INDIA NEWS
MUMBAI RENTALS DEEMED TO INCREASE
Te recent revision of the stamp duty in Maharashtra for leave-license is definitely going to impact the rental market in the residential, commercial and retail asset classes, according to Jones Lang LaSalle India. Te corporate commercial property market will be less affected, since this asset class typically operates on leases locked in for longer tenures which can extend up to 3-5 years. However, retail property leases will feel the pinch, since this sector typically works on annual leases in the form of leave and license, according to JLL India. “Te hike in stamp duty will increase occupancy costs for retail businesses and also for tenants in residential premises,” said Subhankar Mitra, Strategic Consultant at JLL India. Residential apartments are usually given on renewable leases of 11 months, with the nature of agreement being leave and license. Te previous stamp duty on these agreements was nominal at 0.1% of the lease amount. As things stand now, a person paying a rent of Rs.10000 per month will cough up stamp duty to the tune of Rs.1200 as opposed to the earlier Rs.120 rupees. Mitra explains that on an immediate basis, there may not be any significant change in demand. “However, more and more tenants in cities like Mumbai and Pune will begin showing a preference for owned rather than leased properties, as this would make more financial sense,” he said. Tis dynamic would be more evident in Mumbai he added, as this city sees a higher incidence of property leasing on the account of the high cost of ownership. Less expensive cities like Pune would show a lower and slower impact.
INDIA’S SENIOR LIVING SECTOR AT A CROSSROAD With the recent relaxation of Foreign Direct Investment (FDI) restrictions
on investments in the sector and a population of seniors (nearly 100 million seniors in India now) to cater to in the coming decades, there clearly exists an untapped opportunity for investment and development in this sector, according to Jones Lang LaSalle India. Unlike western countries where the senior living industry has gained maturity, India provides an opportunity to developers, service providers, healthcare players and operators to create solutions specific to India while leveraging learning from across the world. In contrast to senior living in the west, the concept of housing for seniors as a specific asset class in India continues to have social stigma associated with it which has restricted the growth of the sector at large. Tere is, however, now a growing realization that families are no longer equipped to take care of their aged family members. Inthis changing social environment, concepts such as contemporary
retirement resorts are becoming acceptable and popular. While this has prompted developers to come up with projects targeting the independent seniors, the country is yet to see integrated continuing care retirement communities. As JLL India reports, there has been a marked increase in the number of senior living projects in the last five years with growing acceptability and demand in the sector. Geographically, senior living projects are coming up in the suburbs of all key metros in the country and in some selected destinations such as Coimbatore, Goa and Dehradun which have traditionally been retirement towns. In 2011, India had about 76 million seniors above the age of 60 years and it is expected that this figure will grow to 173 million by 2025, further increasing to about 240 million by 2050, JLL India reports l
16 I CITYSCAPE I MAY 2012
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