Real Estate unit will turn profitable in Six months: Quikr’s CEO Chulet

Chulet added that the contribution of Quikr Realty to the company’s overall revenue will depend on how much the company decides to invest in it

BENGALURU: Tiger Global-backed online classifieds portal Quikr is looking at a time frame of three to six months for its real estate business, its largest vertical in terms of revenue contribution, to become profitable.

The move could help it catch global rival Olx, which has already turned profitable in India.

Quikr’s real estate listing business, including subsidiary Commonfloor, currently contributes to around 30 per cent of the company’s overall revenues.

“Earlier I was conservative when I had said we will become profitable in real estate in 12 months. However, it is going to happen sooner and it should be profitable in the next 3-6 months,” said Pranay Chulet, founder, and CEO of Quikr.

This is excluding the contribution of the recently acquired realty unit from HDFC, which was profitable during the financial year 2015-16. The new unit will give Quikr access to the real estate brokerage market in India, which could yield higher margins for the company in the future.

Chulet added that the contribution of Quikr Realty, formerly HDFC Realty, to the company’s overall revenue will depend on how much the company decides to invest in it.

In December, HDFC sold its two units — HDFC Developers and HDFC Realty – to Quickr for Rs 3.57 billion in return for 3.3 per cent stake in the online classifieds company. Going by the terms of that deal, the valuation of Quikr now stands at $1.69 billion (Rs 108 billion).

Apart from real estate, the other major verticals of Quikr — Jobs, Cars, and Services, are also on track to turning profitable. “Our jobs platform is already making a profit, real estate is getting there and the cars segment will be inching towards it soon,” said Chulet.

However, the overall profitability of the company was still some time away, owing to Quikr’s focus on growing its business. Marketing is still a big drain on Quikr bottom line and it isn’t going to go away anytime soon, even if the company’s business verticals begin generating cash on their own.

“It’s why our investors have given us money, to grow,” said Chulet, in response to a question on whether the company is planning to turn on the profit tap in favour of all outgrowth.

Quikr’s revenues were up by 55 per cent in the year that ended 31 March 2017 at Rs 637.9 million. The company, however, did not disclose its losses for the year in the documents which it had filed with the registrar of companies (RoC), though in the previous financial year (FY16) they had incurred a massive Rs 5.4 billion loss.

Rival Olx, on the other hand, reported revenues of Rs 925 million and a profit of Rs 80 million for the year that ended March 2017. However, a large chunk of Olx’s revenue is driven by services the India unit renders to its parent unit for which it gets paid.

Realty body lists steps to bolster Residential Sector – NAREDCO submits pre-Budget memorandum

Rajeev Talwar, Chairman, NAREDCO

NEW DELHI: Ahead of Budget 2018-19, National Real Estate Development Council (Naredco) on Wednesday suggested that the government should strive to increase the supply of residential properties and the purchasing power of home buyers to achieve the target of Housing for All by 2022.

It submitted the pre-budget memorandum with various suggestions and recommendations.

‘Win-win proposals’

“We have carefully spelt out our demands and suggestions pertaining to the sector for the upcoming budget. We not only want the sector to grow but also want the home buyers to benefit. All of this should happen along with an increase in government revenue from the sector. Our suggestions, if accepted, will be a win-win situation for all the stakeholders,” said Naredco Chairman Rajeev Talwar.

Industry status

“Industry status is something which is long overdue to the sector. The government should help developers in getting better access to funds and also incentivise homebuyers to create demand for the sector, which is facing a lot of challenges,” he added.

For some time, Naredco has been demanding to bring house construction in 12 per cent GST rate from 18 per cent now with 50 per cent abatement for land from the prevailing 33 per cent. The step will bring tax rate at the level of around 6 per cent of the property cost.

‘Harsh regulations’

“Regulatory requirements are at times very harsh for the sector and affect the pace of growth,” said Naredco Vice-Chairman Parveen Jain.

