India Sum up of 2014:
Judging by the spate of new policy measures and announcements over the past few months made by the new Govt., it spells serious business about reforms in the real estate sector. The Union Budget this year augmented hopes and aspirations backed by an epic funding of Rs. 4000 crores for Affordable Housing. In 2014 the Middle Level housing segment in the tag line Rs. 50 lac to Rs. 1.0 crore did well as compared to the luxury segment, especially in Noida & Greater Noida due to a healthy mix of demand-supply. Again from the home buyer’s perspective the extension of tax incentive for housing loans was an attraction for first time home buyers. The decision by RBI to keep the cash reserve ratio (CRR) unchanged at 4% will help improvement of cash flow in the economy.
Within days of assuming power, the government made a bold vision statement of providing “housing for all” by 2022. Other fairly substantive moves include the provision of Rs. 7060 crore program for establishing 100 smart cities, the notification of norms for launching REIT funding by SEBI, efforts to bring in more flexible modifications to the Land Acquisition and Rehabilitation and Resettlement Bill and the easing of FDI norms.
Notable developments include:
- Provision of Rs 7,060 crore for developing ‘100 Smart Cities’, as satellite towns of larger cities and modernizing the existing mid-sized cities
- Allocation to Urban Renewal (infra development) increased from Rs 5,000 crore to Rs 50,000 crore, covering highways, roads, ports, railway lines, manufacturing hubs, dams, canals, irrigation channels, etc.
- Boost to road construction – Investment of Rs. 37,880 crore in NHAI for construction of National and State Highways. 8,500 kms to be completed this year.
- Expressways to be set up along new industrial corridors – Rs. 500 crore for project preparation
- Setting up new airports, inland navigation system, SEZs etc. through Public Private Participation
Nevertheless, the real estate has progressed at a gradual pace annually contributing nearly 6.3% to the nations GDP compared to other sectors in terms of growth and contribution to economy. The ripple effect of the slow moving economy was felt in the real estate sector with decline in absorption and sharp upsurge in supply. The only segment which by far remains untouched was between Rs. 50 lacs to Rs.1 Cr. In key metro cities.
Outlook for 2015:
As a new beginning brings new hopes, so will year 2015 for the sector. Being a part of the country’s continuous growth process, the sector now deserves better attention from government in the form of policy and budget reforms. Incorporation of land and real estate regulatory bill, provision of putting in place single window clearance system, widening of ECB and granting infrastructure status will further boost the sector.
Over the next five years, Indian real estate market is expected to grow at a CAGR of 20%, driven by 18-19% growth in residential real estate, 55-60% in retail real estate, and 20-22% in commercial real estate. KPMG estimates that the real estate sector is expected to grow by 30% by 2015 while the market is expected to touch $180 billion by 2020.
New and emerging real estate corridors – such as Sohna, Yamuna Expressway and Dwarka-Gurgaon Expressway in NCR, Ulwe and Karanjade in Mumbai and Hennar Road in Bangalore are already attracting a beeline of projects, buyers and investors due to the planned infrastructure and speedy connectivity in these locations.
The Delhi-Mumbai industrial corridor is one of the perfect examples of rise in the infrastructure industry which will cover most of the industrial zones with the parallel development of smart cities as well as efficient creation of a complete logistics network.
According Infra status to the industry would go a long way in resolving the issue of funding for real estate projects, reduce the timeline for project completion and thereby help to cut the overall cost of construction. Infra status for housing would help make projects more price-competitive for the end users and give developers the incentive to push for more sustainable construction and take up affordable housing in a big way. Similarly, the implementation of the real estate regulatory bill with minor modifications will pave the way for a more attractive and transparent real estate market. Additionally, with developers having to register all projects with the regulatory authority before commencing construction, customers would be able to track the status of every project.
Overall, the government’s intention to eliminate ambiguities and introduce transparency is creditable. Its implementation will reassure customers and also inspire developers to follow corporate governance guidelines as well as global best practices.
Lotus Greens 2014 and the year 2015 as it comes in :
- Agenda for next year
- Company’s specific Plans for 2015
- Are there any launches in 2015?
- Details on projects to be completed in 2015
- Any other major initiatives
- Lotus Greens launched 4 of its prime projects worth Rs. 4400 crores in Noida and Gurgaon at one go. The launches comprised of premium residential housing, mixed-used developments, luxury gated community living and a township of exclusive low-rise terrace homes. Planning and development is in process for all 4 projects Lotus Arena, Sector 79 Noida, Lotus Isle, Sector 98 offering mixed-use development to the residents, Lotus Parkscape on Yamuna Expressway and Woodview Residences, Sector 89 Gurgaon.
- Lotus Greens focus remains on the mid segment category for 2015, concentrating on giving more than just living spaces. We will be launching theme projects for healthier and more active lifestyles. Lotus Greens desires elevating the spirit of sports in India, thereby securing the responsibility of approx. 500 acres of sports centric developments in the NCR.
- While developing our focus is to be holistic and follow the correct path for favorable geo-centric and sustainability parameters. Efficient planning of sustainable factors in development is imperative to support the Government’s initiative to promote Smart Cities. Sustainability has been our core thrust area from the outset and we firmly believe in minimizing the exploitation of natural resources thereby not impacting negatively on the existing infrastructure. We are associated with GRIHA towards our objective of developing star rated GRIHA green projects.