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Real estate analysis kozhikode

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  • 1. Kozhikode – The city of ZamorinsA real estate market analysisElective-Real estate Anjith Augustine SPA Urban design
  • 2. FUNCTIONAL CHARACTER • TRADE & COMMERCE • SERVICE SECTOR( TERTIARY WORK CENTRES) ECONOMIC SCENARIO • WELL OFF WITH MONEY FROM NRI’S AND WORKING CLASS SECTOR DEVELOPMENT AUTHORITIES Development Authority- Kozhikode Corporation Town & country planning Dept. kozhikode Development Guidelines- Masterplan 2001 KMBRKOZHIKODE CITY – GROWTH POTENTIAL• 3rd largest city in Kerala• Trade & business hub of north Kerala• High literacy rate• RANKED SECOND AS THE BEST CITY TO LIVE IN (ASSOCHAM STUDY) considering parameters such as health, education, environment, safety, public facilities and entertainment.• Best infrastructure in place• Land availability• High quality educational facilities with one IIM & NIT, medical college• The proposed monorail• New projects like 2 cyber parks, subcity at Kinaloor, industrial investments, BITS knowledge park etc.• Large investments from NRI’s.( 70% of construction someway related to NRI)-CREDAI
  • 3. CITY STUDY CURRENT POPULATION-2,074,778 PROJECTED POPULATION 2021- 2,282,255 GROWTH RATE- 10%SOURCE: KERALA SUSTAINABLE DEVELOPMENT REPORT Year Market condition Rates or cases 2006 Market is good and is up for a boom Rs.1000cr business ( housing)MARKET STUDY FOR THE PASTmortgage crises effects. But the industry held well in 2007 sub-prime 10 YEARS Rs.1500cr total 500-600cr Hsng Calicut 2008 Despite the fall of the market by mid, the Kozhikode market still Rs.500cr business( housing) was active, because of high purchasing power of NRI. Launches of hilite happened even during dip. 2009 The market caught back by august Low rentals for commercial as demand is less. Many office spaces vacant 2010-11 Market on a high Decent growth and good returns 2012 Market slow as NRI investment is low. Reasons- delays and increase in capital investment.
  • 4. Expert opinions… “Kozhikode has not witnessed an artificial demand for housing. Buyers also respond positively to the offers,” says K.V. Haseeb Ahamed, State treasurer of CREDAI. "Traditionally, the share of the non-resident Keralites has remained around 60-65%," says M A Mehaboob, director of Hilite Builders. "Speculative investment for short-term gains is practically absent in Kozhikode," says Nityanad Kamath of Ace Structurals
  • 5. CITY EVOLUTION AND THE NEW DEVELOPMENT DIRECTIONS To Bangalore Old bypass Mavoor road New developments First Rly station Road Rly line New bypass Proposed metro New Development axis Kannur road First settlements City developments
  • 6. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORResidential – apartments and plotted/villahousing market across economic classesThe market is currently focusing mainly onapartments for working class MIG and afew HIG. Villas are not picking up. Thecurrent projects re of mixed use in nature.Factor ResultCapital Value INDIVITUAL -1000-1800/SQFT 3BHK 2300- 3000/SQFT VILLA 3500-3700/SQFTCircle Rate NARental Value 8-15/sqft/mnthQuantum of existing stock 56 apartments,7 villas,1 integrated townshipQuantum Of Vacant Stock NOT AVAILABLEDEMAND/SUPPLY SYSTEM SUFFICIENT DEMAND SUPPLY TO SUSTAIN THE MARKETCompeting ProjectProfile Of Buyers MIDDLE CLASS SERVICE SECTOR/ NRIMode Of Transaction CHEQUE/CASH- CASH PREFERED BY NRIMethod Of Transaction SHORT LEASEImpact Of Social/Physical Infrastructure On BUSINESS CAUGHT UP DUE TO MONORAIL ANDProjects CYBERPARK
  • 7. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORCommercial – Office developments underprivate control, which are actively rented andtransacted. Mavoor road is the prime focuscommercial area in the city. These are mostlyoffice spaces rented out early days. New officeareas are towards the bypass and new bypass.The movement is not very fast.Factor ResultCapital Value 500-1000/sqftCircle Rate NARental Value Rs 80-130/sqft/mnthQuantum Of Existing Stock NAQuantum Of Vacant Stock Office spaces inner spaces are still unoccupiedDemand/Supply System Meeting demandCompeting ProjectProfile Of Buyers NRI, MUSLIM MAJORITY WHO HOLD THE MARKETMode Of Transaction CASHMethod Of Transaction LONG LEASE/short leaseImpact Of Social/Physical Infrastructure On Projects GOOD AS NEW DEV. PROJECTS ARE COMING AND THE CITY IS EXPANDING IN TERMS OF NUMBER.