“We want government to make them realistic and in sync with genuine business expectations. Also, the sector which is facing challenges needs government’s help to tide over the paucity of funds and flexibility in use of the funds. We hope the Budget will address our concerns in this regard,” Jain added

SBI, CREDAI sign MOU towards development of Real Estate Sector

NEW DELHI: The State Bank of India (SBI) and the Confederation of Real Estate Developers’ Associations of India (CREDAI) on Wednesday inked a Memorandum of Understanding (MOU) to jointly conduct various initiatives towards the development of the Real Estate Sector for a period of three years.

SBI and CREDAI have a common objective of providing housing for all.

Each of them will leverage their individual strengths and collaborate in areas which will be beneficial to the sector and the consumers at large.

The MOU was exchanged between Rajnish Kumar, Managing Director SBI and Geetambar Anand, President CREDAI at the CREDAI National Conclave held in Delhi on March 6 and March 7.

Union Minister Venkaiah Naidu was also present for the occasion.

SBI will be a national partner for all CREDAI activities.

SBI and CREDAI will jointly work together for various marketing activities like conclaves, seminars, exhibitions, campaigns and Corporate Social Responsibility (CSR) activities as well.

Speaking on the occasion, Rajnish Kumar, MD (NBG), SBI said, ?CREDAI is the largest Real Estate association in the country with over 11,500 members. We at SBI are extremely glad to collaborate with them and carry out joint activities. We see a lot of synergies in working with CREDAI. Both of us have a common objective of making every Indian own a Home of their own. ?

?The CREDAI SBI MOU is meant to mobilize the credibility of CREDAI members and the reach of the largest bank in India to cater to both home loans and construction finance requirements of the real estate sector. We believe that availability of finance at lower rates would help fulfill CREDAI’s objective of making housing more affordable,” added Geetambar Anand, President CREDAI.

Tips on investing in Rental Property

From the initial choice to really purchasing your first rental property as an investment, there’s plenty of planning and work involved. Buying rental property should be approached with a lot of circumspection and forethought so as to get optimal returns and avoid a serious financial setback resulting from a wrongly-chosen property. There are a number of aspects to be considered when looking for an income-generating property.

You should begin hunting for your rental investment property with an unbiased approach to areas and all of the properties in your investing range. Let us have a look at the top ten things you need to think about when trying to find the best rental property:

Area: The quality of the location in which you purchase a rental property will determine the kinds of renters you will find, and how frequently you may face vacancies. For instance, in case you purchase the home in an area near a university, the odds are that your pool of expected renters will largely consist of students. You may be faced with frequent vacancies during the times when students generally return home for the holidays. Also, there would be a higher churn of tenants, when ideally you want long-term leases.

Examine the location and project for existing and planned public parks, shopping malls, gymnasiums, cineplexes, public transportation stops and all the other factors that would conceivably entice tenants. You can peruse developers’ project brochures and also do online research to establish the saturation of such facilities in a neighbourhood.

You also need to know what new developments are coming in, and what has been zoned for special purposes by the local municipality. You are looking for a region with excellent growth prospects where schools, business parks, shopping malls and entertainment zones are either already in place or planned. Simultaneously, be wary of any new developments which could reduce the value of surrounding properties, such as by causing the loss of green open spaces or public parking facilities.

  • Property Taxes: Property taxes aren’t standard across the board and, as an investor intending to earn money from rent, you would like to know about how much you’ll be losing to taxes. High property taxes are obviously justified in very good areas which are superlatively connected. Such areas also usually attract long-term renters. Locations in upcoming growth corridors should be preferred.
  • Educational institutes: Your tenants may be a family with kids, or intending to have kids, who would prefer areas which are near to one or more good schools. The presence of quality schools in the area you invest in will positively impact the worth of your investment. Remember, the total worth of your rental property comes into play when you finally sell it, even though you’ll be mainly concerned with earning monthly rentals in the interim.
  • Job Market: Areas with growing employment opportunities have a tendency to draw more people – meaning more renters. Obviously, the most desirable situation for you would be to own a rental property near to or well-connected to an established or rapidly growing workplace hub with reputable companies active and generating jobs there.
  • Project Quality: Today, rental home seekers prefer projects which add value to their lifestyle. Good projects with the best lifestyle deliverables may be out of their purchasing reach, but they expect to get such facilities in a rental home. Projects with all the amenities like garden, children’s play area, sitting area for elders, reliable security and professionally managed maintenance are always preferred by families hunting for rental flats. The ambience inside the complex is very important to them.
  • Rents: You should be aware of what the typical rent in the region is. Make sure you find out enough about the region to judge where it is headed in the following five years. Property taxes may rise and even if you can afford them now, significant developments in the area which increase property taxes may make them less affordable.

