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Good Time To Buy Commercial Property

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Good Time To Buy Residential Property

Since prices are at rock bottom, you will get capital appreciation on the property value. These also offer higher rental yields than residential property

For those looking to invest in real estate, commercial property is a better option than residential at this point of time, from the investment perspective. Given the oversupply in the commercial real estate space, prices are currently at rock bottom, as compared to residential property. In Central Mumbai, for instance, a commercial property is quoting at Rs 18,000 per sq feet, while the residential property in the same premises is quoting at Rs 28,000 per sq feet.

Apart from Kolkata and Hyderabad, most of the leading cities are seeing the same trend. Delhi NCR has the highest concentration of under-construction real estate projects in the country with about 33 percent of the total value. Same is the condition in Mumbai, with plenty of commercial properties in places like Andheri (East), Parel and Bandra Kurla Complex

With a stable government at the Centre and the renewed sense of confidence among the industry, there is an expectation that there will be more demand for office space. So, investing in prime commercial property now is a good option. You can get properties at rates cheaper than residential properties and can also earn higher from rental income. So, there is scope for both capital appreciation as well as regular income.

Here are a few pointers on why it is a good investment now and what you must keep in mind before buying a commercial real estate.

Culture of entrepreneurship
Commercial real estate is expected to benefit from the increasing number of new enterprises that are being registered every year. These enterprises are not only overseas-based businesses but also a number of Indian entrepreneurial businesses that have shown a steady growth over the years. Because entrepreneurs are no longer dependent only on foreign players to invest and grow their business, there is a high demand for commercial real estate in most of the Tier-I cities. This is also evident from data by the Reserve Bank of India (RBI), which shows that cumulative loans to commercial real estate increasing with every passing year. In the past six years, the total amount of borrowings for commercial real estate projects has almost trebled.

Not just businessmen, even professionals such as lawyers, doctors, chartered accounts will need office space. To cater to this category builders are building smaller units or dividing their existing property into smaller units. If your budget is not very huge, you can look at investing in such smaller office spaces, which can be later on given out on rent.

Fair valuation of commercial real estate
If you consider valuations of commercial real estate vis-à-vis residential real estate, the residential space has had its bull run. But the commercial property has not had its run since the fall in 2008. A recent report by Jones Lang LaSalle says that “Average capital values in the office sector in India are still 25 per cent lower than their most recent peaks seen in mid-2008. On the other hand, capital values in the residential sector had surpassed their previous peak by end-2011. Given that commercial rental and capital values have bottomed out considerably in most major cities in India over the last couple of years, the commercial real estate is seen with lot of investor interest.” The commercial real estate is a good buy for anyone who intends to have regular monthly income or use the space for his/her own business set up.

Impact of change in government
A clear mandate to the new government has improved confidence incorporates and in global investor companies. Proposed changes in the FDI norms in real estate should augur well and encourage long -term investments in real estate. The change in sentiment is fuelling capital inflows to India. With several foreign companies looking to set up operations in India, they too will require large office space, which will push up demand for commercial real estate in the coming years.

Higher yields
In India, the yields in commercial real estate are one of the highest n the world. While yields from residential properties are between 3-4 per cent, in case of commercial properties it is around 8 percent, and can even go up to as much as 10 percent in some areas.

Yields in commercial real estate are always better than residential real estate. If you are looking for decent rental income to support your passive income and avail wealth tax exemption, then commercial real estate fits the bill. However, capital appreciation in the value of real estate is still much higher in residential real estate owing to pent-up demand.

REITs will make it professional
With the launch of Real Estate Investment Trusts (REITs) commercial real estate is will be managed by a professional Asset Management Company, similar to mutual funds. REITs will create depth, liquidity, and transparency in the market. With the policies still in draft stage, REITs’ guidelines once refined further will the fillip to commercial space.

Investing in a property in which a REIT has already invested is a good idea since the due diligence will be done by the fund and you can be assured of good quality property.

