KOLKATA CONTINUES ITS GROWTH TRAJECTORY IN 2023
Real estate sector has started seeing gradual recovery post pandemic primarily end-user driven. The ongoing inflation and rise in property prices may present a challenge for home buyers. As per Basant Parakh- Managing Director, Orbit Group, the increase in home loan interest rates may make financing more difficult but are still comparatively lower than the rates in 2019-2020. “For potential buyers, this presents an opportunity to negotiate better terms on their home loan. Additionally, the government's initiatives on affordable housing schemes and interest subsidies can help make homeownership more accessible to a wider range of people. The State Government has also extended the Stamp Duty Rebate of 2% till 31st March 2023 and offered a 10% discount in market valuation which has provided a big impetus to all aspiring homebuyers.” Sushil Mohta- Chairman, Merlin Group & President, Credai, West Bengal added, “There will be some challenges in 2023 because of the rising interest rate, the cost of construction due to inflation and global recession. However Indian economy is resilient enough. Global recession will not have any impact in India’s growth story barring some turbulence in the long term. The developers who are committed to deliver will continue to grow. I foresee decent sales in 2023. The extension of the reduction in stamp duty and circle rate till March 2023 in West Bengal will provide a fillip to the buyers and the developers as well.” Prashant Chopra- Chairman, PS Group opined that the impact of inflation, reflected in the rise of property prices, home loan interest, and rate hike may cause delay in home buying decisions. “It will directly impact the interest rate-sensitive sector as EMIs going up can affect affordability. In case of floating home loan interest, the rate hike may hurt EMI pay-outs temporarily, but in the long run it will average out positively. However, the impact on real estate sales will be moderately felt as long as the interest rates remain in single digits.” Harshvardhan Patodia- CMD, Unimark Group was of the view that property prices have gone up marginally across the country due to cost increases after 5-6 years of stable prices. “There is an impact of interest on home loan which is likely to balance out home loan tenure. We have also seen a rise in the disposable income of the customers over the years and demand is robust. Inflation under control hence I do not see any huge impact on sales.” Nitesh Kumar- MD & CEO - Emami Realty Limited added, “The current hike will impact residential sales volumes in the months to come in the affordable and mid-segments. However, the impact of rate hike on home loan EMIs is unlikely to be significant as these loans are for a longer tenure. While interest rates are still likely to remain at decadal lows the opportunity for homebuyers is reducing. It is critical to understand that affordability and demand remains high and buying momentum is expected to remain largely intact. The pandemic has taught borrowers about dealing with interest rate changes. There has been a fundamental change in buyers’ expectations and attitude towards homeownership which will largely withstand marginal fluctuations in lending rates.” Rajvardhan Patodia- Founder, Chairman and Managing Director, Signum Group expressed, “Property prices in Kolkata are realistic and affordable considering rising inflation and drastic increase in raw material prices for construction. The demand for housing in Kolkata has always been buoyant and the city is never a speculative market. We are not seeing any major pushback due to the latest interest rates, since they have primarily been revised to pre-pandemic levels. Real estate purchase goes beyond just investment since it has a sentiment attached. The buying of large homes has increased among younger generation due to home loan benefits. We believe the demand would only increase overtime.” Manab Paul- Founder Director, Sree Balaji agreed, “After Covid the property price were hiked by 10-12% and this price hike happened because of raw material cost. This too without giving any extra benefit to the builders but only to adjust the cost factor. It was a forced price hike. Post RBI home loan revision, interest was hiked by 0.75% to 1% which impacted homes sales a bit but it didn’t deter home seekers buying sentiments. We saw a good movement in sales in the residential segment.” Nikunj Harlalka- Managing Partner, JSB Infrastructures shared, “Due to better connectivity, robust infrastructural development initiative in our state by current government, upwardly mobile consumer’s aspiration has propelled the demand of quality branded homes manifold. Consumers are increasingly manifesting their desire for gated community living specially in post-corona era. This trend is going on despite increase in real estate prices and home loan rate of interest.” EMERGING REAL ESTATE LOCATIONS IN KOLKATA The real estate market in Kolkata has seen a lot of growth and development in the last two years and is expected to continue on this trajectory in 2023. There are several hotspot locations emerging in Kolkata driven by good infrastructure