Neemrana Realty Scene - Lucrative Investment Destination

Neemrana in Alwar region, located off NH 8 is becoming a prominent destination amongst investors for the potential it offers for real estate development. About 110 Kms from Gurgaon, Neemrana while was so far known for its historical prominence has been in news lately for major commercial and projects proposed by Rajasthan government. The launch of Global City and special economic zones and Kundli Manesar Palwal expressway, all these developments make this a very lucrative investment destination. Having visited the site personally and seen the frantic pace of development there, I can say that that this destination is becoming a educational and industrial hub which will fuel demand for real estate for that region itself and has a good potential for some lucrative returns The government of Rajasthan has projected Neemrana as a ‘Global City’ by improving infrastructure and providing room for industrial, residential and institutional set-ups. With fast improving infrastructure and smooth connectivity along the NH-8, Neemrana is emerging as a ‘little Japan’ with the presence of industry majors like Daikin, Nissin Brake, Toyoda, and Mitsui, which have already set up huge state-of-the-art manufacturing facilities here. There is a JAPANESE ZONE there which houses all of these and many more industrial houses to set up there. Which in turn is leading to plans for five star hotel establishments in near future. Apart from the Japanese zone, other industry giants like Parle Biscuits, Hero Moto Corp, Terry-Plus India, Liberty Whiteware, Havells, Tops and Rochees Breweries are running successfully along with other industries in Neemrana within the RIICO (Rajasthan State Industrial Development and Investment Corporation) Zone. Neemrana is being transformed into an education destination with nearly 38 universities receiving sanction to open their institutes here. NIIT, Raffles, Rai University, School of Aeronautics, SMEC are already operational here. The Delhi-Mumbai Industrial Corridor is a $90 billion infrastructure project coming up with the financial and technical aid from Japan, covering an overall length of 1,483km between Delhi & Mumbai. Over the last few years, this town known so far for its historical fort only has been slowly emerging as the next industrial hub. Neemrana is now on the radar of top investors and IT giants as their next business center which has further spurred its growth. The entry of the BPO industry and the Japanese MNCs has played a vital role in taking property prices to unimaginable heights here. No wonder with all these developments, there is a huge spur in residential and commercial activities. The developing zone is turning into a promising real estate destination with modern gated communities, townships, residential complexes, IT hubs and corporate houses. Neemrana’s real estate is being propelled by multiple drivers, with its strong industrial, retail and hospitality base contributing to this in a large measure.

