Overpriced real estate markets in the world

By Vipin Agnihotri

The India street is back again with valuable information for their readers. This time around we will take a look at world’s most overpriced real estate markets.

Monaco

Monaco is all about luxury. Monaco is quite popular for its "tax haven" status. In my opinion, Monaco's real estate market has nowhere to grow but up--or up. Monaco's present plan to expand into the sea by building an artificial peninsula should take off some price pressures.

Rome

The real estate market of Rome is experiencing a slowing rate of return. In my opinion, prices are appreciating in the Roman city center, but the cost of each dollar of appreciation is quite costly in nature. In addition, 14.6% transaction fee premium on buying property doesn't help either.

Paris

Similar to lots of European cities the capital costs associated with buying a home in Paris are boosted by high transaction tax on buyers (11.5%) and sellers (4.8%).

Madrid

According to experts, rental yields as a percentage of cost in Madrid have been minimized by half over the last seven years. This is a pure case of price bubble developing.

Los Angeles

According to many, Los Angeles is the least affordable housing market in America. Despite higher costs in San Francisco and Manhattan, L.A.'s overheated market was built up mainly due to speculators who subsequently exposed it to the credit issues presently dogging the market

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Commercial activity moving to the Tier-III cities in India

By Vipin Agnihotri

Increasing realty costs in the metropolitan cities of India has seen commercial activity move to the Tier-III cities. It has come into the notice of The India Street that property prices in cities like Agra, Jaipur and Lucknow corrected sharply by around 20 to 25 percent following increase in the interest rates in the last six months. All this has happened due to gap in demand and supply in these cities.

The pivotal factor here is that although supply increased in the last two or three years, no fresh demand generated as hardly any new commercial establishments came up in the Tier-III cities. In my opinion, at the first place due to boom in real estate market, investors invested in these products, as the cost of the fund was low. But with the rise in interest rate, investors are finding it real tough to invest in the realty assets. This in turn means that the developers are also finding it tough to sell their project in the Tier-III cities.

According to experts, those investors who had invested in real estate sector earlier want to exit. This is because of the simple reason that there not many end users in the Tier-III cities. But signs are that the hard days would soon be over in these cities. “With the increase in rentals and cost of labor in Tier-I and Tier-II cities, Tier-III cities have emerged as alternative commercial centres where off-shoring facilities could be shifted,” pointed out Rahul Mahajan of Rahul associates.

The recent survey has come to the conclusion that whilst all the Tier-III cities provide for prospective cost arbitrage opportunities for off-shoring facilities, the development and demographic profiles vary substantially across the locations, giving different business risks.

The only downfall with these cities being the non-availability of top-notch telecommunication infrastructure and big pool of suitable professionals. There is no doubt that infrastructure support, governance, cost of living, quality of life, operating cost, would determine the attractiveness of a location to emerge as an alternative commercial center. Plenty of small towns and cities builders are guaranteeing returns through rentals on the investment after completion of the projects. However, in my opinion if Indian economy continues to grow at 8 to 9 percent per annum, the commercial activities in the Tier-III cities are bound to pick up.

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Nariman Point Real Estate Values Still Going Up

By Vipin Agnihotri

It was once the nerve centre of all corporate activity until it collapsed after the property market crash over a decade ago. But at this point of time, Nariman Point- the Mumbai’s first commercial business district is not only back on its feet, but its real estate seems to be once again booming.

When I visited Nariman Point yesterday, I realize that there is virtually no office space available here. It’s quite surprising because barely two years ago there was 25 percent vacancy in most of the buildings here.

“Between January and December 2006, property prices and rentals in Nariman Point have appreciated by 70 percent to 80 percent. There is no availability for large floor space offices since the last six months. Only a few small offices 500 to 2000 sq ft in size are available,” pointed out property consultant Kulshum Mustufa.

Few of the experts are expecting the all time high record of a Nariman Point property transaction to be broken in the coming months. It is worth mentioning in this regard that in October 1995, at the height of the then raging escalating property prices boom, the prime real estate of Nariman Point recorded two transactions at the rate of Rs 38,000 a sq ft in Maker Chambers.

It has come into the notice of The India Street that from Nariman Point to Malad and Powai, rental values have appreciated because of limited supply of office space. Theoretically speaking, space taken up by real estate funds, investment banks, insurance and corporate sectors has led to a significant drive for rental values for grade A quality space.

