Retail realty market looks promising: Survey

Mumbai: Despite negative sentiment, retail real estate market appears to be promising as leading brands and retailers are pursuing expansion plans aggressively, says commercial real estate services firm CBRE.

According to a survey 'India Retail Market View' by CBRE, India witnessed increased transaction activity and retailer expansion in January-June period.

"Leading brands and retailers pursued expansion plans aggressively, increasing their presence across key retail hubs. Retail mall rentals witnessed growth in prime city micro markets of Delhi, while values in high streets increased in Mumbai, Bangalore and Pune," the report said.

In all the seven major cities, the retail real estate market appears to be promising with an increase in retailer enquiries, CBRE, South Asia chairman and managing director Anshuman Magazine said in a statement.

"The same can be attributed to the heightened interest by retailers, coupled with a low base of supply addition as developers continue to focus on attracting tenants in completed products and reducing current vacancy rather than launching new projects," he said.

Nearly 1.12 million sq ft of mall supply was added in the first half of the year, largely concentrated in Bangalore, which was less than 20 per cent of almost 6 million sq ft added during the same period last year.

"The rising level of activity in retail space across key cities is testimony to the growing confidence of domestic and international retailers in India," Magazine said.

He said retailers are looking to expand operations beyond the top three cities to include Hyderabad, Chennai, Kolkata, Pune and Chandigarh due to growing urbanisation and an increase in the acceptance of organised retail.

"Going ahead, transaction activity and size are expected to increase on the back of higher consumer spending and expanding mid-income purchasing power. The anticipated changes in the FDI regime should propel the demand for organised retail space further," he added.

Source: zeenews.india.com

HC order to hit Haryana's realty sector, investments: Assocham

New Delhi: Industry body Assocham on Tuesday said the realty sector and investments in Haryana will be hit following the High Court order directing the state government not to issue permits for construction unless builders give in writing that ground water will not be drawn by them.

The Chamber also asked the state government to ensure availability of basic infrastructure like water in Gurgaon, which houses many multi-national companies (MNCs) and is major property market of the NCR region, as well as the country.

"It will not only give a severe jolt to the realty sector but will also hurt investment scenario in the state," the chamber said, while commenting on the order of the Punjab and Haryana High Court pronounced yesterday.

Citing findings of their study that showed as much as 50 per cent of investments in Haryana as of December 2011 were in the realty sector, Assocham Secretary General D S Rawat said: "This investment was largely driven by a construction boom in Gurgaon, which is a hub of the corporate India- both domestic and global".

With a halt to the construction sector, the investment in the state will be drastically reduced," he added.

Stating that the Indian industry is all for conservation of ground water and striking a balance between development and environment, Rawat said the responsibility for basic infrastructure like water lies with the state.

Of its total investment of Rs 4.98 lakh crore as on December 2011, the real estate sector accounted for Rs 2.48 lakh crore in Haryana, which has other towns like Faridabad, Sonepat, Ambala, Panipat and Karnal where the realty sector is growing fast, even though they are no match for Gurgaon, the statement said.

The state government, with the help of the Centre, must ensure that the basic infrastructure is provided in the state so that investment in Haryana, one of the progressive states, does not come to a halt, the chamber said.

As Gurgaon has become a hub of domestic and MNC firms, mostly in the services sector like IT business outsourcing, the study found out that "the real estate development was the focal point in Haryana as the sector attracted 49.7 per cent of the total investment in the state".

Source: zeenews.india.com

Office space leases soar to 7 mn sq ft in Apr-Jun quarter

Mumbai: Nearly seven million sq ft of office space were leased out during the April-June period, notwithstanding a sluggish real estate market for large space requirements, says a survey.

According to the quarterly report by global property firm CBRE, major cities such as Delhi NCR, Mumbai and Bangalore accounted for over 75 per cent of the entire space absorbed during the three month period.

"After the initial sluggishness witnessed in Q1 of 2012, the rise in absorption of office space is good news for the sector.

"This is an encouraging number when compared to the space take up recorded in the first quarter of 2012, which stood at only around 5.4 million sq ft," CBRE (South Asia) Chairman and Managing Director Anshuman Magazine said in a statement.

During the January-March period, 5 million sq ft office space was leased out.

Nearly 9 million sq ft of office space were added during the April-June quarter, which was largely concentrated in Delhi NCR, Mumbai and Bangalore, comprising almost 96 per cent of the entire quantum added.

Most of the supply added comprised developments that were delayed for the past several quarters, especially in Mumbai, the report said.

"Other cities such as Chennai, Pune and Hyderabad experienced delays in project completions and a rationalisation of the supply pipeline," it said.

However, given the current economic scenario, coupled with a slowdown in large space requirements from big global companies, overall, the office market may witness a drop in absorption this year, Magazine said.

"The demand-supply gap continues to put pressure on value across most micro-markets and could have negative implications on the rental growth. Improvement in the current situation will depend on the global economic environment and the government policies in India," he added.

The report further says the IT-SEZ segment may lose its attractiveness amongst occupiers due to continuing lack of clarity on tax related incentives.

"Occupiers are expected to increasingly focus upon affordable suburban and peripheral micro markets with consolidation being a focus and built-to-suit developments gaining popularity," the report said. 


Source:zeenews.india.com

MCHI seeks more interest rate concessions for poor

Mumbai: While welcoming extension of interest subsidy scheme for this year, Real estate industry body MCHI has called for more interest rate concessions for lower middle and economically weaker section of the society for housing.

"The extension of the scheme offering concessions in interest rate is a positive step, which will act as an incentive to home loan borrowers," Maharashtra Chamber of Housing Industry President Paras Gundecha said in a statement today.

Under the scheme, interest subsidy at the rate of one per cent on housing loans up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh is given. The scheme announced last year was extended to FY13 as well.

A budgetary provision of Rs 400 crore has been made for 2012-13 for implementing the scheme.

The realty body has, however, called for more interest rate concessions for lower middle and economically weaker sections to help them own a house.

"These sections are the worst hit as they cannot afford a house due to high cost of housing triggered by increase in cost of inputs and finance.

"The government should extend the benefit of lower rate of interest of 6-7 per cent, currently available to some government and public sector employees, to all, so that housing would really become affordable in the true sense of the word," Gundecha added.

Source:zeenews.india.com