Latest Property News on 'Mumbai'

Property Prices in Navi Mumbai on Rise

Notwithstanding the concerns over the proposed international airport in Navi Mumbai, real estate prices around the satellite city have rising for the past one month. During the past 30 days, prices of medium residential apartments rose by Rs 300-500 per square feet across various nodes in the city. The present prices range at Rs 2,500-3,000 per square foot across nodes like Kamothe, Panvel, Kharghar, Khandeshwar and CDB Belapur, said Srikanth Puduval, a real estate agent. The prices at nodes far from the proposed airport site — like Airoli, Koparkhairane and Nerul — managed to hold steady at around Rs 3,000 per square foot(medium residential apartments), despite the financial crisis. This also varies, as prices are different for different builders, while high-end and premium complexes are priced higher.

“The soaring of prices is based on speculation that the airport would eventually get clearance. The price rise is across residential and not in retail or commercial structures, but as the area develops (with proposed Special Economic Zone and airport), the hike will spill over to commercial establishments also,” Cushman & Wakefield Executive Director (Occupier Solutions) Arvind Nandan told Business Standard. Real estate prices are determined by certain benchmarks, and prices of Rs 2,500-3,000 for suburbs seem to be on the right side.

Mumbai Developers Look to Increase Property Prices

Real estate developers have begun to increase property prices in some pockets of Mumbai like Ghatkopar, Thane and Andheri, after emerging unscathed from a severe liquidity crunch. “I think the correction (in real estate price) has almost bottomed out. In fact in some places I find that real estate developers have started increasing the rates as their cash flows improve,” said R R Nair, chief executive of LIC Housing Finance, a subsidiary of Life Insurance Corporation (LIC).

The government had ensured easy flow of credit to the real estate developers. Banks increased their exposure and also extended repayment period of loans to developers during 2008-09 to help them tide over liquidity crunch. “The demand for real estate has started picking up as people who had deferred their buying decision are now coming forward to buy homes,” said Nair.

Mumbai Forays into Rental Housing

The unregulated housing market took a step ahead towards an organised future with a brand new concept — rental housing. Recently, Mumbai-based real estate developer Housing Development & Infrastructure and Mumbai Metropolitan Region Development Authority joined hands to provide rental housing to about 43,000 low-income families.

They will develop 525 acres of land in Virar, the northern suburb of Mumbai. HDIL will construct these houses and hand it free of cost to MMRDA, which in turn will rent them out at its terms and conditions. These properties are built specifically for the purpose of renting and are owned by real estate investment trusts (REITs) or corporates, and not by individuals. In most developed countries, like the US, this market is organised. For India, this is the first initiative of its kind. The project, located around 2 km from Virar railway station, will be completed by 2015 in four phases. The first 10,000 units (160 sq. ft each) will be ready by March 2011. Read More »

Developers Resort to Discounts to Sell Commercial Properties

Realty companies are resorting to discounts to sell commercial properties in order to improve cash flows and reduce mounting debts. DLF, the country’s biggest real estate firm by market capitalisation, has recently sold its 66% stake in a special purpose vehicle that owns eight acres at Prabhadevi in Mumbai for Rs 310 crore, which analysts feel was at a discount. It is also eyeing to raise around Rs 2,000 crore by selling two commercial properties in the city. Unlisted firm K Raheja Universal recently sold a plot in Santa Cruz in north Mumbai for around Rs 60 crore.

Mumbai is not the only city witnessing distress deals in the commercial property space. Bangalore-based Sobha Developers is learnt to have put a plot in the country’s IT capital on the block with a ticket size of Rs 100 crore. India’s second-largest firm by market cap Unitech, too, is going all out to sell some of its commercial properties to pay down debt. In the past few months, it has sold its Marriott Courtyard Hotel in Gurgaon for Rs 232 crore and an office property in Saket, New Delhi, for Rs 500 crore. The combined debt of DLF, Sobha and Unitech is estimated to be at Rs 25,000 crore. Vimal Shah, managing director, Akruti City, a city based real estate firm, said: “While the residential space has started looking up, commercial properties do not have buyers. Many big builders all over India are cautious with their commercial complexes.” Read More »

Companies Try to Benefit From Receding Real Estate Costs

Adversity opens up opportunities. With lower rentals and lower costs of buying office space, many companies have shifted offices to take advantage of the lower costs and to gear up for future expansion. Companies such as Swan Telecom-Etisalat and Tecpro Systems have leased and bought office space at much lower costs, in the range of 25-50%. A number of other examples too exist. According to industry sources in the know, Inox Cinemas in Mumbai has moved their corporate office from Tardeo to Andheri, Symphony Services in Chennai has moved from the central business district (CBD) to the Outer Ring Road and Standard Chartered Bank has consolidated its operations and moved to newer locations in Bangalore, Delhi and Mumbai.

Various locations in the country have seen a rental and capital value correction. Office space can be bought or rented for at least 25-30% lower value across the top 8 cities of India. According to a recent Cushman & Wakefield report some of the top micro markets in the country have seen a drastic rental correction. In Mumbai, Worli is down 38%, Lower Parel is down 39% and Andheri is down 33%; In the National Capital Region, Gurgaon is down 26%, Noida is down 20% and Jasola is down 24%. Read More »

Mumbai Goes down to No. 6 on Most Expensive Office Property Market List

Mumbai, which became the second-most expensive office property market globally one-and-a-half years ago at the peak of a real estate boom in the country, has now slipped out of the top-five list, as per a survey of 170 cities by real estate consultant CB Richard Ellis. The city remained at the sixth position among the world’s costliest office markets. The cooling realty prices have also brought down New Delhi from the number eight position globally in November 2007 to the 12th slot in the latest ranking released on Thursday.