  • 8. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORRetail – organised retail properties and highstreet retail properties. Mavoor road isundergoing fast transformation in built toaccommodate more malls and retail outlets ofbranded stores. Areas like old and new bypassare the recent prime spots.Factor ResultCapital Value 3000-6000/sqftCircle Rate NARental Value Rs 80-130/sqft/mnthQuantum Of Existing Stock 9 MALLSQuantum Of Vacant Stock NIL EXCEPT FOR SOME WHICH ARE INNER AREASDemand/Supply System MEETING THE DEMANDCompeting ProjectProfile Of Buyers MUSLIM MAJORITY AS THEY HAVE THE MONEY. INVESTORS FROM OUTSIDEMode Of Transaction CASH/CHEQUEMethod Of Transaction DAILY/SHORT/LONG LEASEImpact Of Social/Physical Infrastructure On Projects GOOD AS NEW DEV. PROJECTS ARE COMING AND THE CITY IS EXPANDING IN TERMS OF NUMBER. BIG BRANDS ALLOWED DURING CONGRESS.
  • 9. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORLeisure and Entertainment – Cinema, theatre, themeparks, any other entertainment facility being runcommercially. City used to lack in these field until recentlywhen all cinemas shifted to multiplexes. Otherentertainment facilities are less like clubs, multi-gyms etcFactor ResultCapital ValueCircle Rate NARental ValueQuantum Of Existing Stock 3 MULTIPLEX, 7 CINEMAQuantum Of Vacant Stock NILDemand/Supply System GOOD FOR CINEMA, NOT FOR OTHER LEISURE FACILITES..Competing ProjectProfile Of Buyers ALREADY ESTABLISHED INVESTORS WHO HAVE BEEN RUNNING THESE SECTORS.Mode Of Transaction CASH/CHEQUEMethod Of Transaction LONG LEASEImpact Of Social/Physical Infrastructure On Projects THE INMIGRATION OF MANY YOUNG NON- KERALITES FOR STUDY AND WORK HAVE OPENED UP ENTERTAINMENT SECTOR
  • 10. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORIndustrial – Flatted factories, standalone developments,industrial estates. Earlier the city used to be industrial hubwith major industries like gwalior irons, CW tiles, shipyard,wood industry etc. but now the market is completely downand the sites are going for complete rewamp.Factor ResultCapital Value NACircle Rate NARental Value (KINFRA)20-30/sqft lease holdQuantum Of Existing Stock GWALIOR IRONS (BIRLA), COMMONWEALTH TILES, KALLAI WOOD FACTORY, STEEL COMPLEX, KINFRA, KINALOOR INDUS CENTRE.Quantum Of Vacant Stock GWALIOR IRONSDemand/Supply System NOT INVESTING IN INDUSTRIESCompeting ProjectProfile Of Buyers SMALL SCALE INDUSTRIES AND STAND ALONE INDUSTRIALISTSMode Of Transaction CASH/CHEQUEMethod Of Transaction OWNERSHIP/LONG LEASEImpact Of Social/Physical Infrastructure On Projects THE NEW KINALOOR COMPLEX IS A BOOST TO OTHERWISE DEAD SECTOR
  • 11. UNDERSTANDING THE ASSET CLASSES OF REAL ESTATE SECTORInstitutional – schools, higher education, universities, hospitals,religious institutions, government institutions and governmentoffices. Kozhikode is known for its high literacy rate. But newprivate interests are coming in with high facility residentialschools. One of its kind in kerala.Factor ResultCapital Value 800-1000/sqft (Aided school)Circle Rate NARental Value NAQuantum Of Existing Stock 170 SCHOOLS,29 PROFESSIONAL COLLEGE INCLUDING NIT IIM & MED COLLEGEQuantum Of Vacant Stock NILDemand/Supply System GOODCompeting ProjectProfile Of Buyers RELIGIOUS TRUSTS,PVT INVESTORS ( RES SCHOOLS)Mode Of Transaction CASH/CHEQUEMethod Of Transaction OWNERSHIPImpact Of Social/Physical Infrastructure On Projects GREATER AWARENESS AND DEMAND FOR QUALITY EDUCATION HAS PUSHED THIS SECTOR TO THE FOREFRONT. BUT STILL DOMINATED BY THE RELIGIOUS INSTITUTIONS.
