In their opinion, the city has managed to avoid a crisis because prices here had never reached ‘unrealistic’ proportions. Kolkata’s real-estate market is also relatively stabilisedsince the number of speculative investors here is much less compared with end-users.

The proportion of end-users vis-À-vis investors is 70:30, says Mr Sanjay Chowdhury, Regional Head, Emaar MGF. “Prices in some other cities had to undergo a correction because they were inherently over-priced. Prices in Kolkata never appreciated so much and have always been realistic in nature,” he says.

Rentals for office space “Rental values for office space are appreciating as much as in the previous years and even the central business district (CBD) is witnessing a higher growth over the period by virtue of non-availability of Grade A offices vis-À-vis the rise in demand,” Mr Abhijit Das, Regional Head, Jones Lang LaSalle Meghraj, says. Rentals at the CBD are currently in the Rs 80-130 per sq.ft per month range. The Life Insurance Corporation of India, which is planning to build a 50-storey office building on the bypass, a non-CBD area, expects to get a rent of Rs 150-170 per sq, ft when it comes up in a couple of years, Mr D. K. Banerjee, Chief Engineer of LIC, said.

“Real-estate prices in Kolkata saw a steady rise rather than a sudden boom and bust which most other States witnessed in the first quarter of 2008. Prices at New Town, Rajarhat, were ranging between Rs 1,200 and Rs 1,700 per sq.ft when development started there a couple of years ago. And then the price gradually saw an upward movement towards the Rs 2,700-3,000 range with national level players (such as DLF and Unitech) entering the market, says Mr Rahul Todi Managing Director, Shrachi. The nature of development — forming joint sector companies with the Housing Board — has also ensured that there is appropriate regulation in controlling volatility in prices, he adds.

“Kolkata has been witnessing a steady growth in prices even in a phase of a downturn elsewhere. We have seen a growth of 7-10 per cent rise in prices over the last couple of months,” says Mr Pradeep Sureka, President, Confederation of Real Estate developers’ Association (CREDAI) Bengal. The rise in property prices over the last six months was 20 per cent as against 100 per cent over the preceding two years, according to Mr Todi. In the past six months developers have seen an average monthly sale of 10-12 units vis-À-vis 25-30 units being sold over the last two years, he adds.

Boom and bust elsewhere Some other regions have not been as lucky, according Mr Pradip Sen, Group Vice-President, Jain Group. “The worst hit States are Maharashtra, Delhi, and other national capital regions (NCRs) comprising Noida and Gurgaon. The sudden boom followed by phases of high inflation rates and crashing stock markets sparked off the domino effect on buying power, severely affecting the real-estate market there,” he says.

A property expert based in Hyderabad predicts that the real-estate market in India is going to face a downturn of 30 per cent over the next 18 months. Sale of residential houses has decreased by 25-30 per cent in Hyderabad over the last three months, he says. Sale of old houses has also seen a decline since people are more inclined to hold on to their property rather than sell at lower rates. “The prices in Kolkata are expected to go up by 20-25 by the end of this year,” Mr Sushil Mohta, Director, Merlin and South City Project, says. His own project, the South City at the Prince Anwar Shah road, will see a rise in price by 15-20 per cent by year-end, he says. The prices of apartments at South City have doubled since its sales began in 2004.

The comparative stability in the Kolkata market has also helped in countering some part of the losses incurred due to escalating raw material costs in steel and cement, which have increased by 15-20 per cent over last three years, Mr Mohta says. However, going by the overall health of the sector, “Kolkata as a market will continue to remain healthy and it is one of the best markets for investment over a long term of 5-10 years,” says Mr Das.

“We are at the end of a cycle where slowdown is for real. But given the robustness and fundamental long-term nature of demand, we will see the beginning of another cycle some time soon,” is Mr Todi’s take.

Even as the sub-prime crisis has impacted property prices in some cities in the US and made deals attractive, in many cases its high net worth individuals buying apartments for their children when they move to cities such as London and New York.

Many of the Bollywood stars, who travel often to cities such as London and New York, too are buying their own houses there. Besides, Indians with big business interests in Dubai are investing in apartments there. Manhattan is seen as a hot favorite market for high net worth buyers from India.

“Even though the sub-prime crisis has not affected the Manhattan market and still remains solid, there is a pent-up and huge demand potential for apartments from Indians. Unlike other US cities, buyers in Manhattan cannot flip their contracts before they close on the deal. Hence, they have to have the full amount available and cannot speculate easily. Additionally, a good property costs $500,000 and above, unlike in Miami and Las Vegas where the barrier is as low as $100,000. So the real reason is that Manhattan is a solid yet affordable market,” says Jaswant Lalwani, who works for the Corcoran Group Real Estate which is among Manhattan’s largest real estate companies and is a member of its multi-million dollar club. Mr Lalwani has himself negotiated over 10 property deals in NYC for buyers in India after his visit here recently.

