Indian Real Estate: Swinging High

Indian Real Estate: High Return Seduction

Real estate prices in India continue to remain at an all time
high, quite beyond the reach of many except for a few of
Fortunes Favourites. The last year has witnessed a doubling in
the capital value of real estate in most cities, and
interestingly the increase was not confined to developing
suburbs, but saturated areas as well, with their limited choice
options. Real estate and property consultants continue to
predict upward swinging land prices affirming the boom as a
stable long-term trend. They attest there are more end users
rather than speculators and short-term investors, who are
snapping up deals for a room with a view. In large part, it is,
also, driven by IT / ITES and foreign direct investment, as in
the case of EMMAR-MGF's ambitious project scheduled to come up
in Mohali.

Given that the real estate prices in India are looking fairly
upbeat, as an investor or an end-user looking for the ideal city
to call home or base a new business venture, a look at the
various metropolises might help zero in on a city that offers
the most.

Chandigarh

Cleaner and eminently more liveable than any other Indian city,
the Chandigarh real estate market is peaking, while scaling new
price highs every day. Escalation of land costs by almost 40% in
the last few months is mostly due to high IT / ITES demand, as
well as, the enforcement of the Punjab Apartment Ownership Act
in Mohali this year. Despite a 100% price hike, Chandigarh
remains a hot option with NRIs, making buying property in its
prime sectors akin to looking at Delhi's Jorbagh or Aurangzeb
Marg. Although saturated with limited options, yet Chandigarh
real estate prices continue to increase by 10% each month.

Retail activity on the rise, Rajeev Gandhi Chandigarh Technology
Park proving to be a magnet for IT professionals, biggies like
Spectramind, Wipro, Convergys showing interest, proximity to the
National Capital Region (NCR), property prices in Chandigarh,
Mohali and Panchkula are rising fast, a trend that maintains an
upward trajectory.

The high demand for real estate sustained by a shift towards
nuclear families, has resulted in Mohali and Panchkula seeing a
25 to 40% rise in the last few months, ever since the
implementation of the Punjab Apartment Ownership Act. A 500-yard
plot that was going for Rs. 70-lakhs in April is now selling for
Rs. 1.30-crore at Mohali.

With a promise of high returns, investors and developers have
been circling like sharks snapping up large chunks of land in
the peripheral regions of Chandigarh, Mohali and Panchkula. It
remains to be seen whether an excess of supply works towards
lowering the costs. In the end, real estate prices in the
Tri-city area will ultimately hinge on the quality of
development and infrastructure.

Delhi

Saturated with virtually no land space available for building,
Delhi is experiencing a rising demand for flats, and prices in
Rohini, Pitampura and Mayur Vihar have doubled within the span
of a year. Gurgaon

Gurgaon, part of the NCR is undergoing a severe supply crunch as
present and future development supplies are drying out with most
of them already committed. Some of the recent acquisitions of
office space have been transacted by Ciena, Dell, Regus, ESPN,
new players in Gurgaon real estate.

Noida

Boasting of the finest infrastructure in the country, Greater
Noida is experiencing increased activity in Sectors 56 - 64, its
IT hub. With the new expressway providing easy access to Delhi
and top quality facilities ensure Greater Noida as one of the
fastest emerging preferred destinations for HCL and other major
IT firms. An in place infrastructure i.e. roads, housing, water,
electricity, relatively low real estate costs, large tracts of
land available for built-to-requirement, campus style
developments, Greater Noida is the new IT destination.

Bangalore

India's Silicon Valley, Bangalore continues to retain its
popularity as the best place to set up shop for IT companies,
and as more of them flood in, they are fuelling the demand for
housing and retail development. And, land prices have seen a 75
to 85% since builders shifted focus to Bellary, Surajpur and
Outer Ring roads. The continuing demand for large office space
by IT / ITES, off-shoring / outsourcing, financial services and
banking sectors is adequate testimony of their long-term
commitment to the city. It is a promise that the real estate
market in Bangalore will continue to boom as long as global
firms remain smitten with its charms.

Continuing to attract investors, Bangalore has managed to lure
Vancouver-based Royal Indian Raj International Corporation into
investing a staggering $2.9-billion in a single real estate
project appropriately called Royal Garden City.

Mumbai

As multinational banks, financial institutions and consulting
firms flock to India's business and financial hub, Mumbai real
estate retains its position at No. 15 of being one of the most
expensive real estate in the world either in terms of both
rental and capital value. More so than either Manhattan at No.
20, or Delhi at No. 32.

As long as India is seen as an attractive investment venue by
global and domestic players, real estate in India will maintain
its edge as a high return asset.

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