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Ruchika Bhalla

Ruchika Bhalla
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Prices increase as new property launches fell by 30% in Pune: Indicates Report

By
Ruchika Bhalla
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The new property project launches in the city of Pune fell by 30 as compared to pre-COVID times, it is only partial of what it was in December 2019 before pandemic hit the world. There is evident supply deficit widespread in the Pune real estate market specially in the residential spaces.Prices increase as new property launches

Recently a report was disclosed by Gera Developments demonstrating that nearly all the new residential property launches in Pune have seen a decline by 30 percent because of constraints imposed following the second wave of the COVID-19 pandemic. The accessible stock for sale fell to a 9-year low. Purposes for the reduction in commercial inventory are vigorous sales but the absence of fresh supply to reinstate the sales. For every 100 units sold only 59 new units were developed, as per the Gera Pune Residential Realty Report that was published on July 7.

According to this new report, H1 2021 saw a new supply of 26,611 units which is 26 percent greater than H1 2020. Though consecutively it has fallen by around 30 percent described with H2 of 2020, it said.

Distinguished to pre-COVID times, it is however half of what it prevailed in December 2019 just before COVID-19 struck the country. This indicates a supply contraction prevailing in the Pune residential real estate area. Relating the period from January 2020 to June 2021 against the corresponding period, there is a deduction of 39% in fresh inventory being put into the market, the report explained.

Inventory levels fell over to a 9-year low in June 2021. As per the statement, the stock ready for sale has also been decreased to 59,224 units, a decline of 21% from 75,421 units a year ago.  The cumulative number of continuous projects has also declined considerably from a maximum of 3,733 projects in Jun 2017 to 2,730 in Jun 2021.

According to the Gera development report, new undertakings inaugurated over 12 months since June 2020, the premium portion has glimpsed a whopping 64% rise from 13,199 units to 21,634 units. The premium section generally encompasses an average price per square foot of Rs 4,898 to Rs 5,876. While on the other hand, the allotment segment (average price of less than Rs 3,917 per square feet), which recorded a drop of 34% in the fresh project undertaken in the past year i.e. before June 2020.

The current supply dipped from 23,390 units to 15,469 units. There is a noticeable shift in consumer priority departing to additional premium residences. Correlating the launch of premium segment estates since 2018, there is inescapably a deduction in the new launches’ gratefulness to the COVID-19 situation.

Rohit Gera, Managing Director, Gera Developments has said “The market has been in an ongoing state of consolidation. With the number of new projects launches declining, the unsold inventory has plunged to a seven-year low. Going forward, we believe that the price rise seen in the past year will gain further momentum.  The surge in residential real estate prices will be due to a decline in inadequate inventory to meet the growing demand. Whenever demand outstrips supply, prices tend to go up,”

He further added “With new project launches at unprecedented lows, the robust demand will face supply-side bottlenecks. This has already propelled a 3.73 percent surge in property prices on an average, over the past 12 months. However, as new project launches firm up, the prices, while maintaining their upward bias, will stabilize in the medium term,”

He further demonstrated that there was a boost in the price for developers. “In addition to the supply crunch, there is a tremendous increase in the cost structures for developers. The last 15 months have seen slower construction and project launches and as a result, the overhead costs for developers have increased. More significantly, the cost of several raw materials including the most critical items such as cement and steel has risen by 25-40 percent,” he indicated.

Real estate NEW LAUNCHES! 92.5 Mn Sq. Ft. of branded housing in top Tier 1, 2, 3 cities in next 2 years

By
Ruchika Bhalla
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Data from the financial presentations of the top 7 listed realty companies reveals that they are looking forward to launching approx. 93.5 Mn sq ft of new residential space within the next 1-2 years.

Real estate new launches

India’s real estate sector might have suffered a setback during the first and second wave of the COVID-19 pandemic but housing demand in the country has revived, housing secretary Durga Shanker has said. The forced lockdowns and continued work from home and online classes have led to the demand for bigger and spacious homes with an isolated workspace.

Leading listed builders and developers continue winning their steaks with the preferences of homebuyers continuously favoring them. Now, they are getting ready for the tier 2 and tier 3 cities- for instance, Bengaluru-based Puruvankara Ltd. And Sobha Ltd. Will expand into Kochi, Coimbatore, GIFT city, Hosur, Thrissur, and Thiruvananthapuram.

Listed players of the real estate industry have their crosshairs trained on tier 2 and 3 as Southern India is a major focus area for them. The listed developers considered for this are- Brigade Enterprises, Godrej Enterprises, Kolte-Patil, Mahindra Lifespace Developers, Prestige Estates, Puruvankara Ltd, and Sobha Ltd.

