Realty set for real good times ahead

The Hindu  May 29, 2014

With the ‘T’ issue resolved and a new govt. in place, construction is expected to shrug off the inertia of the past 4 years and look to better days ahead

It is a new optimism that the real estate sector breathes. Construction activity that had taken a hit in the city and its surroundings is set to pick up and witness steady, healthy growth in the next one year. The gloom of the past four years, industry insiders say, may well have run its course.

From a boom to a nosedive, and to the subsequent piling up of unsold stocks, the construction sector underwent a roller-coaster ride in the last six years. One of the primary reasons for the fall in property interests here was attributed to the protracted separate Telangana agitation.

“We look forward to a new dawn, for stable growth and a healthy, upwardly curve,” says P. Dasharath Reddy, president of the A.P. Real Estate Developers’ Association (APREDA). After the ‘terrible’ times of the last five years, a lot now depends on the new government: its governance would propel construction activity, he feels.

Estimates put housing needs in the city and suburbs at 25,000 new units a year. Most builders say there is very little unsold stock.

“The boom had the inventory going up high and consumption failing to match it. Hence, stocks piled up for a while but it got cleared,” he claims.

Since, there were not many major project launches last year, there could be a shortage of housing units next year, say some.

“Fresh supply (of housing units) in good numbers can be expected in 2016 as we can look forward to a rush for new launches,” says Anand Reddy, executive director of PBEL Property Development. He forecasts a revival by the year-end and also a robust 2015.

“Give six months for the new government to settle down and then the positive momentum will start building up,” Mr. Reddy says.

Telangana Builders Federation president C. Prabhakara Rao rules out the possibility of capital flight from Hyderabad to the new capital to be set up for A.P.

“Speculation has already driven land prices high in cities and towns being suggested as the new capital and those from here will not be keen on investing such amounts,” he argues.

Developers see a possibility of prices rising by the year-end.

“Property prices in Hyderabad are still in the reasonable range when compared to Chennai and Bangalore. Even if there is some appreciation, it will continue to remain affordable,” reasons C. Sekhar Reddy, president of Confederation of Real Estate Developers Association of India.

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Hyderabad poised for new avatar

Source: TOI  May 26, 2014

The city of Hyderabad is poised to acquire a new avatar next week as the common capital of Telangana and residuary state of Andhra Pradesh for a stipulated period of 10 years. 

Hyderabad, founded by Sultan Mohammed Quli Qutub Shah in 1591, has seen vicissitudes of fortune over its 423 years of existence. The city has witnessed the rise and fall of Qutub Shahi Sultanate, brief rule of the Mughals, reign of Asaf Jahi Nizams, the Police Action and aftermath, and the formation and bifurcation of Andhra Pradesh. 

Hyderabad has grown exponentially over the last century, in the wake of the great floods in the Musi in September 1908 that wholly devastated the town, necessitating a massive reconstruction of its civic infrastructure under the Nizams during the 1920s and 1930s. The modern Hyderabad was, thus, born out of the ruins of Musi floods. The formation of AP in 1956 catalysed the growth of the city with the influx of people from other regions of Andhra which were merged with Telugu-speaking areas of erstwhile Hyderabad State. 

Even as early as in 1933, Hyderabad was made a municipal corporation with the enactment of the HMC Act by the Nizam's government. After the formation of AP, the Hyderabad and Secunderabad municipal corporations were merged to form MCH in 1960. Thereafter, in 2007, the Greater Hyderabad Municipal Corporation was constituted by merging erstwhile MCH and 12 adjoining municipalities in Rangareddy and Medak districts. 

Since the 1980s, the city and its environs have witnessed a population explosion, largely due to immigration. Today, Hyderabad ranks as the sixth largest metropolitan city in the country, after Mumbai, Delhi, Kolkata, Chennai and Bengaluru. 

GHMC is the fourth biggest municipal corporation in the country, after Greater Mumbai, Delhi and Bengaluru, with an area of 625 sq kms and population of 80 lakh. However, compared to other metropolitan corporations, GHMC has modest revenues of Rs 2,000 crore annually. To make it a world-class metropolis, Hyderabad would require an annual outlay of Rs 20,000 crore to Rs 25,000 crore. 