Analysts in India, too, see a growing demand among Indian HNIs to make investments in the most happening markets overseas. With the sub-prime crisis in the US, demand for property has reduced in many quarters there. There are a lot of properties without a ready buyer base and prices have come down.

Coupled with this, the rupee too saw some strengthening till very recently. All this has catalyzed renewed interest among Indians who have been aspiring to invest in properties abroad.

Of late, Indians have been entering into joint ventures with local operators in foreign countries such as Mauritius, Bhutan, Sri Lanka and the UAE, thereby vastly increasing the investment scope beyond the ceiling prescribed by the RBI and resulting in increased profitability.

“All other factors apart, the real estate markets in many countries offer very lucrative investment prospects,” says Anuj Puri, chairman & country head, JLLM. And like NYC, London too is very attractive for Indian buyers. “We have many cash rich Indian parents whose children move to London for higher studies. In such cases, it is better to buy serviced apartments for them where they can have their own cars, maids and chefs. That makes them feel much safer than living in rented homes. Besides, we also find a lot of Bollywood stars buying properties in London because they like to spend a lot of time in this city,” says Superna Sethi, MD at Manhattan Group of Companies which focuses on premium, high end real estate deals in London.

Young Indians consider NYC as a global hub for business, finance, media and the arts and with good apartments in Manhattan being available for as little as $750,000 (Rs 3 crore), it is considered to offer very good value for money for a second home.

Besides the US and the UK, UAE and Mauritius too are very attractive for Indians looking to invest in property overseas. The permanent resident scheme in Mauritius is attractive to HNIs who, as part of their wealth planning, wish to consider taking up residency in the potentially tax advantageous island.

Under the PRS, foreigners investing more than half a million dollars in Mauritius are eligible for permanent residence, along with their spouse and children under 18. “Besides, Indians can now legally take $200,000 per person abroad. So, a family of two can officially accumulate $800,000 in two years. I have identified quite a few buildings in NYC which are of global standards and have proved to be popular among Indians. Companies like ours offer full services such as recommend lawyers, mortgage (based on Indian assets) etc, thus making the process easy and user-friendly,” says Mr Lalwani.

Finally, the domestic real estate environment is also giving a push to the phenomena of Indians making property investments abroad. “In India, the real estate sector is expected to witness correction in the short to medium term, making property investment risky because of which investors are exploring beyond geographical boundaries. When compared to India, countries such as Dubai, Mauritius, the UK, Malaysia and Singapore offer better infrastructure, medical facilities, residence options and a vast array of recreation/entertainment options. These countries even offer tax exemptions and incentives to entice potential purchasers. Incentives range from 10-year multiple entry visa to capital gain exemptions for people who want to make the country their second home. Dubai offers a freehold property scheme, allowing foreigners to own property for life, with the right to sell, lease or rent at their will and also offering tax benefits to overseas investors,” says Aditi Vijayakar, director (residential) at Cushman & Wakefield India.

Just last November, the MMRDA had struck the biggest ever land deal in the country after the Wadhwa group quoted a staggering Rs 5.04 lakh per sq m or 46,000 per sq ft for a 16,500 sq m commercial plot. Riding high on this unprecedented deal, the MMRDA had in its 2008-09 budget declared that it expects to raise Rs 3,910 crore from sale of land alone.

However, on Tuesday all that came its way was Rs 1,322 crore. Two plots, both with a reserve price of Rs 3 lakh per sq m — a 7,131 sq m commercial plot and a 6,402 sq m plot meant for a club house and gymnasia — had absolutely no bidders.

The third, a 5,951 sq m commercial plot, went to its sole bidder Jet Airways at Rs 826 crore. As against last year’s phenomenal bids, this year’s winning bid of Rs 3.44 lakh per sq m was about 10% more than MMRDA’s asking price for the plot. A senior executive of Jet Airways said the company plans to set up its global headquarters at the site, which allows for a permissible built-up area four times the plot area.

Most real estate consultants admitted that Tuesday’s land sales were reflective of the global slowdown and the sluggish financial market. “The main reason is the current sentiments associated with the share market crash. There is also a severe glut on finances as the rest of the world is not doing well economically,’’ said Gulam Zia, national director for research and advisory services at Knight Frank.

He added that price correction is inevitable as the current lease rents are not sustainable. “At present the prices are excessively jacked up,” he said.

Even the last of those builders who are still holding on to their sky-high prices will be forced to come down by 20 per cent over the next couple of months in case the stock market fails to bounce back, said a real estate consultant.

