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NRIs shaping up Indian real estate industry Date : Dec 15, 2014
Dubai — Luxury properties, green buildings and eco-friendly homes are gaining momentum among non-resident Indians, or NRIs, that will shape up the future of India’s real estate industry. The exhibitors, developers and participants of the Indian Property Show, or IPS, said NRIs, who also opt for the affordable housing concept, will be playing a major role in boosting the property sector as the current demand in the domestic market is weak. “Undoubtedly, there has been a slowdown in Indian market for last 12 months or so,” Nishant Singhal, director for strategy and International business at Investors Clinic, an Indian real estate consultancy with offices in Dubai, told Khaleej Times at the IPS, which concluded in Dubai on Saturday. He said developers are offering attractive discounts in the form of freebies like modular kitchens, air-conditioners and woodwork to prospective home buyers in the country or abroad. “They are also offering special payment plans like subvention schemes and possession linked plans which results in discounts ranging from five per cent to 15 per cent,” he said. Cyrus Engineer, head of sales and marketing at Shapoorji Pallonji Real Estate, said with the new and stable government in the country, NRIs are more confident about the growth of the Indian economy, thus making India the most suitable option for property investments. With an improvement in overall sentiments and positive announcement for real estate, market and realty index have shown an upward trend. Currently, offices and retail shops have been generating a rental income of around nine per cent to 11 per cent, he said. “The capital appreciation has been around 3.5 per cent annually where as in terms of residential market Bangalore, Pune, Chennai and Kolkata are expecting appreciation due to increased demand,” he said. Green, eco-friendly buildings A spokesperson for Artha Property said the current political scenario is very stable in the country and the real estate market is bound to pick up soon. “There are a lot of positive signs in the industry and the growth will be phenomenal. We are also waiting for a regularised market, where it is easier for a consumer to go ahead with reputed builders.” “NRIs form around 10 per cent of our customer base, we have offices in Dubai and the US. Our strategy is to reach out to each individual NRI personally to gain their confidence on the projects. It is very important to have a local presence in NRI markets,” the spokesperson said. Hiral Sheth of director sales and marketing at Sheth Creators, said property developers consider NRIs an important segment of housing market as they set the trends in the industry. “Believing the NRI preferences, a lot of developers have started roping in brands to build uber luxury properties with palatial amenities and facilities all under one roof. The luxury real estate segment is witnessing utmost appreciation in Mumbai.” She said green buildings are also gaining momentum as it promises to change the course of its construction industry. The share of green buildings in this construction boom could be as high as 20 per cent and is aiding in appreciation of various properties in the city as well as the country. Eco-friendly homes, as a concept and product, are at a nascent stage in India. The awareness level is much higher in the case of commercial and residential projects. “Having said this, we have started getting enquiries about such residences. As consumers become increasingly aware of the advantages of living and working in an eco-friendly environment, we will see a gradual increase in interest in such properties,” Sheth said. Sanjeev Birari, head of International sales, Mantri Developers’ rep office, said the trend when it comes to Indian real estate, NRIs take centrestage especially when the rupee depreciates. “The foreign exchange that they tend to funnel into the sector increases significantly when the rupee slides. In times of rupee volatility, bank institutions and developers tend to announce various schemes aimed at attracting NRIs.” “The reason why more and more NRIs are choosing to invest in Indian real estate instead is because they are now aware that this is the only route that assures them of optimal benefits. As long as they maintain a broad investment horizon and have chosen their properties well, the capital appreciation on real estate translates into multi-fold that put all other asset classes in the shade,” Birari said. Popular destinations Singhal said NCR, Bangalore, Chennai and Pune continue to see good momentum as these cities are seeing maximum job creation. Referring to the Naukri.com job index, he said Bangalore saw incremental employment generation of over 20 per cent in October 2014. Engineer said Bengaluru is amongst the most preferred cities in terms of investment for NRIs who are planning to settle down in India in near future. A booming IT sector, cosmopolitan culture and favourable weather makes Bangalore a perfect destination for property investment, he said. Birari said demand in the housing segment is likely to remain tepid in cities such as Mumbai, Chennai and NCR. A notable exception is Bangalore, where the premium market is “expected to remain active”. “Due to the development of the metro, there are many builders coming up with new projects that will bring significant changes in the vicinity of the metro pathway. With the completion of the metro project, the real estate prices are expected to soar up by 25 per cent in the next five years.” An official at Artha Property said plotted development investment is a must for NRIs and it is very important for them to go with reputed builders. “The market is flooded with a lot of small time players where your hard-earned money may get stuck. Go with a good brand which offers value for money.” Singhal expressed similar views and said NRIs are always interested in buying properties from A-category developers, who have good delivery history. “NCR, Bangalore, Pune and Mumbai continue to be hot favourites for NRIs. I would advise NRIs to look for projects which have all approvals in place and are funded by big banks like HDFC, ICICI and public sector banks like SBI and PNB,” Singhal said. muzaffarrizvi@khaleejtimes.com Source And Courtsey By :- http://www.khaleejtimes.com/biz/inside.asp?section=uaebusiness&xfile=/data/uaebusiness/2014/December/uaebusiness_December178.xml |
  
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