KSA Technopak India Retail Report-2005

Mall developers across the country are creating superior real estate options at a frenzied pace. From 35-40 operational malls currently occupying approximately 6 million sq ft of retail space, India is expected to have over 200 new malls by 2006-end, thereby adding retail space to the tune of 35-40 million sq ft. Further, by 2010, 500-600 malls occupying approx 120 million sq ft are at various stage of planning. Of the 200 malls expected to be launched by 2006-end, about 50% are estimated to come up in 6 metros - NCR, Mumbai, Bangalore, Kolkata, Hyderabad & Chennai with NCR & Mumbai alone accounting for almost 60 of these new malls. However, by 2010, mall developments are anticipated to spread across 60 cities in the country. The fast-paced growth of mall development has been further fuelled by government authorities like the Delhi Development Authority (DDA) beginning to release real estate space for retail development in prime retail areas like Vasant Kunj and Saket in New Delhi. In fact, DDA made a whopping Rs 740 crore from the sale of three plots in Vasant Kunj.

Many mall developers, in a bid to offer distinctive value propositions, are planning specialty malls. These niche developments will emerge as one-stop destinations in their chosen product categories. The Delhi-based Aerens Group is one such exclusive jewellery mall. Further, a number of analogous developments like a Wedding Mall by Omaxe Group, Automobile Mall etc are also in the offing. In line with international trends, Home Malls offering the entire range of building and interior decor solutions are also coming up in various parts of the country including Gurgaon & Kolkata. Concepts like a Toys Mall exclusively for kids and a Factory Outlet Mall offering branded apparel at throw-away prices are also popular in developed economies and are likely to crop up in India.

Disturbing trends

A disturbing trend is the clustering of a large number of malls in a relatively small geographical area. A chief example is Gurgaon where over 20 new malls are likely to become operational in the next two years. This unhealthy concentration of supply in a suburban zone with a limited catchment population will lead to mall developers burning their fingers as their plans are not backed by the requisite planning and market research.

Malls are likely to be the prime drivers of organised retailing revolution in the country. This is especially true in the Indian context as destination high street locations like Fifth Avenue in New York, Champs Elysees in Paris, Oxford Street in London and Causeway Bay in Hong Kong are not likely to develop in India due to the lack of appropriate planning of high street shopping centers. High street locations in India are fraught with problems such as lack of maintenance of common areas, encumbrances on property, absence of single ownership and management, parking hassles, general lack of civic sense, etc. However, as mall developers offer a wide variety of real estate options to retailers with the assurance of guaranteed footfalls, retailers are likely to introspect the viability of stores in high street locations. Further, with the increase in supply, prices are likely to fall. This will, in effect, induce retailers who had hitherto avoided high street shopping centers due to the prohibitive lease rentals, to evaluate establishing presence in these locations. In the long run, both high street retailing and malls are expected to flourish, each complementing the other.

More: expresstextile.com

Retail sector growth fuels speciality malls business

Recently, real estate developer Aerens Group opened its first speciality mall, Goldsouk, for jewellery in Gurgaon. The company plans to set up 10 such Goldsouks over the next five years, each spread over two lakh sq ft on average. Each mall requires an investment of about Rs 30 crore - Rs 40 crore, excluding the land cost.

Real estate developer Omaxe is slated to set up a Wedding Mall in Gurgaon. The Rs 70-crore mall will be a one-stop shop catering to all wedding-related needs over 1.75 lakh sq ft. In a first of its kind venture, Senior Builders is also building a 10-storey Auto Mall in Gurgaon spread over 4.5 lakh sq ft. Likely to be taken to other cities, the total investment in this project is expected to be close to Rs 200 crore.
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Gurgaon, Noida battle for the best suburb tag

Comparison and competition continue between Noida and Gurgaon continues as they prosper into envied destinations for both corporate and residential bungalows.

Grape City India, a software firm, is proud of its sprawling, beautiful campus at Sector 62 in Noida, an industrial sector that has attracted a lot of corporate investment in the last couple of years.

Grape City is a Japanese software conglomerate and their Noida office is the groups major research and development centre.

