THE PHOENIX PERFORMERS

while both retail and real estate sectors took a beating during the slowdown, both are expected to perform much better in 2010, says Savreen Gadhoke

But in the process of getting over-excited over improvement in market affairs, the last two quarters saw real estate players raise prices of housing properties by 15-20%, thereby hampering demand once again. However, as Puri agrees, this is nothing to worry about as “for 2010, residential real estate demands appear to be the most promising. Residential will continue to lead the revival phase, led on by a lowering of mortgage rates and price rationalisation in the newly launched projects. It also looks the most positive in terms of funding. There is liquidity available for certain typologies and formats, most especially in the affordable housing segment.” The non-residential segment, which depends greatly upon overseas funding will witness a slower recovery as Vivek Mittal, CEO, Realty Stocks, says, “The office real estate space has been, to quite a measurable extent, hampered by the turbulence in the global economy, which has put a brake on the expansion of multinationals in India...” While the drying up of FDI in the retail space did play the spoilsport as far as the non-residential real estate segment is concerned, there is hope still. That the office space will bounce back is true. But unlike the residential space, it will need time beyond 2010 to regain lost ground.


THE SLOWER DRIVE...

he global retail sector will struggle for most part of 2010 due to high unemployment rates (in America & Europe) and stringent credit conditions. Fall in exports to the West will increase retail inventory in the Japanese market. There is however a chance of slow improvement, as companies will indulge in M&A activities. The growth of the IT/ITeS sector in the developed nations will primarily drive the demand for commercial real estate space.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Kremlin steps on the gas

Russia-Ukraine dispute leaves Europe shivering

In the late 1980s, American President Ronald Reagan had cautioned Europe, in a hushed voice, against relying too much on Russian energy supplies, claiming that one day the Kremlin might find it alluring enough to twist it into a blunt-force foreign-policy device. It was brushed aside as Reagan’s infamous ‘cynicism’. This week proved he was just being plain foresighted. In the gas conflict between Russia and Ukraine, both sides are licking their wounds after 10 days of hostility. While it has emerged that the pumping of gas will be taken up again in days to come and the chill from the lives of millions in the freezing winter in southern Europe would promptly pass, the damage done politically and economically to both fighting parties will defy any quick fix. “Both stand to lose if they fail to reach a resolution: Russia will appear vicious and callous; Ukraine’s trustworthiness as a purveyor to Europe will be called into question and its bickering leadership will lose integrity internally and overseas,” Dmitri Trenin, director of the Carnegie Moscow Center told TSI.

Meanwhile, Russia declined to resume gas exports to EU via Ukraine early this week, after condemning Kiev for making objectionable changes in the deal that was painstakingly stitched up during the weekend. In a spell of shuttle diplomacy, the Czech prime minister, Mirek Topolanek, got Russia’s Prime Minister Vladimir V Putin to sign in Moscow, and then flew to Kiev, to get Ukrainian PM, Yulia V Tymoshenko, to do so too.

The deal had called for immediate resumption of gas under the supervision of global monitors who would guarantee smooth delivery of the fuel to Europe. Gazprom, Russia’s gas monopoly, cut supplies for Ukrainian utilisation on January 1 over the latter’s alleged fuel debts, and then blocked exports to the EU via Ukraine after condemning it of 'stealing' the gas. Underneath the wrangling over shipment fees and rates, Russia’s outline was clear. Ukraine has infuriated the Kremlin with its proposition to join NATO. Moscow saw an opening to split Europe and weaken those nations it still deems inside its sphere of influence. However, Russia is also worried that the West might deny it capital and technology to upgrade its ailing refineries. Therefore, it's worth watching who will blink first. If it is the West, then a new phase in history will start with Russia in the ring, and not on the sidelines....Continue