Prices in Nariman Point, with no new development, have sharpened 100 percent over 18 months. At present, lease rentals here are in the range of Rs 225 a sq ft to Rs 275 a sq ft. Point to be noted here is that at the beginning of the year it was around Rs 100 to Rs 250 a sq ft. Reclaimed from the sea in the 1970s Nariman Point was one of the most costly real estate enclaves in the world. During the property boom in the early 1990s, average property prices here were in the region of Rs 25,000 to Rs 30,000 a sq ft.

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India Mall Boom – Will it lead to a Mall Bust?

By Dr Suvrokamal Dutta

India is all set for a boom in big format malls. It has come into the notice of The India Street that 20 such malls are planned through the country, each covering an area of over 1 million sq ft, are at various stages of construction.

According to sources, in the NCR region, Unitech’s Great India Place is coming up with retail space of 1 million sq ft. In addition, DLF too is building a 1.5 million sq ft mall on 14 acres in Sector 18, Noida.

Theoretically speaking, DLF’s Mall of India along NH-8 in Gurgaon will be a 3.6 million sq ft mall spread over 32 acres. Initial signs are that the Mall of India will have a big entertainment area, big city town squares, perfectly zoned and giving a total retail experience, besides foods and beverage offerings.

If company sources are to be believed, DLF has plans for 1.5 million sq ft plus malls in cities like Mumbai, Ahmedabad, Baroda, Jalandhar, Pune and Hyderabad in the coming years.

Furthermore, Ambience’s Ambi Mall in Gurgaon is a 1.8 million sq ft shopping mall and Omaxe Connaught Place in Greater Noida has a total build-up area of 1.9 million sq ft.

On the other hand, three malls being developed in Vasant Kunj in Delhi who will have a common corridor linking them all. As a cluster, these malls will have a combined space of 1 million sq ft.

“In Mumbai, at least eight malls covering an area of over 1 million sq ft each are being developed,” pointed out Amit Bhanot, noted business journalist based at India. To start with, there is R-Mall at Ghatkopar, and then two 1 million sq ft plus malls have been proposed in Thane. Orchid is planning another one in Dahisar. Then there is the 1.7 million sq ft Nirmal Lifestyle at Mulund, which is by the way half operational.

Talking about Bangalore, at least three malls with 1 million sq ft of space are under development. Ludhiana will soon have a 1.6 million sq ft mall by Today Homes. In terms of statistic, India is presently estimated to be a $230 billion industry, of which organized retailing makes up 3 percent or roughly $ 7 billion. Organized retail is expected to grow at the rate of 25-30 percent per annum and is projected to attain a size of $23 billion by 2010.

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Chennai Real Estate to Appreciate by 10% over the next 12 months

Chennai is a blend of historic and modern, traditional and advanced urban elements co-mingled in a unique way. The growth of Chennai into one of the major cities in India is attributed to its exceptional geographical location at the seaboard of the palar delta. The main factors, which account for its growth, are the extent of its surrounding area, its easy accessibility from the sea route along with far-reaching railways. Chennai has developed as the largest commercial and industrial center in South India, with an extensive network of transportation facilities including the largest seaport in South India, an international airport (soon to have South Asia’s largest), some well-laid roads and rail facilities.

Let us first discuss The Commercial Office Market in Chennai

According to experts, Chennai is expected to witness a supply of approximately 12 million sq.ft in 2007 - subject to scheduled completion of projects under construction. Of this, nearly 10 million sq.ft. is expected to enter the market in the Chennai suburban and Chennai peripheral locations. 9 million sq ft is expected to be taken up by IT or IT related companies, while the rest is spread amongst the various Chennai industries.

Of the 12 million in supply, the India Street expects 80% of that supply will be claimed before the projects are complete. The remainder will be leased within 6 months of the structures being complete. The India Street sees no let up in Multi National Corporation demand for IT space especially along the OMR IT corridor.

So for our 12 Month Office Market Outlook

The India Street further predicts that all major office related real estate zones around Chennai will increase in value between 5 and 10% but not at the 2006 levels witness last year.

Now let’s turn to the Chennai Residential Market

Let me mention an article I have written on the subject located at our Indiastreet blog that discusses the India bubble hype. Please review that article so that I need not summarize it here.

