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Monday, 14 December 2015

5 positives for the realty market today

Chain reaction: The recent flurry of real estate activity in Mumbai could bring some cheer to the Delhi-NCR market but much of the supply is likely to be in the affordable housing segment

UP gets ready for affordable: The state government has launched the Samajwadi Awas Yojna scheme under which it hopes to develop about three lakh units. On offer are development and land use conversion charge waivers for the developer and no stamp duty for the buyer

Haryana takes the lead: Haryana’s affordable housing policy seeks to provide 1.25 lakh units. Builders taking up state housing projects are to be exempted from licence fees and infrastructure development charges

Current unsold inventory: The unsold inventory (in various of stages of construction) for the NCR and MMR at the end of September 2015 is 1,98,000 and 1,85,000 respectively, according to estimates by Knight Frank

Read Full Story: 5 positives for the realty market today

India is on the verge of large scale urbanisation. Around 31% of the population lives in urban areas and contributes over 60% to the GDP. It is projected that they will contribute nearly 75% to the national GDP in the next 15 years. Cities, therefore, are referred to as engines of economic growth. Ensuring that they function efficiently is critical. The real estate sector will play a crucial role in shaping the Indian economy. Here's a glimpse of trends which will dominate the sector:

Affordable homes: The 'Housing For All by 2022' initiative is a potential gamechanger. Economic recovery is expected to gain momentum, driving the demand for affordable houses.

Smart cities: The government's decision to develop 100 smart cities and rejuvenate another 500 cities is a bold step. Smart cities will see businesses migrating to new cities due to cheaper land, labour and property resulting in even distribution of population over a wider area.

Read Full Story: Expertspeak: Housing for all a game-changer

When can you make money in real estate? You probably can if you buy really low, strike a bargain and get a great deal, or if you are lucky with an investment you never thought would really show double-digit appreciation (for this, you need to have already made the purchase at a price that seems like a real bargain in retrospect).

Bargain buys

A recent JLL report quotes an official saying that project sales are typically spread out at 18 per cent at the time of launch, 55 per cent during construction and 27 per cent on project completion.

It is usually the 18 per cent who make the real killing. But normally, retail buyers looking for a home to live in find investing in such projects premature, given the long delivery timelines.

Builders usually sell a significant portion of the property to early investors to bring in cash early to fund the project construction. Such sales are often at huge discounts with these investors looking to cash in on a resale usually at the pre-launch stage.

With the current slowdown in the real estate market, the need for cash may prompt a few early bird investors to sell at a slight discount to the prevailing prices, opening the doors for retail buyers to seek bargain buys.

Read Full Story: Real estate — the early bird advantage

How Startups Are Making Real Estate Businesses More Efficient

Advances in information technology have generated enormous efficiencies in many industries, including manufacturing, transportation, communications, entertainment, retail and financial services. Yet in real estate, the largest industry of them all, innovation has lagged as agents and brokers have been slow to adopt new technologies.

This is because real estate is often considered a relationship business. Indeed, the markets for commercial, multifamily and residential real estate could not function without networks of human professionals who have built trust working with each other over many years.

However, real estate also is an information business, where transactions depend on the steady flow of data between buyers and sellers, and brokerages with the best data ultimately make the most money.

There is no good reason for real estate businesses to operate without the benefits of faster and more accurate data, or the efficiencies afforded by workflow automation and online collaboration.

Fortunately, things are changing. On the consumer-facing side of the business, companies like Zillow, Trulia, HomeAway and Rent.com launched as startups in the early 2000s to provide online access to home and apartment information.

Meanwhile in the B2B arena, legacy software companies such as CoStar, Yardi and RealPage have updated their platforms to be more feature-rich and user-friendly, and startups like LoopNet (now part of CoStar) have democratized commercial real estate information by providing online access to buyers and sellers of commercial real estate nationwide.

Read Full Story: How Startups Are Making Real Estate Businesses More Efficient

Four Seasons Los Angeles creates edible real estate for children’s cause

Four Seasons Hotel Los Angeles at Beverly Hills, CA is letting consumers take a bite out of its property with help from “Million Dollar Listing” star Josh Flagg.

The hotel’s executive pastry chef Federico Fernandez has created a chocolate replica of the property, along with 20 gingerbread mansions, with all of the edible real estate being sold to benefit Toys for Tots Foundation. The whimsical nature of this charity campaign will help remind participants of the cause they are supporting, perhaps stirring memories of their own childhoods.

Now taking bookings

The chocolate hotel and gingerbread mansions took weeks to create. The property recreation is complete with the hotel’s pool and miniature guest vehicles waiting outside the lobby.