This is a major decision in the real estate market and will be beneficial for a better position in the market.

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RBI gives a major boost to the real estate sector through additional Rs 50,000 cr infusion via LTRO

By
Ruchika Bhalla
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The Reserve Bank of India Friday gave a significant increase to the real estate industry by giving an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) to a floating rate linked to the policy rate for up to three years – a move that has been hailed by both NBFCs as well as the real estate sector.

RBI gives a major boost to the real estate

Even as the threat of Covid 19 is yet to abate, with the restrictions on the movement of people and operating business establishments across the country, a resumption of economic activities is well underway. The Reserve Bank of India gave a big relief to the real estate sector by giving an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) to be undertaken in proportions. The RBI governor Shaktikanta Das enunciated a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank, and Sidbi.

He further said surplus liquidity in the banking system has increased substantially as a result of the central bank’s actions. Stating that the RBI is observing the situations due to the Covid-19 outbreak, he noted that contraction in exports in March at 34.6 percent was much more severe than the global financial crisis of 2008-09. The announcements reflect the increased focus of the regulator on these sectors, believes Piyush Gupta, Managing Director, Capital Markets at Colliers International India.

‘There has been specific mention of lending to the Real Estate Sector by NBFCs which reflects increased focus to the regulator on this sector. Developers now have an additional one year to repay lenders which is over and above one year available so this will help the management of cash flows and reduce asset classification stress of Real Estate focused NBFCs, further a window of Rs 50,000 cr. under TLTRO will provide incremental liquidity to NBFCs, MFIs which could be utilized for onward lending to the real estate sector,’ he said.

The investment under LTRO will be helpful for NBFCs, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“Particularly, the announcement of LTRO 2 of Rs 50,000 cr for targeted funding to NBFCs and MFIs will be beneficial for this segment. Refinancing of Rs 50000 cr to Nabard, SIDBI and NHB is another welcome move. The reclassification of NPA norms from 90 days to 180 days is a great relief to commercial banks. In brief, this is a big bazooka but with caution and prudence. Enhancement of ways and means advances to states by 60% will be a relief to states stressed by the pandemic,” he said.

Mumbai homebuyers alert! BIG RECORD in real estate property sales in City of Dreams amid Covid-19 –KNOW TOP REASONS HERE

By
Ruchika Bhalla
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In the worse times of the Covid-19 pandemic, the city of dreams, Mumbai finally made a big bet on real estate. This sudden movement in the real estate market seems to be an outcome of the steep reduction in stamp duty, low home loan interests, and attractive offers being provided by the developers. The combination of these factors attracted homebuyers and convinced them to believe that this is the perfect time to invest. The market is healing slowly and is in a stable recovery phase, which indicates that this will compensate for these offerings soon.

BIG RECORD in real estate property sales in City of Dreams amid Covid-19

Commenting on the sudden movement in sales for the MMR market, Mani Rangarajan, Group COO Housing.com, Makaan.com, and Proptiger.com said, “One of the catalysts for a huge jump in residential sales in MMR is the reduction in stamp duty. However, the interest of homebuyers also got a boost due to low home loan interest rates, festival season, pent-up demand, stagnant property prices,and incentives/offer given by the developers. We believe that the real estate has now picked up the momentum, and is going to continue to the next year. The market is flush with options and buyers are responding positively to any step which is going to help them save money. In fact, the situation has started improving in MMR after the Unlock.”

According to the Real Insight Report for Q3 2020 by Proptiger Data Labs, residential home sales aggregated to 35.132 units during Q3, an increase of 85% over the previous quarter. RTMI prices are at the lowest at some of the under-construction projects. This is pushing the pent-up demand from homebuyers to invest in these properties or units. GST charges are not applicable on ready-to-move-in homes, the reduction in stamp duty is further giving more boost.

As per the recent real estate projects MMR has close to 18,500 ready units available for sales across different price points. This is a win-win nice situation for even affordable buyers seeking to create a future asset. The chances are these offers given by the developers can be withdrawn from the market gaining momentum and showing positive signs.

Kunal Seth: Director of Shalimar Corp Ltd heraldingin the future Of Indian Real Estate

By
Ruchika Bhalla
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How Shalimar Corp Ltd’s Kunal Seth is ushering in the future of Indian Real Estate

At a very youthful age of 26, Kunal Seth had already determined his role as Director on the Board at Shalimar Corp Ltd, carrying out operations in a patently efficient, technology-driven & no-nonsense expression which has now come to be his signature – a calling ticket for the determined observer discerning his path across the countless milestones the Organization has breached in his tenure.  A descendant of the prestigious Seth family in Lucknow.  Mr. Seth pursued his higher education at the eminent Sherwood College located in Dehradun and took off on to graduate as a summa-cum-laude Alumnus of the esteemed Narsee Monjee College of Commerce & Economics in Mumbai.

