Important developments that you should know about Indian real estate and why this is still the best time for you to get started.
India will soon be the world’s fastest growing economy for the next 25 to 30 years, due to strong domestic fundamentals, massive surge in foreign investment and a forward thinking government.
And within India, Amaravati will surely be one of the top performing markets for you to invest – as in contrast to the saturating metro cities like Bangalore, Hyderabad, Chennai, Mumbai, Delhi etc, Amaravati has immense room for growth as it is a brand new capital city being built from scratch, on a fresh slate and to the very best of global standards.
However after hosting free educational seminars for over 4300 NRIs on our recent 8000 mile roadshow covering 32 cities across USA from March to July this year, we realised that a lot of Indians across the world have been holding off on their investments in Indian real estate because of a number of misconceptions about :
- stagnating / saturated markets
- black money & over-inflated prices
- impending crash in prices due to demonetisation
- lack of transparency and accountability by builders
- worry of depreciation of Rupee against the Dollar
- reduced growth prospects due to slowdown in IT/ITES (a.k.a. The Trump Effect)
- and most importantly, lack of awareness on the tremendous developments & growth prospects in India (especially about Amaravati – Andhra’s new capital).
Unfortunately, the vision & tremendous amount of work being done on ground does NOT get conveyed to most of you across the world and most of the time, they are dampened by rumours and gossip.
But since we are on the field every day and thus have the advantage of knowing ground realities, we have compiled this detailed write-up to help you get over these roadblocks by showing why and how each of the above assumptions & fears are outdated or invalid these days, by giving you an idea of how :
- Quickly Appreciation Rupee = Dual Advantage for NRIs
The rupee is up 6% since Jan 2017 and is set to hit 60 per dollar by end of this year – making this the best time for you to send money to India.
- India’s Growth is NOT dependent on IT alone
Abundance of cheap & highly skilled labour combined with a massive push for “Make in India” is leading to a manufacturing, exports, warehousing & logistics boom which will fuel the growth of India’s future for the next 2 to 3 decades.
- High Regulated Realty Market = Increased Safety of Your Money
How the market is now tightly regulated and controlled, thus holding builders fully accountable and liable for on-time performance.
- Falling Interest Rates = More Demand for Real Estate
FDs have fallen from 9% to 6.5% and this is pushing more investors to real estate for higher returns, as FDs are no longer a viable investment.
- Amaravati set to be one of India’s Leading Realty Markets
Why you should make Amaravati a compulsory part of your investment / real estate portfolio in India.
I hope that the following information will inspire / reinforce your confidence in India (and Amaravati in particular) as THE best investment destination for your money, for the next 20 years.
Rupee is up 6% in the last 6 months & may hit 60 against the dollar by end of 2017
“I see the Indian rupee continuing to get stronger and probably hit Rs.60 against the US dollar by the end of the year on the back of growth in India, strong and rising reserves. If you look at the price parity in India, it is not overvalued.”
Mark Mobius, Executive Chairman of Templeton Emerging Markets (Franklin Templeton Investments)
- After hitting a 2 year high recently, the rupee is hovering at Rs.63.5 per dollar, up 6% from Rs.67.95 just six months ago (i.e. Jan 2017) – making it one of the best performing currencies in the world, contrary to expectations by most NRIs of a depreciation in value.
- Steady growth of foreign investments + massive surge in forex reserves + improving fundamentals of the Indian economy have lead to a steady appreciation of rupee against the dollar, without much volatility.
- Many top policymakers and bankers in India & Wall Street have hinted that it could end up as high as Rs.60 by end of 2017 and remain stable at that level for the next few years.
- The Reserve Bank of India (RBI) has also been supportive of the appreciation (though it may hurt exports), by not intervening (depreciating) in the currency valuation.
- With landmark policy events like demonetisation, implementation of GST, digitisation of finance, etc. confidence in India & the Indian Rupee has shot up and will bring in further foreign investment into India, making the currency even stronger as forex reserves grow over time.
