NEW GLOBAL INDIAN
The Real Taste of Real Estate
Tuesday, 15 June 2010 00:00
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Vinay Pagarani assembles some bare facts of the real estate market of Maharashtra. Coupled with the 'Property Problems: Pondering and Perspectives' covered in NGI's Feb-March issue, this report may serve as the right guide for Indians looking to invest in Maharashtra from anywhere in the world.
Background
With property boom bruiting about, real estate in India is touching new heights. With the new policies adopted by the Indian government regarding foreign direct investment (FDI) since 2002, the realty sector has seen an unprecedented boom ever since. Two reasons why it happened: One, the burgeoning industrial sector dilated the demand for office-buildings and dwellings. Two, liberalisation policies of the government eased the licensing and authorization processes before taking up mega-construction projects.
Every potential investor looking forward to dig profits has been eyeing the property market in India for a wide variety of reasons. It's ever growing economy has been on a roll with 8.1% increase seen in the last financial year. The upturn in economy increases the purchasing power of its people, which in turn generates demand in the real estate sector.
The share market has also shown phenomenal growth again in the last three quarters, which has directly relativity with the property market. Currently, lingering around 18,000 points in April'10, Sensex is said to cross its 20,000 points benchmark by year 2012.
India has welcomed a number of Fortune 500 and other reputed companies. Their financial gain has attracted more companies to initiate operations in India thus creating more demand for corporate space.
Over the years, the real estate market has yielded surplus for its investors. 70 percent of foreign investors in India have made huge gains with another 12 percent breaking even.
India's IT, ITES and Business Process Outsourcing (BPO) industries are perceived as the best in the world. Its expertise in sectors like chemicals, pharmaceuticals, auto components, apparels and jewellery has also made the grade.
Nationalised Banks of India too have stepped into the foray making the process of investing effortless for investors in India. ABN Amro, Bank of Baroda, Citibank, Om Kotak Mahindra and ICICI include some of the popular banks in India that have augmented their Home Loan schemes at lesser capital interest rates than other loans. They have set afloat numerous home projects; where in the bank has affiliations with some select building projects. These initiatives by the Indian banks have gripped investors into the real estate market, when trustworthy names such as HDFC, Standard Chartered et al are associated with building projects.
These positive attributes of the Indian real estate sector will continue to attract more and more foreign investments in the near future.
The scope of Maharashtra
Every favourable aspect of the Indian realty sector mentioned above is evident in the attributes of the realty sector of Maharashtra.
Much to offer their esteemed investors on the realty front, today, these sugarcane-producing lands have evolved into lofty avenues of business, trade and commerce.
Maharashtra has delved into other areas of economies and superseded even other the states. It ranks first nationwide in coal-based thermal electricity as well as nuclear electricity generation
The Government of Maharashtra is a stable and reliable one. The government has adopted favourable measures to keep realty biz in Maharashtra at an all-time high. For instance in early 2010, the government took the bold step of increasing the FSI (floor space index) i.e. the ratio of total floor area of a building to the size of the plot. It indicates the maximum construction allowed on a plot in a particular area. This decision opened up the possibility for redeveloping 16,461 old buildings, which aided the price rise.
Yen for Mumbai
Mumbai, with its international airport, an international port on the coast of the Arabian Sea, and sprawling national highways, has made the entire state easily accessible for the world to see.
This most-desired property destination for real estate property hunters has attracted major builders and developers not just in India but also the foreign collaborators. The core area called the 'Island City' has the most expensive real estate in all of India. The Real Estate market news in Mumbai clearly indicates an upward trend for offices and commercial units' requirements. The demand for office spaces in Mumbai is primarily driven by the telecom, pharmaceutical, IT/ITES, finance, and insurance sectors.
Mumbai houses the top MNCs and business conglomerates along with the entertainment and media industry, both of which call for diverse immigrants, everyday. This has generated a never ending demand for homes in the City of Dreams.
Some of the Top Builders in Mumbai namely Hiranandani Constructions, K Raheja Constructions, Shapoorji Pallonji & Co Ltd, Kalpataru Builders & Developers, Ansal API Builders, Vascon Engineering, Panchshil Realty Group, D S Kulkarni Developers, Oberoi Constructions and Godrej Properties etc are creating huge residential, commercial and industrial projects to fulfill the demands of the Mumbai Property market.
Pune
The second most important city of Maharashtra Pune stands next to Mumbai. Termed as the cultural capital of Maharashtra and the educational capital of the country, Pune is a cosmopolitan city, where different cultures have blended seamlessly. It is dotted with a number of transnational companies such as IBM, Accenture, and Dell, as well as Indian companies like Wipro, Infosys, and Bajaj Auto. Evidently, Pune is becoming a hub of the Information Technology sector, along the lines of Bangalore. It has emerged as one of the most important Business Process Outsourcing (BPO) centers in India. All these factors make the real estate in Pune extremely popular and sought after.
Having more than a hundred educational institutes and extensive industrial prevalence, Pune has urbanized faster than any other city in India. This feature of the city is the reason for the high demand of apartments and houses by students who come from around the country and even the world.
Houses in areas such as Aundh, Koregaon Park, Viman nagar, NIBM road, Camp and Kothrud yield high rentals due to the proximity to many educational institutes. Sensible students are easy to find, especially, with the help of estate agents who are endemically available. The agents do the paperwork, keep an eye on the tenants and ensure that the rent reaches the landlord's bank account, regularly. Many NRIs have their houses on lease under a similar arrangement in & around the city limits of Pune.
The finest of builders in Pune include Aditya Builders, Kumar Builders, Gokhle Builders, Dream Associates, Naiknavare & Associates among others. Their projects vary in terms of location, space, facilities, value; hence the investor can probe to seek what he is looking for. Township projects, especially on the outskirts of the city, are in vogue today. Magarpatta, Krishna Keval, Runwal, Sacred Heard, etc. consist of the well-known of Township. They have gained popularity amongst foreign investors too and are very much in demand. Although, the investor must note that reselling such properties are vexed.
Nashik
About at the same distance as Pune is from Mumbai, Nashik is known for its picturesque surroundings and delightful climate. In many ways, its cityscape too resembles that of Pune's. This 'Wine Capital of India' is located in the Western Ghats on the banks of the river Godavari. Nashik is regarded as one of world's holiest Hindu cities, which witnesses the Kumbh Mela once every 12 years.
When Nashik's first-ever IT hub was inaugurated back in January 2007, commercial and residential property development was expected to gain momentum. Construction activities saw the upswing, and were undertaken on the lines of Mumbai and Bangalore. Today, the city is on a fast track to becoming a major business centre, thus leading to the development of all kinds of properties in Nasik.
From office spaces to flats, apartments, residential plots, bungalows, villas, the urbanising city has a provision for all types of demands and budget with regard to buying property.With the high-ranking builders of India already involved in projects in the city, India already regarded Nashik as one of its fastest growing cities.
Subhadra Properties, Saishree Group, Nishant builders and Kalpataru Developers and such other construction companies are at the forefront of Nashik's residential development process. Several housing societies and commercial complexes have made property buying there a painless task.
Residential projects in areas such as Trimurthy Chowk, Indira Nagar, Deolali Camp, Rajiv Nagar and Gangapur Road are the most sought after for the state-of-the-art amenities that come with them there. The number of professionals from other cities is rising in Nashik, which has brought up the demand for rental homes.
The real estate market in India is yet in a nascent stage and the scope is boundless, even still. It does not resemble a bubble that will burst. An incessant rise for the next two decades is almost certain.
