Hebbal and K R Puram hottest property hubs

Hebbal in north Bangalore and K R Puram in the east have emerged as the top residential destinations to invest in. 

In an investment advisory and research report put out by global real estate consultants Knight Frank, in the five year period between 2013 and 2017, Hebbal and K R Puram are expected to see an average price appreciation of 94% and 91% respectively. These two destinations are on Knight Frank's list of top ten Indian destinations to invest in. 

Ram Chandnani, deputy MD for South India in CBRE, another global real estate consultancy firm, said that Sarjapur-Outer Ring Road and Whitefield areas are also promising, and would see a price appreciation of over 70% in the next five years. 

The Knight Frank report studied various micro markets across the country based on parameters such as employment , physical infrastructure , connectivity to important locations, access to social infrastructure, planned development, proximity to premium office spaces and land availability. Price appreciation in micromarkets was calculated based on future office space demand and absorption levels. 

The report states that demand for office space in Bangalore in the next five years would be 44.4 million sqft, driven by the IT/ITeS, biotech, and aerospace sectors. Of that, 60% would be in the North and East corridors of the city, close to Hebbal and K R Puram. 

In Hebbal, the stock of residential apartment units in 2007 was just 300, which in 2012 has risen to about 1,800. That's a growth of 500% in five years. Similarly, K R Puram has seen a 200% growth in inventory of apartment units, from 2,000 in 2007 to 6,000 as of September 2012. 

"These two markets are sun-rise areas due to various reasons, the most important being connectivity to arterial roads and proximity to business clusters," said Prashanth Sambargi, partner at property brokerage firm Mars Realty. Knight Frank says that by 2017, the average price realization in Hebbal would touch Rs 8,230 per sqft, but would still be 11% less than the price realization seen in the nearby RMV/Sanjay Nagar . The average price realization at K R Puram is estimated to touch Rs 6,200 per sqft; Whitefield, which is a nearby micro-market , would command a higher price of Rs 7,370 per sqft. 

Chandani of CBRE said demand for residential units in Sarjapur-Outer Ring Road and Whitefield have been robust in the last five years, reporting a price appreciation of 100% and 70% respectively ." The residential climate in both these micro markets has been spurred on by the continuing development of business parks and IT SEZ zones. 

However, Sambargi of Mars Realty said Bangalore was like a balloon growing in all directions. "Today one part of the city may look up, tomorrow it's another part. Hence it is hard to predict the future as the real estate landscape is ever changing," he said.

Bangalore, Chennai realty markets show stability

Bangalore and Chennai have emerged as stable markets for real estate development in South India with Bangaloreshowing more maturity than Chennai.

According to Jones Lang Lasalle India, a global real estate services firm specialising in commercial property management, leasing, and investment management, the growth of the real estate sector in both Bangalore and Chennai has been exponential in the recent years.

“Residential property sales in Chennai and Bangalore have been more or less stable of late, with the Chennai market displaying marginally greater buoyancy than Bangalore. The absorption of residential property units in Chennai this year has been almost equal to that seen in 2011. In Bangalore, this year’s absorption has been lower,” Badal Yagnik, managing director, Chennai & Coimbatore, Jones Lang Lasalle India said.

Capital and rental values in city-centric locations are on the higher side in Chennai when compared to those of Bangalore. This is primarily because of the limited supply of city-based residential properties and lack of social infrastructure in Chennai’s suburbs, he said in a latest report.

Residential property capital values as well as rentals in Chennai are driven by location – the specifications and amenities provided in projects do not figure significantly in the decision matrix of customers. Conversely, capital values and rentals in Bangalore are driven primarily by specifications and amenities.

In Bangalore, the residential supply is well distributed – Bellary Road, Hosur Road and Whitefield account for over 68% of the supply for this year. Unlike Chennai, each micro-market within Bangalore competes with others. This has resulted in residential real estate development that is typified by more innovative products and has kept competition intense.

Community living as a concept has also seen greater acceptance and adoption in Bangalore than in Chennai. This is owing to the fact that Bangalore has a number of locations, which are supported with good social infrastructure – an aspect wherein Chennai falls shorter.

This is one of the most important reasons why Bangalore has already seen a number of well-executed township projects with superior amenities. In contrast, Chennai has yet to see a large, fully executed township project, the report said.

Due to limited availability of suitable plots, land prices have increased manifold in Chennai, where demand for residential units has always far exceeded supply. This has made city-based properties expensive for new buyers. By the same coin, investments made into this asset class have yielded rather attractive returns in terms of capital value and rental income.

That said, the Chennai real estate market is currently at an inflection point, and the next 6-12 months will see large-scale migration to suburban locations. This will result in a lot of project completions in the suburbs, and therefore the promise of a better lifestyle for home buyers in these locations.

Apart from IT/ITeS and financial services, Chennai’s economy is driven by the automotive, manufacturing, telecom and semi-conductor sectors.