  • 12. MICRO MARKETS AND LAND MARK REAL ESTATE PROJECTS CONFIDENT A MALL/MULTIPLEX/R ES MIXED USE MOBILITY HUB B COMMERCIAL 6 COMPLEX 1 7 10 C INTER TRANSIT HUB WITH MONORAIL/COMM 9 ERCIAL B D HILITE HILLS INTEGRATED 8 TOWNSHIP 5 A 11 C E CYBER CITY 12 F KSRTC TRASPORT COMPLEX MIXED 3 F USE ( GOVT ) D E 2 4
  • 13. MICRO CHARACTER MARKET TRENDMICRO MARKETSMARKETReal estate micro marketsDISCARDED onTHE FISHERMAN COMMUNITY AREA. NOT PRIME such / pricing/ physical1.BEACH AREA THE AREA IS MOSTLY based AS certain homogeneous character NOT GOODarea/ nature of activity say CBD/ secondary markets, industrial estate etc. Attempt should be2. CITY BEACH CAME TO REAL ESTATE FOCUS VERY RECENTLY BY THE COMING UP OF NEW FLYOVER GOODmade to identify micro markets in such a manner that they represent the core activity not allAREA CONNECTING TO CITY. MANY RESIDENTIAL APARTMENTS HAVE COME UP ON BEACH FRONTactivity/ product. THE CRZ RULES SHOWING THE DEMAND.CERTAIN PARTS OF OLD CITY. VIOLATING3.CBD THE CORE CITY AREA WHERE THE MAIN COMMERCIAL FUNCTIONS ARE IDENTIFIED. MALLS, VERY GOOD OFFICES, SHOPPING CENTRES ETC FEATURE HERE. ALMOST REACHED SATURATION IN TERMS OF LAND AVAILABILTIY AND HENCE IS GOING FOR RE DEVELOPMENT. TREND IS TO POOL LAND PROPERTIES TO BUILD MALLS AND SHOPPING CENTRES.4.KALLAI AREA PART OF THE OLD CITY AREA. DISCARDED IN TERMS OF REAL ESTATE SECTOR AS IT FEATURES NOT GOOD MAINLY INDUSTRIAL USES. ALSO KNOWN FOR WOOD LOGGING CENTRE.5. DREAM CITY REGION ALONG THE CANOLI CANAL. ENVISAGED AS A DREAM CITY URBAN AREA BY 80’S EXCELLENTAREA MASTERPLAN. BUT DIDN’T COME UP DUE TO ENVIRONMENTAL REASONS. BROUGHT TO FOCUS NOW WITH MAJOR REAL ESTATE DEVELOPMENTS HAPPENING ALONG THE CANAL. MOSTLY COMMERCIAL MALLS AND RESIDENTIAL MIXED USE.6. WEST HILL ONE OF THE RESIDENTIAL HUBS OF THE CITY. MIDDLE CLASS HOUSINGS. BECAUSE OF THE GOOD ELEVATED TOPOGRAPHY AND DISCONNECT FROM THE CORE CITY NOT A BIG REAL ESTATE TARGET. BUT APARTMENTS ARE COMING UP.7. AREA WHICH CAME TO FOCUS NOW AND IS PREFERRED AS MAIN CENTRES FOR RESIDENTIAL GOODERANJIPALAM APARTMENTS.8. NEW BYPASS THE PRIME REAL ESTATE AREA CAME DUE TO THE COMING OF THE NEW BYPASS TO KANNUR. EXCELLENT THE SPECULATION BASED ON THE COMING OF CYBER CITY, MOBILITY HUB AND HILITE HILLS INTEGRATED TOWNSHIP ALONG HAS MADE THIS AREA THE MOST WANTED.9.MALAPARAM RESIDENTIAL SUBURB. KNOWN FOR ITS CHEAP RENTAL HOUSINGS. FAST DEVELOPMENT DUE TO GOODBA THE NEW BYPASS AND GOOD CONNECTIVITY.10.SILVER A RESIDENTIAL SUBURB. REAL ESTATE APARTMENTS ARE FAST COMING UP IN THESE REHIONS AS GOODHILLS THE PROXIMITY TO CITY AND THE NATIONAL HIGHWAY. PREFERRED BY WORKING CLASS11. MEDICAL WAS NOT A DEVELOPED AREA EVEN WITH THE PRESENCE OF A MEDICAL COLLEGE. BROUGHT TO EXCELLENTCOLLEGE FOCUS BY THE COMING UP OF BUS TERMINAL AND THE PROPOSED MONORAIL. NOW A PRIME REAL ESTATE AREA.