- Some of G&C’s own clients who work on Wall Street (NY), have expressed their opinion that the Rupee could go as far as Rs.58 per $ in the next 2 to 3 years.
This is hence the best time for you to start sending money to India to get the most out of your dollars.
News coverage about this :
- Rupee may hit 60 against the dollar by 2017-end : Mark Mobius, Executive Chairman of Templeton Emerging Markets (Franklin Templeton Investments)
Click Here to Read More
- NDTV – Why Rupee is among the Best Performing Currencies versus Dollar
Click Here to Read More
- India’s forex reserves surge to record $392.86 billion
Click Here to Read More
India’s growth & future isn’t dependent on just IT/ITES & Outsourcing alone – a.k.a. The Trump Scare!
- One must keep in mind that India’s growth is NOT dependent on IT, outsourcing and few other soft industries ALONE.
- India has a huge advantage over most countries in terms of a massive, young, educated and cheap workforce (eg. the hourly labor cost in India for manufacturing averages $0.92, compared with $3.52 in China – Boston Consulting Group).
- This abundance of cheap and highly skilled labour combined with a massive push for “Make in India” and stable government is leading to a manufacturing, exports, warehousing and logistics boom across India and this will fuel / add to the IT based growth of India’s future for the next 2 to 3 decades.
- Lack of infrastructure, uninterrupted electricity, seamless logistics and straightforward legal / licensing processes are the major factors holding India back – and this is exactly what states like Andhra Pradesh are tackling with planned infrastructure (at city level – Smart Cities – and also with SEZs, Solar Parks (Hindupur), IT parks, manufacturing hubs like Sri City, Tirupati’s Mobile Cluster (where Apple may set up shop), ports like Krishnapatnam Port, etc) and corruption free E-governance.
- More importantly, apart from outsourcing and exports, India’s domestic population itself is the world’s largest consumer base for a large variety of products and services.
Therefore even a slowdown in IT/ITES will not hamper India’s overall growth in the long run and hence, you can invest without any such concerns.
“All in, I believe India’s economy has bottomed out and will pick up pace in the next few years. With its young and growing labour force, rising middle class, and relatively low household leverage, there is no doubt in my mind that India is on a structural rise. I am very bullish about India’s prospects.”
– Piyush Gupta, CEO – DBS Bank (One of Asia’s largest banks)
Interest Rates are Nose diving & Investors are looking for Alternatives
FDs & Other Traditional Investments Not Profitable Anymore
Due to massive inflow of deposits post demonetisation, Fixed Deposits (FDs) – one of India’s most popular investments – have lost their charm, with returns falling tremendously from 9% to 6.5% today and which will fall further to as low as 5% over the next few years.
Real Estate is now increasingly preferred over Gold & Stock Markets
With returns from FDs falling drastically, investors are now desperately looking for alternate investments that fetch higher returns and for this, the 2 most popular alternatives now are stock markets & real estate.
Renting out Apartments gives VERY LOW Returns
Rental income from residential property is hardly 2.5% to 3% per annum – less than what many savings account will give you. With home loans getting cheaper, more people prefer buying a home rather than paying rent – leading to a further decrease of rental ROI from pure residential property.
Mutual Funds are not Consistent & Stock Market is Risky & Unpredictable
While mutual funds have performed well with an average ROI of 12% to 15% p.a., they are not consistent and there is no guarantee of income, no tax benefits, no possibility to get a loan to invest in them and much more – making them undependable to quite an extent. Stock market is downright risky where you can end up making 50% one day and losing 100% the very next day.
All of the above means that there are very few investment options in India for those looking to earn a consistent, stable and high monthly income.
And to address this very big gap in India, G&C has focused its energies over the last 4 years on promoting the Serviced Hotel Apartments concept across India, which has already been proven across the world in matured markets like USA, Australia, Dubai, South East Asia, New Zealand, etc.