Amenities in the building
In order to get good rents make sure the property has good amenities such as parking space, backup power supply for lifts, fire safety measures, good quality wiring in the offices for running several computers and so on. The infrastructure in the offices, such as seating space and so on, should also scalable so that more number of people can be accommodated if the company hires more staff.

Vacancy
For a commercial property, it is even more important to ensure that it does not remain vacant for too long, than a residential one. So, the location of the property is very important. Choose a prime property that is among the top 10 in the locality to ensure that it does not remain vacant for too long.

With the rise of India as an ideal business destination, commercial real estate is a safe bet for investors looking for attractive yields. With the economy set to grow in the coming years, there will be more demand for commercial properties.

Source: Business Standard

Commercial

Square Capital Becomes The Largest Organized Distributor Of Secured Mortgages In India

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Square Capital Becomes The Largest Organized Distributor Of Secured Mortgages In India

Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards has underlined its market dominance by becoming the largest organized distributor of secured mortgages in the country. It is currently facilitating USD 30- 40Mn (INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, home against property and business loan. Its impressive growth is attributed to the rise in availability of affordable housing in India as well as the increasing consumer propensity to rely on fintech platforms for a full spectrum of financial needs.

Speaking on the recent numbers, Amit Prakash Singh, Principal Partner, Square Capital said Real estate and fintech aggregation are a synergistic match to a vast degree and Square Capital, was able to build on the established best practices of Square Yards to become one of the largest mortgage distributors in India today. We are betting big on affordable housing to drive future growth, particularly with the Pradhan Mantri Awas Yojana offering interest subsidies and of course, the huge number of untapped first-time home buyers that can be catered to in the home loan segment up to Rs. 30 lakh.

Government schemes such as the Pradhan Mantri Awas Yojna which offers interest subsidy between 3-6.5% for loans between Rs.6-12 lakh for EWS and LIG categories and subsidy of 4% and 3% for loans of Rs.9 lakh (for those with income up to Rs.12 lakh annually) and Rs.12 lakh (for those with income up to Rs.18 lakh annually) respectively, are driving consumers to opt for home loans that they can repay easily and fulfill their dream of real estate ownership. In fact, several studies have shown that loans have gone up by more than 20% over the last few years for affordable housing purchases. Square Capital is optimizing this opportunity to the hilt by enabling easier access to credit for potential home owners.

In the absence of any national-level mortgage distributor that has managed to scale up over the last decade, Square Capital has not only been able to generate massive digital leads but is also enabling fulfilment, either digitally or through its hybrid online to offline (O2O) approach.

About Square Capital

Square Capital is a marketplace lending platform that aggregates offers from financial institutions on a single platform and provides end to end fulfilment support in the lending process that includes assessing the credit worthiness/risk of clients, helping them choose the right product from the appropriate lending organization, managing their documentation, advising on professional issues pertaining to taxation & insurance and assisting the client till the entire lifecycle of loan disbursement.

Also Read: Under The First MahaRERA Verdict, Builder To Return Rs.26 Lakhs To Buyer

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Commercial

ASK Group and TVS Emerald Join Hands To Setup Rs 400 Crore Real Estate Investment Platform

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ASK Group and TVS Emerald Join Hands To Setup Rs 400 Crore Real Estate Investment Platform

ASK Group’s Property Investment Advisors, the real estate equity arm, and TVS Motor Company’s real estate wing Emerald Haven Realty Limited (TVS Emerald) have decided to set up Rs 400 crore real estate investment platform.

The raised capital will be spent on several affordable mid-segment projects.

“We strongly believe that affordable and mid- segment market offers huge growth potential and this is in sync with the TVS Emerald’s core purpose of providing better living space to the urban middle class,” said Amit Bhagat, MD & CEO ASK PIA.

“Our endeavour is always to delight customer by fulfilling the aspiration of the urban middle class in their quest for a better living space,” said R. Chandramouli, President, and CEO, TVS Emerald.

The first investment under their partnership will be of developing a 10-acre land parcel having 5,48,000 sq ft of saleable area. It will have an equity investment of Rs 83 crore in Porur, Chennai.

Sunil Rohokale, MD & CEO, ASK Group said, “This platform is poised to get benefited in the heightened regulatory regime of RERA through focus execution and satisfying customer needs.”