“Nobody will stick their neck out at a time like this, but the fact is that there is already an excess supply of commercial space in the market and this is expected to go up one year down the line. Neither corporate India nor multinational companies are willing to pay the lease rent demanded,’’ said a real estate agent.

“Developers are just exercising caution, anticipating low to moderate demand for office space over the next one or two years. Other than corporate headquarters and financial companies no one can afford the lease rents today,’’ said Amol Shimpi, national director for land sales at Colliers International. He, however, added: “Two plots do not reflect the way the wind is flowing.”

The MMRDA slightly offset its loss in the commercial plots through its two residential plots as Starlight Systems —a collaboration of Piramal group and Suntech realty—quoted three times MMRDA’s asking price.

The firm beat eight other bidders by quoting a record price of Rs 3.52 lakh per sq m making it the biggest residential deal for the MMRDA till date. The prices quoted were even higher than those quoted for the commercial plot.

“There may be less demand for commercial space but the same is not true for residential space. The only residential project in BKC is our project Signature Island. The two plots are adjacent to our project and we didn’t mind paying any price for it. With the total 4 acres of residential plot that we now have, we hope to create a kind of BKC’s equivalent of NCPA at Nariman Point,’’ said Kamal Khetan, managing director of Suntech realty.

Additional metropolitan commissioner Milind Mhaiskar denied that the poor response for the commercial plots would affect MMRDA’s revenue. “This is just due to the fluctuating markets. We will soon re-tender the two plots without reducing our reserve price,’’ he said.

The move would also be encouraging for foreign property funds keen to join India’s construction boom but are not allowed to own finished buildings. Through REITs, they could buy the assets they develop, offering them an easier way to exit the projects and take profits on their investments.

In December, market regulator Securities and Exchange Board of India (SEBI) issued draft guidelines for REITs, which pay most of the rent from their buildings to investors as dividends. But people in the industry say unless tax breaks are also offering by the government in its upcoming budget, a local REIT market would be a non starter.

The SEBI proposal contained no mention of the kind of tax breaks that kick-started other property trust markets, but it could be fleshed out in the federal budget due on Feb. 29. Property trusts, long-established in the United States and Australia, have caught on in Asia in the last five years, with investors enjoying stable yields that are higher than government bonds, and share price rises when rents and property values rise.

REITs would be riskier in India’s immature market, where a three-year building boom sparked by easing of foreign investment rules barely masks crumbling colonial-era infrastructure.

Thanks to a foreign exchange relaxation, Indians can now legitimately remit up to $200,000 (Rs79.26 lakh) every year for investment purposes, including property. With two persons (you and your spouse), the amount can be raised to $400,000 a year, enough to buy you decent property in many global cities.

In a budget of around Rs80 lakh will expel you to the outer border of Mumbai’s western suburbs. On the other hand, a two-bedroom-hall-kitchen (BHK) flat at Dubai’s Marina would cost Rs35-60 lakh. More opulent residential configurations would cost Rs1 crore and above. This is a steal compared to rates in Mumbai. In Dubai, Indians cannot actually buy property, but they can lease one for 90 years. On this basis, it is possible to obtain four-bedroom luxury apartments or even decent-sized villas for up to Rs1.5 crore.

Similar investment won’t be able to fetch property in New York or London, but you can get great property for Rs4-5 crore — upwards of around £500,000 — which is what decent property in south and central Mumbai now costs.

Donald Trump Jr, executive vice-president, development and acquisitions, Trump said that the company’s chief focus will be on high-end projects in Mumbai, Delhi, Hyderabad, Bangalore, and resorts and villas in Goa.

For now Trump is managing several marquee hotels, resorts, casinos and building complexes in New York, including the Trump Casino, Trump International Hotel, Trump Marina Hotel and Casino, Trump Taj Mahal Casino Resort and Trump Tower.

Recently, the company entered the Dubai property market with the Palm Trump International Hotel and Tower through a local joint venture. Trump is also planning joint ventures or licensing agreements with local developers.

Trump believes that that although property prices in India have spiral, they are not as high as global realty prices. Trump believes that the emergence of nuclear families and demand for real estate can drive the growth for high-end developers.

Like the US, India is becoming increasingly urbanised, where more youth are moving into cities which is one of the prime reason that investors and developers like Trump are entering into the booming Indian property market.

Meerut is a place you can reach by a short bus journey from Delhi, a matter of a major convenience. Meerut today enjoys the unique advantage of a city growing by leaps and bounds, given the large supply of quality real estate.

The city also experiences an upswing in prices owing to the presence of leading construction companies eager to buy land in Meerut and raise buildings. Property prices in Meerut are known to have trebled in the past two years.

Commercial Property in Meerut

There is an emerging limited segment of high end commercial development in Meerut. Most of the office spaces are in the form of B and C Grade commercial-cum-retail complexes. Some upmarket areas are Abu Plaza, Metro Plaza, and Ganga Plaza.

