The real estate
market
is a challenge to survive and the survivors only
reap profits! The jungle of buyers or sellers has
just one motto – survival of the fittest. There is
no room for succumbing to a slow market, or for that
matter, opting out, after raking in the profits. The
market lures new players regularly, while the old
ones just won’t retire. Surviving a slow real estate
market involves the adopting of time-tried and
tested strategies. The real estate market allows
agents and independent buyers and sellers to enjoy
percent prices and growth that cushion any blow,
armed with the right moves.
Regular forecasts and inflation affect the true
value of real
estate
assets constantly. However, in a slow market, one
where selling is more difficult than buying, you can
survive the phase by focusing on the dos and don’ts
identified and recommended by the experts. The
strategies enable any agent or individual buyer or
seller to deal with the meandering market trends. A
slow market is volatile; prices sink one moment and
rise the next.
Surviving in a slow market is all about keeping the
right perspective. If you are a seller in a slow
market, once you realize that the value of your
property has depreciated, you need to network and
plan. As a seller in a slow market, you should take
the opportunity to upgrade the property. You could
consider renovations and restructuring. A simple
coat of paint makes all the difference to the
exteriors or the home. The slow market phase can be
capitalized on by enhancing the value of the
property. As a seller, it is best to use this time
to upgrade, rather than rush into a sale.
The phase could also be used to network extensively.
This is a time where decisions need to be made with
a long-term perspective. You need to increase the
physical appeal of your home. Today, buyers look for
stained carpets and chipped walls, and nothing skips
their attention. Every buyer welcomes cosmetic
makeovers. New carpets and replaced sinks and
retiled bathrooms close deals.
In the case of buyers, a slow market works. With
depreciated rates, the slow market is a buyer’s
market. With a little care before shoveling the
deal, you can save a lot of extra money and use it
in styling the home. The home improvement steps
taken by a seller is a good investment for both, the
buyer and the seller. However, while one has to wait
a while, the other needs to close a quick deal. The
agents on the other hand benefit during a slow
market if they represent the buyer, but only after
the market trend shifts if he or she represents the
seller.
Surviving in a slow market calls for using the phase
to your benefit. It hardly matters which side of the
ship you are on. Port and starboard, both call for
strategy and planning. One way or the other, deals
do come through, slow market or not. The real estate
market is very unpredictable and volatile.
Investments need to be made wisely. You can survive
any market trend by paying heed to the abundance of
advice available online and offline, 24x7.
Real Estate Developers Plan to Raise
Fund
With recent qualified
institutional placements (QIPs) of Unitech and
Indiabulls Real Estate raking-in over Rs 4,000 crore,
market watchers believe that more than a half a
dozen real estate companies, including Parsvnath
Developers, Omaxe and Sobha Developers, could be
next in line for fund raising. Housing Development &
Infrastructure Ltd (HDIL) on Saturday sustained the
fund-raising momentum in the realty space when it
announced plans to raise over Rs 2,800 crore from
sale of shares. Delhi-based Parsvnath Developers is
also mulling various options, including a QIP, to
raise overall Rs 500-800 crore in the current
quarter. According to a person involved with the
plans, Parsvnath would use the funds for ongoing
projects and lowering its debt obligations, that are
currently pegged at Rs 1,600 crore.
When
contacted, the Parsvnath Chairman, Mr Pradeep Jain,
declined to comment on the company’s plans but said
that the market sentiments were strong. “There is an
investor appetite for real estate stocks and also
valuations at the current level are attractive,” Mr
Jain said. Similarly, Omaxe is looking at
fund-raising options such as QIP or a preferential
placement although just how much it would look to
raise, could not be ascertained. Omaxe’s total debt
currently stands at Rs 1,600 crore and the company
hopes to trim this to Rs 1,000 crore by the
fiscal-end. Hence, in case of Omaxe too, part of the
money raised could go into retiring debt and the
balance into new and existing projects, a source
pointed out.
An e-mail sent to the external communications
agency of Sobha Developers went unanswered.
Macquarie analyst Mr Unmesh Sharma said that there
could be two rounds of capital raising in the realty
pack. “In the first round, we will see companies
raising capital to repair their balance sheet, and
in second phase some companies will go for share
sale to opportunistically purchase assets,” he said.
In April, Unitech’s QIP issue of Rs 1,625 crore
lifted the flagging sentiments in the real estate
sector; this was followed by a stake sale by DLF
promoters, and a QIP issue by Indiabulls Real
Estate. According to a Unitech official, nearly 95
per cent of Unitech’s QIP issue was placed with FIIs
such as HSBC, Prudential, Orient Global, Sandstone
Capital and Och-ziff. Earlier this month, promoters
of DLF Ltd offloaded 9.9 per cent stake in the
company to institutional investors, for Rs 3,860
crore. Capital International Fund bought the largest
chunk of DLF shares, while other investors were HSBC,
Fidelity and T Rowe Price. Indiabulls Real Estate
too raised Rs 2,656 crore through issue of shares on
institutional placement basis.
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