Development of various infrastructure projects, including metro has provided a perfect backdrop to rise of Andheri east as a commercial hub. This has changed the whole economic scenario of the area.
During the first half of 2015, Mumbai recorded total of nearly 2.5 msf supply with 83% contribution from Grade A developments, according to a report by Cushman & Wakefield.
The increase in net absorption can be attributed to sizeable activity witnessed in the first quarter of 2015 and a lot of pre-committed spaces being absorbed in a major project completion in Q2. In line with H1 2014, preference for premium spaces kept net absorption levels unchanged at almost 89% of total net absorption in H1 2015 too. Leasing activity in the first six months of this year was significantly higher at 2.85 msf, as compared to 2.1 msf for the first half last year. The significant improvement in leasing but marginal increase in net absorption indicated the g rowing trend of relocations and consolidations by major occupiers within the city.
City level vacancy was noted at 18.8% by the end of first half, 1.6 percentage points higher compared to first half of 2014 mainly due to high infusion of supply and comparatively lower transaction activity during the inter mediate months. Weighted average rentals increased marginally across submarkets due to increase in quoted rentals of certain buildings witnessing higher demand.
Among the various areas reporting growth in Grade A commercial buildings, Andheri East is cited to be one of the fastest developing suburbs of Mumbai. Andheri East boasts of a perfect blend of both residential and commercial complexes. Its sub-localities, too, offer a mixture of regions that offer afford able and mid-segment homes.
Andheri East developed as an industrial area in the 1980s and later grew into a commercial office destination. Today, the region comprising Marol, Jogeshwari-Vikhroli Link Road and Chandivali belt is home to some of the premium Grade A office spaces.
Some of the important sub localities present are Marol, Tunga Village, Gundavali, Sahar Village, Sag Baug and Subhash Nagar. Andheri East is an important business district of Mumbai and it houses several MNCs and other commercial establishments. Industrial areas like Saki Naka, Mumbai Industrial Development Corporation and Santacruz Electronic and Export Promotion Zones are important landmarks in Andheri East.
For years, south Mumbai was the hub for premium property in Mumbai, but this is fast changing. According to recent reports, the media, pharma, FMCG and SME sectors seem to be the key residential property drivers in the Andheri East belt. With many big names such as HUL, P&G, Glenmark, Sun Pharma shifting their headquarters to the Andheri-Powai belt, there has been a sudden increase in demand for premium and marquee properties in this market. For the families, some of the best educational institutes, five star hotels, libraries, parks, banks, hospitals and recreational avenues are easily accessible, thus increasing its appeal to families.
Factors affecting real estate growth
Andheri East is becoming a cosmopolitan locality due the presence of many state-of-the-art office campuses and commercial buildings. The vicinity is attracting many reputed real estate developers. Over 125 projects are present here. While most of them offer ready to occupy homes, 25% of these projects are under construction. Well-developed social infrastructure and the existence of several recreational spots makes this neighbourhood an ideal investment destination.
Infrastructure developments
Being one of the main Suburban Business Districts of Mumbai, the area boasts of having the best infrastructure. According to the state government, the World Bank is planning several developments in Andheri East that will help it rise as a sought-after residential locality. The main draw of the area lies in the fact that it is well connected to other parts of the city via railways and metros.
Source: magicbricks
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Thane's real estate market is aspiring to position itself as a realty hotspot and 2016 may be the year to achieve just that.
Realty developers are ready with their list of demands as Budget 2016 approach es shortly. The year 2015 proved to be years of endurance and subsistence but to push the growth momentum in 2016, developers are hopeful of a proactive budget. "The budget 2016 will be a crucial affair for the realty market of Thane and Mumbai. There are huge expectations from the government. Recently, the Maharashtra CM announced an additional 0.3 Floor Space Index (FSI) for construction projects in Thane, which is a positive development for further growth of Thane city. Premium FSI will help the city go vertical, thus resulting in the creation of more housing stock, coupled with more stability in property prices. Vertical expansion is the best way to meet the rising demands of the city. This move will help in the proper and uniform development of Thane. There are many such expectations, which need to be fulfilled from budget 2016 which will be a game changer for Thane and Mumbai's realty markets," says Maulik Sheth, director, Sheth Corp. Experts believe that with the formation of a housing regulatory authority and realty bill, developers are keeping a close eye on the budget. The newly formulated amendments will encourage the developers to expand their horizon and deliver innovative products to its buyers.