Also Read: Chandigarh Brokers Yet To Register Under RERA

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ANAROCK Property Consultants Acquires LJ Hooker’s Indian Operations – Redwoods

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ANAROCK Property Consultants Acquires LJ Hooker’s Indian Operations – Redwoods

Strategic acquisition to boost ANAROCK’s capability in integrated real estate solutions, dedicated design center in Bangalore

Bangalore, August 30, 2017 – Consistent with its focus on becoming India’s leading residential real estate solutions company, ANAROCK Property Consultants Pvt. Ltd. has announced the acquisition of Redwoods, the Indian arm of LJ Hooker, based out of Bangalore. The acquisition was closed today, with ANAROCK absorbing all Redwoods employees.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “The acquisition of LJ Hooker’s Redwoods is in line to our overall business strategy and will help us augment our operations across key southern markets. It will give us unparalleled competitive advantage in offering customized real estate solutions. With its strong presence and unique multi-pronged approach, ANAROCK is decoding unmatched value for both B2B and B2C clients.”

ANAROCK Property Consultants is already redefining the residential real estate services sector in India by offering integrated solutions through a hybrid model of online and offline convergence. The company launched its operations under its flagship brand name of ANAROCK in June 2017 and is well on its way to cross INR 100 crores of revenues for 2017 calendar year. The firm has aggressive plans to achieve INR 250 crores of revenues in 2018.

With a growing team of over 750 professionals, ANAROCK aims to cross 1000 in employee strength by the end of 2017. The company currently operates in all key property markets across India – Mumbai, Chennai, Bangalore, Gurgaon, Noida, Hyderabad, Kolkata AND Pune, with an international presence in Dubai.

About ANAROCK Property Consultants Pvt. Ltd.:

ANAROCK Property Consultants Pvt. Ltd. is one of India’s leading real estate services company having diversified interest across real estate value chain. Anuj Puri, ANAROCK Group Chairman, is an acknowledged thought leader in the Indian real estate industry and numbers among the most established expert on India’s real estate opportunities, both in India and across the globe. With a career spanning over 27 years, Anuj Puri was the former Chairman & Country Head of international property consultancy JLL India.

The ANAROCK Group’s key strategic business units comprise of residential broking and advisory services to clients, investment services, debt, equity and mezzanine funding, and research and consulting. ANAROCK’s residential team consists of the industry’s finest residential real estate professionals who understand the ever-changing consumer needs and market trends.

With its vast experience and expertise in serving the most reputed developers, corporate houses, portfolio investors and individual investors makes ANAROCK India’s pre-eminent residential real estate services firm. The company’s investment arm has built a revolutionary business model of bulk-purchasing residential apartment inventory through a proprietary investment fund. For further information, please visit www.anarock.com

About LJ Hooker:

Established in 1928 by Sir Leslie Joseph Hooker, LJ Hooker has grown to become Australasia’s best-known real estate brand (Galaxy BrandTrack 2015). It is one of the largest residential and commercial sales and property management organizations in the industry with more than 8,000 sales professionals, property managers and support team members in 730 franchised offices.

LJ Hooker has an exciting and impressive heritage of innovation, perseverance and bold decision-making. The company’s strong people-focused culture was established and defined by its founding visionary: Leslie Joseph ‘LJ’ Hooker in 1928. A constant innovator, entrepreneur and devotee of best practices, he changed the way real estate business was conducted in Australia. Today, LJ Hooker is Australia’s best known real estate brand.

About Redwoods Projects Pvt. Ltd.

Established in 2006 with the philosophy of providing customized real estate solutions to clients, Redwoods has expertise in fund management, deal structuring, fund syndication, joint developments and unique transactions. With over 25 million sq.ft. of leasing experience across all major markets, Redwoods have nurtured long-standing relationships with all major developers across India.

Redwoods partnered with BNP Paribas Real Estate in 2008 to jointly provide real estate services in India. The company successfully exited the Joint Venture in 2010 after establishing a successful realty arm in BNP Paribas.

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