India Inc India Inc: Wednesday, 13 July 2016 12:19

Realty Corner with Deepak Varghese - Silver lining in sight for the Indian realty sector?

India’s commercial property segment may be in for some good news but the residential segment seems to be lagging behind. Here is an overview of some key developments that will determine future growth in the country’s property market.

The months of April and May have been good for commercial leasing across major locations, reflecting an uptick in commercial activity.

Commercial projects have low appetite for funding by institutions as an exit from such loans are subject to the vagaries of leasing. Most of the developers have gone slow in developing commercial projects and some of the cash-rich commercial property developers, like RMZ and Embassy, have been buying commercial properties from Unitech, Essar and DLF, besides mega funds like Brookfields. All in preparation of Real Estate Investment Trust (REIT) listing, which recently had yet another positive change by the regulator. Under the new norms, REITs can now invest up to 20 per cent of their fund corpus in under-construction projects, compared to the earlier cap of 10 per cent.

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