However, the residential property market is primarily driven by IT/ITeS, which is concentrated in certain locations that axiomatically see the highest demand and therefore supply. This has resulted in the city’s Southern and Western suburbs accounting for more than 70% of the residential real estate supply, Yagnik said in his report.

‘Mumbai will give best returns to realty investors’

The slump in the realty market notwithstanding, buyers across India looking at realty for pure investment reasons should consider Mumbai as the top pick, according to real-estate consultant Knight Frank.

According to Knight Frank’s investment advisory report released on Tuesday, the top three investment destinations from across India where prices have risen more than 125 per cent are from Mumbai — Ulwe, Chembur and Wadala.

Ulwe topped the list of 13 destinations where prices may rise between 91 per cent and 145 per cent over the next five years. Prices in the area are expected to jump from an average of Rs 4,000 a sq. ft in 2012 to a forecasted average price of Rs 9,800.

The consultant rated Ulwe as the top pick, as “Ulwe will immensely benefit by the upcoming Seawood urban-suburban rail network, which shall connect it to prominent office hubs through a mass rapid-transport system.”

“With property options ranging from Rs 3,200 a sq. ft to Rs 15,000 a sq. ft and investor returns in the range of 18.6 per cent to 29 per cent a year, residential real estate will emerge as a promising asset class for the next five years,” said Gulam Zia, Executive Director (Retail, Advisory And Hospitality), Knight Frank.

Around 13 destinations spread across Mumbai, Delhi-NCR, Bangalore, Chennai and Pune were identified from over 100 urban centres in the country based on assessment of real-estate drivers including employment, physical infrastructure, connectivity to important locations, access to social infrastructure, planned development, proximity to premium office spaces and land availability.

Other destinations in the list included Noida Extension and Dwarka Expressway (NCR), Medavakkam, Pallikarnai (Chennai), Hinjewadi, Tathawade, Ravet and Wakad (Pune), and Hebbal and KR Puram (Bangalore).

Protecting Furnitures In the Monsoon

The monsoons albeit delayed are now in full swing. It is also a time that you need to see how your precious furniture can be protected since this season brings a series of problems. Moisture can damage wooden furniture. Soiled surfaces, coupled with the dampness in the air, can lead to mould growth, ruining your leather furniture. Iron or metal comes in contact with water and air it will lead to rust formation.

Taking Smart Care

Place a plastic sheet on your sofa before you place the sofa covers to protect the cushions. You can also use a plastic cover over your bed mattress.  Avoid placing your fine wooden furniture near the windows, as exposure to rain can be harmful. To maintain its original quality for the longest period of time, it is necessary that one takes regular care and provide it the required attention.

“Cleaning laminate floors is very easy and requires minimum effort. A cost effective alternative to hardwood floors, laminate floors are not only easy to install but also require very less maintenance. The problems that we face with wooden flooring during the rainy season are swelling of wooden flooring, cracks, scratches, dirt and dust. Due to moisture in the atmosphere, wooden flooring tends to swell.  One needs to ensure the wooden flooring is waxed properly and polished to protect wooden flooring from moisture,” says Gaurav Saraf, Jt. Managing Director, Square Foot.

Handy Safeguarding Tips

Along with implementing weatherproof measures one must also make it well equipped with all the necessary supplies for converting it into a cosier place. Says Sanjay Raj, CEO & Executive Director, Golden Gate Properties Ltd., “moisture can damage the shape and quality of furniture’s in the house. The colour of the furniture starts fading, the sofas start smelling and becoming damp. Termite infestation is a major problem in furniture due to water leakage or high humidity. Also the sofas might become damp and infected due to dust accumulation and moisture weather. Except termite treatment, every other tip mentioned by us can be done personally.

To save your furniture’s from getting spoilt make sure that you keep your furniture’s away from the window. Allow sufficient amount of daylight to pass through and brighten the room. Also make sure that you properly wax or polish the wooden furniture’s.  It’s important to keep leather sofas clean and dry in order to protect them from getting spoilt. For this use vacuum cleaner or a soft cloth to wipe out the dust and keep it exposed to air.

Regular house cleaning can protect your home from moisture content in the air. Air conditioners and Dehumidifiers are good options to reduce humidity levels inside your home.  Expose upholstery and rugs to sunlight to protect them from moisture.  Using several coats of teak or tung oil can protect your furniture from getting spoilt.”

Aditya Nadkarni, Brand Head and spokesperson, Debenhams advices, “always keep a dehumidifier in your room if you have pieces of antique furniture. Keep your wardrobes and cupboards at least six inches away from the walls as they tend to get damp in the monsoons.    Have your fans switched on full speed and keep your windows open as and when possible. This kind of cross ventilation will keep your home dry.

Those who have wrought iron furniture should coat them with anti-rust before the rains. Then get them re-painted. A regular coat of non-scented hair oil on your furniture will prevent it from rusting. Fix a sturdy brass handle to your wooden door in the monsoons.  It will make it easier for you to open the door in case the door gets jammed. Place silicon packets near your gadgets to prevent moisture.

