BDA cancels Rs 670-crore layout tender Houseliv

The Bangalore Development Authority (BDA) has finally cancelled the controversial Rs 670-crore tender that was called for the electrical works at the Dr Shivaram Karanth Layout. 

According to the notification published by BDA on March 10, the tender was cancelled “due to administrative reasons”.

While the BDA called for the tenders on February 24, on February 27, had reported that the BDA had floated the tender without seeking approval of the State Pre-Tender Scrutiny Committee, which came into force following “40 per cent commission” allegations in June last year.

The Committee, headed by Justice Rathnakala, had also flagged the issue to the state government and a report on the same was carried in  on March 10. 

It had also expressed concerns over such actions and said that they had derailed the purpose of the committee. 

Real Estate Bengaluru

Property prices going up on Bengaluru periphery

With an increase in post-pandemic demand, property prices in the peripheral areas of the city have gone up significantly.

Realtors say prices have gone up by up to 20 per cent since 2018-19. In Mahadevapura, for instance, land price has gone up from Rs 5,000-Rs 6,000 per sq ft in 2018-19 to Rs 8,000 now. Similarly, in Yelahanka, it has gone up from Rs 8,000 to Rs 11,000.

The pandemic had changed the way people were looking at housing. “Work from home and e-schooling saw many homebuyers shift to the peripheral areas for bigger homes and a better lifestyle,” said Ashish Sharma, city head of a real estate group.

Wider roads and better amenities in some of the newly-developed layouts are encouraging people to shift to peripheral areas, said a realtor from R R Nagar.

“People have realised that there is a need to decongest the core areas. Wider roads, better traffic, and a shorter commute to work have been driving the idea,” said Balamurali Krishna from a real estate agency in the neighbourhood.

Since many IT companies have asked employees to return to office, many youngsters are now looking to buy properties close to the workplace. That is the reason for a rise in demand in Mahadevapura and surrounding areas. Realtors say they have seen a spurt in enquiries over the last six months.

“With people returning to the city, rents have also gone up drastically. This has pushed many youngsters to look out to buy their own properties,” said Suresh Hari, chairman of The Confederation of Real Estate Developers’ Association of India Credai , Bengaluru.

While in areas surrounding RR Nagar, the Bangalore-Mysuru expressway and Namma Metro connectivity have fuelled development. In areas around Mahadevapura, the return to office and progress in metro connectivity have helped. “As metro connectivity became a reality, property prices started shooting up in areas surrounding Mahadevapura,” said Nagendra, who runs a real estate agency. A rise in the prices of construction material has forced prices up though. “From steel to cement, prices of everything have gone up and this has pushed up property prices,” he said.

Though the demand has gone up, not many are keen on selling the properties and this has caused a supply deficit, some experts said. 

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MC Explains: How will Delhi-NCR construction ban affect the real estate sector?

Amid deteriorating air quality in Delhi-NCR the Commission for Air Quality Management (CAQM) has agreed to adopt actions under Stage III of the Graded Response Action Plan (GRAP), including a ban on all construction and demolition activities.

Developers say it will significantly delay upcoming projects while inflating costs across the board, leaving homebuyers in a lurch amid high loan interest rates. However, experts say this will be a lesson learnt for the real estate sector in India. We decode how the move will impact the real estate sector.

The Ministry of Environment, Forests and Climate Change notified GRAP for the first time in January 2017. The Central Pollution Control Board's strategy, which was filed in November 2016, served as the basis for this.

Grap  is an emergency response system that will be put into action when air pollution levels reach a certain point. When the AQI is in the "poor" category (201 to 300), Stage 1 of GRAP is activated. The second, third and fourth stages are to be put in place three days ahead of the AQI reaching the ‘very poor’ category (301 to 400), the ‘severe’ category (401 to 450) and ‘severe +’ category (above 450).

Under GRAP Stage III, all construction and demolition activities are prohibited, except for those necessary for ensuring national security, defence, healthcare, and the development of railways, airports, metro rail, interstate bus terminals, roads, flyovers and other structures. Additionally, mining won't be permitted in the area.

On October 27, the air quality index was 354, on October 26 it was 271 AQI, on October 25 it was 302 AQI, and on October 24, the Diwali day, it was 312 AQI.