“The latest ranking highlights the decrease in rentals due to a reduction in demand. However, Mumbai continuing in the top 10 list and Delhi being at 12th place globally reflects the shortage of prime office supply in India,” said CB Richard Ellis South Asia, CMD Anshuman Magazine. Office rentals in Mumbai fell 31% since November 2007 from $189 per sq ft a year to $131 per sq ft now. Similarly, office rentals in New Delhi also fell 31% from $126.7 to $86.9 per sq ft a year. Read More »

MCHI to Host Indian Realty Expo 2009 in Dubai

Maharashtra Chamber of Housing Industry, or MCHI, will be showcasing properties of major builders from India at the 12th India Realty Expo 2009, to be held in Dubai from June 4 to 6 at the Sheraton Dubai Creek Hotel and Towers. The expo will be held under the aegis of MCHI, a member of the Confederation of Real Estate Developers’ Association of India, or CREDAI, to provide an opportunity to non-resident Indian investors to explore the opportunities offered by the real estate sector in India. As many as 15 leading developers, all members of the MCHI, would be participating in the exhibition, which would showcase properties from Mumbai, Thane, Pune, Goa and other cities.

“This is the right time for NRIs to buy into Indian real estate, which has seen a fair amount of correction from the peak property prices,” Nainesh Shah, Secretary of CREDAI, and Chairman International Exhibitions, MCHI, said. The exhibition this year will focus on ready-to-possess homes valued at up to Rs7 million, homes offering possession within three to six months, affordable budget homes and low home loan interest rates from banks and financial institutions.

CRISIL Grades Mumbai Based Valuers

Credit rating agency CRISIL has started grading real estate valuers with the very first grading announced for a Mumbai based valuer. The grading of real estate valuers is expected to facilitate benchmarking for the valuers and also help banks, housing finance companies, real estate mutual funds, select real estate valuers for specific valuation assignments.

The company today said that it has assigned ‘Grade 3′ to BDO Haribhakti Consulting Pvt Ltd which, reflects that the valuer’s ability to provide fair property valuations is ‘good’. CRISIL considers parameters like management quality, organisation structure, organisation system and financial strength before grading the valuers, it said in a press release issued here. Read More »

Real Estate Recovery Possible by Diwali

After a long time we are witnessing real estate developers taking pride in reducing or slashing rates in Mumbai, Thane and Navi Mumbai to encash on the existing demand in the real estate market. The good deals may be offered for a few weeks or for the first ten properties or for a killer deal for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the willingness to connect with the “real” pricing has dawned on the developers to sell at reduced prices to encourage more and more sales. With the new UPA government there are a lot of hopes and it will be interesting to see how the next few months unfold for the property market. We still need a great deal of transparency to be infused in the way we deal in the property market. The sales teams in the builder/ developer offices are at their all-time creative best with sales tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of sorts of the kind witnessed earlier this year, when sales plummeted big time.

They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is an even greater need to price competitively, maybe with a lower profit margin, than holding on to the price and project as the interest meter runs. The mantra for developers in the present times, I guess, is to be aware of the markets (realistic demand and supply) and the competition, which the buyers know today. For a buyer to understand the market more clearly before making a decision, he/she must understand at which juncture the market is hovering; also, with fresh developments in the political arena, what the impact will be in coming months. An important point to note would be that, yes, there has been a correction up to 15 to 30% already in the market post December 2008 and prices have come to September 2008 levels, which were already high in any case and up on account of the festival demand which happens nearly post monsoons by default. After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop again, but the next couple of years at least will be stable, as after a correction you cannot go up again quickly. With a stable government we can expect more rational policies but a stock market kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Read More »

Commercial Rentals Witness Steep Decline in Metros

Commercial real estate rentals in Mumbai and New Delhi have seen a steep decline of 24 per cent in the January-March quarter over the previous quarter of the financial year 2008-09, according to a research report by Jones Lang LaSalle Meghraj (JLLM), a property consultancy firm. “The biggest decline in commercial rentals have been in Mumbai and Delhi, down 24 per cent in the January-March quarter, followed by Kolkata, Hyderabad, Chennai and Pune, which were down 10-15% from the previous quarter,” the report said. Further, as inventory piles up, rentals for commercial property do not appear to be heading north anytime soon. According to the report, “By the end of 2009, the total stock of ‘Grade A’ office space in Mumbai would exceed Bangalore, which has the highest stock at present.”

“There is plenty of inventory available. So, there is lot of scope for negotiation. Rentals have fallen across parts of New Delhi, but Gurgaon and Noida have seen the biggest decline. The average rate in Connaught Place, the business district of New Delhi, is around Rs 400 per sq ft,” said Ajay Rathore, CEO of Century 21 Integrated Property Solutions, a brokerage firm in New Delhi. “India’s property market has cooled down following several years of rapidly rising rentals and aggressive development activity. Prime office rentals in the best sub-markets of Mumbai and New Delhi have fallen by 10-25% from the levels recorded at the end of 2007. Both cities continue to have huge development pipelines. However, financing woes have led to delays in planned projects,” said a research report from Knight Frank Newman Global’s annual review of global real estate. Read More »