Spotlight - BHIWADI

Bhiwadi lies on NH-8 i.e., the Delhi Jaipur highway. It is in close proximity to Gurgaon and is termed as the Gateway of Rajasthan. Bhiwadi is one of the emerging real estate destinations in NCR. The place is emerging as the NCR's next big industrial hub and has seen growth of affordable residential developments within the last few years. Some of the biggest names in the real estate business have come up with their projects here. This town is a fast-developing Tier II town, providing all the lifestyle facilities of a big city. With high property rates in Gurgaon and Manesar, Bhiwadi has come up as a profitable and affordable locality for real estate investors and buyers. Bhiwadi is in Rajasthan's Alwar district and has an excellent connectivity with eight lane NH-8 through Dharuhera-Bhiwadi bypass road. This town is only about 55 kilometres from the Delhi International Airport, 90 kilometres from Alwar, 40 kilometres from Gurgaon and around 60 kilometres from Faridabad. This area will also be connected with the upcoming Kundli-Manesar-Palwal Expressway which is a future connectivity promised in 2021 Gurgaon-Manesar Master Plan. Therefore, this area holds vast potential for robust growth in the near future. The development that started along NH-8 in Gurgaon has spread to Manesar, Dharuhera and now Bhiwadi, and is likely to go upto Alwar. We feel that this city gives value for money to the investors and the buyers. This development has also increased its pace with the intervention of an industrial hub, i.e. The Rajasthan State Industrial Development & Investment Corporation Limited (RIICO) is aggressively pushing for rapid development and major investments into the town. The infrastructure facilities in the town are increasing with each passing day, and developers have acquired land on both sides of NH-8 where they have launched their plotted developments and group housing projects. With the promise of good employment opportunities, a better standard of living, and good connectivity at very affordable prices as compared to other regions in NCR, this place offers better facilities at affordable prices and is well within reach of the middle class who wish to reside within the NCR. The availability of apartments and independent floors is greater, as compared to plots. The first developer to move in this area was Ashiana Homes. With the rise in demand, the projects like Ashiana Aangan, which were launched at the price range of Rs 2,200 per sq ft, are now selling in the range of Rs 3,400 per sq ft. The prices in this area are still reasonable if compared to other areas of Gurgaon. The property rates here have showed stable to positive values and have witnessed an average hike of 12 per cent per annum since the last 2-3 years. Some top key players in the real estate have come up with their residential projects in the area, like Ashiana who has launched and handed over seven group-housing projects, namely Greens, Bageecha, Gulmohar Park, Gardens, Villas, Rangoli and one senior-living housing society 'Utsav'. Other players are such as Avalon, Nemai, Terracity, M2K, Cosmos, Essentia, Omaxe and Krish Group have also come up with their projects in this area. We feel that the existing selling prices of the apartments in Bhiwadi are still reasonable, i.e., one can get a 2BHK apartment at the price range of Rs 30-40 lakh as compared to Sohna road and Manesar, which would easily cost Rs 60-80 lakh. This area will see a good growth in property prices within the next 3-5 years with the establishment of the industrial area. Bhiwadi can therefore be looked as a good location for long term investors. With an investment period of 2-3 years, one can expect a minimum of 25-30 per cent returns on their investments. Source

Housing prices up 6.7% in Q1: RBI

According to RBI, there has been a 6.7 per cent growth in housing prices across the country in the first quarter of the current fiscal, Reserve Bank said today. "The Reserve Bank's quarterly House Price Index, based on data for nine cities, indicates a Q-o-Q increase of 6.7 per cent at the national level," the RBI macroeconomic and monetary developments report released on the eve of monetary policy announcement said. On a year-on-year basis, the price increase has been recorded at 24.1 per cent, the report revealed. The index takes into account price situations in nine cities - Mumbai, Delhi, Chennai, Bangalore, Ahmedabad, Lucknow, Kolkata, Jaipur and Kanpur, it said. Housing prices in the financial capital grew at a tepid 3.1 per cent for the quarter ended June, while growth in Kolkata was the fastest, at 28.9 per cent, it said, adding Bangalore and Kanpur witnessed a fall. Going by transaction volumes, there was a 6.4 per cent rise on a sequential basis, the quarterly index showed, while on a Y-o-Y basis it stood at 9.3 per cent, it said. Source

Will Indian companies still score ?

With rising prices, stock market crash, rupee depreciating and oil prices hitting the roof, Indian growth story has definitely hit a road block. Foreign investments worth $3 billion were withdrawn from stock market in Q1, recent crash is no encouragement either. However, wasn’t it an expected phenomenon? The success story has been continuing over last 5 years with growth rate an envy of all the other nations of the world, with Indian economy reaching its plateau with increased domestic demands causing inflationary pressures resulting into a bitter halt.
Now, this scenario does sound too grim, isn’t it ? However one must also observe the fact that although India might not witness a impressive growth rate of 9% but she will still be witnessing a strong 7.5% growth rate with the current scenario in this fiscal year.
On a broader scale one can comment that growth in infrastructure is in essence actual economic growth which does seem to be taking a back seat in the current scene. Where India does have its own shares of issues with infrastructure, manufacturing, attracting foreign investments, however the robust & strong sectors like IT, pharmaceuticals and property sectors compensate for them. These sectors are not only generating revenue from overseas markets, however are also able to fulfill huge domestic demand which has come into play with rising salaries.
Now, with the current situation does India still remain any which way attractive to investors? Investors need to focus on areas that are organically growing and are not dependent on government reforms and are not affected with government policies. India will surely be a unique market place witnessing highs & lows in short spans however the consistent growth pattern will be the constant factor assisting investors in their interest in India. The biggest challenge will ofcourse remain to maintain cash flow with lowest debts. Indian companies have on the whole grown even with changes in government policies, which should continue as a trend in future as well.

