Small-Town Investment to Bear Fruits

If you are unable to invest in real estate at the prevailing steep rates in the metros, a good idea would to look at properties in smaller towns and cities which are still at a nascent stage of witnessing a realty boom of sorts.

After reaching dizzying heights in metros like Mumbai, the real estate action is gradually shifting to upcoming smaller towns and cities. Guwahati, Nagpur, Bhuvaneswar, Ludhiana, Surat, Kochi, Indore, Vishakhapatnam, Mysore, Coimbatore, to name a few, have been described as "emerging centres of growth" which are now lending sparkle to India's booming economy.

These emerging growth centres are characterised by low real estate costs, availability of land for development and untapped manpower pool. "Anticipating the latent demand in these markets, a number of real estate developers and retailers have chalked out expansive plans to harness the opportunity," states a Knight Frank report.

This has also attracted the likes of Hiranandani group, Godrej Properties, DLF and Parsvanath to look at tier-II and tier-III towns where they could get their future growth from. As an industry observer said, the rate at Mangalore's City Centre, a prime locality, is just around Rs 2,200 per sq ft., while most of suburban Mumbai seems to be way beyond that.

What is also driving this transformation, according to Knight Frank, are a number micro and macro factors such as sustaining GDP growth, expanding service sector, rising purchasing power and affluence.

Realty is spreading its tentacles to the smaller towns on the back of the Indian IT/ITES sector which is scaling up its operations by exploring these towns in a bid to stay globally competitive. "Rising manpower and real estate costs, plaguing attrition levels and very often risk mitigation have been the key reasons for this movement," the report points out. Considering that IT/ITES contributes nearly 80% of total office space, this sector has been the main demand driver in these cities.

Another variable facilitating real estate growth in India is the growing urbanisation. According to United Nations Population Division, the urban population in India will continue to grow at a rate of 2.5% per annum for the next two and a half decade. As per the Census of India 2001, 41% of the total population of India will be living in urban areas by 2011.

Source://indiatimes.com

Indian property reaches Dubai

The 8th India Property 2007 — Dubai was organised by The Confederation of Real Estate Developers Association of India (CREDAI) and Maharashtra Chamber of Housing Industry (MCHI). It was held at the Dubai Renaissance Hotel, from June 14 to June 16, 2007.

India Property 2007, Dubai featured some of the prominent names in the Indian real estate industry. Both residential and commercial properties were showcased. Developers from Mumbai, Navi Mumbai, Pune, Nashik, Goa, Bangalore, and Hyderabad were among those who showcased their projects at the exhibition. This exhibition was supported by the Ministry of Urban Development, Government of India, with LIC as co-sponsors.

There are an estimated one million Indians residing in the UAE with Dubai being the hub of commerce and industry, and increasingly developing as a major hub for service industries such as IT and Finance. NRIs in Dubai are well placed in local society.

Asian expatriates account for more than 75 percent of the UAE population with over 40 percent of these less than 25 years of age. NRIs in Dubai are high net worth individuals, which makes
them a potentially rich market for real estate investments in India.

J.S. Augustine Co-Chairman, International Exhibitions, MCHI explained, “India is poised for an unprecedented economic growth. With our GDP crossing 9.5 percent, the opportunities for every Indian, irrespective if they are NRI’s or others are considerable. Even land in the distant villages has appreciated in price. Commercial and Residential are yielding high returns. Rentals have grown. There can not be a better time than now to invest in Indian real estate. CREDAI and MCHI facilitating this for NRIs in Dubai is a boon and they can transact with a lot of trust.”

CREDAI and MCHI will ensure complete transparency for the customers throughout the entire transaction and guarantee them the amenities and specifications as promised during the deal. In the event of any dispute the consumer can approach CREDAI to assist them in resolving the same.

Source://cybernoon.com

Europe’s construction major sets up India base

Strabag Societas Europaea (Strabag), one of the largest European construction companies headquartered in Austria, is building its base in India in a major way. Zublin International GmbH, a Strabag SE group company, has signed an agreement with the real estate arm of Indiabulls group to jointly bid for a slew of infrastructure projects in the country. The projects range from airports to highways, bridges and metro railways.

A few years ago, Dywidag, another Strabag group firm, was involved in building a technically complicated stretch of the Delhi Metro rail project.

Since the association between Indiabulls and Strabag will be on individual project basis, currently there is no definitive monetary commitment between the two parties. However the companies have agreed to work on each project as equal partners, an Indiabulls’ official said.

According to industry experts, the construction sector is one of the fastest growing sectors in the country. “Infrastructure development is high on government’s priority list. Therefore, it is very logical for global leaders in the infrastructure sector to look at India,” an analyst said.

Indiabulls through Indiabulls Real Estate and Zublin will work together to consolidate the resources and experience of both the companies and jointly work on large specialised infrastructure development projects, a late release from Indiabulls said. At present Indiabulls has presence in commercial and residential real estate space and its entry into the booming infrastructure construction space is being seen as a natural extension of its business.

The Strabag Group, with a revenue of about euro 10 billion (about Rs 55,000 crore) in 2006, is one of Europe’s leading construction groups with nearly 53,000 employees and operations in about 80 countries globally.
For the sake of comparison, Strabag is over four times the size of L&T Ltd, whose engineering and construction division had recorded a revenue of about Rs 13,100 crore last financial year ended March 2007.

source://timesofindia.com

Indian inflation still seen as threat

India's economy is still showing signs of overheating in some areas despite a drop in overall inflation in recent weeks, the prime minister's top economic adviser said yesterday.

C. Rangarajan, who heads the Indian prime minister's Economic Advisory Council, said he was also concerned over the surge in foreign money coming into India, complicating efforts by monetary authorities to cool the economy.

The Indian economy has grown more than 8.5 per cent annually over the past four years, boosting incomes and consumption, and in the process driving up demand and prices. In some areas, such as real estate india , prices have nearly doubled in two years, stoking fears that the economy might be overheating.

"We are seeing some signs of cyclical overheating," Rangarajan told reporters on the sidelines of a business conference in Mumbai. "This happens in all economies in a period of rapid economic growth when capacities tend to get utilized fully and demand pressures persist."

Rangarajan said, however, that he expected companies across the country to boost investment and expand production capacity.

According to the latest government data, the inflation rate based on wholesale prices eased to 5.06 per cent in the week ended May 19 from 5.27 per cent in the preceding week. The inflation rate stayed above 6 per cent in the first quarter.

The current levels are still high compared to economies that share the same features with India.

India's rapid economic expansion has lured foreign companies, but their increased investment has also fuelled inflation.

Source://thestar.com