  • 14. PROPERTY RATES AT DIFFERENT MICRO MARKETS CAPITAL:Rs 3000 RENT:8/sqft/mnth CAPITAL:3000/sqft CAPITAL: RENT:8/sqft/mnth CAPITAL:3500/sqft RENT:8/SQFT/MNTH RENT:8/sqft CAPITAL:3000/sqft CAPITAL:4000/sqft RENT:12/sqft/mnth 6 RENT:15/sqft/mnth 1 7 10CAPITAL:Rs4000/sqftRENT:Rs8/sqft/mnth 9 CAPITAL:6500/sqft CAPITAL:4000/sqft RENT:NA RENT:15/sqft/mnth CAPITAL:6500/sqft CAPITAL:3500/sqft RENT:30/sqft/mnth CAPITAL:4500/sqft 8 RENT:NA RENT:10/sqft/mnth 5 CAPITAL:4000/sqft RENT:10/sqft/mnth 11 CAPITAL:4000/sqft RENT:NA CAPITAL:6500/sqft RENT:25/sqft/mnth 12 CAPITAL:6000/sqft RENT:20/sqft/mnth 3 CAPITAL:4500/sqft CAPITAL:NA RENT:NA RENT:NA 2 CAPITAL:3000/sqft RENT:20/sqft/mnth 4 CAPITAL:3000sqft RENT:10/sqft/mnth
  • 15. NEW DEVELOPMENTAL ACTIVITES AND THER SCALE/NATURE Cyber park- along the new bypass road Keralas tallest residential 40 storeys Mavoor road New malls/multiplexes/mixed uses- old bypass road Hilite hills. South indias first of its kind integrated township. New bypass road
  • 16. Builders which are not specific to Kozhikode Builders which are into commercial other than residential Builders only indulged in residential market Builders which are based in Kozhikode and which are focused on Kozhikode and its precinct market only.• There are already established local builders who have made sufficient profit.• This has attracted other established builders to the city to invest.• Most of the investors are into residential• Recently investments have started in commercial and hospitality.
  • 17. FINDINGS• Areas of high investment are in residential sector especially with a mixed use typology preferred due to the peculiar linear city condition of Kerala.• Integrated townships more likely to come along the new bypass as facilities are less in this area.• Villas and villaments are not adequately marketed enough to catch the clients as villas are a most preferred typology in all cities like cochin because of the large plot house culture of Keralites.• Office commercial wont get a boost as the large office spaces in the cyber park are open for allotment.• Retail boom is what the city will witness in the next few years and will need to catch no the potential. Malls/multiplexes/retail branded stores are flowing into the city, which is bound to increase with the FDI policy.• Hospitality sector including hotels of business class and above are found short in the study where there is good demand in the future• Industries are surely moving out of the city and definitively not good for investment• Market is focusing on a linear way as the cities in Kerala as always grown. Hence with the coming of monorail land other fast movement options the city is bound to expand soon to places as far as 20 to 30 km away. Now the city limits itself to 15 kms.• Potential of the constantly flowing NRI funds makes sure the market is not affected much by the ups and downs as we have witnessed in the past depression.• Hence Kozhikode primafacia is definitely a good place for investment.
  • 18. REFERENCESInterview with Asha Thomas- real estate consultantInterview with P.C Augustine- chief manager, Regional Credit hub, Federal bankInterview with Praveen Jacob- commercial manager, Confident builders Confederation of the Real Estate Developers Association of India (CREDAI) Kozhikode chapter.Http://www.Stampdutyregistration.ComHttp://www.Beyondsquarefeet.Com/pdfHttp://iimklive.Com/index.PhpHttp://www.Lemonhunt.Com/Www.Hindu.ComWww.Timesofindia.ComHttp://www.Bharatestates.Com/Www.Economictimes.ComWww.Hilitehills.ComWww.Propertydays.ComWww.Helloaddress.ComKerala urbanization reportCensus of india 2011