Improvements in Indian Economy as per latest Morgan Stanley Report

Indian economic scenario is improving as per latest reports from Morgan Stanely While the growth indicators for Indian economy are showing signs of stabilization, the macro economic environment still needs addressing and reforms to kick in, particularly inflation which is affecting Indian economy at a very core level right now The third quarter specifically saw some activity in real estate sector & government projects and witnessed some sequential improvement in regions exports, however the macro environment in its current form is what is hampering the overall growth to a big extent The recent reforms push by government amid the politically unstable environment – allowing FDI in multi brand retail segment, aviation and broadcasting, opening up pension segment to foreign investments and raising the FDI cap in insurance to 49%, are all positive signs and such reforms will lead to positive investment sentiment Having said that, we must be cognizant of the fact that there these will have impact in long run and no quick correction of the fiscal deficit can be expected in very near future Some facts for consideration are as follows :-  The April-August central government expenditure and fiscal deficits have risen by 19.7 per cent and 23.4 per cent respectively, higher than the Budget targets for the full year  Government spending accelerated to 32 per cent year-on- year (YoY) in August even as gross tax revenue growth slipped to 7.9 per cent.  The Wholesale Price Index based inflation accelerated to 7.8 per cent YoY in September, from 7.6 per cent in August, due to the impact of diesel price hike. Retail inflation accelerated to 10.3 per cent YOY in Aug from 9.8 % in July The report further added that no major efforts by the government are likely to manage rural farm workers' wage growth or improve the productivity of these workers and accordingly the "correction in macro stability indicators, particularly inflation, will remain very slow".

For stability, NRIs turn towards realty

Recently an acquaintance, a fund manager by profession, relocated to India to set-up a domestic private equity fund. He had invested in a Mumbai residential property strategically located close to the primary business district and an international school. This investment, done a few years back, helped him crystallise his plans for relocation to India and start his venture without spending time in finding the right location, house and school. What I found most interesting was that he had not even considered eventually relocating to India when he bought this apartment. He had simply done it for investment five years previously. The Way Of The NRI To date, I have not met a single NRI who is not keen to buy real estate in India. Home ownership in this country is one of the most satisfying means available to them to stay connected to their motherland. Very often, such investments in their country of origin help them to maintain their relationships back home while they seek their fortune abroad. Another NRI businessman based in Europe and now relocating to NCR on the heels of the Euro crisis, was seeking to build a local business base here. Achieving this while resettling family on all fronts has not been an easy task for him. He is on the lookout for the ‘best’ location for a residential property in NCR and naturally finds the cost of properties in the prime areas staggering and beyond belief. He had not considered investing in a property earlier. Completely out of sync with the market dynamics back home, he blithely assumed that his foreign-earned savings would make finding a luxurious home a breeze. He was ill prepared for the astronomical ticket sizes that now prevail. Over the past few years, we have noted that NRIs are investing in residential real estate specifically in large Indian cities to build a back-up base in the country. This particularly applies to NRIs with professional/entrepreneurial ambitions who intend to set up businesses in these cities in the future. After the 2008-09 global financial crisis, India has stood out as a showcase example of financial stability, specifically in terms of its conservative banking sector. More than anything else in the past, the crisis caused NRIs to seriously contemplate owning homes in India as their rattled confidence in all things foreign gave way to a yearning for familiarity and stability on both on the personal and professional fronts. Rules Of Engagement NRIs have no restrictions limiting them with regards to how many commercial or residential properties they can own in India. However, there are restrictions on the repatriation of sale proceeds, which is limited to two units. Effectively, this means that NRI face no restriction while investing into commercial or residential real estate in India. However, when a NRI decides to sell and take the money back to the country of residence, he can do so with the sale proceeds of only two units. NRIs can invest into real estate by remitting funds to India through normal banking channels, or by invest through funds in NRE/FCNR/NRO accounts maintained in India. They cannot make payment via traveller’s cheque or foreign currency notes. They are also restricted from making any payments outside India or settling payments through exchange of funds outside the country. NRIs can avail home loans from institutions approved by the National Housing Bank, and loan repayment can be done either through inward remittances, debit to NRE/FCNR/NRO account, via rental income earned in India or by borrowing from close relatives residing in India. NRIs can also avail of home loans from the employer in India, provided specific terms and conditions listed by RBI are met. NRIs can mortgage residential property in India with a financial institution without any approval from RBI and a foreign financial institution with prior approval from RBI. NRIs can rent out their property without the approval of the RBI. Rent received can be credited to NRO/NRE account or remitted abroad. Authorised dealers have been empowered to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIOs who do not maintain an NRO account in India, based on appropriate certification by a chartered accountant confirming that the funds proposed are eligible for remittance and that applicable taxes have been paid or provided for. No one can exactly predict the fate of any currency, or the stability of any economy. Economies are notoriously ‘subject to market risk’ — for instance, no one had expected that west Asia would see political uncertainty a few years back. However, when it comes to personal and career stability, there must be no margin for error. The current trends suggest that more NRIs are taking important decisions with regard to owning residential real estate in India as a bulwark against uncertain times. Source

