The ground’s perking up
The Hindu Business Line, March 22, 2009, page 15
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Unlike the last few months, there are signs of interest in real-estate picking up in March. Even if these may not indicate a revival, they give hope of better times ahead.
--------------------------------------------------------------------------------
R. Balaji
Buyers are interested…
Walk-ins are on the increase…
I have had some bookings happening over the last few days…
Things are not as bad in February-March as they were in the previous months…
These are some of the observations of real-estate developers of residential and IT space, officials at a housing finance company and property consultants. Compared to the last few months, March seems to show some signs of activity in the market in Chennai and some other cities. Even if these are not signs of a revival they definitely indicate enough to give hope of better things to come, they believe.
An official at a leading housing finance institution says developers are definitely reporting an increase in sales across a range of segments. A major IT space developer has, in the last three months, got bookings for a few lakh sq ft in his project. Housing loan enquiries are also more in number than a couple of months ago.
The reason? Possibly, buyers — specifically the end-users — have reconciled to the latest market conditions; maybe they realise that there is value at current price levels and interest rates, as banks have dropped home loan rates. Maybe the price cuts by developers also helped. Why look a gift-horse in the mouth? After the doldrums in December and January, any sign of movement is welcome, say real estate players.
At least, developers’ interest has perked up enough for them to look at launching projects. Take, for instance, Provident Housing’s project launched last weekend — according to a company official handling the project coming up on Old Mahabalipuram Road, buyers have lapped up nearly all of the 518 apartments announced in the first phase. Only about 30 units are left in the project that has been priced in the affordable range — about Rs 18 lakh for a three-bedroom unit. Construction is to start next month.
According to Mr M. Murali, Managing Director, Shriram Properties Ltd, which is promoting a 60-lakh sq ft IT SEZ, Gateway, at Tambaram on the outskirts of Chennai, the company has decided to promote a 600-apartment residential project in the non-SEZ area. It has cut back on the IT and commercial space. Give the buyers value and advantage — location and pricing — and properties will sell, he says.
Across cities
Buyers’ interest is not just restricted to Chennai but also to small cities and other urban centres where properties had not been overvalued and the markets not flooded with projects. Kolkata is the other metropolitan city that continues to see movement of residential space.
Coimbatore and Visakhapatnam also offer potential even under current market conditions, he says.
This is the reason why Shriram Properties is promoting its Smart Homes projects of value housing of 700-1,400 sq ft apartments in these cities, apart from Bangalore, Mr Murali said.
Of the projects planned in four locations in Bangalore, approvals for one with 600 apartments are in place and the project is to be launched on Sunday (March 22). Over the last three months, a soft launch of the projects has seen sales that are nothing to complain about — 360 units have been booked at the Bangalore project; in Visakhapatnam 337 of the 600 units have been sold with the units priced at Rs 2,800 a sq.ft.
Mr Murali attributes the activity in Visakhapatnam to the low supply of quality housing, also the city is seen as the next major option to the State capital. Hyderabad itself is saturated, he said.
In Kolkata, the company has planned over a million sq.ft of residential development. The approvals are in place and marketing plans are being finalised.
Mr T. S. S. Krishnan, COO, Appaswamy Real Estates, attributes the perk-up to the belief that buyers in Chennai realise that prices are not likely to drop further in projects within the city. At one of the company’s project on 100 Feet Road near Koyambedu, bookings are on the increase for a project priced at Rs 5,000 a sq ft. Compared to December and January — months he would like to forget as a bad dream — there is life in the market, he says.
Mr Ajit Chordia, Managing Director, Khivraj Tech Park, a leading developer of IT and residential space, who is promoting Opaline, a residential project on Old Mahabalipuram Road, says customer walk-in is on the increase – 15-20 on weekdays and 30 on weekends. Last year-end it was down to single digits on weekends and even less on weekdays. Sales have also perked up, he said.
Some life in IT
Mr Chordia, who has also promoted the 1.8 million sq.ft Olympia Tech Park, one of the largest IT developments in Chennai, said there is a definite increase in enquiries for IT space. Leading MNCs in IT and telecom are looking for quality space, he said.
According to Mr S. Salaikumaran, Director and COO, India Land and Properties Ltd, the project has seen over 6 lakh sq ft being leased out over the last three months.
Enquiries have been up in the last couple of months as compared to the previous months.
There are mixed reactions to the movement seen in IT space leasing. According to market sources, the movement seen in IT space is largely driven by companies taking advantage of the drop in lease rates. Not necessarily, said Mr R. Murugesan, Chief Operating Officer, Shriram Properties.
At the Gateway SEZ, in February, the facility saw enquiries for two “large-scale leasing” though the names cannot be divulged, he said. IT leasing is not an “everyday affair” like residential sales.
But definitely, enquiries are up and they are a mix of companies expanding and new space requirement and those exiting high-lease rents to take advantage of competitive rates, he said.