The cash-strapped GHMC, however, has projected an ambitious budget for 2014-15, with a total outlay of Rs 4,599 crore, including revenue expenditure of Rs 1,887 crore and capital expenditure of Rs 2,712 crore. 

Many new schemes and initiatives have been envisaged in the budget to give a boost to civic amenities in the twin cities, without raising the tax rates. To balance its budget, GHMC is seeking more funds from the Central Government. 

Since Telangana and residuary AP Governments would be using the civic amenities in the city, which serves as common capital, the GHMC wants liberal grants from both the states. 

Though the current financial year commenced on 1st April 2014, the GHMC could not launch many of its new initiatives and projects since the Model Code of Conduct had been in force in the city from 1st March on account of municipal polls in the state and the general elections. 

Only the routine works were attended to during the last three months, since civic officials were busy with general elections in the twin cities. The food scheme for providing meals at Rs 5 to the poor was launched on a pilot basis on the eve of elections. Now, the GHMC would need to operationalise this scheme fully so that 50 centres are set up across the city limits to provide meals to 10,000 persons a day. 

For provision of safe drinking water in slums and poor localities, about 400 Reverse Osmosis (RO) plants have to be set up quickly so that the residents are insulated from water-borne diseases during the ensuing monsoon. Opening of more night shelters at the main hospitals and other locations needs to be expedited. 

Apart from the new schemes and projects, GHMC would have to continue its focus on improvement of basic civic amenities, particularly, maintenance of roads, parks, playgrounds, street-lighting, storm water drains, sanitation and garbage clearance. Works on new flyovers, roads, parks, community halls and 1,000 public toilets among others need to be launched immediately. GHMC also has to coordinate with the Hyderabad Metro Rail authorities to ensure that the work on HMR goes on apace because the city cannot bear traffic chaos indefinitely. 

Hyderabad MMTS 2nd phase work starts

Eenadu May26,2014

Split boosts Telangana, Andhra Pradesh real estate sector

Source: DC,  May 24, 2014

Real estate transactions in coastal Andhra and Rayalaseema regions, which had been sluggish for the past year, have picked up since March 2014, after the AP Reorganisation Bill was passed in Parliament.  

In the Telangana region, where the business has been moderate for the past 18 months, it has begun to pick up fast in Hyderabad, Ranga Reddy and Nizamabad districts.

Figures from the Seemandhra stamps and registrations department indicate that the highest number of real estate and property transactions was registered in Vijayawada and Guntur, where there is  talk of the new capital being situated.

Growth in the stamps and registration figures was highest in Guntur, at 118.78 per cent, with a total revenue of Rs 1,818.74 lakh in April 2014, against Rs 831.32 lakh in April  2013.

Next are Vijayawada (East) and Vijayawada with 81.29 and 92.09 per cent growth in real estate, with revenue of Rs 1,593.23 and Rs 1,428.04 lakh respectively in April 2014, against Rs 878 and Rs 743.42 respectively in April 2013.

(Read: Realtors predict increased sales, prices in both regions)

Visakhapatnam came next (64.38 per cent), followed by Bhimavaram (60.86), and Kakinada (59 per cent).

In Telangana, though the growth rate was just above moderate, investments were higher. Overall investment in April 2014 in Telangana was Rs 2,828.46 lakh (58.48 per cent growth), while in Seemandhra investment was Rs 2,007.84 lakh with 41.52 per cent growth.

The highest revenue for the stamps and registration department in the undivided state came from Ranga Reddy and Hyderabad (south) districts at Rs 5,827.34 lakh and Rs 2,574.91 lakh respectively.

“Despite political clarity, investors and potential buyers are focusing more on Hyderabad for the reason that the city is in the phase where it’s gradually developing. With major players entering the market, infrastructure in these regions has seen  considerable change and similar attention would be given to its other districts as well,” said Ganesh Vasudevan, CEO, of the website Indiaproperty.com

Hyderabad metro gets rail coaches from Hyundai-Rotem

L&T Hyderabad metro gets rail coaches from Hyundai-Rotem

Source: Business Line  may 21, 2014

L&T Metro Rail Hyderabad Ltd (LTMRHL) has announced the arrival of the first metro train for the project at the Uppal depot here from South Korea made in Hyundai-Rotem plant.