Single-family homes often bring renters looking for long-term leases. A dual-income family is definitely preferable over single professionals, as they are likelier to pay their rent on time and to be fiscally stable. As a landlord, you would like to find an area where finding such tenants is likely and where such properties are available.

When you’ve narrowed down the right location, look for a property that can potentially yield you steady and growing rental income as well as appreciation on the capital value of the home. Consider properties which are within your budget and slightly above it as well. The slightly costlier options can be paid for by some bank leveraging, and developers may be open to negotiating the price.

Also, remember that buying property can become even more desirable with some modifications and cosmetic uplifts, which will attract tenants who are willing to pay higher rents. Such changes to the property will also serve the purpose of increasing the sale value of the home in case you want to put it on the market after some years of good rental income.

Every state and every city has areas which have both suitable and excellent properties when it comes to rental potential. In Pune, areas like Undri, Kothrud and Ambegaon are excellent locations for rental properties because of the consistently high demand. In Mumbai, the more cost-effective locations in Navi Mumbai such as Koparkhairne, Airoli and Ulwe are very good options, though property prices are naturally higher there.

Do your research well and ensure that you have your finances in place if and when a very good option comes up. Remember, real estate investing does not begin with purchasing a rental property – it starts with creating the finances where you can purchase a rental property.

Kishor  Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd.  is the driving force behind one of the most successful real estate development firms in Pune and beyond.

Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

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Elara Technologies introduces Unique Offering for Indian Real Estate

Part of REA Group, SMART Investment and International Property Expo is Asia’s longest running property and investment showcase with editions across the region.

Elara Technologies Pte Ltd, which now owns PropTiger.com, Housing.com and Makaan.com, today announced a first of its kind offering for the Indian Real Estate ecosystem to provide them international exposure. Part of REA Group, SMART Investment and International Property Expo is Asia’s longest running property and investment showcase with editions across the region.

Aligned with Elara Technologies long term vision to become India’s leading online-to-offline (O2O) digital real estate services platform, this association would enable the company to offer attractive solutions to Indian real estate developers to showcase their properties to a wide international audience as well as the large Indian diaspora residing overseas, particularly in Singapore and Malaysia. The expo will have over 50 developers and more than 15 service exhibitors from across the globe including Malaysia, Thailand, UK, Australia and Malaysia among others. The expo also witnesses around 4,000 visitors including 500-600 NRIs.

As part of this an integrated product offering, the developers would also have the option of engaging solutions provided by Out of Box Interactions (OoBI, part of Elara Technologies). The company offers cutting edge solutions that help home buyers visualize their dream homes and provide developers a variety of technology-enabled marketing solutions to help them showcase their properties.

Commenting on this, Mani Rangarajan, Chief Business Officer – Platform Business Unit, Housing.com said, “Our association with SMART Investment and International Property Expo is one of the first offerings that leverages our affiliation with the REA Group and is a one-of-its-kind opportunity that offers unprecedented international exposure to the Indian real estate ecosystem. In line with our objective to become a leading O2O player in the segment, this association will help Indian developers tap the lucrative overseas market, both from a home buyers and investors perspective.”

“One of our objectives as an enabler is to contribute towards the evolution of the real estate ecosystem in India and make it future ready. And at the event we are doing this through OoBI – a technology-enabled solution that is used by over 200 developers. We are certain that developers, both Indian and foreign would find value in it” he further added.

