- Wealth PMS (50L+)
We have seen rentals cooling off by 10 to 20 per cent in the last three to four months,’’ said Ashok Bhasin, managing director, Wadhawan Food Retail, which runs the Spinach brand of convenience stores.
According to property consultants, Kishore Biyani’s Future Group has been unable to strike deals for nearly 6 to 7 lakh sq ft of ready retail space in the last three to four months due to high rentals.
“Now retailers are demanding zero rentals and a full revenue-sharing agreement. Until and unless developers realise the need for reasonable rentals, many deals may break off,” said Bappaditya Basu of property consultancy Jones Lang LaSalle Meghraj.
Uhem. Spinach has an outlet close to where I live (and btw, their biggest problem can’t be rent. It takes a gazillion hours to check out.) And Biyani just did a big number at Raghuleela mall and called it Vashi Central. I like the revenue-share funda. Now, just get people to actually buy something.
[Lehman’s bankruptcy] may impact the financial major’s existing investments worth $500 million in realty firms, including DLF and Unitech, besides drying up another $500-million worth of potential investment which was expected to flow into Unitech’s Mumbai projects.
From falling rates, to falling investors. Not a pleasant time to be a realtor.
ET: Dire straits:
ccording to industry sources, the average drop in sales for the industry in the last calendar year was more than 60%. Since April, there has been another drop of 30-40% in sales compared with those last year.
What’s more, the drop has not just been in the bigger metros, but in tier-II and tier-III cities as well. They have seen an average fall of more than 25% between February and August, according to the data compiled by the Associated Chambers of Commerce and Industry of India.
The home buying season typically starts during the festival season (Diwali) and ends in March and most developers do almost 60% of their business in this period. Says S K Sayal, CEO, Alpha G Corp: “We just hope Diwali brings us some relief as we have suffered enough in the last four months. If things do not improve we will be seeing lot of distress sales and massive price cuts.”
So not just commercial but retail as well. Whoa. This gets interesting. The house you wanted to buy may be available for a song …. after 2010. Let the panic set in – it usually takes a couple years.
People who own houses – your first house can never be an asset as long as you live in it, so the price shouldn’t matter. We don’t really have HELOCs and all that in India at the mo.