In Gomtinagar, Lucknow’s respected Vibhuti Khand location, opposite the prestigious Indira Gandhi Pratishthan Complex, exists a large structure that is well-known to Real Estate experts, Investors & thousands of other people living in  India. This preferably spectacular construction is the Shalimar Titanium; residence to Shalimar Corp Ltd main headquarters, lay together among a myriad of admirable institutions varying from TCS to HUL, ITC, L&T, Siemens, Varun Beverages Ltd, NSE, VIVO, Vodafone, all safeguarded rather properly within the 11-Storey Block A of the similar premises.Shalimar Corp Ltd heraldingin the future Of Indian Real Estate

Deep within this institutional homage to the wonderful art of Modern High-Rise Architecture lies a relatively modest yet elegantly built & embellished cabin. In this cabin, behind a shiny & rich Mahogany-made table sits a man who is renowned for his natural dignity, concise yet greeting behavior, and the gleam of the future in his eyes.

He responds concisely when asked whether he considers himself to be a Commercial Darwinist that In my opinion, The ‘Survival of the fittest paradigm is a bit too passé. ‘Survival of the Technocrat’ is the fresh embodiment for achievement. That has been the reality of World affairs since the Dot Com boom. Just ask Bezos or Musk.” Over a steaming cup of unsweetened plain Green Tea, a selection of beverages somewhat metaphorical of his assumption systems and his affection of simple efficiency, he recounts his period as a youthful acolyte at Sherwood College. “Boarding schools are the perfect reality check for any young boy out there. You’re another urchin among thousands. The value you have, you make for yourself. I have never forgotten.”

When questioned about his vision of Shalimar Corp’s – & India Real Estate Inc S – future He described his great strategies spiritedly and said. “We have barely begun to scratch the surface of what technology offers for Indian Real Estate. The sheer untapped potential of IT & groundbreaking Software Applications, coupled with leaps in Electronic & Mechanical equipment is astounding. It’s as if a Holographic portal has opened up at a crossroads for Indian Real Estate, with a golden future awaiting us on the other side.”,he reveals excitedly. He adds, “The most brilliant part of it is, it’s not as though we’re trying to reinvent the wheel here. We’re trying to simulate it, experience it at a closer level, experiment with it, and optimize it till we achieve warp speed. Once that happens, all that remains to be done is to materialize it.”

When asked about what exactly he plans to put into operation, he went further. “Virtual Reality technology isn’t a pipe dream anymore. Augmented Reality is already being used extensively in design all over the World, saving costs, improving efficiency & design and most importantly, allowing innovators to go where no one has stepped foot before.”

Discussing specifics has enabled him to recoup his briefness and accuracy and he further says, “We’re working on projects that will allow our potential buyers to experience their future homes in microscopic detail. Without ever leaving their couch. Such is a tremendous power that drives me to give my 100% every single day. It’s almost a dream come true for Real Estate Developers like myself and my incredible team. Cutting down logistics, travel inhibitions, and potential for dissatisfaction by a margin this big? Sign me up!” This is but one of the multiple fascinating specialized jumps on the cards for Shalimar Corp Limited with Mr. Kunal Seth Co-Piloting the Ship with Directors Mr. Khalid Masood, Mrs. Leena Seth & Mr. Abdullah Masood.

His review of how the pandemic situation impacts his plans?  Were “If anything, the Pandemic proved that the time was right for this huge leap. And I’m completely certain that not only shall we make the leap, but stick to the landing. It’s a calculated, concerted, and well-thought-out team effort from some of the most remarkable professionals in the Industry, found at Shalimar Corp Limited. I have utter and complete confidence in every one of them. Hopefully, we shall be the frontrunners of this inevitable revolution.

COVID-19: The impact of 2nd wave on real estate – Experts have this to say

By
Ruchika Bhalla
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The second wave of Covid-19 has been more distressing than the first one. The localized lockdowns across the country has shown its down side in each aspect of economic activities. The biggest challenge faced by the real estate sector due to lockdown is reduction in site visits which has severely impacted the sales. People are still wary of stepping out unless very important and are in wait-and-watch mode. It is due to this situation most of the proposed launches are also being deferred by the developers across the nation. Therefore 1st quarter of 2021 results were not very encouraging owing to low site visits and subsequent low sales figures.