Great expectations
"Like 2015, there is a lot of expectation from the budget of 2016. The year 2015 witnessed a lot of policy announcements and so facilitation of these policies is something that the industry is looking at. The sector has been demanding an industry status and this will help bring about a change in the whole sector. There is a need to streamline taxes and bring in further tax concession to enable more liquidity in the economy, thus giving a boost to higher consumption," feels a Tata Housing spokesperson. Experts point out that last year, the government set the bar by introducing REITs, which gave the industry a ray of hope to at tract the mid and small level investors but the industry and investors are still unclear on the implementation of the mechanism. The industry is looking forward to a balanced budget, which would give a boost to both, the industry and home-buyers.
Sandeep Ahuja, CEO, Richa Realtors, suggests, "With a rapidly growing economy, developers are enthusiastic about what is in store for the real estate sector. As the budget arrives, it also announces the amount of money that will be allocated for development projects like the metro train and infrastructure. A metro train in Thane is assumed to be in stock in the budget 2016. So, Thane's real estate has high expectations from the upcoming budget. In this budget, we await for clarity on GST and a cut in the corporate tax, which was announced in the last budget. Infrastructure like metro trains, roads and highways, work as catalysts in boosting the real estate market of an area. If the metro project in Thane receives a nod from the budget, then Thane will witness tremendous growth. At the same time, due to increased connectivity, Thane will become a preferred destination for consumers looking for property. Another factor that can accelerate the growth is road connectivity from Thane to different parts of Mumbai."
Growth prospects of Thane's realty market
The Union Budget's provisions, coupled with consecutive rate cuts and schemes, have boosted consumer sentiment towards first-home and end-user purchases. With a rapid growth in commerce in the region and the demand for housing, experts believe that the union budget 2016, will further firm up the prospects of Thane's realty market.
"Post the budget 2016, Thane's realty market is likely to witness acceleration in its growth, thus attracting new developers, product offerings and innovations in the sector. The budget is likely to bring in a wave of green buildings amongst the builders, which is the need of the hour. Open spaces and townships are the way forward to ensure planned development. Thane is considered as one of the prime locations with wide growth prospects in terms of realty and retail growth. Its connectivity with the suburbs and the outskirts of Mumbai further brightens its prospects. Quality housing with amenities, thoughtfully designed to cater to every need of the residents, drive interest of home buyers who may be the old gentry of Thane looking to upgrade their lifestyle or the first generation immigrants working out of the city. All in all, the future of the realty market looks bright and promising," opines Kaizad Hateria, general manager, corporate customer relations and asset class specialist, Rustomjee.
Home-buyers are looking at Thane as an investment destination, which can give them a healthy appreciation on their investments due to its commercial importance, connectivity and social infrastructure development. The government is serious about the growth of Thane as it has been selected as one among the smart cities to be developed in the country. Therefore, developers and experts are optimistic about the growth prospects of Thane, which seem very realistic, post budget 2016.
Source: magicbricks
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Akosha Tiwari, a BPO professional, has good understanding of finance. She recently sold off her ancestral property which fetched good returns. The money received was invested wisely in a 1BHK flat of 550 sq ft in Andheri West for Rs 65 lakh. The flat was bought and intended for end-use as she was living with her family in a bigger apartment at Goregaon West. This took place in 2011 when the property prices ranged from Rs 11,000-18,000 per sq ft in Andheri West. At that time the locality was popular with easy connectivity to the Bandra-Kurla Complex, which was then a secondary business hub.
Today, Tiwari is all set to tie the knot. She wants to finance her new home in South Mumbai by selling the Andheri flat. She evaluated the cost of her flat in Andheri through intensive market research and was delighted to find it worth more than a crore. She says, “I am happy to find that the worth of the property has increased. Also, there are buyers in the market who want a property in Andheri, since I have been getting calls.”
This can be because the property is new, the location is strategic and it is a destination for the nouveau rich. Currently, property prices in Andheri West range between Rs 18,000-22,000 per sq ft.
Tiwari’s case is a classic example of investing the money at the right time and in the right place. Although exiting the market at this point of time might not be a favourable choice. Like Tiwari, there are many investors in the market who are making money, despite slowdown. Escalating property prices in the last few years is the prime reason behind the increase. The reason for the price rise is the increased cost of land in Mumbai and various other factors.