The management scouted for various locations in Gurgaon and Noida for land to construct their own building when they outgrew their rented office space in New Delhis Kalkaji area.

Ashok Ghosh, President of the companys Delivery Services, says they settled for Noida because of its superior infrastructure. Noida is better than Gurgaon because it has better roads and smooth traffic. The overall atmosphere, infrastructure, and environment are better in Noida than in Gurgaon. The management here is also better. There is less bureaucracy and red tape. So we feel that Noida is a better choice, Ghosh said.

Industry experts say Noida scores over other suburbs such as Faridabad and Gurgaon because of its well thought out urban planning, friendliness of its managing authority and proximity to New Delhi.

Source: webindia123

In the suburbs like Gurgaon, Noida, and Greater Noida, there is a lot of demand for premium property. More and more developers have now started catering to the premium segments.

The base value for residential real estate has now risen to Rs 40 lakh, says Rohit Modi of Ashiana Homes. This in effect means that the buyer whose budget was between Rs 20-25 lakh for a three-bedroom apartment has now been edged out of the market. He can now hope to buy such a property only in Indirapuram and Greater noida where property values are still within the Rs 1,600 per sq ft range.

The issue is not what the per square feet value is today, says Modi. Rather the consumer computes what his repayment capacity is and then purchases what matches his budget.

When single floors were declared illegal in Gurgaon, middle-income end users got pushed out of this market. Developers were offering single floors in the Rs 15-25 lakh range.

Source: IndiaTimes

As the demand for residential properties is getting hot in the NCR area, a new residential destinations is emerging along the Gurgaon-Sohna road.

As many as 10,000 apartments are coming up in area and nearly all the leading developers are launching projects there. Of course, theres a strong commercial reason. More and more people are preferring to shift to Gurgaon as the town now houses the corporate headquarters of more than 350 multinational corporations. Clearly, the walk-to-work concept is in.

Indeed, Gurgaon is emerging as the main hub for IT and IT-enabled services which has spurred the demand for commercial as well as residential properties. The income level of IT professionals is much above the average industry salaries. Since most of the couples earn, they often are ready to own a house in two to three years of working. This class is increasing very fast; therefore the demand supply gap is on the increase.

Arguably, the infrastructure in Gurgaon is currently inadequate. Overall, the infrastructure facilities can be substantially improved only through dedicated efforts by Haryana Urban Development Authority. However, to counter these, most developers are offering amenities such as 100% power back-up.

The state government can also help in developing Gurgaon as an international class city with better planning. This would, of course, require both HUDA to interact more often and sincerely implement measures for creating urban and social infrastructure.

Improvements in the urban and social infrastructure will see a lot of activity and movement in the commercial and residential sectors, besides helping the prices to go up.

Source: IndiaTimes

A taste of Egypt

The retail real estate boom in the national capital region (NCR) shows no signs of slacking. Omaxe, one of NCRs dominant building group, has launched yet another premium apartment building complex with an estimated expenditure of Rs 148 crore.

This one goes by the name of Luxur and is located at South Avenue, Omaxes township on Gurgaons Sohna road. As the name suggests, this apartment complex draws inspiration from Luxor, the ancient Egyptian city.

Five-star hotels are Gurgaons latest fad

AFTER shopping malls, its raining five-star hotels in Gurgaon. With one five-star hotel having recently begun operations and two already under construction, the paradigm shift from retail sales to deluxe hospitality could not have been more marked. If trends are any indication, Gurgaon may very well boast of a dozen five-star hotels in another couple of years.

Till now, Gurgaon was home to two five-star hotels—The Bristol on the Mehrauli-Gurgaon Road and The Trident Hilton on National Highway 8. Recently, Carlton Hotels Worldwide opened a five-star hotel named Park Plaza in Sushant Lok. To add to that, Vatika Group and Today Hotels are also coming up with luxury five-star hotels in Sector 29, billed as Gurgaons City Centre. Gurgaon has a shortfall of around 3,000 room nights per day, which means that these many clients have to be shifted to Delhi hotels each day. With the number of MNCs and corporates spiralling like never before, there is an increased demand from business travellers, says Park Plazas General Manager Rubal Chaudhry, adding that their hotel is primarily targeting the upscale business traveller and not the leisure traveler. Needs of a business traveler are different from a leisure traveller, says Chaudhry. This is substantiated by the fact that Park Plaza has only 45 rooms designed to suit the tastes of on the move senior-level business travellers.

