Ongoing Projects In Kolkata Real Estate Sector
Ongoing Projects In Kolkata real estate sector has made a big change. Engulfing the period of stagnation, the evolution of Indian real estate sector has been phenomenal, impelled by, growing economy, conducive demographics and liberalized foreign direct investment regime. However, now this unceasing phenomenon of real estate sector has started to exhibit the signs of contraction. What can be the reasons of such a trend in this sector and what future course it will take? This article tries to find answers to these questions ...Overview of Indian real estate sector Since 2004-05 Indian reality sector has tremendous growth. Registering a growth rate of, 35 per cent the realty sector is estimated to be worth US$ 15 billion and anticipated to grow at the rate of 30 per cent annually over the next decade, attracting foreign investments worth US$ 30 billion, with a number of IT parks and residential townships being constructed across-India. The term real estate covers residential housing, commercial offices and trading spaces such as restaurants, hotels and theaters, retail outlets, industrial buildings such as factories and government buildings. Real estate involves purchase sale and development of land, residential and non-residential buildings. The activities of real estate sector embrace the housing and construction sector also. The sector accounts for major source of employment generation in the country, being the second largest employer, next to agriculture. The sector has backward and forward linkages with about 250 ancillary industries such as cement, brick, steel, building material etc. Ongoing Projects In Kolkata seen as fundamentally Strong. Therefore a unit increase in expenditure of this sector has multiplier effect and capacity to generate income as high as five times. All-round emergence In real estate sector major component comprises of housing which accounts for 80 % and is growing at the rate of 35 %. Remainders consist of commercial segments office, shopping hotels, malls and hospitals. o Housing units: With the Indian economy surging at the rate of 9 % accompanied by rising incomes levels of middle class, growing nuclear families, low interest rates, modern approach towards homeownership and change in the attitude of young working class in terms of from buy and save to buy and repay having contributed towards soaring housing demand. Earlier cost of houses used to be in multiple of nearly 20 times the annual income of the buyers, whereas today multiple is less than 4.5 times. According to 11th five year plan, the housing shortage on 2007 was 24.71 million and total requirement of housing during (2007-2012) will be 26.53 million. The total fund requirement in the urban housing sector for 11th five year plan is estimated to be Rs 361318 cores. The summary of investment requirements for XI plan is indicated in following table SCENARIO Investment requirement Housing shortage at the beginning of the XI plan period 147195.0 New additions to the housing stock during the XI plan period including the additional housing shortage during the plan period 214123.1 Total housing requirement for the plan period 361318.1 O Office premises: rapid growth of Indian economy, simultaneously also have deluging effect on the demand of commercial property to help to meet the needs of business. Growth in commercial office space requirement is led by the burgeoning outsourcing and information technology (IT) industry and organized retail. O Shopping malls: over the past ten years urbanization has upsurge at the CAGR of 2 %. With the growth of service sector which has not only pushed up the disposable incomes of urban population but has also become more brand conscious. , if we go by numbers Indian retail industry is estimated to be about US $ 350 ban and forecast to be double by 2015. . Thus rosining income levels and changing perception towards branded goods will lead to higher demand for shopping mall space, encompassing strong growth prospects in mall development activities. O Multiplexes: another growth driver for real-estate sector is growing demand for multiplexes. The higher growth can be witnessed due to following factors:. 1. Multiplexes comprises of 250-400 seats per screen as against 800-1000 seats in a single screen theater, which give multiplex owners additional advantage, enabling them to optimize capacity utilization. Ongoing Real Estate Projects In Kolkata Side is becoming costly due to scarcity of land here. 2. Apart from these non-ticket revenues like food and beverages and the leasing of excess space to retailer provides excess revenues to theater developers. O Hotels/Resorts: as already mentioned above that rising major boom in real estate sector is due to rising incomes of middle class. With increase in income propensity to spend part of their income on tours and travels is also going up, which in turn leads to higher demand for hotels and resorts across the country. Apart from this India is also emerging as major destination for global tourism in India which is pushing up the demand hotels/resorts. Path set by the government. The sector gained momentum after going through a decade of stagnation due to initiatives taken by Indian government. The government has introduced many progressive reform measures to unveil the potential of the sector and also to meet increasing demand levels. O 100 % FDI permitted in all reality projects through automatic route. O In case of integrated townships, the minimum area to be developed has been brought down to 25 acres from 100 acres. O Urban land ceiling and regulation act has been abolished by large number of states. O Legislation of special economic zones act. O Full repatriation of original investment after 3 years. O 51 % FDI allowed in single brand retail outlets and 100 % in cash and carry through the automatic route. Therefore all the above factors can be attributed towards such a phenomenal growth of this sector. With significant growing and investment opportunities emerging in this industry, Indian reality sector turned out to be a potential goldmine for many international investors. Currently, foreign direct investment (FDI) inflows into the sector are estimated to be between US$ 5 billion and US$ 5.50 billion. Top most real estate investors in the foray. Investor's profile. The two most active segments are high net worth individuals and financial institutions. Both these segments are particularly active in commercial real estate. While financial institutions like HDFC and ICICI show high preference for commercial