The present Indian economic scenario is finally showing a northward movement for the demand in the commercial real estate sector. Consecutively, the higher demand for the office space will also influence the sale in the residential real estate sector too. According to a market research, the first quarter of 2011 experienced a 20% increase (almost 6 million sq ft) in the demand for office market all over every potential real estate sectors in the country in comparison to the same duration last year. Almost around 27% of the total office space was absorbed in the National Capital Region of Delhi.
Market analysts opine that the Indian office market will carry on this growth graph in the coming years. With corporates reworking and introducing their expansion strategies nearly in all industry sectors, requirement levels and transaction rate are anticipated to continue the upbeat in the near to midterm. Although with momentous supply in the market, rentals are likely to stay under pressure except for Grade A office spaces in certain main micro-markets.
In spite of escalation in demand of office space, the rentals have not been raised as the market is viewing a good supply of quality office space in the area. This is actually a good news for the end user who is seeking for office space. The report further explains that as the demand levels have seen a rise but due to the high supply pipeline and ready availability of quality office space the prices have not experienced any undue increase. In a few micro-markets, elevated vacancy levels can lead to the development of some downhill pressure on values in the short to medium term. However, the values in the Central Business District (CBD) locations in cities like Delhi, Pune, Kolkata and Hyderabad continued to be constant where as cities like Bangalore and Chennai experienced development. The report also states that the office market in the country is likely to go on with the growth process with new opportunities coming in due to corporate expansion strategies.
The CBD of Connaught Place and surrounding locations in Delhi experienced improved attention from potential tenants in the first quarter of 2011. As compared to the earlier few quarters, there was no supply to the CBD in the first quarter. Analyzing the general shortage of new supply, a few Grade B buildings have started renovation plans in order to improve their amenities and get more tenants.
Gurgaon experienced an addition of around 0.85 million sq ft of new IT office space and about 0.47 million sq ft of non-IT office space. Transaction going ons kept on the higher side as compared to the other micro-markets with absorption confirmed at around 0.75 million sq ft in IT/ITeS and another 0.12 million sq ft in the non-IT sectors. Higher transaction activity and increasing tenant attention on SEZ developments paved way for the hike in the rental values by almost 7-8 %.
On the other hand Noida witnessed a lower office space leasing activity as compared to the previous quarter. A rising tenant focus in SEZ developments along the Noida-Greater Noida expressway is expected to enhance the transaction activity in the near term.
In Mumbai it is the Bandra Kurla Complex or BKC which is currently the “hotspot” for most corporates, MNCs and banks as compared to the rival commercial business districts of Lower Parel and Nariman Point-in the latter, lease rentals are currently between Rs 225 and Rs 250 a sq ft on an average. “Nariman Point buildings can only offer offices ranging between 500 sq ft and 3,000 sq ft but clients who want a floor space in excess of one lakh sq ft find it readily available in BKC,” they said.
In Mumbai Experts said that a decade ago. “Developers preferred to construct residential apartments due to quick sales at the under-construction stage. Eight of out of 10 files submitted to the BMC for approval were residential. But with growing businesses, there is going to be a demand for quality commercial premises in the Central Business areas,” they said.
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Buy a property that fits your requirements
Since the day you start earning you want to buy or invest in a property that suits your requirements. By the time this dream starts turning into realty, and finally you start searching for a property, two major factors determines your search. You either buy to invest or you buy to live. Then some other questions that arise are whether an apartment or a plot, Housing project by a developer or an independent house or plot in an already established locality. In order to get the best deal, you should have a clear picture in your mind as to what you are looking for, and the kind of property you are searching, you are the best judge of your situation.
Will you rent out the property and use the rent amount to pay your EMIs, or would you be able to pay back your home loan installments while you reside in your newly bought home. If you are looking forward to purchase an apartment, or a plot, then you need to plan about how you will handle your finances and continue your current lifestyle.
The property location will influence both the kind of tenants you will get and the type of returns on investment you will be acquiring. Areas that have higher employment opportunities are likely to get more tenants. So you should always check the property location for current or projected parks, malls, movie theatres, public transport hubs like the Metro and all the other factors that can help you to get more buyers or tenants.
DEVELOPMENT PROSPECT
Gather all details about any new project that is being developed or has been zoned into the locality in which you are eyeing a project. If there are a quiet few new business parks or malls coming up in location near your property then it is possibly a good growth neighborhood.
