Election 2014-Generating big hopes for investors in property
The BJP manifesto made at least three promises of direct interest to real estate developers. The party promises to put up 100 new cities, develop a national land use policy and nationally roll out a low-cost housing plan. For investors in property and for the sector as a whole, the promise to upgrade infrastructure and e-governance bodes well for both. Better connectivity will positively boost real estate values and open up new markets for developers. It will likely open up more land along with the improved land use policy. Higher transparency in property deals and increasing buyer confidence will likely be lead by the emphasis on electronic records and e-governance.
Public Private Partnership (PPP) model, promised policy interventions, credit availability through interest subsidies will augur well for the affordable housing segment. Mahindra Lifespace Developers, among the listed players, with plans to launch a project in Boisar near Mumbai and Avadi in Chennai, has been creating a big push.
The plans to create 100 new cities and emphasis on twin cities and satellite towns may also benefit Mahindra. With its Mahindra World City near Chennai the company pioneered the integrated city concept in 2002. IT corridors such as Bangalore remained resilient as the property market turned soft last year. However, vibrancy may return to industrial hubs such as Coimbatore, Pune and Chennai if the BJP manages to turn the spotlight on manufacturing. The developers such as Sobha and Puravankara that have projects in Coimbatore may be aided with the plans to push engineering and textile manufacturing.
Ashiana Housing that focuses on non-urban locations may be assisted with the ‘Rurban’ idea of bringing urban amenities to rural areas. But some proposals don’t augur well for the sector. For mall developers such as Phoenix Mills, the opposition to multi-brand retail is likely to have negative implications. At the same time Oberoi Realty and Prestige Estates Projects may also get hit, the impact would be lower due to higher share of residential sales.
Source: Hindu Business Line
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