The impact of 2nd wave on real estate - Experts have this to say
Experts are certain that the Covid-19 second wave impact on the real estate sector will be a limited one as the sector is better equipped now and has already made reforms and moved on to digital tools.

That said, covert housing demand is growing bigger as demonstrated by the sound sales revival seen after the second wave. Whatever be the case, investors and developers are keeping their faith high that the impact of the second wave of pandemic will be limited on real estate as the sector is better equipped now and has already made reforms and moved on to digital tools.

Each and every sector has suffered its own share of bruises in the second wave, each one has been adversely hit. Be it manufacturing, mining, consumer durables, real estate, construction etc. The realty sector like others has also seen a decline in leasing and sales owing to offices and malls getting shut with corporates opting for work from home. This has created millions of sq. ft. of vacant spaces adding stress on to the prevailing inventory in office spaces. Brands and retailers were forced to either exit malls/high street as the shop owners were simply not being able to keep up their rental commitment or else they invoked and renegotiated the rentals. According to Savills India, office space preoccupation in major Indian cities stood at 27.4 million sq. ft. in the year 2020 (Jan-Dec) which is a steep drop of 51% as compared to the last year’s captivation of 55.7 million sq. ft.

Interestingly, the residential housing has seen an upward trend with customers appreciating the importance of having their own home. As per the preference change the tier 2/3 towns saw a lot of spike in demand for large sized homes in open environment mainly integrated townships. However, the demand for Indian real estate continues unabated.

It has been accessed that private equity investment inflows into the Indian real estate sector stood at USD 1.9 billion (INR 135 billion) in Q1 2021. Post Covid related slowdown, investors are now beginning to gain confidence and therefore the first quarter of 2021 has already seen close to a third of the total outlays otherwise seen in the entire year of 2020.

Commercial set-up, such as malls and offices and other commercial establishments is dire for economic growth. It has its own importance because it has a direct impact on the economic cycle. With social distancing becoming a norm specially after the distressing second wave, the end users may demand for larger spaces to operate from in the long. There is a shift in the sentiments for better security, health, and safety facilities and therefore likewise services are also likely to be demanded. The recent selling of commercial properties indicates that investors and buyers recognize the value of this sector to the well-being of nation and the economy.

An important change witnessed by the commercial sector after the Covid 19 pandemic is that it is looking at an increased investment from NRIs. The decline in rupee value has made investment prospects for NRIs noticeably more lucrative. Real estate investors have turned their attention to commercial real estate, which offers a higher yield and appreciation potential.

The second wave of the pandemic has definitely shadowed the buyer sentiments with each one embracing a more vigilant attitude. The sentiments in the years to follow will be guided by how quickly India is able to control the spread of COVID and vaccinate its entire population. Inputs by Divaker Bhalla, CEO-DNA Ventures Pvt Ltd

Real Estate sector is the second highest employment generator after agricultural sector employing more than 52 million people in India contributing 6-7% to India’s GDP. The real estate projects consume products from more than 250 different types of industries. Real Estate Industry has suffered a major setback due to ongoing pandemic of Covid 19. The impact of Covid 19 has pushed back the development of real estate projects by about two years. It was due to the country wise lockdown in the first wave of the pandemic where all sort of construction activities came to a halt, specially due to the migrant work force moving back to their native places.

The impact of the second wave of pandemic has been limited on real estate as the sector is better prepared now and has adapted to digital tools and platforms. The focus is on virtual tours and digitally enabled marketing activities. It has been observed that post second wave of Covid 19, while the number of project site visits have decreased, there has been an increase in the genuine buyers of residential properties by end users. Hence closures are faster as compared to pre-Covid times.

Demand of leasing in commercial space will also see a surge with few preferential changes. There is preference amongst the global corporate clients for quality commercial buildings which satisfy their demand of keeping their workforce safe with large open spaces, use of technology to mitigate human interaction, large lifts and good ventilation systems. Enterprise clients would prefer smaller and flexible spaces so that employees can work closer to their suburban homes. Massive consolidation is expected in the commercial property segment as single asset owners who are struggling to retain tenants will divest. Another trend would be of strong asset managers joining hands with developers to refurbish stressed office assets to rent them.

The swift vaccination drive has infused confidence back in to the home buyers. Therefore there is hope and trust that the situation will start improving which will give the much needed thrust to the realty sector.

On the whole, Indians have the ability of bouncing back in adverse situations and I foresee this trend continuing in the realty sector. Expert comments by Sidharath Bhalla, Business Director, Hectares & Beyond.

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