Speaking about this, R. Chandramouli, CEO and President, Emerald Haven Realty Ltd. (TVS Group) said, “The SMART Investment and International Property Expo is one the most important events for real estate developers across the world and we are glad that Elara Technologies has facilitated the Indian developers to showcase their properties at the event. Not only does this give us an opportunity to cater to the huge Indian diaspora in Singapore, but also takes real estate marketing a notch higher through innovative technology-enabled solutions. Also, Singapore has a large South Indian population which makes it an even more attractive proposition for us. We look forward to the exhibition this year and hope this is the beginning of a long standing association.”

Talking about this association Deep Vaswani, Business Development Manager, GoHome.com.hk, SMARTExpos.com and SquareFoot.com.hk said, “Elara Technologies operates one of the biggest digital real estate networks in India and our association with them is a great opportunity for us to tap the Indian real estate developer ecosystem that caters to a large section of the Indian diaspora that resides in Southeast Asia. India is one of the most attractive real estate markets in the region and the presence of Indian developers would certainly be appreciated by the investors and visitors to the exhibition. We hope that they would benefit from the participation at the event.”

In January earlier this year, PropTiger.com and Housing.com announced a merger to for India’s largest digital real estate entity with an objective of becoming the country’s preferred full service online-to-offline (O2O) real estate platform. The company is the only player offering the full range of real estate services, such as personalised search, virtual viewing, site visits, legal and financial diligence, negotiations, property registration, home loans and post-sales service. As part of the deal, REA Group, a leading digital real estate company with interests in Australia, Asia and Europe also acquired a strategic stake in the company.

The SMART Investment and International Property Expo is scheduled to be held in Singapore on March 25 and 26, 2017 at the Suntec Singapore Convention and Exhibition Centre.

Urbanisation: Can we re-connect our Cities with Nature?

In pre-modern times, people in Indian cities still coexisted peacefully with nature. Sadly, in the current real estate development scenario, we have definitely witnessed an increasing separation between nature and individuals. In the pursuit of their development and urbanisation agendas, our cities have seen high-rise buildings replacing backyards, parks and forested areas. However, it is wrong to blame solely real estate developers and municipalities for this scenario. They are effective reacting to the growing demand for such buildings from people whose evolving lifestyles focus more on work and after-work entertainment and shopping.

Let us take the city of Pune as a case in point. In previous times, this city had a much smaller geographic spread and there was no real need to increase it. Pune was supposed to be city for retired people. The city and its trade activities coexisted very well with a strong agrarian component both in the central and peripheral regions. Population growth was relatively limited. The neighbouring city of Bombay, established by the British circa 1845 as a major port and trade hub, attracted a significant mass of migrants looking for urban-based employment.

In fact, the British viewed Pune – or Poona, as it was known in earlier times – as a region of political unrest and resistance against their rule. Pune began growing both in terms of population and geographical spread only after India attained independence in 1947. Then came Pune’s Technological Revolution, Pune transformed from a relatively small city to a full-fledged metropolis and was drawing a massive influx of people responding to its rapidly increasing employment opportunities – first in manufacturing, then also in software technology and information technology-enabled services (ITeS).

When Pune was still relatively small and untouched by the rampant urbanisation we see here today, there was negligible impact on the natural wealth for which it was once so famous. Today, we see its once generous share of green open spaces eaten up by both low-rise and high-rise housing developments, landfills, commercial complexes and shopping centres.

As a result of this process, city dwellers become disconnected from nature. It is true that there is a lot of awareness and concern about the need to reestablish a healthy environment, and healthier cities. However, it is also true that most real estate development taking place today is about amenities and facilities, and that any vegetation that is factored in is merely aesthetic and ornamental. Essentially, the city has gone from green to grey, and any new thinking about and efforts towards reconnecting people to nature must indeed be trans-disciplinary and coordinated.

Construction is an inseparable element of a city – a city without buildings is inconceivable, and deforestation is inevitable. In fact, the very genesis of buildings lies in mankind’s need to protect itself from the wild animals inhabiting forest areas with strong, impregnable structures. Today, wildlife has been more or less wiped out from our cities, but economic inequality has given rise to new threats of forced entry and loss of life and possessions. As long as mankind prevails, buildings will prevail as well – but can we bring nature back into our cities, as well?

