…in Gurgaon for Rs 20 lakh? If not, what are the rates for plots there, and would this be a suitable investment option?
Nitin A Vohra, Ghaziabad
The current rates at Gurgaon range between Rs 3,200-6,000 per sq ft. At an average rate of Rs 4,000 per sq ft, a 1-BHK flat of 800 sq ft would still cost you above Rs 30 lakh. Adjoining areas like Faridabad and Ghaziabad would still offer you properties within your budget. As for the price and feasibility of a plot there—though Gurgaon’s property prices are stabilised, they will rise again over the long term. The prevailing market rates for plots there range between Rs 31,000-36,000 per sq yd.
Would you recommend buying real estate over investing in the stock market? Or are both routes more or less equally balanced in terms of benefits and drawbacks?
Abraham E. Pinto, Mapusa (Goa)
Historically, over a longer term, real estate provides returns that are comparable with returns on equities. However, the volatility in prices of real estate is lower than equities leading to a better risk management to return trade-off for the investment.
I am eager to invest in Maharashtra’s new boomtown—Pune. My budget would not exceed Rs 35 lakh, however. I have been told that Chakan or Hinjewadi would be ideal places for investment. What are the rates and prospects there, and how would you advise me?
Nilkanth Mhatre, Airoli (Navi Mumbai)
Chakan is witnessing a lot of industrial and residential development. The demand for property is driven by investors as well as end users and the rates there range from Rs 1,800-2,000 per sq ft. Appreciation potential is between 10-12% per annum. The rates at Hinjewadi are in the range of Rs 3,200-3,500 per sq ft.
There are many townships coming up in this IT-centric area, and you will still be able to buy a decent flat there within a budget of Rs 32-36 lakh, depending on the project you select. The rates are moving upwards steadily.
I am trying to track the investment pattern of real estate investors in India for my thesis. There does not seem to be any discernible pattern, though, maybe because the market has been much disorganised so far. Could you give me some insights into this? Who are investing the most?
Abhinav Karandikar, Mumbai
The two most active investor segments are High Net Worth Individuals (HNIs) and Financial Institutions. Both these segments are particularly active in commercial real estate. While the institutions like HDFC and ICICI show a preference to commercial investment, the high net worth individuals show interest in investing in residential as well as commercial properties.
Apart from these, is the third category of Non-Resident Indians (NRIs). There is a clear bias towards investing in residential properties than commercial properties by the NRIs, the fact could be reasoned as emotional attachment and future security sought by the NRIs.
As the necessary formalities and documentation for purchasing immovable properties other than agricultural and plantation properties are quite simple and the rental income is freely repatriable outside India, NRIs have increased their role as investors in real estate.
I understand that Greater Faridabad in Delhi NCR offers good returns to investors over longer periods. I wish to buy a property there purely for investment reasons, not for self-use. Would you suggest that I go ahead with this?
Baldev Kasitha, Jhansi (via email)
You have heard correctly—Greater Faridabad is indeed a lucrative investment destination in the medium-to-long term, especially with the coming of the FNG (Faridabad-Noida-Ghaziabad) Corridor. This corridor will handle a major amount of commercial traffic. There are a number of major developers planning group housing and commercial projects in Greater Faridabad and you will see significant appreciation in the next three years.
I have not made any kind of real estate investments so far, but would now like to put down around Rs 25 lakh of my savings in Kundli near Delhi. I understand that the NCR region is overall good for returns on property investment. Do you agree?
Jhumur M. Bhattacharya, Kolkata
Not entirely. Property investment potential in the NCR is not growing uniformly. Kundli, for instance, makes sense only in terms of long-term investment. At present, the prices in this entire sector have stabilised. Faridabad and Ghaziabad are better options, since growth is still a current phenomenon there. The Kundli-Manesar-Palwal Expressway will open up more investment potential for Kundli, but this is still in the future.
Whenever names like Wal-Mart are mentioned, the Indian retail industry starts worrying about the entry of foreign players into the market. I would have thought that this would be a sign of welcome progress. I believe your firm handles the highest number of large retail space transactions—what is it about foreign players that bothers Indian retailers?
Hamid Barafwalla, Gulbarga
Though true at one time, I cannot agree that this is the general case anymore. Many large Indian players are looking forward to the increased competitiveness and are, in fact, planning proactively to leverage the advent of foreign giants into the industry. Others, however, do still worry about global retail giants dominating the local landscape, as they possess a lot of financial muscle vis-à-vis the Indian retailers. These retail giant houses can bring their better managerial practices and IT-friendly techniques to cut wastage and set up integrated supply chains to gradually replace the presented disorganised and fragmented retail market.
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