17122016-rel-01.qxd 12/16/2016 5:15 PM Page 1 c m y b CHANDIGARH | SATURDAY | 17 DECEMBER 2016 Why Amritsar is an emerging hotspot New mantras to beat demonetisation crunch TRIBUNE PHOTO: VISHAL KUMAR VINOD BEHL A. SHANKAR Amritsar, famous for the Golden Temple, is a major spiritual and cultural centre in India which attracts more visitors than Taj Mahal. On any given day, nearly 1 lakh religious tourists visit the city. Amritsar is the second-largest city of Punjab after Ludhiana, and the most ancient and historic city for Sikhs in Punjab. It is also the most popular destination for non-resident Indians (NRI) in India. The city enjoys a strategic location with good connectivity to prime cities of India and Pakistan, as it is only 28 km from the border of Pakistan. Along with excellent connectively through road and rail transport, the city houses an international airport with a capacity of 150 commercial flights per week, both domestic and international. For the population of 1.21 million (2016) in Amritsar, a 31 km-long BRT corridor is nearing completion stage to ease traffic congestion and improve public transportation in the city. The urban population comprises 34.08 per cent in the district, with 80 per cent of this population based in Amritsar City. Amritsar has a radial and ribbon-style growth pattern, emanating from the city core and expanding towards the northern and the eastern directions. The city’s economic fabric is diverse, with manufacturing and the service sector forming the backbone and about 93 per cent of the workforce engaged in secondary and tertiary services. Historically, the city has been part of international trade routes like the ancient Silk Route from China to Europe. With improvements in the bilateral ties with Pakistan, Amritsar is likely to re-emerge as a ‘Gateway to West’ and prominent trade hub of Northern India. There are approximately 25,000 industrial units in the Amritsar district, with the major commodities of production and export being woolen blankets, embroidered clothes, printed textiles, shawls, carpets, local cuisine perishables, etc. It is also among the 20 focal point industrial estates identified by the state government. Amritsar is the largest grain and commodity trade market of Punjab, supported by strong educational and healthcare facilities which provide ample opportunities for growth of the city. The city is strongly visualised to captivate upcoming investments into the real estate sector in the near future due to following attributes: Emphasis on heritage and spiritual tourism: Increased connectivity Industrial developments to boost economy Top-ranked city in Round # 2 of Smart City Challenge Improving education and healthcare facilities Transformation evident in commercial and retail In Amritsar, the commercial sector is largely in the form of high street retail markets, some organised malls and industrial houses. The city’s commercial market was not significantly office space-driven, and the demand for real estate has by and large been for residential, agricultural and industrial property in past years. Keeping in trend with the organised retail mall culture, Amritsar also has a few specialty malls. This trend has created business opportunities for developers for developing commercial spaces, and has also opened the doors for investments into the retail sector by various retailers. Moreover, as Punjab is inviting the service industry besides its two main occupations of business and agriculture, the demand for residential and commercial properties is also growing in the city. Sensing this, realtors are making a beeline for the city as it gets ready to embrace faster economic and real estate growth. Office space demand for organised Grade A and B spaces on the outskirts of the city’s core market area has Residential Market On A Growth Path The real estate business in the city was stable, though due to frequent changes in norms, property prices remained stagnant for the past 1-2 years. Currently, Amritsar has adequate supply of residential units, with many new township projects launched along the national highway and airport. The primary reason for this inclination is the predominant sentiment in Amritsar favouring land rights. Further, with a number of malls, multiplexes and townships under construction in Amritsar, the demand for residential real estate is expected to remain strong. The old city area along the Civil Lines is an established residential corridor comprising plotted developments, and commands the highest pricing. Other high-end residential localities are Green Avenue, White Avenue, Basant Avenue, Ranjit Avenue and Kennedy Avenue. The prices of plotted development in this region vary in the range of ~35,00060,000/sq.yd. Affordable plotted housing developments in locations within the city which are more than 8-10 km from the Golden temple command rates between ~15,000-25,000/sq.yd. Towards the outskirts of the city along national highways and airport, there are many residential township projects promoted by the reputed national and regional level developers. In this corridor, the prices of plotted developments range from ~10,000-18,000 per sq. yd. and apartment price ranges from ~2,300-4,000 per sq. ft. The residential real estate that has been undergoing prolonged slowdown has been hit further by demonetisation as prospective homebuyers are waiting for the impending price correction in view of drop in demand besides expected cuts in interest rates. On the other hand, debt-ridden and cash-strapped developers are taking several marketing initiatives to lure home seekers in order to lessen their pain of slowdown. Price protection Home seekers, who have of late been taking a back seat in view of the ongoing face off between property developers and homebuyers, have further adopted a ‘wait and watch’ stance post demonetisation, amidst claims by real estate experts that home prices will take a hit in the coming months. In this backdrop, many developers reeling under downturn and facing cash crunch, are chanting a new marketing mantra of ‘Price Protection Assurance, especially