An experiment to achieve exactly that is reaping astounding results in cities like Singapore, where a natural ecosystem is being re-introduced into the urban fabric. It is astounding what such a vision of futuristic urbanisation can achieve. Clearly, concrete and coexist with abundant greenery and one must not necessarily negate the possibility of the other. However, it takes a magnificent town planning vision, coupled with a strong political will – and also unswerving support from a city’s population.

As long as demand for homes is skewed only towards concrete buildings with modern amenities and some token greenery, only such supply will follow. Increased demand for urban housing where natural environment is more than just a token gesture and, in fact, available to sufficient saturation to actually have an environmental impact, such supply will surely follow.

We are seeing the return of such demand in Pune, and it is driven not only by the higher environmental consciousness of today’s young homebuyers but also their concerns about their own and their children’s’ health and well being.

A city does not lose its ‘green’ identity overnight – in cities like Pune and Bangalore, the erosion of this identity took several decades. It will take a few more decades to bring it back, but it is possible if all stakeholders – from town planning and municipal authorities to real estate developers and buyers – decide that it is worth it and must be done.

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Student Housing – The Next big Real Estate asset class?

Globally, student housing is acknowledged as an important and lucrative real estate segment, generally included under ‘alternative’ real estate asset classes. In its current form in India, student housing essentially comprises of buildings that primarily offer residential accommodation for large numbers of students in boarding schools, colleges or universities. However, the residential facilities in such institutions are invariably severely under-equipped to match the demand for them. Also, the services and amenities they often fall far short of the international standards seen in established student housing markets such as the US or UK.

The education sector in India is growing rapidly. With the increasing number of students enrolling for higher education each year, student housing is obviously a complimentary product to this growth. Interestingly, the opportunity has come at a time when residential real estate (largest sector accounting for close to 85% of the value of investable real estate market) is currently slow and certain developers could bank on this opportunity to transform specific under-construction residential projects into student housing, bringing it under the more lucrative rental-yielding commercial project stream.

Emerging concepts like student housing can help developers and investors diversify into an income-yielding asset class that can potentially offer higher yields than the commercial office and retail properties because of a favorable demand-supply scenario.

In the US and UK markets, student housing is already an established and investor-friendly asset class because of its size and attractive market yield. Globally this segment, which has already attracted 200 billion dollars of investment, is essentially operated on a lease rental basis. Student housing in London has gained prominence mainly because of the higher yield rate, which has recently been 4.5% versus commercial yield rates of 3%.

In London, there are currently 376,000 student enrolled for higher education, out of which 290,000 are full-time students. This number has grown by 42% in the 10-year period up to 2013-14 academic year as shown in the figure above. A significant 28% (104,000) of the total enrollments are from student outside the UK who need a local accommodation. This statistic has almost doubled in the said period. Globally, the number of students abroad is likely to double to 8 million by 2025 according to OECD ‘Education Indicators’ estimates, which also predict that London will have 224,000 students in the next decade.

Despite being an established market for student housing, the UK is also confounded by a demand-supply imbalance that works in favour of developers and investors in this asset class. The student housing market there has also evolved to a level where differentiated categories – premium (examples include brands like Nidos and Urbanest) and mid-level (Unite and Liberty) – have evolved. Both categories have been successful in the UK, and achieve high yield rates.

The potential for success of in the student housing real estate market in India could be similar or even more to that in the UK. Some of our cities, such as Pune, Bengaluru and Chennai, see very high annual student enrollments. There are 34 million students in India for higher education, of which 76% (26.6 million students) migrate from different states to these cities and invariably require accommodation. A broad estimate indicates that currently, cities like Pune and Bengaluru can only accommodate about 18-20% of the inward migrating students.

In short, student housing as a product is severely undersupplied in the major markets, and has the potential of high and sustained occupancy rates. This provides a marked opportunity for investors focused on attractive yield-based real estate products. Concurrently, student housing in India has immense scope to be developed as an asset class for developers.