Rooms can be “reserved” for $550, while the mansions are on the market for $5,000 per house. Interested consumers can coordinate a property sale through the front desk of the hotel.

Read Full Story: Four Seasons Los Angeles creates edible real estate for children’s cause

Flat rates in Varanasi Commercial Property for Sale in Varanasi Residential Plots for Sale in Varanasi

Real estate investing is all about timing, and Sam Zell knows this better than anyone.

He sold his real estate firm, Equity Office, to Blackstone Group for $39 billion near the peak of the market. This was back in February 2007—only months before real estate credit markets started to spiral out of control.

He’s doing it again.

At the end of October, his real estate fund, Equity Residential, agreed to sell more than 23,000 apartment units to Starwood Capital for $5.4 billion. The sale represents over 20 percent of the Equity Residential portfolio.

The fund plans to sell another 4,700 apartment units in the near future. Most of the proceeds will be returned to investors in the form of a dividend sometime next year.

Another real estate fund managed by Zell, Equity Commonwealth, has sold 82 office properties worth $1.7 billion since February. The fund plans to raise another $1.3 billion by selling off more properties over the next few years.

Read Full Story: The smart money is getting out of real estate

Commercial office space in Varanasi Office Space for Rent in Varanasi Commercial office space for lease in Varanasi

Chicago Real Estate Market Update: November Another Down Month

It looks like the Chicago real estate market turned in another disappointing month in November. Home sales were down 1.6% from last year. Of course, the Illinois Association of Realtors will see it even more negatively in about 2 weeks when they report a decline of 2.0%. However, I'm thinking that these estimates might be off a bit. When I look back to last November's data it looks to me like either they pulled the data later in the month or there were just fewer reporting lags - i.e. the benchmark was higher than normal.

Nevertheless, the effect I'm worried about here is small and at best November was flat to last year. It's still clear that home sales have lost a lot of their momentum in the past few months. You can see it in the long term sales history graph below where all the November points are flagged in red and the light blue line is a 12 month moving average. Note that this November was lower than both 2012 and 2013.

Of course, none of this is a surprise in light of the extremely low inventory levels out there. How can you have strong sales when the shelves are bare?

Read Full Story: Chicago Real Estate Market Update: November Another Down Month

The paradox of Indian real estate

India has a huge demand for houses. Industry experts peg this number at 50 million houses in next 10 years – urbanization as a trend has just touched the tip of the iceberg. At a fundamental level, the underlying drivers of demand are strong – key drivers being:

a) High population growth, unlike some European countries that experience negative population growth and have a difficult time filling out existing inventory

b) Population becoming more affluent i.e. more people getting more money in their hands to invest

c) Cities like NCR, Mumbai, Bengaluru see other factors that drive further demand; high immigrant population – with several 100,000s moving in and out of these cities every year creates churn and opportunity; also these cities see demand from neighboring states e.g. the people who can afford it, in let’s say UP, Himanchal, want a secondary residence in NCR/Delhi

Read Full Story: The paradox of Indian real estate

Al Rajhi Capital & Arcapita exit from ARC Real Estate Income Fund

Al Rajhi Capital and Arcapita announced the successful exit of ARC Real Estate Income Fund for a total transaction value of SAR 1.35 billion.

Since its launch in 2010, the fund acquired seven key high quality, income-generating assets in the logistics, warehousing and retail sectors, in the Kingdom of Saudi Arabia and the United Arab Emirates.

The fund was jointly sponsored by Al Rajhi Capital and Arcapita.

Commenting on the occasion, Gaurav Shah CEO of Al Rajhi Capital, and Atif Abdulmalik, CEO of Arcapita, said in a joint statement, “We are pleased with the performance of ARC Real Estate Income Fund since our investment five years ago and believe it was the right time to exit the fund to deliver maximum profits for our investors. Throughout its term, the fund performed well, maintaining full occupancy on extended term leases to quality tenants across its portfolio of assets.”

“In an extended low interest rate environment, the ARC Real Estate Income Fund proved to be an attractive and stable investment opportunity for its investors, delivering an average annualized yield of 7.2%, and distributing an annual yield in excess of 9% over the last two years. The fund delivered approximately 18% growth in net asset value during this term. The performance of the fund demonstrates the attractiveness of the KSA and UAE markets for the logistics sector as well as the expertise of Al Rajhi Capital’s and Arcapita’s fund managers in sourcing and acquiring investments for the fund.”