Unlike some of the other major cities in India, Chennai’s residential market still has legs. Home prices are still increasing in the CBD, while new projects on the OMR are selling out quickly. Moreover, a proposed new Floor Space Index (or FSI) along the OMR from 1.5 to 2.5 will allow even greater density which means more profit for developers.

In the high-end market, residential prices in Chennai are creating new benchmarks. The prices of premium properties have increased over 200% in parts of central and south Chennai during the past 15 - 18 months.

There is still a lot of nervousness for high end residential properties outside of Chennai including the OMR due to a lack of temples, quality schools and transportation. The India Street believes a purchase along the OMR is smart given that most of the foreign corporations are located there and there is a strong need for quality housing in the area. Moreover, once the new airport is built, TIS predicts the residential market appreciation areas will shift out of the CBD to the OMR and new Airport regions.

Finally, let’s discuss the retail market in Chennai

Like everywhere in India, quality retail establishments are hard to find. Yes, there are malls and yes there are singular cases of quality retail, but until the market is opened up to multi-brand foreign retail establishments, retail in India is substandard and weak. Yes, you’ll hear from pundits that the market for retail is strong, but only because the only suppliers are Indian. Given a choice, Indians will opt for foreign retail brands because they are better (due to being in a competitive landscape) and we know that Non-Resident Indians prefer them over similar India brands. Please understand we are generalizing here, but we know from experience that this is true.

Due to the lack of mall space in Chennai, malls under construction are witnessing high pre-leasing activity. It’s likely to be a landlord market through 2008. The High Streets of Chennai continue to be the choice for organized retail as there are only 3 malls operating in the City.

TIS predicts a 10-15% increase in retail lease value growth during the next 12 months. The new malls are expected to witness high absorption and low vacancy levels through 2008. Currently demand is driven by local retail establishments like the Future Group and Reliance. However, if multi-brand foreign retail is allowed, TIS predicts the rental values will increase by 50% instead of the still robust 10-15% without multi-brand foreign retail.

In summary Chennai is a better place to invest today than most of the other top cities in India. That may change in the future, but investing in Chennai is currently a good bet. Remember however, the Indian real estate market is not a mature market. It is still in a fledgling stage, in terms of regulations. The markets abroad are much more developed and structured due to their stringent real estate laws. In places like the US and Europe, no agent can deal in property unless or until he or she has a real estate licence. The Indian market is totally unstructured in that sense. Anybody can deal in property, there is no licencing system so beware of those you partner or work with. Research them thoroughly and ask the tough questions. India is not transparent, and therefore due diligence is a must.

- The Editor

The India Street

Challenges ahead for Indian real estate industry

By Vipin Agnihotri

No doubt, Indian real estate has seen a sustained upsurge in recent years, but there are number of issues and challenges confronting the industry.

Maharashtra’s draft housing policy is all set to be completed this month and will look into the areas of affordable housing, rental housing, transparency among other things. The best part about all this is that state government has accepted its role as a facilitator and enabler and is making attempts to erase the constraints faced by the real estate industry.

“The government could not be a mute spectator to the rising prices in residential real estate and affordable housing was a objective which it was striving towards,” pointed out SS Kshatriya, Principal Secretary, Housing Department, Government of Maharashtra. He also added that the sale and purchase of property on carpet area basis would be made mandatory.

When asked about the issue of having a regulator for real estate, he said, “When you liberalize a segment of industry, there is corresponding requirement for regulation, and real estate will follow power and telecom, in terms of having a regulator.”

In my opinion, spectre of rising prices in real estate may need to be regulated as well, but if the industry would do it by itself there might not be the need for state government to step into the regulation aspect as regards to pricing levels.

If experts are to be believed, the emphasis should be on creation of new areas with infrastructure and facilities rather than further developing existing urban areas. At present, land costs constitute around 50 percent of the total project cost and was largely responsible for the high prices.

Until and unless supply increases, through freeing up of land locked under the Urban Land Ceiling and Salt Pan reservations, the concept of reduced prices will remain just a mirage. If one flat is chased by ten buyers, prices will always rise. “While the unchecked speculation in North India has resulted in a price correction, other parts of the country have not witnessed a change in prices as yet,” pointed out Anuj Puri, Country Head, Jones Lang LaSalle Meghraj.

The challenge lies ahead as to how to provide housing solutions for all segments. The government should go out of city centres and develop infrastructure. The secret of reducing prices is to create surpluses and that is only possible if restraints on FDI are removed.