It is true that this is a very new and therefore largely unfathomed asset class in India. However, so were malls and serviced apartments at one point in time – both products which have now successfully transitioned into organized sectors, and are moneymaking asset classes. The demand for student housing in India will continue unabated and in fact grow rapidly, so this is alternative real estate segment has all the hallmarks of becoming a revolutionary new product in Indian realty.

Square Yards launches international property portal for cross-border Real Estate investments

MUMBAI: Real estate startup Square Yards on Thursday announced the launch of an International property portal (global.squareyards.com) for enabling global cross border real estate investments.

This is notably the first and only portal by any Indian tech startup focusing exclusively on global real estate.

Square Yards is already the largest player by revenues (annual revenue run rate in excess of USD 25M) in the Indian real estate and has a virtual monopoly in some of the key NRI diaspora markets. It is now replicating its Indian success in international markets by acquiring multi country real estate licenses and entering into collaborative arrangements with leading International developers for exclusive cross-border marketing and selling rights.

“International real estate is one of the fastest growing and most profitable segment of our business. We want to invest more into it and are currently building our local agent network in each of the countries. We would gradually expand to 25+ International markets and our ambition is to get to an undisputed number 1 position for off-plan properties sold anywhere in the world,” said founder and CEO at Square Yards, Tanuj Shori.

The new international portal currently features a host of exclusively sourced off-plan properties from seven countries namely UAE, USA, UK, Australia, Canada, Singapore and Hong-Kong. Along with rich information about International projects, the portal also offers deep insights into top real estate investment destinations in the world through its proprietary Investment ScoresTM calculation methodology.

The tool rates top international cities on a combination of 21 different parameters such as rental yields, capital appreciation, price, availability, transaction costs, taxes and macroeconomic factors. The investment score, driven by powerful analytics and meticulously designed algorithms, gives a fair judgment of the inherent attractiveness associated with a particular market.

Square Yards has been on international expansion spree for past few years with a prolific presence in 10 countries. The company recently announced two consecutive rounds of fund raising.

In January it raised USD 10 million multiple investors and in November USD 12 million equity funding from the private equity arm of Anil Ambani led Reliance Group.

REITs to come up in 12-14 months: Knight Frank

MUMBAI: The real estate investment trusts (REITs) are likely to kick off in the next 12-14 months helped largely by liberalised regulatory norms and demonetisation, leading property consultant Knight Frank today said.

As per Knight Frank, the domestic environment is ripe for listing of REITs, an investment vehicle that invests in rent-yielding completed real estate projects.

While, capital market regulator Sebi had notified REIT regulations 2014, no single trust has been set up so far as investors were seeking further easing of the norms as well as various tax breaks, to make these instruments more attractive.

The government has brought amendments in the IT Act to provide a tax efficient and stable regime for REITs in India, while Sebi had also eased up REITs norms in December, 2016.

“Amidst the conducive environment of liberalised REIT regulations, clear guidelines on disclosures and governance of REIT, the demonetisation decision of the Government of India has only accentuated the cause of REIT,” Knight Frank chief economist and national director Samantak Das told reporters here.

Das noted that demonetisation of high value currency notes has pushed up the liquidity in the banks which has further led to a considerable fall in government bond yields.

“From the REIT perspective, the decline in government bond yields and the overall interest rate regime has increased the spread with prime office properties,” Das said.

“This has also led to the compression of capitalisation rate for prime office assets that are perfect candidates for REITs and this compression has led to the upward revaluation of office property in prime markets like BKC in Mumbai, making REIT listing more attractive,” he added expressing optimism that REITs would come up in 12-14 months.

According to a report on REITs released here by Knight Frank while majority of issues restricting launch of REITS have been addressed through changes in the tax and regulatory regime, there still exist some key demands on the taxation.

Among others, these include exemption from dividend distribution tax paid by special purpose vehicles (SPV) to holding company and holding company to REIT and similarly exemption from withholding tax on interest the paid.

“The government also ought to consider waiving the stamp duty where a REIT holds property over a specified period of years or alternatively the state governments could consider a one-time waiver of stamp duty on transfer of assets to REITs,” the report said.
“If the sponsor seeks to consider an alternative route

(other than SPV model) to hold the REIT assets, this may not be feasible for REITs in India due to high state stamp duties and registration costs applicable in various states on acquisition of properties,” it added.

