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Ajita Shashidhar

NEW DELHI, Dec. 29

WITH as many as 80 malls planned this year across the country, the retail sector has definitely been the main driver in terms of space acquisition this year. This has been closely followed by the ITES sector, with the developed economies looking at India not only as a key destination for outsourcing but also as an R&D hub.

The satellite city of Gurgaon itself is going to have five mega malls-cum-multiplexes, while there are a couple of them in the pipeline in the other satellite towns around the Capital such as Ghaziabad and Noida.

"Retail has grown and become more organised and mature than ever before. We have seen a boom in the retail-cum-leisure sector with a number of multiplexes and malls coming up in various parts of the country. This is not restricted only to the metros but has become a trend even in the smaller towns and cities of the country," says Mr Anshuman Magazine, Managing Director, CB Richard Ellis.

Agreeing with Mr Magazine, Mr Sanjay Verma, Executive Director, Cushman & Wakefield, suggests that the Government should bring in FDI in retail. "Real estate includes almost 60 per cent of the cost of any retail project, hence FDI in this sector would greatly help in reducing the cost of construction, gestation of the project and so on."

Talking about the overall scenario of the market this year, Mr Verma said that the market, which had been rather volatile in the last two to three years, is gradually moving towards stability. "There has been a dip of five to 10 per cent in the prices in areas such as Gurgaon, as well as the suburbs of Chennai and Mumbai, due to excess supply, but prices have started responding to the economic indicators."

Both Mr Verma and Mr Magazine also feel that the Indian consumers are beginning to look at real estate as an investment option. "A real estate transaction a couple of years ago was requirement-based, while now it is more investment-based," remarks Mr Verma.

Mr Magazine adds by saying, "Investment-sale is yet another concept which is gaining popularity in India - investment into income producing real estate assets, or, in layman's terms, real estate that is already on rent. This return is especially attractive keeping in mind today's investment market where traditional investment avenues such as the stock market are becoming unpredictable and bank deposit rates are at an all-time low."

The mindset of the consumers to look at real estate as an investment opportunity has been further fuelled by the attractive tax rebate offered against home loans. This has increased the number of end-users investing in houses, resulting in a 30 to 35 per cent growth rate in the residential segment.

Mr Abhay Baigal, Vice-President, Birla Home Finance says, "With interest rates falling rapidly and loan tenures having increased, the loan affordability has gone up."

Agreeing with Mr Baigal, Mr Deepak Joshi, Area Marketing Manager, ICICI Home Finance, Delhi, says, "ICICI has grown by 400 per cent this year. We have been disbursing loans to the tune of Rs 100 crore every month."

However, the market has not taken too kindly to the Kelkar Committee's suggestion to bring down the tax rebate on home loans from Rs 1.5 lakh per annum to Rs 50,000. "This move will definitely lead to a fall in demand," remarks Mr Baigal.

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