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Chennai Real Estate : Ready For The Quantum Leap

By DHRUVA JYOTI CHOWDHURY, KOLKATA, INDIA

Chennai has several inherent advantages for real estate development and the city is poised for a quantum leap. There has been an unprecedented growth in demand for real estate across all markets making the exercise dearer. This is attributed in no small measure to the vibrant economy, robust growth and the resultant housing demand-exceeding supply.

As the Detroit of India, Chennai has been luring several industries to its fold due to its strategic location, availability of skilled manpower, better infrastructure and cosmopolitan outlook. The IT sector's prolific growth has triggered real estate demand to a new high now. And the declaration of old Mahabalipuram road by the State Government as IT corridor and laying of world-class infrastructure facility under way has seen a virtual exodus of property developers to garner land for development.

The all-round development has enthused even property developers from other cities like Bangalore, Hyderabad, Mumbai, Pune and New Delhi to enter Chennai and test the waters. Mumbai developer Hiranandani Constructions has already acquired nearly 100 acres on IT corridor opposite Siruseri Park. While some builders have finalised a few deals, others are in the process of clinching deals. It has been a Herculean task for a majority of the builders to get hassle free title to the property. The 100 per cent foreign direct investment (FDI) under automatic route in real estate development is a virtual boon for major global players to enter Indian cities. A number of trade delegations have visited the city for preliminary survey to consider investment in large-scale projects. Not a day passes without an investor group surveying the IT corridor for suitable areas for development. While Singapore Realty is yet to officially launch their maiden township project in Siruseri Park, a number of township projects are under active consideration in select areas.

With the thrust given to infrastructural development, there has been a perceptible in the mindset of people about commuting to city areas. People are nowadays prepared to shift to suburbs if integrated township project is available with built-in facilities. A section of people in the budget range of Rs. 25 - Rs. 30 lakh are keen to own independent homes even if it involves travelling 20 km outside the city. But it should be equipped with a complete range of facilities, he added.

The residential property market has been witnessing an unprecedented growth across all markets. There are homebuyers who are location-specific and prepared to wait as and when a suitable project is undertaken for development in the locality. "We have a waiting list of over 100 buyers for specific locations and what is more clients are keen to commit whenever a project is launched in that particular location", says T Chitty Babu, managing director of Akshaya Homes.

A significant development is that land values zoomed across the city. Realtors say that this trend can be attributed to upsurge in demand for city properties. The spillover effect is felt in suburbs as well with property developers garnering more areas for residential property development. Yet another trend is that developers are shying away from city areas due to steep increase in land values and unviable operation to develop real estate. It is this sudden development that triggered apartment price increase in posh areas across the city (see table 2 below). "It is becoming virtually unviable to acquire land at the exorbitant rate and develop large areas of residential property in the city", feels V Suresh, managing director ,Real value promoters limited. Obviously, with a number of people chasing too few a stock in prime areas, apartment prices zoomed at select areas across the city, he added.

While apartment prices are up by 25-30 per cent in the last six months alone, it was mainly due to sudden spurt in land prices in specific locations, feels P V Sanmugam, managing director, KGEYES Residency Private Limited, which has recently built a high end apartment project on Greenways road, and a new project is under way in Boat club area.

Click above to enlarge

Property developers complain that development control rules are to be partly blamed for the steep increase in property prices. With acute land shortage, a city like Chennai has to grow only vertically and to that extent, the government should have liberalised the floor space index (FSI). It is futile to extend such incentives only to IT buildings when there is no proportionate supply to match housing demand due to entry of migrants from other cities. Moreover, the government should consider granting multistoried apartments outside corporation limit, realtors say.

This is important especially in view of the fact that 50 out of the 80 IT parks coming all over the city are under various stages of implementation on the IT corridor alone. Second, inordinate delay in granting building permission leads to cost overrun of projects, which is ultimately passed on to the buyer. Approvals invariably take more than six months especially at a time when other cities are introducing single window clearance and fast track clearance schemes. Today home buyers are in a precarious situation though several housing finance companies and banks provide flexible lending norms and all time low lending rates to invest in housing.

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KOLKATA REAL ESTATE : More Supply - Less Demand

by Dhruva Jyoti Chowdhury, Kolkata, India

While the property prices are moving at a great pace across the major cities in the country, Kolkata has also felt the heat. Property prices are up by 10 – 35 per cent at select areas due to demand-supply mismatch. What is more, even up market apartments are being lapped up in quick succession due to vibrant economy and the increase in disposable income.