Going by the report, REIT as an investment vehicle has a huge opportunity in India as the country has a rent yielding office inventory to the tune of 537 million square feet valued in excess of USD 70 billion.

Besides, there are other properties like warehousing, retail malls, shopping centers, school buildings which hold huge potential REITs, the report said.

India set to receive $ 4.2 Billion new Investment from Global Real Estate in 2017-18

“India’s attractiveness as a global investment destination has strengthened on account of the country’s political will to attract and protect investment growths. India’s inclusion in the top investment destination is a testament of this confidence: said Anshul Jain, Managing Director, India, Cushman & Wakefield.

NEW DELHI: The amount of new capital available for global real estate investment in 2017 is estimated at USD435bn, according to Cushman & Wakefield’s The Great Wall of Money report, which tracks the amount of newly-raised capital, including debt and equity, targeting real estate at a global level. The report states that the total global wall of money in 2017 has fallen by 2% compared to 2016’s peak of USD 443 bn, but is the second highest figure recorded since 2009. Of the USD 435bn figure noted for 2017, capital targeting EMEA shrunk 9% in US dollar terms to USD130bn, whilst the Americas grew by 2% to USD173bn and Asia Pacific posted a marginal increase to USD132bn.

In Asia Pacific which accounts for 30% of the global volume, China, Japan, Australia and Hong Kong ranked in the top 10 target investment destinations globally, with Singapore and India a few spots behind at #12 and #15 respectively. The growing investment interest in Asia Pacific reflects the maturity and growth of opportunities across the region as well as the prospects for attractive returns.

India’s strong showing in the rankings is a result of continued policy moves to institutionalize real estate investments in the country. With investors acquiring assets in anticipation of the introduction of REITs. Investments in the country’s office sector is expected to more than double this year with many of pending major acquisitions. The global investment is finding routes to India with a long-term horizon on account of strong economic growth and sentiments of the country.

Anshul Jain, Managing Director, India, Cushman & Wakefield said, “India’s attractiveness as a global investment destination has strengthened on account of the country’s political will to attract and protect investment growths. India’s inclusion in the top investment destination is a testament of this confidence. The country saw its best year in 2016 with Private Equity investments the highest in 9 years. Globally too funds are revising their strategies to concentrate on specific growth circles.. India’s office space provides great promise in this direction. Further, the core office markets in India provide stronger rental returns as well as easier exit options as against other sectors.”

China is expected to remain the second most targeted country after the United States, with a majority of capital committed from domestic funds. Japan is Asia Pacific’s second most targeted market. The majority of capital targeting Japan is domestic, reflecting the strength of the local J-REIT capital base and a strong home bias on the part of investors. However, the biggest change to Japan’s capital base is the growth of other Asian investors.

Positive investment momentum in the region remains sustained and will continue to draw investor interest and ample capital. As the global market cycle matures, we expect investors to be increasingly rewarded by exploring secondary markets as well as investing beyond core strategies. The region, at the forefront of global growth and with an expanding real estate universe, will continue to present opportunities across the risk-return spectrum.

Affordable Housing, EPF Rules: Multiple tailwinds could perk up Real Estate

Improvement in affordability bodes well for the health of the residential real estate segment

The BSE Realty index was the highest gainer last week on plans by top realty players to get into affordable housing, announcement of subsidy guidelines by the government, easing of EPF (employee provident fund) rules to fund realty purchases and go ahead by Maharashtra government to the real estate regulatory Act. Key realty stocks gained between 4 per cent and 20 per cent. Sobha, too, gained 13.4 per cent as the company is shifting its focus from mid to high-end residential projects to higher share of affordable projects. Analysts at Nirmal Bang Institutional Equities say that the grant of infrastructure status to affordable housing and the benefits from it are expected to help maintain operating profit margin and improve sales for the company.

