The year 2013 was no cake-walk for the real estate sector in India, though the worst is over. And, the current questions that arise in everybody’s mind is whether the New Year would change the state of affairs?
Experts point out that the year would also get affected by concerns including rising inflation, employment concerns, rupee depreciation, delay in new launches and lax management by experts which haunted 2013.
And, the initial months would be prone to these, whereas the later months would prove to be better, opine industry players.
There is wide spread concern that the customer sentiments would improve towards the second-half of the year, though it is likely to maintain a low-profile initially.
Post the impending general elections, certain changes are anticipated. Builders trying to manage liability amid limited and difficult cash flows, input expenditure and low sales would see a breather by the next year as the economy might take time to respond. Also, in view of the economic concerns, RBI has imposed restrictions regarding allocation of funds.
So, by the end of 2014, housing market is expected to revive to a significant level.
Commercial Real Estate in 2014
With about 25 % decline, in net office space absorption, the year 2013 was no different for the commercial sector as well. The severe economic concerns forced many offices to shut down or stay away from further expansion, resulting in a decline in new commercial launches.
However, the potential of commercial properties was agreed upon and private equity investments were stable in last year. The proposed implementation of REITs (The Real Estate Investment Trusts) further reflected positive sentiments.
There was significant inflow of funds from leased properties. And, the reforms implemented last year are also thought to bring about some changes.
Amid plans to improve the realty sector, what remains a concern is the huge debt that realty firms have earned over a few years. Many of the realty firms have been served notice. In the list of companies with significant liability are premier names like DLF.
The DLF management has made it clear that the company is planning to pay back the debt by this fiscal year.
Companies are trying out different methods to come out of the debt, and projects are constructed based on the market requirements.
Experts point out that the year would also get affected by concerns including rising inflation, employment concerns, rupee depreciation, delay in new launches and lax management by experts which haunted 2013.
And, the initial months would be prone to these, whereas the later months would prove to be better, opine industry players.
There is wide spread concern that the customer sentiments would improve towards the second-half of the year, though it is likely to maintain a low-profile initially.
Post the impending general elections, certain changes are anticipated. Builders trying to manage liability amid limited and difficult cash flows, input expenditure and low sales would see a breather by the next year as the economy might take time to respond. Also, in view of the economic concerns, RBI has imposed restrictions regarding allocation of funds.
So, by the end of 2014, housing market is expected to revive to a significant level.
Commercial Real Estate in 2014
With about 25 % decline, in net office space absorption, the year 2013 was no different for the commercial sector as well. The severe economic concerns forced many offices to shut down or stay away from further expansion, resulting in a decline in new commercial launches.
However, the potential of commercial properties was agreed upon and private equity investments were stable in last year. The proposed implementation of REITs (The Real Estate Investment Trusts) further reflected positive sentiments.
There was significant inflow of funds from leased properties. And, the reforms implemented last year are also thought to bring about some changes.
Amid plans to improve the realty sector, what remains a concern is the huge debt that realty firms have earned over a few years. Many of the realty firms have been served notice. In the list of companies with significant liability are premier names like DLF.
The DLF management has made it clear that the company is planning to pay back the debt by this fiscal year.
Companies are trying out different methods to come out of the debt, and projects are constructed based on the market requirements.
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