Read Full Story: Al Rajhi Capital & Arcapita exit from ARC Real Estate Income Fund

How To Play Billion-Dollar Real Estate Deals With Just $1,000

The biggest innovation in real estate investing is a marriage between crowdfunding platforms like Kickstarter and real estate tycoons a la Donald Trump. Real estate crowdfunding websites like Realty Mogul and RealtyShares pool money from wannabe magnates to buy portions of commercial properties the way you would stock on the stock market. Likewise, they offer developers a new funding source for their projects.

Real estate crowdfunding platforms give unaccredited, small investors access to billion-dollar deals that are typically only available to accredited, ultra-wealthy people or institutions. The technology streamlines the investing process by cutting out middlemen and lowering fees in hopes of passing on larger returns to investors.Read Full Story:

How To Play Billion-Dollar Real Estate Deals With Just $1,000

Save for your Dream House with these Tips

Saving for your dream property in Dubai (or anywhere in the world) can seem like a daunting task. But what if I told you that it is a big task that can be easily accomplished by simply cutting down on unnecessary expenses and luxuries? Here are six easy ways you can save some extra cash to put towards the home of your dreams:

Get a Savings Account

Firstly open a savings account dedicated solely for you ‘dream home fund’. Separating your spending money from your savings money will assure that there’s no temptation to spend it and will help you stick to a budget.

Create a Monthly Budget Plan

Assess how much you (and your partner) make each month and make a realistic and honest budget plan that you feel you can stick to. Print out a checklist of your monthly expenses and check them off as you go through the month, this way you can see that they have been paid and that you’re on track.

Adjust your Utilities

This one is easy to cut back on. Instead of taking a ten minute shower, take a five minute shower. Switch off any lights and appliances you are not using and cut back on the amount of time you use your heater in winter (rather use a hot water bottle) or aircon in summer. You’re utility bill will be cheaper and you can put the excess money in to your savings account instead.

Don’t Eat Out as Much

It’s easy to give in to the temptation of fast food. Driving though McDonald’s is a quick and easy solution for dinner on the way home after a late night at work. But each take-away meal adds up, (normally to more than your groceries would) taking away precious pennies you could be saving.

Think About your Travel Costs

Petrol to and from work can be expensive, especially if you’re commuting a long distance five days a week. Opt to use reliable public transport (train or bus) instead, or start a lift club with other people in your area and share the cost between you.

Cut out Big Expenses

Swap your yearly island vaycay for a local weekend away, or put off buying that new car you’ve been eyeing up for just one more year. By cutting back on your big expenses you will be adding larger sums of money to your ‘dream home fund’ bringing you closer and closer to making it a reality.

In 12 months, real estate sector will be in a better position: Pirojsha Godrej

Godrej Properties, the property development arm of Godrej Group, on Thursday launched its 35-acre flagship project in Vikhroli in Mumbai, which houses its headquarters and other group companies. Managing director Pirojsha Godrej discusses the company’s plans and overall real estate scenario with Raghavendra Kamath. Edited excerpts:

CRISIL recently said the top 25 property developers are facing challenges in terms of refinancing their debt due to decline in customer advances. What is your take?

There are serious challenges, no doubt. Cash flows are weak because of customer demand environment. Some developers have much more difficulties than others because of higher debt load and decline in customer advances. But we can not put everybody in one basket. Some developers are seriously struggling but some are doing very, very well.

There have been conflicting reports about the pick-up in the Mumbai residential market. What is your take on that?

The demand environment is subdued everywhere. I don’t think there is no demand. Many developers are seeing very good sales. For example, we have done more sales in the first half of this financial year than any other full financial year. For the right developer and right project, demand continues to be good. I am not only talking about us. There have been successful launches by other developer as well. For more full fledged recovery, confidence needs to improve more. Things are on the upswing and for full-fledged recovery, it will take six to 12 months.

Read Full Story: In 12 months, real estate sector will be in a better position: Pirojsha Godrej

7 Steps To A Hot Commercial Real Estate Deal

The demand of both commercial as well as residential real estate property in India increase day by day due to increase infrastructure of India in different sector like information technology, BPO sector many multinational company established business in India. India Ratings & Research has maintained an unenthusiastic to steady outlook on the real estate property industry sector for 2014-15 on the back of continued weak end-user require and unpleasant consumer sentiments.

Most of real estate companies rated the agency have a stable outlook, as the risks impacting the real estate sector have been factored into their ratings. The entities rated at investment grade are either single commercial real estate properties or residential real estate property with long-term lease agreements or residential real estate companies with healthy sales and strong cash flows.