investment, the high net worth individuals show interest in investing in residential as well as commercial properties. http://firstkolkataproperties.com/ongoing- projects-in-kolkata-ongoing-construction-in-kolkata/ real estate in India has been among the better and more preferred options of investment for some time now. Apart from these, the third most important category is NRI (non-resident Indians). They mostly invest in residential properties than commercial properties. Emotional attachment to native land could be reasons for their investment. And moreover the necessary documentation and formalities for purchasing immovable properties accept agricultural and plantation properties are quite simple. NRI's are showing greater interest for investing in Indian reality sector. MAJOR INVESTORS. O Emmer properties, of Dubai one of the largest listed real estate developers in the world has tied up with Delhi based MGF developments to for largest FDI investment in Indian reality sector for mall and other facilities in Gurgaon. O Dlf India's leading real estate developer and UK's famous Laing O Rourke (LOR) has joined hands for participation in airport modernization and infrastructure projects. o A huge investment was made by Vancouver based Royal Indian raj international cooperation in a single real estate project named royal garden city in Bangalore over period of 10 years. The retail value of project was estimated to be around $ 8.9 billion. O India bulls real estate development has entered into agreement with dev. property development, a company incorporated in Isle of Man, whereby dev. got subscription to new shares and also minority shareholding the company. But in recent developments India bulls have acquired entire stake in dev. property development in a 138 million-pound sterling (10.9 billion rupees) share-swap deal. A number of global have shown interest in this sector. Ongoing Projects In Kolkata North has suddenly wakened up to improved infrastructure and this is impacting the property prospects of the city. Following are names of some of the companies who have invested in India. International developer Country Investment. (US $ million). Emmer properties Dubai 500. Ascends Singapore 350. Salem & capture group Indonesia 350. GE commercial finance U.S 63. Tishman Speyer Properties U.S 300. Simultaneously many Indian retailers are entering into international markets through significant investments in foreign markets. O Embassy group has signed a deal with Serbian government to construct US $ 600 million IT park in Serbia. o Parsvanath developers is doing a project in Al - Hasan group in Oman. o Puravankara developers are associated with project in Srilanka- a high end residential complex, comprising 100 villas. O Ansals API tied up with Malaysia's UEM group to form a joint venture company, Ansal-API UEM contracts pvt ltd, which plans to bid for government contracts in Malaysia. O Kolkata's south city project is working on two projects in Dubai. Sliding phase of the reality sector-. In this present scenario of global slowdown, where stock markets are plunging, interest rates and prices are mounting, the aftermath of this can now also be felt on Indian real estate sector. Overall slowdown in demand can be witnessed all across India which is causing trouble for the major industry players. Correcting property prices and rentals are eroding away the market capitalization of many listed companies like Dlf and unitech. Because of the basic principle of demand and supply, fundaments behind slowdown ...Property prices move. o when demand is high and supply low prices will go up. When demand is low and supply high prices will go down, o. When property prices are going down: owner will try to sell the property at least profit or least cost. The downfall had been cushioned by fall in stock markets as it put a stop for wealth creation, which leads to shortage of capital among investors to invest in real estate activities. Apart from this in order to offset their share losses many investors have no choice, but sell their real estate properties. Other factors which have contributed to this slowdown are raising interest rates leading to higher costs. Due to this almost all the developers are facing serious liquidity crunch and facing difficulties in completing their ongoing projects. Situation seems to be so disastrous that most of the companies have reported 50-70 % cash shortfall. The grade A developers which are facing cash crunch include DLF, MGF, Emmar, Shobha developers, Unitech, Omaxe, Parsvanath Developers, Hiranandani Group, Ansal API, BPTP Developers and TDI Group. As an outcome of this liquidity crunch many developers have started slowing down or even stopped construction of projects which are either in their initial stages of development or which would not effect their bottom line in near future. Also with increasing input costs of steel iron and building material it has become it has become enviable for builders to construct properties at agreed prices. Ongoing Projects In Kolkata result there may be delays in completion of the project leading finical constraints. At the same time IT industry which accounts for 70 % of the total commercial is facing a slowdown. Many residential buyers are waiting for price correction before buying any property, which can effect development plans of the builder. Aftermath of reality shock to other sectors. Cement industry hit by reality slowdown-.The turbulence in the real estate sectors is passing on pains in cement industry also. It is being projected that growth rate of cement industry will drop down to 10 % in current fiscal. The reasons behind such a contingency are higher input costs, low market valuations and scaled up capacity which are in turn leading to reduced demand in the industry. High inflation and mounting home loan rates have slowed down the growth flight of real estate sector which accounts for 60 % of the total cement demand. The major expansion plans announced by major industries will further add to their misery as low market demand will significantly reduce their capacity utilization. Ambuja Cements too is trading at a higher discount than previous down cycle, suggesting bottom valuations. Replacement valuations for Madras Cements and India Cements indicate scope for further downslide when compared to their previous down cycle valuations. All this has added to stagnation of the cement industry. It is being estimated that all major developers, have decided to cut down on their advertising budget by around 5 %, on Ongoing Projects In Kolkata real estate.