Not all the players going the short-and-sweet way though. Take Today Hotels for example, which is coming up with a 240-room five-star deluxe hotel. Apart from regular five-star facilities, our hotel will offer club facilities to residents of DLF, Sushant Lok and South City areas, says Anil Sobti, assistant manager (commercial) of Today Hotels. Located adjacent to National Highway 8, this hotel will be one of the biggest in Gurgaon.

More:cities.expressindia.com

Looking ahead of the Metros

With the economy looking brighter than ever in the last half decade, individual spending power is at an unprecedented level. As a result, the metro towns have been witness to frenzied expansion. New Delhi, the national capital is also the administrative capital for most multinational companies. Whet-her dealing in IT, Finance, ITES or other BPO activities, they have requirements of huge floor spaces, along with high levels of communication, connectivity and quality.

The NCR developed rapidly because Delhi, with its ancient road plans, over-burdened traffic and high cost of real estate, was not a feasible option to meet the urgent demand. Development in the suburbs became a genuine alternative. Both, Gurgaon and Noida have for some time been on the international map, thanks to the pace with which they have met this demand for both, commercial and residential property. With high-end villas, row housing, townships and apartment complexes for both high-end and budget buyers, they have set a hallmark. Gurgaon, in fact, is growing as Delhis twin city, rapidly developing to become the Manhattan of the region by bringing the tertiary sector within its many IT parks and business zones.

The new trend for the future will be the need-based shift from what we see as NCR to small satellite towns, which will be transformed with the availability of housing loans, plans for malls, IT and industry parks within planned townships. Buyers are looking for a life-style to complement the increasing disposable income. With the advent of single families, people are spending more on premium quality accommodation. Finally, buyers have become selective after consistent exposure to properties built abroad. Quality, timely delivery and high standards of construction, along with add-on facilities are mandatory to cater to this expanding market. The real estate industry is in a highly upswing mode for the past 18 months, and looks set to progress further to expand beyond the mega metros, to the never-seen-before Megapolises, signaling the arrival of the new, developed nation.

More: timesofindia.indiatimes.com

Real estate prices zoom in Delhi, Mumbai

Residential real estate prices in Delhi and Mumbai shot up by nearly 50-60 per cent in 2004. The steepest rise was in Delhi at around 60 per cent, and new colonies in suburban Mumbai saw a price escalation of about 50 per cent, according to real estate consultants Cushman and Wakefield (C&W).

In the Delhi region, there was increased purchase of suburban property like penthouses, the price of which ranges from Rs 1.5 crore to Rs 4 crore in Noida and Gurgaon.

Also, there was strong investment in land — almost 70 per cent of total areas offered — even before projects were launched.

“Earlier, people preferred to put money only after seeing the end product, but they are now willing to invest even before the launch of a project, purely based on developers’ track record,” Sanjay Verma, joint managing director of C&W said.

More: cities.expressindia.com

State Of The Industry

Occupancy witnessed a growth of 10.3 per cent in 2003-04. Average rate increased after a five-year decline, registering a growth of 45.5 per cent from the previous year. However, the large growth may partly be attributed to increases in ARR experienced by survey respondents in the branded hotels category, and those with a larger rooms base.

The central and state governments are encouraging hotel development in all categories, and particularly in the mid-market segment, in preparation for the Commonwealth games to be held in the city in 2010. The National Capital Region is expected to see the development of approximately 17 hotels in various categories over the next three to four years, with approximately 11 new hotels to be in Gurgaon. Due to strong demand, we anticipate occupancy and average rate to grow over the next few years before this new supply comes in. This will be supported by significant infrastructure development in terms of roads and transportation and the (proposed) privatisation of the Airport. The development of new convention centre facilities in New Delhi, as and when this takes place, will further boost room night demand.

More: expressindia.com