Among the areas undergoing swift real estate development in and around the city, specific mention must be made about Mayfair Road, Lansdowne, Loudon Street, Gurusaday Road, Ballygunge circular road and the Theatre Road. Residential property prices moved not less than by 10 per cent across all markets, if the realtors are to be believed..

The appreciation is steep in areas like Alipore by 36 per cent last year, 57 per cent in EM bypass, 33 per cent on Jessore Road, 20 per cent in Gariahat and Rashbehari. Even entry-level investors are handsomely rewarded if one wants to enter at the green field stage and opts to quit at the implementation stage. However, most of the demand is end user driven and investors are yet to plunge into the city.

Incidentally, Kolkata is a shining example where private-public model has been working effectively. Recently ICRA, premier rating agency, has accorded the highest published rating RT2 plus to Hiland Park Phase II which translates into strong project ever granted to a real estate developer in the country.

The commercial property market is predominantly driven by IT and ITES sector and the organized retail formats. In 2005, aggregate office segment absorption of approximately 5.5 lakh sq. ft. has been reported with a majority of the demand in suburban locations of sector V, Salt Lake and New Town Rajarhat. However, with a few IT oriented development projects maturing, rentals in Sector V have remained stable at Rs. 34-35 per sq. ft. per month.

According to Cushman & Wakefield, property consultants, the real estate sector is expected to witness increased activity in the short to medium term. While demand is expected to improve, quality stock will gradually enter the market (in Sector V and Rajarhat) over the next 6-18 months. Several national level developers have acquired land to tap the expected IT/ ITES demand. Technology firms are anticipated to provide employment to approximately 14,000 people translating into a real estate opportunity of around 1.10 million sq. ft.

Availability of skilled professionals at relatively lower costs compared to other metros, low attrition rates, stable power supply and proactive state government are instrumental in driving the national developers to Kolkata.

DLF Looks to Conquer Bangalore and Global Airports

Dhruva Jyoti Chowdhury, Kolkata, India

With the DLF venturing into the Real Estate sector in Bangalore, the metropolitan’s realty market is set to get ‘red’ within the next few months. According to the DLF plans more than 10,000 residential apartment units in the city can be expected to come up within the next few quarters of the year. The real estate major is also focusing on coming up with a mall on a huge 2 million sq ft in the state capital.

DLF has dashed into Bangalore with a planned investment of about 3,000 crore rupees in developing the apartments stretched over 100 acres and has also possessed 80 acres of land on Bannerghatta Road and 20 acres in Electronics City. The project is proposed to get set go in the next three to four months, while the first set of apartments would be ready by two years.

Work on the mall, which is coming up in Whitefield, has already begun and will be open for commercial use in about 18 months from now. The mall is likely to be one of the biggest in the country.

Internal sources within the DLF has also informed the India Street that the company is also attempting a fresh foray into airport modernization and has associated itself with Germany’s Fraport AG Frankfurt Airport Services Worldwide, the owner and manager of Frankfurt Airport, as its partner.

A special purpose vehicle, ‘DLF Fraport SPV’, has been set up to focus on the development and management of airports in India. The shareholding of DLF and Fraport in the special purpose vehicle (SPV) will at least be 26% each.

Fraport is already present in India through the consortium it formed with infrastructure conglomerate GMR Group and the India Development Fund to bid for the modernization of the Mumbai and Delhi airports. GMR-Fraport eventually won the modernization bid for the Delhi airport in early 2006.

The SPV it has formed has agreed to jointly bid for the Chennai airport. The combined entity also plans to bid for developing and managing Greenfield airport projects including one in south Gujarat and the dedicated general aviation airport in Delhi (a general aviation airport handles private aircraft, helicopters and charter flights, apart from small cargo planes).

The two companies will also look at the upgrading and modernization of non-metro airports. There are around 35 non-metro airports in India.

DLF has been eyeing, without concrete results, airport re-development for some years. In July 2004, it tied up with the Malaysian Airport Holding Bid to bid for the privatization of the Delhi airport.

This joint venture was, however, terminated in April 2005. Later, in the year, DLF joined the consortium led by Bharti Group and Changi Airport of Singapore for the modernization and upgrading of the Mumbai and Delhi airports.