The reason for price rise
“Actually capital values have not risen but construction and land costs have gone up in the last three years. Selling price is the sum of the mentioned costs plus the developer’s profit. With the cost component only rising, there is little chance of prices going down. Moreover, land is a scarce resource in Mumbai. It is either mill land (most of which is already bought and developed) or factory land or slum-encroached/ redevelopment land (and developing these involves complicated procedures). The government does not have any land to offer," says Ramesh Nair COO & International Director - JLL India
Being an opportunist investor
Those buyers who can seek opportunity in the real estate are the real opportunists who make the most of the buyer’s market. “In Mumbai, prices have doubled in the past 4-5 years in some areas. For example, if a buyer invests even in the slum areas, chances are that the property prices will double even there. Money grows fastest in Mumbai and that holds true as per past trends. In short, Mumbai realty is for an opportunist investor,” says Ghulam Zia, executive director, Knight Frank.
New Projects Vs Old Projects
Since an investor is not a future end-user, an under-construction project always excites him. “Pre-launch projects from successful developers who have a good track record, get a number of bookings. Once it gets completed, the prices reaches the peak. A ready property is easy to sell", says Rohit Purohit, an independent investment advisor, practicing in Mumbai, Thane and Navi Mumbai.
True story for Vasai-Virar
Vasai-Virar is a classic example where property prices have actually risen in the past five years. Here is the past trend of property price rise in the area, as per Magicbricks data:
However, the infrastructure here still remains a drawback. “Water quality is not good and has left many residents sick. Electricity is erratic. Commuting from the station to your residence can only be via autos, which costs a fortune. Mosquitoes and insects menace is compounded during monsoon,” says Shashiraj Rao, one of the ex-residents of Vasant Nagri, Vasai East. Since investors are not actual end-users, infrastructure plays little role while deciding the location. Supply-demand tactics are the major players in deciding the pricing pattern.
Those who invest in real estate to make quick returns are smart, especially those who had entered and exited the Mumbai market by making profits. One of the reports by property consultancies says, “The areas which will benefit from Metro connectivity have already seen price rise over the past eight years. This trend is set to continue with the launch of the Santra Cruz Chembur Link Road." Hence, it would be interesting to see whether investors will continue to make the most of the hype in the market or will fence-sitters actually enter the market to end their long wait.
Source: magicbricks
Contact
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After a long wait, the residents of Pokharan Road no1 are a relieved lot. The general body meeting has cleared the budget for road widening work on the stretch and the Thane Municipal Corporation has swung into action too.
This development is the result of a campaign, which started on WhatsApp by a few active citizens of Thane to highlight problems of the city. Residents raise issues pertaining to city's amenities and infrastructure on WhatsApp group called Thane Citizen's Voice, which are now being administered by the Thane Municipal Corporation (TMC).
In one such instance, the long-pending issue of road widening of Pokharan Road no1 received a go-ahead. Civic chief Sanjeev Jaiswal has given a 15-day deadline to shops to vacate or relocate from the area, as the shopkeepers requested to grant them time to vacate the space. The work began with Jaiswal visiting the area on Sunday. Later in the day, he met the police officials, city engineer, deputy commissioner and other officials, instructing them to start the work with immediate effect. Removal of illegal shops started from Monday.
Toeing the central government's 'ease of doing business' policy, the state government aims to make all permissions/ clearances required from local bodies and the revenue, urban land ceiling departments available online. In a bid to increase transparency, land records may also be put up online.
"VV Chandanshive, DCP (zone V) and senior officials associated with the Vartak Nagar police station have been asked to help civic officials in removing encroachment and illegal shops that come in the way of road widening work," said Jaiswal.
Residents from Pokharan Road no1 have been complaining about bottleneck traffic for a long time, especially during peak hours, and have expressed their relief on TMC's decision.
"Our problems are being heard and officials are responding. The work order given for Pokharan Road no1 is a testimony to the effectiveness of this campaign," said a resident.
The civic chief has asked people to cooperate and has instructed the officials to take action after 15 days and start work immediately.
"We are happy that finally the work order has been given. The road widening would bring little respite for us, as we have to go suffer bottleneck traffic everyday," said Abhishek Waghmare, a resident.
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RBI's latest monetary policy review has put onus on the banks to pass the previous rate cut onto the homebuyers.