NRI real estate investment norms simplified

The purchase and sale of immovable properties in India by a Non Resident Indian (NRI) or by a Person of Indian Origin (PIO) is really a very simple and easy affair with not much hassles and problems. For a detailed and authentic answer one should always refer to the Foreign Exchange Management (Acquisition and Transfer of Immovable Properties in India) Regulations, 2000 as amended from time to time. The above regulations have been notified by the Reserve Bank of India vide Notification No. FEMA/21/200-RB dated 3rd May, 2000. Likewise, to get a latest update on the subject the investors may also very carefully go through the latest Master Circular on Acquisition and Transfer of Immoveable Property in India by Non Resident Indians/Persons of Indian Origin which has been issued by the Reserve Bank of India vide Master Circular No.4/2012-13 dated 2/7/2012. Before going further to analyse the different provisions of the law relating to acquisition and transfer of immovable properties in India by Non Resident Indians as well as by Persons of Indian Origin it would be worthwhile to know and understand the legal definition of these two entities as per the Foreign Exchange Management Act. As per Notification FEMA-5 /2000 dated 3.5.2000 as amended from time to time, a Non Resident Indian (NRI) is a person resident outside India who is citizen of India or is a person of Indian Origin. Likewise, the definition of Person of Indian Origin (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who (i) at any time, held Indian passport, or (ii) who or either of whose father or whose grandfather was a citizen of India by virtue of Constitution of India or the Citizen Act, 1995. With regard to acquisition and transfer of property in India by an Indian Citizen resident outside India it is specifically provided that a person resident outside India who is a citizen of India may - a) acquire any immovable property in India other than agricultural/plantation /farm house, and b) transfer any immovable property in India to a person resident in India. c) transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India. As regards the Acquisition as well as transfer of Property in India by a Person of Indian Origin (PIO) the Regulation 4 of the above mentioned regulation specifically states that a person of Indian origin resident outside India may - (a) acquire any immovable property other than agricultural land/farm house/ plantation property in India by purchase, from out of (i) funds received in India by way of inward remittance from any place outside India or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act; (b) acquire any immovable property in India other than agricultural land / farm house / plantation property by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India; (c) acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India; (d) transfer any immovable property in India other than agricultural land/farm house/plantation property , by way of sale to a person resident in India; (e) transfer agricultural land/farm house/ plantation property in India, by way of gift or sale to a person resident in India who is a citizen of India; (f) transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian Origin resident outside India. Article Courtesy