development and connectivity because of the metro lines. As Harshvardhan Patodia shared, “New Town and surrounding areas in Rajarhat, areas around the Eastern Metropolitan ByPass are going to be the favoured locations for premium real estate investment. For MIG and LIG investments, Garia, Southern ByPass, Boral, BT Road, Jessore Road, Madhyamgram, Barasat and Diamond Harbour Road will be the emerging locations.” Basant Parakh stated, “The emerging real estate location with investment potential in 2023 is the Rajarhat-New Town area in the North- East of Kolkata; a planned satellite town and home to several new and innovative residential and commercial projects. New Town & Sector-V is now a sought-after destination for residential development with the young professionals because of the commercial development and proximity to the airport. The areas are well-connected to the rest of the city as well as the airport by roads and has good infrastructure facilities making it an attractive destination.” Nitesh Kumar added, “Located in South-West of Kolkata, Joka, is rapidly growing and considered developing real estate neighbourhoods, providing conveniences of contemporary living. It is supported by infrastructural enhancements, improved connectivity, and affordability. New Town – Rajarhat, Kolkata are upcoming destinations. VIP Road, EM Bypass and the upcoming metro line from airport to New Garia are one of the best localities for real estate investment in Kolkata. Southern Bypass connected throughout by metro stations have become a hot spot for development in the affordable luxury segment.” Nikunj Harlalka was of the view that the next real estate growth engines reside in tier-II cities. “There is enormous untapped potential in smaller towns in terms of commercial and residential real estate due to steady overall economic growth of the country.” Prashant Chopra said, “The most promising locations with remarkable growth potential have been the stretch along Eastern Metropolitan Bypass and the two extensions - New Town and Rajarhat in the East and Joka in the South-west of the city. The posh neighbourhood in the making along the Eastern Metropolitan Bypass is home to luxury condos, duplexes and high-end real estate projects besides premium hospitality brands turning this area into billionaire’s avenue. New Town has significantly transformed into an integrated township, especially after the government declaring it as a smart city. It is focused in drawing home buyers, investors and MNCs alike. Rajarhat is also emerging as a popular home buying destination with a variety of housing alternatives, from apartments to opulent villas. With high demand it has more significant growth potential than affluent areas like Salt Lake and South Kolkata. A rapidly developing neighbourhood for affordable real estate is Joka, with more than 50% of the areas inventory being priced under Rs 50 lakhs, it is becoming the choice for many.” Raj Vardhan Patodia mentioned, “In Kolkata, the areas which are seeing real estate investments are BT Road, Madhyamgram, Southern Bypass, Rajarhat and New Town beyond action areas. Many new housing projects are coming up where new projects have bearing on the investment potential. These regions are building on affordable housing units seeing an uptick in the real estate investments and prices.” Manab Paul expressed that every major city in Bengal holds good opportunity for investments under developing zones that are well connected to outskirts of the city and the main city’s infrastructure. “Towards South of Kolkata cities like Rajharhat and Joka are doing well. Howrah and Hubli are doing well with the people in and around that area doing exceptionally well along with major projects coming in these areas. Kolkata as a city has proved to be a city of good investment opportunities and people are taking advantage of those given opportunities.” COMMERCIAL AND RETAIL REAL ESTATE GROWTH POTENTIAL Prashant Chopra said, “There is tremendous growth potential when it comes to commercial and retail real estate in the city. Government also has been formulating and implementing policy decisions to promote West Bengal as an IT hub alongside the multiple mega projects that are planned, the investments in the state and especially Kolkata are expected to soar. All this alongside lower land acquisition costs, lower employee pay scales compared to other metro areas, and accessibility to cutting-edge infrastructure are the primary impetuses for driving growth for commercial and retail spaces in the city.” Raj Vardhan Patodia commented, “We are seeing investment across commercial and retail asset class from local and national players where there is a demand for A Grade office space. People are moving beyond the traditional Central Business District (CBD). The commercial real estate market is growing in locations including Sector V and Rajarhat. Sector V is particularly experiencing strong growth in commercial zones and office spaces.” Sushil Mohta concurred, “The commercial segment has seen traction in Kolkata. On the office market performance, the ‘return to work’ transition during the year 2022 has led the city to clock gross office leasing of 1.1 mn sq