.
 
The Seller Sentiment Survey indicates that sellers continue to be bullish about markets with an HSI of 161. Of the sellers, 35% are doing so to book profits while 29% want a bigger accommodation. Of the respondents 60% of sellers are looking to sell apartments/flats.
 
Domestic News
 
Makaan.com revamps its mobile site
India is witnessing a mobile revolution and the number of smartphone users are likely to cross 180 Million over the next 12 months. There are many users who are experiencing internet for the first time on mobile and therefore it is important for the organizations to provide them the information in the medium of their preference. Keeping this in mind, Makaan.com, India's fastest growing property website, revamped its mobile site with a new Photo view feature that gives the user a feel of the property along with its important details. The current revamp has enabled the company to improve key user engagement metrics like time spend and conversion rate.
 
The revamped mobile site also offers adaptability and adjustability feature. This feature allows the site to craft a customized experience for each device, be it a Blackberry, Android or an I-Phone. It automatically delivers the content the users want to see, site adjusts the resolution to accommodate content in the given screen size. Along with adjusting the content to screen size the site also adjusts and loads according to the internet connection available to ensure best user experience.
 
The mobile site aims to make property search faster, simpler and easier. The design, structure and functionality of the site have been optimized so that users get immersed in the property listings. The  mobile site has improved the user engagement and the users can now add a property to 'Favorites', to quickly search for them when they visit the site again. They can also use Connect instantly with the seller feature. Additionally, users can also browse the properties on map along with locality information, such as Schools, ATM, Mall, Hospitals, etc. The revamped site has enabled Makaan.com to enhance its performance with a 20.2% increase in conversion rate. This is a huge competitive advantage as the mobile site will be able to generate over 20% more enquiries from same traffic.
 
Puneville's dazzling Independence Day launch draws massive attendance
The launch of Puneville, the game-changing, futuristic luxury township by Pharande Spaces at Punawale on India's 68th Independence Day drew massive attendance of eminent dignitaries and real estate industry stakeholders. After hoisting the tricolour was hoisted at the launch venue to the refrains of the national anthem, Hemant Naiknavare - President, CREDAI Pune addressed the gathering and was generous in his praise for Puneville's never-seen-before features.
 
"Puneville is a brilliantly conceived and executed luxury township," he said. "Pharande Spaces, in partnership with globally acclaimed architects Aedas, have outdone themselves by delivering a fantastic residential project. The timing of this launch is perfect, because Puneville is the ultimate celebration of freedom of an ultra-modern lifestyle. Also, thanks to Pune's rapidly accelerating Information Technology boom, demand for such ultra-modern township homes has never been higher."
 
Talegaon needs more affordable housing: Maple Shelters
Though Talegaon has long since been identified as a very suitable destination for residential property investment in Pune, most of the talk about this serene and nature-rich location has been about row houses, larger premium flats and senior living projects. As a matter of fact, a sizeable share of the demand for flats in Talegaon actually comes from locals and people who have migrated there to seek employment in the many industries operating in Talegaon.
 
Talegaon is situated 40 kilometres from Pune on the Mumbai-Bangalore highway, far enough from the main city to have escaped mass real estate development and thereby retain its exceptional natural attributes. Thanks to the fact that Talegaon is located at a higher elevation above sea level, it enjoys better climate than the central regions of Pune. Nevertheless, this is a key growth location by virtue of being located at the nexus point of Pune, Nashik and Mumbai.
 
Snapdeal.com, Tata Value Homes partner to sell Homes online
Snapdeal.com, Indias largest online marketplace and Tata Value Homes have entered into a first-of-its-kind, strategic and exclusive partnership. With this partnership, Snapdeal.com will now foray into the real estate category and start selling apartments by the real estate major on its site.  Together, the brands will work towards revolutionizing the real estate sector in India.
 
As part of this exclusive partnership, Snapdeal.com and Tata Value Homes will together offer online booking of all Tata Value Homes projects on the website. Now, the 25 million+ Snapdeal members will be able to book a home online by paying just Rs 30,000. For the launch period, Tata Value Homes will also offer an exclusive benefit for a limited period to customers who book through Snapdeal. Under this, each customer will get Rs 10,000 per month for a year on booking any of the Tata Value Homes property on Snapdeal.com.Bookings will open on 28th August at 10 am on Snapdeal.com.
 
Talking about the new partnership, Kunal Bahl, CEO and Co-founder at Snapdeal.com said, At Snapdeal.com, our vision is to create life changing experiences for both our buyers and sellers. Buying a home is one of the most important and life changing events for in our lives. In line with this, we want to bring our promise of ease and best value to the real estate category as well. We have partnered with TATA Value Homes as it stands out in the industry with quality construction, ethical and transparent business practices. We have changed the way consumers shop. Now we intend to change the way they buy their homes.
 
State Bank of India revises interest rate on home loans
The interest rates on SBI home loans were reduced significantly w.e.f. 20th December, 2013 and a separate interest rate structure was also rolled-out for our Woman Home Loan borrowers. It has now been decided to offer uniform interest rate on Home Loans w.e.f. 26th August , 2014.
 
Mittal Universal launches Mittal Elanza in North Bangalore
Mittal Universal is all set to launch Mittal Elanza, its impressive premium condominiums in North Bangaloreoff Hebbal.Mittal Elanza is strategically located in the heart ofKogilu. This location has witnessed unprecedented growth, swiftly emerging as one of the most coveted destinations. The project consists of5 towers with premium 2 BHK & 3 BHK apartments. The project will create an ideal urban experience in harmony with nature catering to the mid-segment.
 
Mittal Elanza is developed by Mittal Universal, a leading real estate company, known for its obsession for quality, innovative construction, new yet tested technology, customer needs and aesthetic appeal.Conceptualized by the internationally renowned architect Hafeez Contractor and his passion for the project is seen in an ideal urban experience he has created in harmony with nature. The project offers an array of amenities comprising of mini theatre, infinity swimming pool, Landscaped Entrance lobby and terrace with stunning views of surrounding greenery , Club house which boasts of Gym, Yoga room, Games room, Childrens play area, jogging track, party area and of course pet corner.Mittal Universal extends its passion further with facilities which can surprise and delight its occupants.
 
Samruddhi Realty presents Winter Green a premium housing project in Bangalore
 
Housing.com launches iOS app in its New Avataar
 
International News
 
Boston Properties outlook is stable: Moody's
 
Moody's Investors Service, ("Moody's") affirmed the ratings of Boston Properties, Inc. and Boston Properties Limited Partnership with a stable outlook.
 
The following ratings were affirmed with a stable outlook:

Boston Properties, Inc. -- (P)Baa2 senior unsecured shelf; Baa3 preferred stock; (P)Baa3 subordinate shelf; (P)Baa3 preferred stock shelf Boston Properties Limited Partnership -- Baa2 senior unsecured debt
 
While Moody's believes that Boston Properties owns and operates some of the highest quality office properties in the sector, and the REIT's performance has been steady if not solid, important aspects of its credit profile remain well outside of Moody's thresholds for rating improvement: development, leverage (specifically net debt/EBITDA) and geographic concentration.
 
In Moody's opinion, Boston Properties' superior office portfolio quality in mostly supply-constrained markets enables achievement of higher lease rates and higher occupancies. Management has also sought to reduce risk through a diversified tenant and industry base, as well as modest lease rollover. The firm also benefits from ample liquidity, punctuated by a cash balance of $1 billion and a fully-available $1 billion line of credit at June 30, 2014. As well, the FFO payout ratio stood at a conservative 51%.

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