LEASING OUT
When you are purchasing an apartment, do check the list of amenities offered by the developer within the premises, property location and quality of construction work. Prospective tenants these days are looking for well furnished apartment with wardrobes, utilities in the kitchen and bathroom furnishings, so ensure that your apartment has all these facilities in place. Also keep a record of all required lease documents duly signed by the tenant and you in order so that every formality can be completed as early as possible.
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Things to check before buying your dream home
Purchasing a dream home is a very crucial choice and should be thought through carefully. A home is not only a roof on one’s head but it also brings about peace of mind and security, and therefore all the aspects related to real estate purchase needs to be taken care of in advance.
Before you buy a dream home, you need to check some important parameters:
1) Do check the Title Clearance of the land in the name of the builder and the bankability of the project.
Purchasing a dream home is not only confined to the advertised price of the house, but there are certain added expenses that are attached with it and you should be ready t to bear those extra amount.
2) Developers do charge One time “other charges” which includes Internal and external maintenance Charges, Electrical Charges , Club Membership , Car Park etc or any other miscellaneous charges that are USP of the project.
3) Some charges like preferential location charges of Floors,Apartments Park view , etc are all charged extra from the quoted price by the developer.
4) Generally the developers quote the price on “down payment, plan” in which the developers give an upfront discount and collect 95% of the total cost within a month.
5) Customers can look for other payment Plan also which are linked to construction progress of the Project commonly known as Construction link Plan which though has a lesser discount than the down payment plan given by the developer but it mitigates the customer risk as the installment given by the customer becomes directly link to the progress of the project, therefore customer also has satisfaction of giving the installment once he sees the progress of the project.
6) The customer should also be ready to pay approx 8-10% of your house cost as Registration and stamp duty charges before the possession is delivered to him by the developer.This price is not tagged with the asked price of your dream home when the project is advertised.
7) Regarding the cost factor one should also not forget the annual maintenance charges which are being fixed now for every society.
8)- Purchasing a home in India is always a family affair so opinions of the family members should be taken .
Now a days Developers have multiple projects going simultaneously therefore for marketing and selling of projects new avenues have come up in the real estate market.
The last couple of years have seen the rise of Channel Partners who sell the projects on behalf of the developers to the client. The developers insentivise them and due to the market competition the channel partners do pass a certain percentage of their incentive to the customer. So it is not a bad idea to cross check with channel partner about the discounts that are available for a given project. The catch here for the customer to understand is to buy through a genuine registered established broking firm
In the current scenario, as both the partners are working, it’s a good idea to take a joint home loan as the amount for home loan gets increased and the bank also takes into consideration the fact that though the payment default risk remains but is mitigated.
You should also consider the possibility of any geographical change on the work front or otherwise.as you are the best judge of your job profile so invest wisely and well where you think you get good return on your investment both monetary wise as well as mentally. This is more true in case of an NRI as NRI has to take into consideration the cultural and geographical factor while making a choice for his dream home.
The above mentioned issues though commonly known to everybody yet somehow get slipped , it might not be a bad idea to quickly jot down the points that you think are imp for you in decision making and then go on to make your search for your dream home. And then keep them striking out pointwise as you move forward in your search.
We wish you Happy Searchig but do remember three key words “ Find Decide Buy” in the whole process.
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New registration law makes properties costlier in Delhi
The dream to own a home in the capital city is now going to be a costly affair as the Delhi Government has made up their mind to hike the registration fee for properties that fall in the bracket above Rs 50 lakh. According to this new rule, a home buyer will have to pay out 1 per cent of the cost of property as registration fee where as the earlier cap was of Rs 50,000 notwithstanding the price of the property. For example, if an individual is buying a property costing Rs 1 crore then he will have to pay Rs 1 lakh as registration fee, and likewise for a property of Rs 2 crores, one will have to pay Rs 2 lakh as registration fees.
Earlier, a minimal fee of Rs 100 was charged as a registration fee by the Delhi Government Authorities till year 1964. After 45 years, in the year 2010, the Delhi government introduced a ruling that differed between properties that costs Rs 50 lakh and more. The registration fees of conveyance deed, sale deed, gift deed etc. concerning to immovable property was hiked to be 1 per cent of the declared value of the property or the respective circle rate, whichever was higher, though, this was capped at Rs 50,000. But in case if the value of a property has not been declared then the registration fee will be Rs 1,000.