Starlit Suites as a Perfect Alternative for High Monthly Income
- This search for higher yielding assets has led to a flood of bookings for Starlit Suites – our high monthly rental income generating hotel apartments across India (you can read more about this here).
- Our first such project – Starlit Suites Bangalore (Electronic City) is generating 9.3% ROI for its investors in its 2nd year of operations and will hit 11% to 12% by early 2018. This is in addition to capital appreciation of 8% p.a. since its inauguration in 2015.
- Our second tower – Starlit Suites Kochi – is in its 8th month of operations and is on track to hit 7% to 8% ROI as projected by the end of its 1st year of operations by end of 2017.
- Signature towers are under construction at Tirupati (operational January 2018), Shirdi (operational November 2017), Delhi-Neemrana (operational September 2017), Hyderabad (operational January 2019), with Pune and Trivandrum set to commence construction in the next 3 months.
In other words as per G&C, there is simply no better option in India for an individual investor like you to earn a stable, consistent and high monthly income with numerous tax benefits and availability of home loan at very reasonable rates.
Disciplining Indian Real Estate
How you stand to benefit from Demonetisation, RERA & GST
The back to back implementation of demonetisation, RERA Act (Real Estate Regulatory Authority) and GST over the last 8 months has choked the industry, although it was long overdue & expected.
While these historic and game changing regulations have caused short term anxiety and pain, we are already seeing their long term benefits for everyone as below.
Benefits of RERA Act :
- The implementation of Real Estate Regulation Authority (RERA) Act has greatly increased transparency + accountability, protection against delays, liquidity of investment & stability of prices, while eliminating all unbranded / sub-standard builders who will not be able to endure the strictly regulated environment of the industry going forward.
- While most top rung builders have already been following the rules as an internal guideline themselves, this act will boost the confidence of investors (individual and institutional), making it easier for everyone to invest, maintain and profit from real estate.
Benefits of Demonetisation :
- With the elimination of cash, majority of small, shady & unbranded builders were WIPED OUT slowly as they could no longer survive in the “fully white” economy.
- While demand for homes remained stable, the supply of new homes has fallen drastically, leading to a natural increase in prices as more people chase a lesser number of homes.
- While many expected a crash in real estate prices and have been holding off on their investments, prices have remained quite stable in most markets and many cities have infact seen a steady growth in prices – Hyderabad for example has gone up 12% in the last 8 months!
You can also click here to read why demonetisation did not affect prices and if you too have been holding off on investments because of this, do not waste anymore time and get started right away!
As Major Cities Saturate, Amaravati is set to grow rapidly over the next 2 Decades
Amaravati will emerge as One of the Top Investment Destinations versus Saturating Markets in India
Over the last few years, top realty markets such as Bangalore, Hyderabad, Pune, Chennai, Mumbai, Delhi, etc are saturating due to excess supply, lack of supporting infrastructure & standardisation of projects – where almost every builder’s project has the same features & specifications.
This has made it harder to differentiate projects and extract a premium while reselling, thus slowing down the invest, resell and reinvest cycle and also significantly reducing the amount of profits you can earn from such investments.
Of course a few select pockets are still high recommended – such as villa plots in North Bangalore / Devanahalli; provided you enter at the right price.
In contrast, Amaravati is a virgin market being built from the ground up on a clean slate and to the very best of global standards.
More importantly, it is being led by a government that is keen on creating India’s best capital city with the most modern infrastructure, smart city planning and foreign investment & technical expertise.
With the government focusing not only on IT but also on knowledge sectors and industries like Solar & Wind Power, Pharma, Biotechnology, AI / Machine Learning, Big Data and Data Centers, Automation, Electric and Driverless transport apart from the traditional manufacturing sectors for Automobiles, Electronics, Mobile Phones, etc .
Andhra Pradesh is poised for double digit growth (current GDP is 10.9%, making it the fastest growing state in India, compared to national average of 7.4%) and has also been declared the No.1 state in terms of ease of doing business by the World Bank.