The CAQM order on October 29 said, "As per the dynamic model and weather/ meteorological forecast, the overall air quality over Delhi is likely to remain in the Very Poor to Severe category from October 29 to October 30. The air quality is likely to deteriorate and remain in a Severe category from October 31 to November 1 and for the subsequent six days, the air quality is likely to fluctuate between the Severe to Very Poor category."

Due to unfavourable meteorological conditions with slower wind speed and sudden spike in the farm fire incidents, it was considered necessary to implement Stage III of GRAP with immediate effect in the entire NCR, the order added.

How will it affect the real estate sector?

The recent decision on a complete ban on most construction activities might lead to a surge in apartment costs, Amit Goenka, managing director (MD) and chief executive officer (CEO) at Nisus Finance says. "The decision will certainly impact the bottom line of developers but may lead to a price increase as expected supply does not meet current demand. And costs for developers to become compliant with the regulations may have to be factored in going forward," Goenka said.

Additionally, losses incurred during this phase may get passed on to consumers as the builders will try to recoup lost interest costs, he added.

Noida-based Realtor Surendra Khariya said, "Last year when the construction halted due to similar reasons, the projects were delayed for two-three months."

Manoj Gaur, President, Confederation of Real Estate Developers' Association of India (CREDAI) NCR and chairman and managing director, Gaur Group, said the construction ban causes even non-polluting sites to stop work and the workers may leave the city fearing an extended ban. "And by the time, the workers are called back and the construction restarts, already several months will have passed. At that juncture, several prospective homebuyers consider their decisions to buy the project," Khariya added.

As per ANAROCK research, there are over 4 lakh homes under different stages of construction in the Delhi-NCRregion. The impact of a ban on all construction activity in these areas can delay the projects for three-four months.

What solutions do developers offer to tide over the issue?

Developers note that pollution is a growing problem and should be dealt with holistically. Especially in Delhi-NCR, the source of pollution comes from the construction sector as well as from stubble burning and other emissions.

Gaurav Gupta, secretary, CREDAI NCR told Moneycontrol, "In the end, it is the homebuyers who need to wait or pay more money. Mitigating measures like anti-smog guns and windbreakers are being increasingly used to prevent pollution due to construction activities."

Previously, CREDAI NCR had written a letter to Real Estate Regulatory Authority (UP RERA) and Delhi RERA, asking the authorities to include RERA-registered projects in the exempted category lists. Gupta said they are still awaiting a response from the government bodies.

However, Ritesh Mehta, director, JLL, said the exemption or the construction ban cannot be a solution to tackle the problem. "We need to regulate the construction sector and set up committees, even among the developers, to come to a holistic solution together. If done 2-3 years back, today we would have policies and solutions to tackle the recurring problem, especially in Noida," Mehta said. Minimum parameters need to be set to developers today, he added.

Gupta said more than 50 percent of developers in the NCR-Delhi region have started following safer technologies like aluminium formwork construction and pre-fabrication construction techniques that are safer and considerably reduce air pollution.

UP RERA could not be reached for comments.

What do environmentalists say about the construction ban?

The real estate sector is already aware, environmentalists say. Dr T V Ramachandra, a scientist at the Indian Institute of Science, reiterated India needs core policy changes in its construction sector to solve this problem. "Several European countries have tackled this problem using special monitoring devices and site controls," he added.

A research paper from World Resources Institute (WRI) mention several measures that can be taken up for clean construction. "If clean construction methodologies and measures are quantified, and the construction sector chooses to consciously pursue them based on true evidence, blanket restrictions will prove redundant," the research says.

Another Switzerland-based journal mentions, "Optimised construction processes, healthier materials and international agreements and policies such as the Sustainable Development Goals (SDGs) can support the sustainable development of the construction industry across the globe."

Akash Vashisht, a National Green Tribunal (NGT) lawyer, said, "The larger public interest is in improving the quality of the air. At this point, there must be a balance between the builder and the homebuyers, in the case of delays due to halted construction. Additionally, it must not be seen as a setback but should set a precedent for the real estate sector in India."