SN Subrahmanyam, Whole-time Director and Senior Executive Vice-President, Construction and Infrastructure, L&T, was a part of the team which welcomed the rolling stock in Uppal depot in Hyderabad.

After review of the project, he emphasised on the completion of the project within the scheduled time, cost and quality.

‘New era begins’

NVS Reddy, Managing Director, HMRL, in a statement, said “It is the beginning of a new era in the transportation history of Hyderabad.”

VB Gadgil, Chief Executive and Managing Director, L&T Metro Rail (Hyderabad), said, “It is a significant milestone for the project and an indication that we are ahead of time in bringing the trains to Hyderabad.”

Subsequent to the rollout ceremony of the first train at the Hyundai-Rotem’s Changwon factory, it was shipped to India in April 2014 after successful completion of all factory acceptance tests.

The train cars were moved from Changwon to Masan Port, Korea and loaded into a ship.

The journey

After travelling for about two weeks by sea in Hyundai Glovis Ship, they arrived at Chennai port on May 9. After clearances, all the three train cars of first train of Hyderabad Metro Rail, were unloaded from the ship and were transported to Hyderabad by road. They were then moved through three individual trailers from Chennai to Hyderabad by road. All the cars reached here today.

The train cars are being unloaded on the depot track and later assembled to carry out the required testing.

The metro authorities expect to commence trial runs on the phase one stretch of 8 km shortly and operations early next year.

Hyderabad Real Estate Market Overview

Source: Briefing wire   15/5/2014

Since the Telangana bill there have been many reviews on how it will impact the economy and real estate sector. Despite being one of the most developed cities in India, Hyderabad went through a general period of uncertainty in the political front. Impact was clearly seen in many industries in the state of Andhra Pradesh. 2014 saw the rise of Telangana and Seemandhra, the twin states after years of political struggle. The bifurcation coupled with the general election further created an ambiguity and in the realty sector. In spite of the different conditions, Hyderabad has emerged as a strong hold of the realty sector today.

2014 will see the real estate industry flourish in the city with many deals and offers for prospective home buyers. The buyers will capitalize on the low prices, pushing sales in the city. The unsold inventory in the city is seen to be sold at competitive prices making way to new projects in Hyderabad. The residential real estate market for now seems to be a buyer centric market. Affordable housing options are many to choose from, improving buyer sentiments. Compared to other metros like Mumbai, Delhi and Chennai where prices are sky-high, Hyderabad with affordable pricing in the market is a refreshing change. One can avail apartments in Hyderabad with a reasonable price band in areas of Miyapur, Gachibowli, Lingampally, Kukatpally etc. These localities boasts of close proximity to the IT hub of the city.

Rentals is also said to improve in Hyderabad with the development of good office spaces. Demand for organized commercial real estate has been stagnant for now, but this will change in the next six to eight months. If buyers are looking to rent or buy a flats in Hyderabad, this is the right time as everything is readily available in good prices, favourable the buyer and the tenant. Currently one can rent a 3BHK apartment or individual house in HITEC city or neighbouring areas like Kompally for as low as INR 16,000 per month. This is very low when compared to other metros in India namely Mumbai, Delhi, Bangalore and Chennai. Kolkata can be considered to be in par with Hyderabad when it comes to low property prices.

HITEC city is the biggest driver of employment and real estate in Hyderabad. IT/ITes sector is said to further grow in the region and the builders are sure to benefit greatly from this. The commercial real estate market is also said to revive with investors gaining confidence after the finalization of the bifurcation.

The Hyderabad realty sector is in its nascent stage if experts are to be believed. Its development is not only because of low prices or political uncertainty. But also because the city offers good infrastructure facilities for its residents. Buses run by APSRTC have mapped the city very well. The upcoming Hyderabad metro rail project will also give the city a five star status. In the next 5 years, we are ready to see a shift in the Hyderabad real estate market. This upward trend is going to greatly benefit the state’s economy and real estate.

Sulabha is an expert in India real estate. She has also authored many studies for builders in Hyderabad and real estate experts.