DLF also has a 50-50 joint venture with UK’s infrastructure and construction group Laing O’Rourke to execute DLF’s mega infrastructure projects. The joint venture with Laing O’Rourke will, however, not overlap with the company’s SPV with Fraport, said a DLF spokesperson.

The company which is set to raise as much as Rs9,650 crore in what will be India’s single-largest initial public offering, said it plans to sharply curb expenditure on land acquisition, down 54% to Rs3,000 crore from a previously proposed Rs 6,500 crore.

DLF owns or holds development rights for 10,255 acres, unchanged from January. Profit in the year ended 31 March rose tenfold.

DLF and its subsidiaries own 11.3% of the land reserves, they have sole development rights for 44.6% of the total. They have agreements to purchase or letters of acceptance for 35.9% of the land while the rest are joint developments with partners.

DLF owns 3.5 million sq. ft of space in completed buildings in New Delhi and its suburbs, including Gurgaon and Noida. It also holds plots of about 7.2 million sq.ft that do not form part of its land reserves, DLF said.

The National Capital Region, which comprises New Delhi and adjoining areas, accounts for 51 % of DLF's land reserves.

The real estate major has also entered into an agreement for floating a joint venture with Ranbaxy group company, ‘Fortis Healthcare’ to set up hospitals across the country with about Rs 6,200 core of investment.

Fortis will have a majority holding with 74% stake and the rest will be with DLF in the proposed joint venture.

The Joint Venture plans to set up a chain of 200-450 bed hospitals in 31 cities in India within three to five years. While the joint venture will mark DLF’s foray into the healthcare segment, for Fortis the move is a part of its strategy to become a Pan-India player in the healthcare segment and resolve real estate problems for setting up new hospitals. The planned investment of Rs 6,200 crore would go toward meeting cost of land, construction and medical equipment. The JV plans to build hospitals in cities where DLF has a presence. Already DLF has a land reserve of 10,255 acres in 31 cities.

Earlier, DLF had forayed into hotel business by tying up with US-based hospitality giant Hilton Group to set up a chain of 50-75 hotels and service apartments in India under the certain brands of the international major. The company had also entered into an agreement with US-based Prudential Insurance to set up a joint venture company to sell life insurance products in India.

Cashing in on India’s retail sector

By Dr Suvrokamal Dutta

While there is no doubt that investment in Indian retail sector is not for everyone but there are ways for investors to cash in. Theoretically speaking, a budget of between Rs 30-50 lakh buys you into the rampaging retail roller coaster.

If experts are to be believed, malls are the formats that grab all the headlines- and earn the highest ROI- but you can safely forget about getting a piece of the action if you do not have a disposable nest egg of at least a crore to play with. Moreover, it is worthwhile pointing that large chunk of mall developers prefer to lease out rather than sell space within their malls.

“High-street shop space in the city centre is out too, since capital rates in Mumbai’s retail intense localities like Linking Road, Breach Candy, Churchgate and Mahalaxmi range between Rs 25,000-80,000 per square foot,” pointed out Rahil Nandan, retail expert.

Though, when you take into consideration the fact that the space ATMs occupy in flourishing market areas like Linking Road, Colaba Causeway, Bandra and Lower Parel technically qualify as retail space. While ATMs see a plenty of activity in almost any residential or business area, people need ready cash most often in retail-intense areas.

In my opinion, investing in space large enough to warrant the presence of a major bank’s ATM in such a locality is an economical option within the above-stated budget. In general, ATM occupies around 174-250 square feet. Since ATMs are small spaces, they also give rents higher than the average high street store. “Any bank that leases such a space to locate an ATM in will pay the usual interest free security deposit for 6 to 12 months,” pointed out Kadam Ali, noted business journalist based at India.

The pivotal factor here is that this money will earn you interest in the bank in addition to your future rental earnings. Once such a space has been obtained, one can approach major banks with an ATM-specific lease proposal.

In case if one’s option in South Mumbai are limited to 100 square feet or thereabouts, the scope enhances vastly if one considers the suburbs or Tier II/III markets. You may not believe at first but in a budget of Rs 40-50 lakh, one can purchase a retail space of up to 700-1000 square feet there. In my opinion, this can turn out to be extremely lucrative in both the short and long terms, since there is a definite scope for appreciation.

As is the case in any property investment, make sure that the property has a clear title and is free of encumbrances. A lawyer’s services are highly advisable in this regard.