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India is poised to be the big Asian tiger alongside China. India scores better since it’s a democracy unlike it’s communist neighbour, making it much more attractive to the capitalist West. Banks, financial companies, services companies, IT companies are all flocking to India. India has also opened it’s door to FMCG’s. Almost all major auto companies have set shop in India.

An attractive political climate, an English speaking population and an extremely well educated workforce, make India an instant attraction for companies worldwide. This has resulted in more jobs created in the country. People have a greater buying power and are using it as well.

Real estate prices in India have been rising more than steadily in the last few years; major cities and IT hubs have seen prices going up in multiples not percentages. Bangalore, Gurgaon, Noida, Panchkola, Pune, Mysore, Mumbai have all seen steep escalations in price. NRI’s in the US, UK, Dubai and Australia are investing in real estate in India in a big way. This is another reason for prices going up. Tax cuts on housing loans have made them more attractive to buyers. Banks and financial institutions are going all out to advance housing loans. More so because this is an extremely safe investment. Places like Bangalore now see a lull, since prices have been going up for too long. This is a good time to invest there. Places like Pune are still undervalued.

Big Indian companies like Reliance, Birla and the Tata’s are all engaged in new projects in India that run in tens and thousands of crores.

Mumbai’s new SEZ is an attractive real estate destination.

Prices in India still compare well to other big cities worldwide. Also an ever growing population means that house prices will never take a hit, since demand always outstrips supply. companies like DLF are buying land in a big way. Hiranandani in Mumbai is another big group that has purchased in a big way in Mumbai.

As long as the Indian economic story looks good, and we continue growing 8-10% every year, the real estate boom is here in India, for sometime into the future.

The Pune Factor

According to a quarterly report by a major consultancy, Pune is edging out Mumbai as the preferred destination for information technology(IT) companies. According to the report, commercial realty prices are expected to decline in the northern suburbs of Mumbai owing to excess supply of office space that is sought by IT firms.

While Mumbai and Pune offer distinct advantages to IT companies seeking to locate their offices, the survey notes: “In the recent past, however, IT firms have shown a preference to locate their facility in Pune.

A comparative analysis between the two cities provide good insights into the advantage of locating in Pune compared to Mumbai.”

According to the report, while a highly skilled workforce is available to IT companies in both Mumbai and Pune, the consequent higher cost and higher attrition rates in Mumbai see Pune becoming a more viable option for these firms.
On the other hand, in respect of transportation, power supply and air connectivity, Mumbai scores higher than Pune for IT firms, as the latter is found to be restrictive on this count.  Real estate prices in Pune are also more advantageous for IT firms as they are of as high a quality as in Mumbai, while being moderately priced, compared to the high realty costs in Mumbai.

In addition to this, the higher cost of living in Mumbai compared to Pune sees the latter finding another strong reason for ITES firms to be locating into. One feature which is expected to boost ITES companies in both Mumbai and Pune is the recently announced stamp duty reduction from 10 per cent to five per cent.

The stamp duty cut effectively reduces the gross acquisition cost of developers, investors and actual purchasers of commercial property and land. The report also expects this to result in an increase in transaction volumes for purchase of commercial property and land, which will encourage transparency in transactions.

Contributed by : Adi Daruwalla