G&C has hence over the last 2 years, focused its energies and investments in acquiring and developing over 600 acres of what will become benchmarks in their respective categories in Andhra Pradesh – with the simple vision that proactively planned infrastructure is the bedrock of a booming economy.
Unfortunately, none of the vision, rapid growth and development taking place in this capital city is being conveyed or communicated to people like you around the world and at most times is dampened by rumors and gossip, because of which many have switched off or stayed away from investing in Amaravati’s USD $8 Billion growth story.
Rumors about change of government that could derail Amaravati
- There are rumors that a change of government in the upcoming elections in AP (which itself is grossly overrated and based solely on gossip & rumor mongering) – could slow down or even stop the development of Amaravati.
- Even those who are very keen on investing in Andhra and have the money readily available, are holding back, afraid that a change in Govt may adversely affect Andhra’s growth and in turn, affect their investments – something we believe is impossible!
- One must keep in mind that the policies & projects for development of infrastructure for Amaravati are through Government Orders (GOs) at Central Govt and State Govt level, putting in motion huge public and private investments that are IRREVERSIBLE – infact a chain reaction of irreversible events have already taken place over the last few years and hence there is no going back.
- So even if another government takes charge, their only way forward is to do better than the previous government by building on the current master plan, which has been finalized and approved by all authorities.
- A tremendous amount of time, money and effort has been invested into Amaravati by multiple stakeholders – the central and state governments, public and private industries and most importantly, the people of Andhra Pradesh (most noticeable through the massive Land Pooling Scheme of 30,000 acres plus).
- It would be impossible for someone to even think of undoing all these efforts and hence you can take it for granted that even a new government / party will continue developing Amaravati and maybe do a better job at it just to prove themselves.
The notion of reversing these developments is IRRATIONAL and UNREAL at best and hence you should not pay attention to such rumors.
Even the hardest political opponents have made press statements that Amaravati will be the focus.
Take a look at Amaravati’s Infrastructure
For you to get an idea of the quality of infrastructure being planned at Amaravati, take a look at the videos below and you can safely assume that even if just 50% to 70% of the below vision is successfully implemented, Amaravati will easily become the best planned city in India.
Road Infrastructure and Streetscape
Amaravati Flythrough Animation
The proof of this vision and the confidence of institutional investors is already showing in terms of new developments that are visible on the ground.
We have listed out some of the more important ones for your ready reading :
Rs.6000 Crore BRS Medicity (works have begun)
- This includes a Rs.4000 Crore BRS Medical City, a Rs.1600 Crore Indo UK Health Foundation along with World Famous King’s College & Hospital and the All India Institute of Medical Sciences (AIIMS, Govt of India) – already under development.
- Another 18 medical institutions & colleges are coming into Amaravati in the next 6 to 8 months.
- This will boost Medical Research & Tourism, which is now a very important driver of economic growth for many countries.
- Click here to read news coverage in The Hindu.
- Click here to read news coverage about Amaravati turning into a medicare hub of AP.
- Click here to read news coverage about foundation stone laying ceremony for BRS Medicity.
Already Operational – Asia’s Largest, Most Advanced Data Center – Pi Amaravati, Mangalagiri
- With a 5000 rack capacity, this is the largest data center in Asia & one of the largest in the world, with the highest (Tier IV) certification from the Uptime Institute.
- Being expanded further with Rs.550 crores additional investment.
- Click here to read news coverage of Pi Amaravati’s inauguration.
- Click here to read about expansion plans for Pi Amaravati.
Rs.3000 Crore / $450 Million SRM University (under construction)
Spread across 200 acres and designed by the same architects who designed MIT, Stanford,etc. SRM will invest Rs.3000 crores / $450 Million over 10 years and will offer classes in collaboration with with MIT & Berkeley.
Click here to read news coverage in The Hindu.