Even as the latest monetary policy review by the Reserve bank of India (RBI) has maintained a status quo much to the criticism of the real estate sector, it has raised hopes since it puts pressure on the banks to pass the previous rate cut onto homebuyers. There are reasons to believe that the drastic rate cut, which could actually revive the housing demand, is on the cards but Raghuram Rajan, RBI Governor, probably didn't wish to dampen the euphoria of substantial rate cut with a symbolic cut to end the year. Moreover, he has always been concerned with the fact that RBI's rate cut is not reaching the homebuyers to the desired extent.
Reasons behind the optimism that the real rate revision is ahead are many. Despite the fact that there has been some surge in the consumer price inflation, the growth forecast of 7.4 percent is something that suggests consumption demand in the domestic market and the consumer spending is all set to increase.
The RBI, hence, in its monetary policy review kept the repo rate unchanged at 6.75 percent. The economists are therefore calling it a prudent measure keeping in mind the fiscal deficit, even though a section of real estate developers cried foul as it went against their long-standing demand for a substantial rate cut to revive the housing demand.
RBI's statement, however, reflected a larger macro-economic concerns as it said, "On the domestic front, provisional estimates of gross value added (GVA) at basic prices for Q2 of 2015-16 rose on the back of acceleration in industrial activity. Other indicators suggest the economy is in the early stages of a recovery, though with some areas of continued weakness."
Most of the analysts within the built environment of Indian real estate seem to understand the larger picture. Devina Ghildial, Managing Director, South Asia, RICS, maintains that considering the overall economic situation, earlier reductions in repo rate have consistently eased off inflationary pressure, which is visible over the last few months. However, this has not really transformed in pushing up housing demand in real estate sector, which is evident from industry reports released in the last quarter.
Shishir Baijal, CMD of Knight Frank India, also believes that in line with the anticipation, the RBI has kept the rates steady. The stand is in sync with the developments in the macro economic scenario wherein GDP growth has risen to 7.4 percent in the July September quarter from seven per cent in the earlier quarter and with around 30 percent contribution by gross fixed capital formation. Investment demand and manufacturing growth are also exhibiting a distinct rise. Further, retail inflation expectation is higher and actual inflation is likely to build up in the coming months as the impact of the poor monsoons unfolds.
"The global concerns including weaker rupee also add to the worries. The current stance of the RBI also underlines its concern that despite a total of 125 bps cut in the repo rate by the RBI till September 2015; banks have not yet transmitted enough the benefits to the end consumers. In real estate we do not see any dampening of spirits as a total of 125 bps cut in the rates is already done across the year and now much depends on how banks transmit the benefit to home buyers," says Baijal.
Analysts hence point out that regardless of this cumulative cut, banks on their own should be able to transmit more benefit to the end consumers as the cost of funds is becoming cheaper with improved liquidity conditions. Factors like a relook at the pricing strategy by the developers and abiding by project completion timelines and the overall economic growth also stand crucial.
The RBI is also conscious of the fact that less than half the 125 bps rate reduction this year has been passed onto customers by banks, and hence any further rate cut would be beneficial only when the apex bank takes action to standardise the methodology for determining base rates which all banks will move to.
Anshuman Magazine, Chairman & MD, CBRE South Asia, believes this decision was largely expected. The multiple rate cuts initiated by the RBI through the year have provided some relief to the economy and the real estate sector.
"While it will take some more time for the announcements to reflect at the ground level, the housing segment has seen stability and improvement in market sentiments. As we move into the New Year, we hope the RBI will continue to monitor the situation and make necessary adjustments to boost the economy," says Magazine.
The developers never the less have their own concerns. Nikhil Hawelia, Managing Director, Hawelia Group, asserts that concerns of the RBI might be at a larger picture of the economy and the interest of the real estate sector has been ignored in the process. According to him, a sector that has the potential to revive the real demand in the Indian market is not getting its due attention; something that will do no good to the Indian economy.
"I will call it an opportunity lost since this is the beginning of change of mood as far as consumer spending is concerned. There is a visible improvement in the Indian economy as well.Had the RBI taken cognisance of this, it would have given a fillip to both with a substantial rate cut," says Hawelia.
Developer's demand might be legitimate but what the RBI is more concerned with is probably the timing of any further rate cut. More importantly, it is expected that the next rate cut would bring a real change in lowering the EMI burden of the homebuyers. The current monetary policy review, therefore, may not be meeting the expectations of the real estate developers; it shows the way forward for a turnaround in the year ahead.