ft, representing a 42% YoY growth over 2021 while new office completions remained at 200,000 sq ft in 2022.” Nitesh Kumar commented, “Commercial property belt of Salt Lake showed maximum vibrancy and accounted for about 3/4th of net absorptions last year and is projected to grow at the same pace. This was followed by Rajarhat and the secondary business district (SBD) of Kolkata. Retail has witnessed a comeback in Kolkata in the last two years. With new malls opening up in the city, Kolkata has an inventory of 6 mn sq ft of mall space, largely located in the east and south of the city. Proposed new Malls in Behala – Joka, New Town Rajarhat promise to bring in more retail majors to the city.” Harshvardhan Patodia shared, “Retail in Kolkata is all time high where a good demand is seen in the retail leasing both in high street locations and malls. All pan India brands are in an expansion mode. There is definitely a good potential for investment in retail and a couple of new malls launches are expected this year. Demand for commercial space looks promising especially in Salt Lake, Sector-V and Sub CBD areas.” Basant Parakh added, “The commercial and retail real estate sector in Kolkata is expected to see growth in 2023. The growth in the retail sector is also expected to lead to an increase in demand for commercial space, which could result in a rise in commercial property prices. The city’s commercial and office space sector also ended 2022 on a positive note with a robust growth in leasing activities reflecting the improvement in business sentiments and market activity.” Nikunj Harlalka stated, “Those days are gone when a family used to travel miles to nearby metro or semi metro cities for the branded quality products. Nowadays almost all known brands outlets are available there in all small towns. Even a small town comprising a low population have access to all national and international brands. As a result, standard of living is at par with any big metro cities. Even smaller towns are remarkably becoming self-sustained in terms of availability of branded products.” Manab Paul added, “The whole world would have thought that the commercial real-estate after Covid would be slow but that didn’t happen. With the nearest developers even their unsold space of five years was sold off in Kolkata and Sector-5. The investment in IT space saw a significant movement. Retail, office space, office rental, new and old office set up, new office extensions saw encouraging and positive developments.” KOLKATA INFRASTRUCTURE DEVELOPMENT Urbanisation is growing at a rapid pace where the overall income level of people, particularly the middle class is growing in the country. Though, Kolkata has its own infrastructure woes, it has truly undergone a facelift through various social and civic infrastructure development projects. Nitesh Kumar shared his perspective. “With one of the lowest road surface areas, dense unplanned developments in the older parts of the city has no robust infrastructure. Kolkata Municipal Corporation (KMC) is committed in developing the transport infrastructure to reduce traffic and improve vehicular movement. The expansion of the elevated road network, flyovers are coming up at high traffic points in an organised manner. Vital infrastructure projects in Kolkata that are the proposed or ongoing are expected to attract real estate investors and alter the property market of Kolkata. The major ones being –Airport Garia Metro Corridor. Joka Esplanade Metro. East West Metro. A multi-tier automated car parking facility under the Gariahat flyover (1.6 km). Extension of Joka Metro. Flyover on Raja S C Mullick Road. Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the West Bengal government has also proposed a Rs 27 bn action plan. This includes the widening and extension of arterial roads, strengthening and broadening of secondary roads, construction of elevated roads, flyovers, bridges and pedestrian underpasses across various locations in the city.” Sushil Mohta added, “Demand for housing and other real estate classes in urban and semi urban areas will always be there. Therefore, at least for the next ten 10 years the real estate sector will always have opportunities. The developer has to pick the right kind of project, design it right, price it right and deliver it in a scheduled manner with the promised quality, then one can grow without any challenges. With the increase in affordability, the demand will always be there for real estate products, and the sector will always be healthy.” Basant Parakh said, “New projects such as the metro rail expansion of 82 km through five routes running through some of the areas with growth potential such as Sector V – Howrah Maidan and the BBD Bag – Joka metro line. Accompanied with the construction of flyovers and bypasses and other road developments with the goal of improving connectivity will make it easier for people to commute. These projects are also helping to boost the city's economy, attracting businesses, and creating job opportunities. The recent and ongoing development of the Southern Bypass and B.T. Road areas, as well as the opening of the Tala Bridge, has greatly improved connectivity of