in markets like Mumbai & NCR, which are most hit by the slowdown. Under this marketing initiative, big developers of Mumbai like Lodha and Runwal Group and Vatika in Gurgaon, are offering protection to home buyers by way of guarantee of compensation, if home prices go down. Vatika Shield, besides ensuring zero risk of capital erosion, is also offering the facility to exit after three years with been sluggish; a majority of the occupiers prefer to position themselves in Amritsar’s established markets as these provide them better access to their clientele. However, the current outlook has changed drastically by shifting towards uptake of commercial spaces in select micro markets. continued on p3 PRICE TRENDS NOIDA & GREATER NOIDA Location Avg Rental (per sq ft) Avg capital (per sq ft) ATS Greens Gautam Budh Nagar Sector 20 Sector-25 Sector-61 Sector-62 Sector-93 Sector 82 Alpha-I (Gr. Noida) Delta-II (Gr. Noida) Sector 36 (Gr. Noida) Sigma-4 NRI City Omaxe (Gr. Noida) Knowledge Park 5 (Gr. Noida) Chi - Phi Sector Taj Expressway 16-22 11-15 14-17 18-21 16-18 16-17 16-20 12-14 11-14 5-9 6-8 7-9 11-14 5-8 6-8 8-9 9000-13000 3000-5000 15000-17000 6000-9000 6000-11000 5000-12000 7000-12000 4000-7000 3000-5000 3000-5000 4000-6000 4000-5000 4000-7000 2000-4000 3000-4000 1000-6000 Source: PropTiger Datalabs c m y b refund. But in view of the fact that builders are offering this scheme for the first time and there is trust deficit between buyers and developers, its efficacy will be on test. NCR-based Delhi Infratech Limited has come up with ‘Book now, pay after three months’ offer for its flagship residential luxury project – De Nest. Under this scheme the homebuyers can book a property now and pay just 10 per cent of the total amount after three months Protection against delays Collaborative approach Under fire from homebuyers, authorities and courts, post RERA, some developers, especially in NCR, who have been unable to deliver their projects for long, have taken to collaborative approach. In a few cases in Gurgaon and Noida, this ‘settlement scheme’ has been adopted by authorities and courts. Under this mechanism, all pending payments by homebuyers are put in specially opened escrow accounts, related to project sales and project development. the aid of developers to market their homes. Premier property portal Magicbricks.com, has recently introduced, what’s being touted as India’s most advanced property price movement tracker. This first-of-its-kind price flash engine, has come at a time when amidst price volatility, buying and selling has become quite challenging. Making use of advanced algorithms, deep data mining and rich insights, it tracks movement of property prices and helps property buyers to Considering that in the wake of large scale delivery defaults by developers, homebuyers’ money is stuck in projects and prospective buyers are shying away from investing, some developers are now offering protection against delayed delivery. In case of any default in delivery, developers are offering money back guarantee. There are some who are waiving all future demands (EMIs) in case of any casualty of homebuyer. Morgage marketing Hit hard by the slow sales, real estate players like affordable housing specialist Xrbia is chanting a motgage marketing mantra. It has come up with a first of its kind of offer of ‘No Income Proof Home Loan Scheme’ aimed at estimated 400 million people in informal sector who fail to meet income proof requirements of lenders for buying home. Under this marketing scheme, 10,000 prospective homebuyers can reserve 1BHK, costing ~7.70 lakh with down payment of just ~18,790. Those with annual family income of up to ~6 lakh can also avail ~2.20 lakh subsidy under the Pradhan Mantri Awas Yojana. THINKSTOCK These escrow accounts are to be strictly monitored to ensure that funds are not diverted by developers and are used only to complete the particular project to which the escrow account belongs. It may be mentioned that many homebuyers had stopped paying their EMIs to developers of delayed projects, fearing that their money could be diverted or misused by the developers. The new escrow mechanism is particularly suitable for those projects where only small development work is pending and are nearing completion. Tech advantage In these times of hardship, tech tools are also coming to instantly know of any price changes and any good deals available in the market. Sudhir Pai, CEO, Magicbricks.com, said, “There is a lot of uncertainty regarding property prices post demonetisation, and consumers are confused whether they should take any action or hold their decision for now. However, we believe, on the contrary, demonetisation has opened the market for serious property buyers. This is one of the best times when consumers can negotiate best prices and deals with developers.” “For this, they need to constantly monitor the prices of the properties they are interested in and make their move whenever a great deal comes their way. Also, in the current situation, data and information will drive action as it will bring in transparency, trust and confidence. We believe this can be the greatest and most trusted ally of a buyer or investor in today’s circumstances and will be of great value to both,” he added. To help developers and homebuyers in these difficult times when online marketing of homes has already gained acceptability, Facebook has come forward to offer its platform for marketing of homes and developers like Tata Housing has recently made most of this opportunity. In order to ensure that brands make good use of its platform, Facebook has come up with its Blueprint-free creative training modules to create exciting creatives and get an insight into best practices for marketing products. Beating the slowdown, leading developers like Lodha and Indiabulls who have an inventory of ‘Ready for Possession’ homes with occupation certificates, are not just able to successfully market their luxury projects in Mumbai, but are also able to command a premium on such projects.
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