The Hindu Business Line, March 22, 2009, page 15
--------------------------------------------------------------------------------
Unlike the last few months, there are signs of interest in real-estate picking up in March. Even if these may not indicate a revival, they give hope of better times ahead.
--------------------------------------------------------------------------------
R. Balaji
Buyers are interested…
Walk-ins are on the increase…
I have had some bookings happening over the last few days…
Things are not as bad in February-March as they were in the previous months…
These are some of the observations of real-estate developers of residential and IT space, officials at a housing finance company and property consultants. Compared to the last few months, March seems to show some signs of activity in the market in Chennai and some other cities. Even if these are not signs of a revival they definitely indicate enough to give hope of better things to come, they believe.
An official at a leading housing finance institution says developers are definitely reporting an increase in sales across a range of segments. A major IT space developer has, in the last three months, got bookings for a few lakh sq ft in his project. Housing loan enquiries are also more in number than a couple of months ago.
The reason? Possibly, buyers — specifically the end-users — have reconciled to the latest market conditions; maybe they realise that there is value at current price levels and interest rates, as banks have dropped home loan rates. Maybe the price cuts by developers also helped. Why look a gift-horse in the mouth? After the doldrums in December and January, any sign of movement is welcome, say real estate players.
At least, developers’ interest has perked up enough for them to look at launching projects. Take, for instance, Provident Housing’s project launched last weekend — according to a company official handling the project coming up on Old Mahabalipuram Road, buyers have lapped up nearly all of the 518 apartments announced in the first phase. Only about 30 units are left in the project that has been priced in the affordable range — about Rs 18 lakh for a three-bedroom unit. Construction is to start next month.
According to Mr M. Murali, Managing Director, Shriram Properties Ltd, which is promoting a 60-lakh sq ft IT SEZ, Gateway, at Tambaram on the outskirts of Chennai, the company has decided to promote a 600-apartment residential project in the non-SEZ area. It has cut back on the IT and commercial space. Give the buyers value and advantage — location and pricing — and properties will sell, he says.
Across cities
Buyers’ interest is not just restricted to Chennai but also to small cities and other urban centres where properties had not been overvalued and the markets not flooded with projects. Kolkata is the other metropolitan city that continues to see movement of residential space.
Coimbatore and Visakhapatnam also offer potential even under current market conditions, he says.
This is the reason why Shriram Properties is promoting its Smart Homes projects of value housing of 700-1,400 sq ft apartments in these cities, apart from Bangalore, Mr Murali said.
Of the projects planned in four locations in Bangalore, approvals for one with 600 apartments are in place and the project is to be launched on Sunday (March 22). Over the last three months, a soft launch of the projects has seen sales that are nothing to complain about — 360 units have been booked at the Bangalore project; in Visakhapatnam 337 of the 600 units have been sold with the units priced at Rs 2,800 a sq.ft.
Mr Murali attributes the activity in Visakhapatnam to the low supply of quality housing, also the city is seen as the next major option to the State capital. Hyderabad itself is saturated, he said.
In Kolkata, the company has planned over a million sq.ft of residential development. The approvals are in place and marketing plans are being finalised.
Mr T. S. S. Krishnan, COO, Appaswamy Real Estates, attributes the perk-up to the belief that buyers in Chennai realise that prices are not likely to drop further in projects within the city. At one of the company’s project on 100 Feet Road near Koyambedu, bookings are on the increase for a project priced at Rs 5,000 a sq ft. Compared to December and January — months he would like to forget as a bad dream — there is life in the market, he says.
Mr Ajit Chordia, Managing Director, Khivraj Tech Park, a leading developer of IT and residential space, who is promoting Opaline, a residential project on Old Mahabalipuram Road, says customer walk-in is on the increase – 15-20 on weekdays and 30 on weekends. Last year-end it was down to single digits on weekends and even less on weekdays. Sales have also perked up, he said.
Some life in IT
Mr Chordia, who has also promoted the 1.8 million sq.ft Olympia Tech Park, one of the largest IT developments in Chennai, said there is a definite increase in enquiries for IT space. Leading MNCs in IT and telecom are looking for quality space, he said.
According to Mr S. Salaikumaran, Director and COO, India Land and Properties Ltd, the project has seen over 6 lakh sq ft being leased out over the last three months.
Enquiries have been up in the last couple of months as compared to the previous months.
There are mixed reactions to the movement seen in IT space leasing. According to market sources, the movement seen in IT space is largely driven by companies taking advantage of the drop in lease rates. Not necessarily, said Mr R. Murugesan, Chief Operating Officer, Shriram Properties.
At the Gateway SEZ, in February, the facility saw enquiries for two “large-scale leasing” though the names cannot be divulged, he said. IT leasing is not an “everyday affair” like residential sales.
But definitely, enquiries are up and they are a mix of companies expanding and new space requirement and those exiting high-lease rents to take advantage of competitive rates, he said.
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