Rates of agricultural land in Meerut are growing mainly in the areas falling adjacent to main roads and hover around Rs 25 lakh – Rs 32 lakh whereas for other purposes, the prices have increased from Rs 41 lakh – Rs 52 lakh per hectare.

Add to this are the high price trends being witnessed by the agricultural land on city roads. The rates there range from Rs 19 lakh – Rs 25 lakh per hectare. For the other purpose, the rates are no less than Rs 26 lakh.

Outlined below is the chart summarizing old as well as revised rates of commercial property in Meerut:

Meerut - Commercial Property Rates

Residential Property in Meerut

There is a great demand for quality accommodation units on outskirts of Meerut which are blessed with excellent infrastructure facilities, sound planning as well as top grade security. The most sought after location is along the Meerut Bypass.

Also, the Hapur Road and the Cantonment Road are gaining prominence as ideal destinations for property investments and are attracting large developments. Commercial and residential complexes are of late coming up on Mawana Road and Modipuram on the Muzaffarnagar Highway.

Earlier, property prices in Gurgaon and Noida were considered to be going through the roof which drove the interests of property buyers to the known residential areas in Delhi and the places falling in its vicinity.

Meerut property market has certainly shown phenomenal potential for growth. For the individuals who cannot afford to buy an apartment in Delhi and yet desires to remain near the city, Meerut offers the cost effective options.

Outlined below is the chart summarizing old as well as revised rates of residential property in Meerut:

Meerut - Residential Property Rates

Retail market in Meerut

Meerut retail market is making rapid strides with the emergence of exclusive shopping malls and multiplexes. The city’s most famous retail hub so far is PVS Mall located in Shastri Nagar.

There is a CG mall featuring a three-screen multiplex which has recently been bought by Adlabs. A multitude of property developers envisage to make it BIG in Meerut retail sector. MSX Developers are soon to come up with a multiplex-cum-shopping mall spread over 2.5 lakh sq. ft of area. The construction would start within six months and is likely to be over by mid-2009.

Era Group is too planning to transform the old Ajanta Cinemas into a glitzy Era Mall. The mall would be leased out and its highlights would be a shopping mall, multiplex, food court, and swimming pool on top floor with a restaurant. The development of mall is scheduled to be over by the next 18 months.

Sushant City, the upcoming residential project of Ansal Properties will have a mall as it’s another attractive facet. At present, no booming mall culture exists in Meerut but the city’s inherent potential for organized retail will be recognized soon.

Upcoming Real Estate Projects in Meerut

Sushant City: Ansals Landmark Holdings has plans to develop a 300 acre Signature Township ‘Sushant City’. It would offer an array of options such as built up houses, independent floors, bungalows and villas. The Township would cater to housing requirements of 5000 families.

Palm Greens: A high end residential project to be developed by Supertech Group, in collaboration with the Proview Constructions Ltd. The project will come up on the main Delhi and Hapur Bypass Road opposite Sanjay Van. The complex would have six blocks with 608 flats, each with a price range of Rs 14.5 lakh to Rs 33 lakh.

With an increase in number of domestic and foreign players across industries shifting their base to tier-II cities, the demand for such Townships is on high. Other known real estate developers considering acquiring land for Townships and residential development in Meerut include Parsvanath, Jaipuria Group and Gaur Sons.

The property prices as well as the increase in rental values in Mumbai owe much of its credit to the large scale investments in the commercial sector. Mumbai has always been the hot favorite for most of the corporate sector to have their headquarters in the city. And with increasing investments by MNCs in the IT, ITES and the BPO sector, there has been a growing demand for office space; which have consequently created an imbalance in demand and supply for residential properties. The rental values in Mumbai have also in high corresponding to that in other metros.

Mumbai is also the fashion capital of India, so it is one of the foremost cities to be hit by the retail buzz. With the opening up of the retail market, there has been a growing demand for retail properties in Mumbai. This has created a viable market for mall space and other retail stores and showrooms. These retail stores and malls are either owned by a business group or leased for hefty prices as the demand is high.

We provide you an indicative list of property prices of both the residential as well as commercial units in Mumbai for your convenience.

Mumbai - South Mumbai Property Rates

Mumbai - Western Suburbs Property Rates

Mumbai - Central Suburbs Property Rates

Navi Mumbai Property Rates

** Price as per the market value in June 07
** Property Rates are subject to change due to market vagaries and may differ by virtue of location and project, depending and facilities and other factors.
** We have tried to incorporate Price for every major areas located within Mumbai. If you have any queries or suggestions related to our property price data or cannot find the area you are looking for, please email us at info [at] indianrealtynews [dot] com. We will try to accommodate your request.