HCL’s Rs.1000 crore Development Center (Phase 1 under construction)
The State government has signed definitive MoU with HCL Technologies Limited and work has already begun on the 1st IT centres in the capital city.
Click here to read news coverage in Economic Times.
VIT University, All India Institute of Medical Sciences (AIIMS, Govt of India), National Institute of Design (India’s 2nd NID)
and many more large institutions already under construction
India’s Biggest Convention Center with a 5 Star Hotel and Golf Course being planned by Dr. BR Shetty from Dubai.
Click here to read news coverage in The Hindu.
Major Recent Infrastructure Developments
Dredging of Krishna River (contracts awarded, works have commenced)
The Krishna river has been declared as National Waterway 4 (1st of its kind in India) and is being dredged from Muktyala, Jaggeyyapeta (next to our project – Alakananda) upto Amaravati to facilitate transportation of all raw material for construction of Amaravati – cement, steel and sand – by barges on the Krishna River from Muktyala – as this reduces tremendous amount of cost, time and environmental impact.
Click on links below to read about news coverage by Times of India about :
Material to build Amaravati will flow via Krishna River
Amaravati to be built via Water Transport
Rs.1050 crore barrage to be constructed near Kanchikacherla
As part of the finalized Rs.20,000 crore Outer Ring Road and will be the first access point for Amaravati from Hyderabad, Mumbai, Pune and Western India. This is in addition to the iconic Ibrahimpatnam bridge.
Click here to see news coverage in The Hindu about 6 final designs submitted by L&T for bridges to be constructed over Krishna River
Mangalagiri emerges as the Hottest Investment Destination in Amaravati region
Owing to its location in the center of Amaravati, Vijayawada and Guntur with the advantage of a National Highway connecting the area, Mangalagiri is poised to become the best growth corridor.
Click here to read news coverage about Mangalagiri hogging the limelight for most new developments in and around Amaravati!
Take a look at developments on the Ground
Seed Access Road
Amaravati to Ananthapur Super Expressway
Inauguration of VIT & SRM Universities
7 New Ways to reach
What this means for you?
Keeping in mind above factors and the tremendous action on ground, I strongly feel this is the best time to invest in India and in particular, Amaravati – for you to take advantage of prices today, before the markets start an upward rally which is expected to begin shortly.
Please recall my vision statements regarding the Amaravati master plan, where I mentioned that growth for the next decade will be mainly in the Hyderabad to Vijayawada corridor (with Jaggayyapeta & Kanchikacherla being the key spots) AND the Vijayawada to Guntur corridor (with Mangalagiri being the key spot) – fondly touted as the DOWNTOWN / GACHIBOWLI of Vijayawada by many experts.
I Have Relocated to Vijayawada, to focus more on our Amaravati projects
- My family and I have shifted base from Bangalore to Vijayawada to focus more on our Amaravati projects.
- This drastic move has further cemented the confidence of many of our patrons in the importance of making Amaravati a part of their / your real estate portfolio in India.
- While Bangalore will continue to be our headquarters, I will be working out of our 91 seater office at Gollapudi, Vijayawada spread over 5000 sft – making this the largest real estate office in Vijayawada.
- We have also commissioned additional city offices at Benz Circle and Bharati Nagar and will shortly be adding the 4th one near Mangalagiri.
- If you happen to visit / transit through Vijayawada in the next few months, please feel free to give me a call and my team will be happy to show you around our projects.
- You can reach me on +91 9980380000 / +1 845 213 8217 or any of my team members with whom you are in touch with to schedule a visit.
I strongly feel that you cannot go wrong with India and more so with the steady appreciation of rupee against dollar, this is the best time of NRIs to shift money to India and make the most out of your dollars.
I wish you all the best and hope to have you as an important part of G&C’s renewed growth story over the next 5 to 10 years.
Please feel free to get in touch with me or my team members for any further information.
India : +91 99803 80000
USA : + 1 845 213 8217