Experts say today the developers are already aware -- what lacks is the implementation of the policies and are integrating modern-day technologies. "Though GRAP is solving the problems over a short time, we need stringent implementation of the policies, especially in real estate, to have a larger impact on the environment," Vikrant Tongad, another environmentalist added.

Team Houseliv Realty

Real Estate: Office Space Leasing Jumps 26% To 13 Million Sq Ft During September 2022 Quarter Houseliv

Office space leasing in India during the September 2022 quarter stood at 13 million square feet (msf), a 26 per cent jump as compared to the corresponding quarter last year. Vacancy levels declined 30 basis points to 16.7 per cent and the demand is likely to cross 50 msf by the end of the year led by pent-up demand, according to a report by Colliers.

“Industrial and warehousing demand stood at 6.7 msf in Q3 2022, highest since Q1 2021. Delhi-NCR accounted for the highest share at 56 per cent, followed by Pune at 16 per cent share. 3PL operators continue to drive demand with 42 per cent leasing share," said the report, titled ‘reQ Real Estate Quarterly Q3 2022’.

Institutional Investments in the Indian real estate market closed at $1 billion during the third quarter of 2022, a 54 per cent jump YoY. The investment volume in 2022 is likely to cross 2021 levels amid the positive business sentiment. 

Several banks have raised their lending rates following the RBI’s repo rate hike. However, improved business confidence and retail spending during the festive season will likely support the demand activity, the report said.

Ramesh Nair, CEO (India) and managing director (market development-Asia) of Colliers, said, “The Indian Real Estate sector has bounced back sooner than expected if the first nine months of 2022 are anything to go by. Office demand has witnessed a twofold rise YoY during YTD 2022 at 40.6 mn sq feet and is likely to cross 50 mn sq ft towards the year-end. However, concerns about the upcoming global recession might trigger some short-term volatility in the market over the next 2-3 quarters. At the same time, the Indian market is relatively resilient and the growing economy will continue to fuel demand across various asset classes."

The report said real estate due diligence can capture a slice of the 300 mn sqft pie of existing and upcoming commercial office buildings. The top-six cities in India have about 120 mn sqft of ageing Grade-A stock, which is more than 15 years old. Due Diligence can help developers and landlords understand the scope of upgradation and achieve higher traction from occupiers, especially in the prime micro-markets of major cities.

“Modern technologies at workplaces can improve operational efficiency as well as employee productivity. Such an investment can reap remarkable benefits and returns for both, the landlord and occupier. They can look at minimum efficiency reporting value (MERV) filtration up to MERV 15 to improve and balance the air quality, and other recognised standards for acceptable IAQ and ventilation," Colliers said in the report.After a gap of two years, return to offices has gathered momentum with ebbing COVID-19 cases, signifying positive occupier confidence. At the same time, about 74 per cent of the occupiers are looking towards distributed workspacesworkspaces as a strategy to shift from location-centric to people-centric workspaces.

Team Houseliv Realty

Why Karnataka's Mysuru is the next real estate hotspot in India

 Mysore  is the second largest city in Karnataka and is popular for its rich heritage, culture and natural beauty. Because of its favourable climate, it is one of the cities in Karnataka that is expanding the quickest. It is on the verge of rapid growth and development in the coming years. The charming city of Mysuru is quickly becoming a real estate hotspot not just in Karnataka but also across the country. Even though Bengaluru is one of the best places to invest in and will continue to be one, the city's hectic lifestyle, unusual traffic, and exceptionally high pollution levels are causing some prospective buyers or investors to think about investing in real estate in other nearby cities. Because of this, there has been a noticeable rise in the number of families choosing to relocate to the peaceful and secure areas of Mysuru.

1. Bengaluru Mysore Corridor

Also known as the NICE Corridor, this 111 km long private tolled highway is perfectly meant to connect Bengaluru and Mysuru, the two largest cities in Karnataka. This corridor will contribute to a reduction in travel time from the recommended 4 hours to just 90 minutes. With a 10-lane road to Bengaluru and access to flights and trains, Mysuru has enormous potential. In addition to being a paradise for builders, Mysuru is now a popular place for consumers to purchase home plots, apartments, and villas.