Always check the electrical wiring in the house before the monsoons.” Adds Gandharv Gombar, Director, Kanu kitchen Kulture Pvt Ltd., “put camphor in your cupboards, it takes away the moisture and protects your clothes. Neem leaves are also effective against silver fish, which are a common problem in the rainy season. Check for any seepage over the ceiling and if you find any, immediately fill it up with Plaster of Paris or white cement.” Enjoy your furniture to the fullest in spite of the monssons.

Pune, Bangalore lead real estate sector

Pune and Bangalore have beaten the gloom and doom in the real estate sector with robust launches, clever project formats, quicker approvals and consistent demand from home buyers.

An October report by SBI Capital Securities Ltd indicates Pune and Bangalore saw a slew of launches and sales in two completely different price categories.

Pune saw huge demand for small homes at low prices, primarily on the outskirts, where a chunk of fresh projects are coming up. The city, two hours from Mumbai by road, saw a steady pace of launches of around 3 million sq. ft a month.

Bangalore is seeing greater demand for larger properties at higher prices.

Property analysts reasoned that while projects at affordable prices played a major role in boosting sales in Pune, Bangalore saw huge demand for high-end properties such as villas or luxury apartments due to a strong buyer base of information technology professionals and senior corporate executives.

In the past year or so, home sales in India have been lukewarm owing to the slowing economy. Developers struggled also because of a scarcity of funds with lenders becoming wary of the sector.

Overcoming this lacklustre period, at least a dozen projects with small-size apartments were launched in Pune in recent months, and sales have been upbeat, data by SBI Capital show.

Bangalore developers saw good sales in the July-September quarter, when their counterparts in Mumbai and the national capital region, or NCR, struggled.

Chennai, after seeing a number of new launches for a few months, seems to have paused though average prices in the city have increased from Rs.57 lakh in January to Rs.65 lakh (by July), SBI Capital said in its report. Mumbai, which includes large micro-markets such as Thane, Navi Mumbai and the Mumbai Metropolitan Region, is witnessing a decline in the pace of new projects every month. NCR has seen steady launches but at a slower pace than Pune or Bangalore.

“Mumbai has seen a stagnation in supply of new projects for two years now and prices have remained intact. Its neighbouring Pune, even after seeing a 5-15% increase in prices this year, has many projects in the Rs.15-50 lakh category, which is fast moving,” said Lalit Kumar Jain, national president, Confederation of Real Estate Developers Association of India.

NCR will see a mixed bag, with strength persisting in markets such as Gurgaon and New Delhi, while other markets with high speculative participation are likely to see substantial oversupply as both investors and developers offer their products for sale, Macquarie Capital Securities (India) Pvt. Ltd said in a report this month.

In terms of project completion and delivery of homes, Chennai, Pune and Bangalore will see high levels of handing over of apartments to buyers, said SBI’s Shah.

In Mumbai, though, only 63% of the existing inventory is expected to get completed by 2014, he said in the report.

Demand for residential space rallies, while office space demand slumps

Real estate stocks have seen a massive rally in the last month, but market experts have been divided on whether this is backed by a change in the sector's fundamentals. However, data procured by Bloomberg TV India shows that residential real estate prices have indeed shown considerable strength across many key markets.

According to data, price of residential space has skyrocketed by 6% in six months. In a month, the demand of residential space in Bangalore has gone up by 3% and in Gurgaon the hike is as high as 9%. Whereas, in the past six months, demand of residential property in Bangalore has risen by 9%, while in Gurgaon it has rallied to a staggering 20%.

 

On the hand, according to the CB Richard Ellis data, demand for official space has reduced by 14% QoQ. In terms of commercial space demand; NCR, Mumbai and Bangalore contribution has gone down from 75% to 62%.

 

Moreover, prime office space absorption is down to 6 million square feet from 7 million square feet, QoQ.

Real estate markets witness over 10% increase in property prices

All major real estate markets have witnessed an over 10% increase in property prices over the last quarter.

This, coupled with stiff interest rates  and bleak growth, is increasingly worsening the affordability ratio especially in residential spaces in Mumbai and the NCR, says ReligareInstitutional research.

"Real estate market continues to remain under pressure given weak economic growth, unfavourable affordability levels, tight liquidity and execution-related issues. These issues coupled with investors looking to exit projects may lead to higher discounts being offered during festive season," says the brokerage firm in a recent report on Indian real estate.

While volumes remain low in Mumbai, a few instances of hikes in sales price by 10% have been noted, Bangalore remains the steadiest market with volumes and prices moving in tandem. However, new launches has moderated across cities particularly in Mumbai followed by Gurgaon.

"Given the weak economy and execution risks, we see early signs of pressure on property investors in key markets which could lead to high festive-season discounts. Affordability levels may worsen as compared to 2008 levels if growth declines. With property prices remaining high, a drop in income growth may adversely affect affordability," says Religare.