What this meant was that the properties that were priced below Rs. 50 lakh will be charged one per cent registration fee. On the other hand, for properties priced at Rs 50 lakh and more, a flat Rs 50,000 was charged as registration fee. This was sarcatic, as in first instance this meant that if one was falling under the more costly property bracket, one would in effect be charged with lower registration fee whereas if one was falling in the not so costly property bracket, one would be over burdened with 1 per cent as registration fee.
Property agents say that, “It is due to this cap that the registration fee was kept same for a property costing Rs 50 lakhs as well as a property costing Rs 1 crores or more”. On ground realities, it appeared unjust to a customer who buys a property costing Rs 50 lakhs and a customer buying a property costing Rs 5 crore would be paying the same amount of money as registration fee.
The Delhi Government apprehended this irregularity and resoluted to modify its ruling thereby doing away with the Rs 50,000 cap. With the cap no longer in existence, the registration fee for a property costing more than 50 lakh will be proportionally more.
One more reason that prompted the Delhi Government to reconsider the prevailing property registration law was its own state of apparently unending financial crisis. The city government is facing a financial crunch because of the over expenditure on the previous beautification and infrastructural development for the Commonwealth Games that were held in October 2010. Market Analysts firmly believe that this change will surely help the Delhi Government to generate more income from the property registration fee. The Delhi Government hopes to make an extra Rs 100 crores by waving of the upper limit in registration fees of the property.
The reassessment of the registration fees will also lend a hand in keeping a tab on the present undervaluation of properties in the city. The new property registration fee law will also be applicable for registration of documents including conveyance deeds, sale deeds, gift deeds, partition deeds and settlement deeds.
A Basic Checklist For Safe Property Buying and Investment Planning
1. First, check property’s title related issues. Be careful of development structure where title cannot be secured, either individually or collectively to a society, once possession of the premises is delivered. Please note that a sale under a power of Attorney is legally questionable.
2. Make sure that the property’s construction complies with applicable laws by asking for certificates such as completion, occupancy and NOC from right authorities. Also check for any disputes or litigation.
3. Check for access and entrance points to the premises, existence of real estate management entity, maintain and security, adequate electrical load, back up electricity supply, right to install equipment on terrace.
4. If the investment is in a unit (office/shop, and not the entire commercial space),unit holder should procure equal right against other owners of the premise, ensure payment of rent with minimum involvement from other owners, ensure provision exists whereby termination of lease is with unanimous consent of all unit holder, have ability to sell/mortgage the unit.
5. Check and pay appropriate stamp duty and register the sale deed with in 4 months of execution.
6. If you need help, choose someone reliable and expert. Always verify claims made by builders or dealers and take second or third opinions before taking a decision. Never take anything for granted as property dealings involve huge capital investments.
Small real estate agents can close more transactions by offering best services in investment consultancy, insurance, real estate settlement and escrow services. You may be specializing in commercial real estate, or residential. Look around your city or locality, you can execute highly sophisticated transactions operating outside the bureaucratic constraints of a large company. Big competitors really cannot move at our speed.
Property business in India is drowned in paper work, and you have to make a commitment as a firm, much like builders and developers. Listening is the key to doing business, and finding common ground is incredibly important. Many people ask here if they should get into real estate brokerage and the simple answer is “We don’t know” – only because we don’t know if they can work as hard as the successful ones do.
Remember, most owners and buyers like to work with experienced and trust-worthy agents to enhance their chances of successfully negotiating a home purchase or sale. Your reputation can be a critical factor in getting deals regularly. Unfortunately, there are some real estate agents whose wrongful activities make the entire community suffer.
This is what a property owner has commented about property agents – “I will never use a real estate agent to sell or buy property. I have in every case been either ripped off or not told the full truth about a property that I was interested in. And as far as I’m concerned, if their lips are moving, they’re lying.”
Another angry home buyer has this to say – “In my opinion the property agents are a bunch of crooks, they manipulate the price of the houses to keep themselves in jobs and drive expensive cars. They are the people who sell houses to foreigners/NRIs and jack up the prices. They keep encouraging people to sell and resell their houses to raise the house prices.”