The Mumbai-Pune Expressway, which cut travel time between the two cities to two hours, helped Pune pick up speed. This corridor may help Mysuru do the same. This led to the growth of Pune's infrastructure as well as several job possibilities. In the Karnataka city of Mysuru, a similar tale is predicted to surface again.

2. Infrastructure

Mysuru is a developing metropolis that has seen most of its growth to date in the areas along the Ring Road. This meets the housing demands of many purchasers, many of whom were drawn to the vast unoccupied parcels of land that were available across the street by a well-maintained infrastructure and several renowned builders. Real estate in this city has already been touched by the Outer Ring Road; other developments like Film City, NICE Corridor, etc. are anticipated to have an even greater impact.

The city boasts of wide roadways within the city that avoids traffic congestion during the day-to-day commute, which also helps in accommodating a larger size of population and on-road traffic when the city expands in the future. The recently launched Mysuru Airport is a welcome addition to the developing city, which currently operates domestic flight services. An upgrade to international flight services is already in the pipeline.

3. Cost of living

Mysuru is considered one of the most cost-effective cities in India when it comes to the standard of living. The day-to-day expenses in the city are way more economic than most metros in the country. The city offers an excellent quality lifestyle on a very affordable budget. Mysuru city is an excellent place to retire since it has lower living costs than Bengaluru, where people across class segments find it difficult to keep up with the daily cost of living.

4. Knowledge Centre

With the University of Mysuru and other reputable educational institutions, Mysuru has long been a better and more well-known education center. Today, the city is home to several nationally and globally recognised educational institutions, such as Visvesvaraya Technical University on Ring Road and Delhi Public School on Bannur Road.

5. Industrial and IT Boom

Mysuru is a well-planned city with excellent infrastructure that can support the tech ecosystem. Mysuru is growing rapidly and is getting closer to the IT city Bengaluru in terms of development. One of the biggest IT clusters in Karnataka has evolved in Mysuru. The state's second-largest exporter of software is in Mysuru. Infosys, Wipro Technologies, Software Paradigms India, and other significant contributors are contributing heavily to the city's strong growth in the IT sector.

6. Master Plan for Mysore 2031

The plan calls for Mysuru Airport development. The Mysore Urban Development Authority (MUDA) further intends to build a Film City, an international convention centre, and lodging options (hotels) close to the airport. All of these will significantly increase the Mysuru real estate market, particularly in the neighbourhoods around the airport.

7. Cleanest city in India

Mysuru has bagged the title of 'Cleanest City in India' recently and this makes the city more desirable for families and people who are planning to settle down. The city follows a scientific solid waste management system that has resulted in not just better roads, but also cleaner air, clean public parks, and cleaner drinking water, among others.

Eshwar N, CEO of G Square Housing said "One of the most affordable cities in India to live in, Mysuru offers its residents everything they could possibly want at a fraction of the cost of Bengaluru. Everything in Mysuru is far less expensive without sacrificing quality, including basic groceries, restaurant meals, housing, and education. With its fast-developing infrastructure along with rapid Industrial and IT expansions, Mysuru is one of the best places to live a peaceful life and invest for prosperous future returns in our country."

Team Houseliv Realty

Consolidation in real estate gathers momentum; listed companies lap up growth opportunities Houseliv

The ongoing consolidation in Indian Real Estate has gathered further momentum, with established and listed real estate developers continuing to gain more market share in terms of sales and Liquidity. Homebuyers increasingly prefer developers with a sound execution track record and financial position, experts said.

The trend is getting accelerated as access to liquidity in the current market environment, where bond yields have already firmed up and continue to head north, is proving to be a key factor in determining delivery timelines, a concern for homebuyers.

“The property sector has been undergoing a major transformation. The business environment is changing rapidly, prompting all the stakeholders to react and adjust accordingly. We have been able to continuously expand our business portfolio with attractive return opportunities owing to the ongoing consolidation in the market.”

Sunteck recently acquired a 7.5-acre land parcel in Mira Road’s Beverly Park locality through a joint development agreement. The project is estimated to have development and revenue potential of around 2.5 million sq ft of built-up area and Rs 3,000 crore, respectively.