areas to other parts of the city. Overall, the infrastructure development in Kolkata is modernizing the city, making it a more liveable and sustainable place for everyone.” Nikunj Harlalka said that there is a rapid progress in essential infrastructure like road and others, which will further push the growth trajectory and purchasing power resultantly and demand for better living. Harshvardhan Patodia added, “The State Government is focusing on road development, new bridges and flyovers with a sizeable investment which will open up to several micro markets for real estate development. Kolkata being an old city, we need more urban renewal and regeneration projects and also all the metro lines under construction should be completed on schedule which will majorly improve connectivity in the city.” Manab Paul said, “Majority of infrastructure developments in Kolkata like roads widening, railway station, and bus station/terminus are more or less done. Kolkata is not under-developed or developing, it is already developed. Infrastructure-wise we already faced all the pain but in near future we would enjoy the gain of developed infrastructure in many ways.” Prashant Chopra agreed, “There has been focussed improvements in areas of transport infrastructure to reduce traffic. Expansion of elevated road network is changing the way Kolkata travels and flyovers are coming up in high traffic points in an organised manner. The benefits are real time. The only drawback is the pace at which the developments are taking place. However, such transformations, especially that of a city as large as Kolkata cannot happen overnight.” Rajvardhan Patodia shared, “There are no power outages any longer and the traffic is manageable in Kolkata compared to the other metros. New bridges have been built/ restored including the reconstruction of the Tala and Majherhat bridges. The metro is expanding to distant localities. Extension of the metro up to Dakshineswar will ease the connectivity of BT road to other parts of the city, and the upcoming cross-city metro connectivity is good for the overall real estate market.” EXTENSION OF STAMP DUTY WAIVER, PERMANENT REDUCTION IN STAMP DUTY, URBAN LAND CEILING. TRANSFER OF FAR – TDR WILL HAVE SIGNIFICANT IMPACT. NITESH KUMAR I THINK THE YEAR 2023 WILL ALSO BE A GOOD YEAR FOR THE SECTOR AS THE DEMAND FOR QUALITY HOME WILL BE ON THE RISE DESPITE THE HIKE ON INTEREST RATE. ON THE OFFICE FRONT ALSO, THERE WILL BE MORE TRACTION IN KOLKATA AS MORE COMPANIES ARE COMING TO THE CITY AND PEOPLE ARE RETURNING TO OFFICES BARRING IT SECTOR WHICH STILL CONTINUES TO OPERATE IN HYBRID MODEL. SUSHIL MOHTA I HOPE TO SEE THAT WBRERA REGULATIONS ARE IMPLEMENTED THOROUGHLY BRINGING TRANSPARENCY TO THE REAL ESTATE INDUSTRY IN KOLKATA. THERE SHOULD BE MORE FOCUS ON SUSTAINABLE CONSTRUCTION. OVERALL, THE REAL ESTATE MARKET IN KOLKATA IS EXPECTED TO CONTINUE TO GROW AND DEVELOP IN 2023, WITH A NUMBER OF EMERGING LOCATIONS OFFERING INVESTMENT POTENTIAL. BASANT PARAKH WITH THE PREREQUISITES – SUPERIOR INFRASTRUCTURE, SKILLED MANPOWER AND FAVOURABLE GOVERNMENT POLICIES ALREADY IN PLACE, KOLKATA HAS THE POTENTIAL OF BECOMING A FOCAL POINT FOR IT AND SOFTWARE COMPANIES. PRASHANT CHOPRA HAVING WITNESSED THE STEADY DEMAND, WE STAND ENCOURAGED BRINGING IN MORE WORLD-CLASS RESIDENTIAL COMPLEX WITHIN THIS PART OF THE COUNTRY IN THE COMING YEAR WITH A HOPE THAT INFLATION REMAINS WITHIN CONTROL, WHICH GIVES MORE PURCHASING POWER AMONG THE PROSPECTIVE BUYERS. NIKUNJ HARLALKA WE WISH THAT THE REDUCED CHARGES IN THE STAMP DUTY AND CIRCLE RATE INITIATED BY THE STATE GOVERNMENT CONTINUE PERMANENTLY. GOING FORWARD, PEOPLE SHOULD CHOOSE KOLKATA AS THEIR NEXT BUSINESS DESTINATION CONSIDERING THE FUSION THE CITY OFFERS, AND AS A RESULT, THE DEMAND FOR OFFICE SPACE WILL TRANSLATE INTO RESIDENTIAL SALES TOO. RAJVARDHAN PATODIA KOLKATA SAW MANY SECOND HOME BUYERS IN THE LAST FIVE YEARS INTERESTED IN SECOND HOMES, VACATION HOMES, PREMIUM LUXURY HOMES, BUNGALOWS IN THE CITIES. THE PREMIUM BUNGALOW PROJECTS ARE DOING BETTER THAN ANY OTHER MULTI-STOREY BUILDING PROJECT. THIS MOMENTOUS CHANGE IS HAPPENING IN KOLKATA WHERE PEOPLE PREFER PREMIUM BUNGALOW OVER APARTMENTS. MANAB PAUL GOVERNMENT SHOULD GIVE REBATE ON STAMP DUTY AVAILABLE FOR CUSTOMERS WITH BETTER INCENTIVES FOR SUSTAINABLE AND GREEN REAL ESTATE PROJECTS UNDER DEVELOPMENT. THE EFFORTS MADE BY THE AUTHORITIES FOR EASE OF DOING BUSINESS PERTAINING TO SANCTION AND APPROVALS SHOULD BE SPEEDED UP. HARSHVARDHAN PATODIA THE YEAR 2022 WAS A YEAR OF RESURGENCE OF THE REAL ESTATE SECTOR IN INDIA. DESPITE FEW HEADWINDS LIKE GLOBAL INFLATION AND GEOPOLITICAL TENSION, RISING PROPERTY PRICES AND INCREASE IN INTEREST RATE, THE SECTOR WITNESSED GROWTH BECAUSE OF THE STRONG DEMAND IN DOMESTIC SECTOR.
Tags : Kolkata Growth Real Estate Developers Basant Parakh- Managing Director Orbit Group Sushil Mohta- Chairman Merlin Group & President Credai West Bengal Prashant Chopra- Chairman PS Group Harshvardhan Patodia- CMD Unimark Group Nitesh Kumar- MD & CEO - Emami Realty Limited Rajvardhan Patodia- Founder Chairman and Managing Director Signum Group Manab Paul- Founder Director Sree Balaji Nikunj Harlalka- Managing Partner JSB Infrastructures