Source: magicbricks
Contact
501, 5th Floor, Plot No - A-123/4,
Odyssey IT Park, Road No. 9,Wagle Estate
Thane (W) - 400 604, Maharashtra, India
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A no-objection certificate (NOC) from the state government will no longer be required for acquiring agricultural land for industrial development, revenue and agriculture minister Eknath Khadse said on November 17.
"As a part of the ambitious Make in Maharashtra plan, we have decided to amend the agriculture land rules, 1950, so no permission will be required for acquiring agricultural land for industrial development. The cabinet has approved the proposal and an ordinance will be promulgated to amend the law," Khadse said.
Elaborating on the new proposal, Khadse said it was found that huge tracts of agricultural land, particularly in the jurisdiction of municipal councils and corporations or urban bodies, were lying unutilized or have been reserved for non-agriculture purposes. Such lands will be allotted for industrial development.
"We found that owing to stringent rules, we were not able to utilize these lands for industrial development. Now we have simplified the procedure for using these lands for setting up industries," Khadse said.
Stating that an industrialist will not be required to knock at the doors of the industries development commissioner for securing his permission, Khadse said once the land is procured, the entrepreneur will have to utilize the land within five years. If he fails to utilize the land within the stipulated period, he would be eligible for a five-year extension, but in that event he will have to pay a cess of 2% of the total cost of land and will have to utilize the land within 10 years. If he fails to utilize the land within 10 years, the land will be returned to the original farmer."Earlier, once the land was acquired, it was to be utilized within 15 years from the date of procurement. We have reduced the period to five years," Khade said.
Khadse said as per the existing laws, a non-agriculturist is not eligible to buy agriculture land. However, for speedy industrial development of the state, the government had amended the rules to permit a non-farmer to procure farm land for industrial development.
"Besides the agriculture land rules, we will amend the regional and town planning act too, so agricultural land procurement for industrial development will be hassle-free," he said.
Source : content.magicbricks.com
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Odyssey IT Park, Road No. 9,Wagle Estate
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The Maharashtra Housing and Area Development Authority (Mhada) has identified land parcels spread over 1,100 acres across Mumbai Metropolitan Region (MMR) for developing affordable housing projects.
"We have identified these land parcels based on connectivity and infrastructure including water supply among other facilities that are needed for setting up affordable housing projects there," said SS Zende, vice president and chief executive officer of Mhada.
The land parcels are in Thane, Raigad and the newly formed district Palghar, which includes Vasai and Virar. Mumbai Metropolitan Region includes cities of Mumbai, Thane and Navi Mumbai.
"In terms of process, we will now find out reservations, if any, on these land parcels. Following that, we will send our request for these plots to revenue and forest department, all of this is expected to get over in the next two months," said Zende.
The land cost, the bulk of expenditure for any real estate project, will be minimum in this case as these land parcels will be allotted by the government to the state housing authority. The process of planning and drawing of a roadmap for these projects will be initiated after the land allotment.
The state minister of housing, labour and mines Prakash Mehta had last month announced that Maharashtra was considering opening up land parcels under the no-development zones as well as plots belonging to Indian defence personnel in an effort to build affordable houses in Mumbai.
While stressing on the need for affordable housing in the country's commercial capital, Mehta said that if needed the government will even look at the salt pan land, defence land, airports authority and BPT (Bombay Port Trust) for these projects.
The Maharashtra government has already entered into an agreement with the defence ministry that will allow land under its control in Mumbai to be used for mass housing.
The minister had nudged real estate developers, who drew his attention to high taxes and development levies, to develop more affordable housing projects in the city.
Cities across the country have been falling short of planned housing for low income and economically weaker households, resulting in an ever worsening housing shortage. Mhada's exercise to identify land parcels for affordable housing projects assumes importance in the backdrop of the government's vision of achieving Housing for All by 2022, and the state government's emphasis on bringing efficiency into various government schemes related to housing.
Source : content.magicbricks.com
Contact
501, 5th Floor, Plot No - A-123/4,
Odyssey IT Park, Road No. 9,Wagle Estate
Thane (W) - 400 604, Maharashtra, India
Mobile : (+91) 9833 4583 23 E-mail : mchithane@gmail.com