This was the sixth such project acquired by Suntek Realty since the pandemic. It has acquired projects in multiple locations, including Borivali, Vasai, Shahad-Kalyan, Vasind, Pen-Khopoli totalling 25.5 million sq ft, the largest by any developer.

“The real estate sector is witnessing consolidation both at the demand and supply end,” said Abhishek Lodha, MD and CEO, Lodha Group. “We have tied up 14 new land parcels through joint development pacts between March 2021 and June 2022, and the development potential is around 14 million sq ft worth nearly Rs 21,000 crore.”

According to him, homebuyers are willing to transact with branded developers with proven execution capabilities and can be trusted on quality and timely delivery.

Apart from Lodha and Sunteck, Godrej properties  Prestige Properties  and Houseliv Realty  have also been leading the consolidation drive with several outright acquisitions, forming joint ventures, and entering into development management agreements.

Godrej Properties has acquired 12 projects with a development potential of nearly 16.2 million sq ft in the last two years. The company has been leveraging its brand and financial position to tap consolidation opportunities “The average size of the project to be added to the portfolio will probably be 1.5 to 2 million sq ft,” Pirojsha Godrej, executive chairman, Godrej Properties, told ET in May. “But it can vary depending on location and opportunity... A lot of our new projects are in such areas where our economic interest is higher.”
The developer has also been raising funds to drive consolidation with the use of additional capital and to significantly strengthen its development portfolio. Currently, it has a war chest of $1 billion to support its growth plans.
Ratings agency India Ratings & Research expects grade I players to register double-digit, on-year sales growth of around 15% in FY23. It has maintained the outlook on the sector as improving. However, while the outlook is positive for grade 1 companies, it’s negative for non-grade 1 developers, and this is expected to continue.

The formalisation of the sector, led by a raft of policy reforms, is driving fringe players to partner with grade 1 developers for project execution and sales as they command the market. Large real estate developers are also exploring partnerships for synergies in terms of sales, liquidity, branding and business development.

Top real Estate  developers are expected to double their sales over the next three-four years, driven by robust demand, increasing affordability and industry consolidation, CLSA said in a recent report on India’s property industry.

Bangalore Real Estate , Houseliv Realty

Planning to buy a house? Is festive season a good time to invest in real estate @Houseliv

Are you planning to move to your own house or buy a second one? Many homebuyers consider the festive season an auspicious time to buy a house. Real estate as an investment asset class has innumerable benefits if the right location, right developer and the design element are chosen. The festive season of Dussehra and Diwali is considered auspicious for making investments. Livemint spoke to Real Estate Market Expert experts regarding the good time to buy a second house

Houseliv said buying properties during the Festival Season is mostly driven by three reasons: a) It is seen as an auspicious time to invest in something valuable; b) It is also a time when new building projects are launched; c) Real estate developers are known to roll out interesting offers and schemes to attract buyers to their projects. 

But the biggest factor driving people to buy homes today is their experience during the Covid-19 pandemic and lockdown. It has made people rethink their priorities, and thus owning a home has gained importance as it spells comfort and security, added Houseliv Realty.

Buying second home makes sense right now as developers give discounts and other exciting offers during the festive season.

Maharashtra, already the second home markets in Panvel, Alibaug, Lonavala, etc. start witnessing momentous shift in demand with the Ganpati festival. 

Meanwhile, other prominent markets such as Goa, Sindhudurg & Konkan, Nainital, Dehradun, etc. are also enjoying robust demand.  In South markets like Ooty, Nandihills, Bannerghata, Bengaluru, etc are also witnessing pickup in demand.

Houseliv Realty 

Overall the market for gated villas, second homes, farmhouses etc. are growing at a scorching pace.

“Developers and/or Financial Institutions work in tandem to come up with irresistible deals and offers that aid a lot of fence-sitters to close the deal as well as capitalize on the high demand to speed up sales. For the buyer, it becomes imperative that the objective of the investment is clear, as to whether the investment is for recurring rentals, appreciation, vacation stay or retirement home," 

real estate sector has made a tremendous comeback after the pandemic. This trend seems to continue gaining momentum during the upcoming festive season when buyers tend to invest in properties because it is considered to be an auspicious period for home buying.

Real Estate Property Site Bengaluru