Getting a reputation of high integrity and ethical conduct will serve agencies well. Exhibiting any practices that are not highly ethical will most likely cause owners, builders, other dealers or brokers to hesitate or refuse to do business with you. It’s impossible to serve the client properly if the broker on the other side of the transaction is suspicious of you.
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Realtors® – Selling beyond your geographic boundary.
Realtors® who are assisting homeseekers and homeowners to buy and sell homes in their residence country can now add Indian Properties without having to step out of their office.
You are a Realtor® living at USA, Canada, UK or any other International location assisting prospects to buy/sell homes there. You are aware of the booming Indian Real Estate Market and wish to expand your portfolio by offering properties from India to your clients. Perhaps you have even flown down to India, formed an association or two with Indian Builders to sell their projects internationally, but after the initial euphoria dies and when it comes to processing- Indian Service Level Standards don’t match your expectations!
If the situation sounds familiar, read on…The geographic distance appear to be the biggest hurdle in transactions- limited awareness of opportunities, process, market trends, time involved in prospecting, then managing applications, payments, receipts and post sales. Add to it the follow up for your broker co-operation and then repatriation issues are just not worth the effort for you to focus outside of your local market, be it USA, UK, Canada or anywhere else.
The anxiety of buying a home 10,000 miles away is far more than your customer who’s buying a home where he lives. The lack of back office support – a dependable framework is what lowers your trust in Indian Real Estate market. Operational issues – manintaining relationship with builders; staying informed of upcoming projects, market trends, local information; follow-up on your sales, documentation, receipts, development updates etc… cannot be handled from thousands of miles away without having a dependable framework.
“I tied up with a builder in NCR area to sell their properties over here in USA. I have a very good clientele which has a sizeable amount of Indian Customers. The problems I faced were too many after which I decided it was not worth my time” states a California Bay Area Realtor. She had quite an experience in trying to conduct the cross border transaction some out of which include:
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1. She had a PAN India customer base and so she needed a portfolio that included properties from almost everywhere in India and not just a handful locations.
2. Indian Real Estate Market is booming. Pricing is very dynamic. Properties appreciate at a much faster pace than they used to a decade back. A couple of the leads she sent to the builder’s office got solicited directly by the Builder, a few of them walked out of the deal because they felt the price being quoted to them by the agent was different from the price being offered by the builder and some found out that there were some other opportunities to look at.
3. Of the few deals that she managed to close, servicing them was a very time consuming and helpless position, because she had to depend on the support from the builder’s office tens of thousands of miles away.
4. Finally, the repatriation of referral fees that she received wasn’t that smooth. There was a mysterious web of process and documentation to be submitted to RBI which served as an icing to the desert.
“I look forward to leveraging atOnePlace.com framework. I am quite excited about it. I firmly believe that there are tremendous opportunities to market Indian Properties here in US, but my experience has been, unless you have a dependable framework, its not worth the effort” she says.
So how can atOnePlace.com help Realtors to sell Indian Properties?
Simply put, atOnePlace.com is an online marketplace for Real Estate that has tied up or is in the process to tie-up with hundreds of Builders PAN India. The website has hundreds of new opportunities, both in Commercial and Residential projects, in almost every tier-1 and tier-2 city in India. Realtors like yours can be associated with atOnePlace.com and can leverage the framework to market Indian Properties. Pre and post sales support is handled by the back office support and servicing team at India and USA. All you do is use the tools, stay informed, and prospect. Once the deal closes, atOnePlace would send you a cheque in your local currency for the referral.
atOnePlace™ has launched its BETA services with a vision to bridge the gap of information, trust and service level standards offered by Indian Real Estate Market and International Clients expectations.
Read more on: How atOnePlace™ works for you-Realtor®
For any questions, contact agentenquiry@atoneplace.com
Some restrictions may apply. Check with atOnePlace office for further details. This is not an offer of real estate agency, nor a solicitation of an offer to sell, to agents of any state, province or country in which registration or other legal requirements have not been fulfilled. Check with local authorities and legal experts for any legal issues involved in marketing or prospecting international real estate. NO Federal or State agency has judged the merits or value, if any of any property. This promotional material is not intended to constitute an offering in violation of the law of any jurisdiction. WARNING: THE CALIFORNIA DEPARTMENT OF REAL ESTATE HAS NOT INSPECTED, EXAMINED OR QUALIFIED THIS OFFERING. All rights reserved.
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