While most developers offer affordable housing options, these form a limited proportion of their overall projects. Analysts expect developers to launch homes with carpet space of 60 square metres to avail 80 IBA benefits. However, even with developers launching two-three projects under the new schemes from FY2018, the total value of such schemes will remain less than 5-7 per cent, feels analysts at Kotak Institutional Equities. Among listed developers Brigade, Prestige, Kolte Patil, Ashiana Housing, Sobha and HDIL are expected to launch homes under this category.

Nonetheless, there are other tailwinds which are expected to boost residential sales volumes over the next six months. Adhidev Chattopadhyay and Shreyans Mehta of Emkay Global believe that falling home loan rates and government’s affordable housing initiatives announced in December 2016 and in the 2017-18 Budget, presents a case for a bounce back in residential volumes from second half of FY18 (October 2017 onwards) as buyers eventually return to the market with prices remaining stable. They prefer developers with a ready portfolio of office/retail assets especially in Bengaluru given better demand and those which have a presence in mid income housing.

Among the listed players Prestige Estates, Brigade Enterprises and The Phoenix Mills derive more than 60 per cent of their enterprise value from rental assets.

Improvement in affordability also bodes well for the health of the residential real estate segment, which has been reeling with high inventories due to muted demand. Analysts at Kotak Institutional Equities say they are positive on the medium-term prospects of the sector due to improving price-to-income ratio. For example, the price-to-income ratio for Bangalore improved to 4.8 times in FY2016 and will likely improve further to 4.2 times in FY2018, from five to six times during FY2010-15, they say.

Though stocks have seen some uptick, investors should stick to rental plays like Prestige and await for more signals from the affordable housing theme before taking exposure to other realty companies.

Indian firms may have Rs.4 Lakh Crore excess Working Capital: Report

It excludes financial institutions, automobile manufacturers, infra and real estate corporations

MUMBAI: Top Indian companies might be having excess working capital of Rs 4 lakh crore, says a report.

Giving the estimate on the excess working capital that might be available with the domestic companies, global consultancy EY on Monday said firms need to execute focused programmes to release such funds towards growth activities.

“A high-level comparative analysis indicates that Indian companies may have up to Rs 4 trillion ($60 billion) in excess working capital, over and above the level they require to operate their business model efficiently and meet all their operating requirements. This figure is equivalent to nearly 9 per cent of their combined sales,” EY said in a report.

According to the report, there is a significant potential for improvement in operations of the companies.

“To stay competitive in the global market, Indian companies need to establish and execute focused programmes to release free cash from working capital to fund growth,” it noted.

Further, the report said companies should explore traditional and innovative working capital funding techniques with the aim to improve the overall cash flow position.

The conclusions are based on a review of the working capital performance of leading 500 companies — in terms of sales — headquartered in India.

It excludes financial institutions, automobile manufacturers, and infrastructure and real estate corporations.

“Our overall analysis draws on companies’ latest fiscal 2016 reports and compares performance in 2016 with that in 2015 and the previous four years,” EY said.

Refinancing risk of Real Estate developers seen rising in FY18: Ind-Ra

MUMBAI: Falling sales have dimmed hopes of cash-strapped real estate developers for refinancing their debt obligations in FY18, says India Ratings and Research (India Ratings). The real estate sector has mainly relied on refinancing to meet its debt servicing obligations, given the negative cash flows. Such refinancing has provided a cushion for developers to hold prices despite slowing sales, and the high prices will further delay recovery in sales and cash flows. Ind-Ra believes sales are unlikely to revive in FY18 and refinancing will increasingly become difficult.

India Ratings had highlighted in the report ‘Structural Changes Required to Reboot Real Estate Sector in FY18’ that real estate developers have been less reliant on bank credit and the growth in banking credit to the commercial real estate sector slowed down in FY17, with a growth of mere 0.4% since the start of the fiscal till January 20, 2017. The report had also highlighted that significant interest had been observed from non-banking finance companies and private equity investors for refinancing debt in the last three years.

Ind Ra notes that, finances of real estate developers continue to remain stretched due to elevated inventory and debt. India Ratings estimates that debt levels will further rise given the negative operating cash flows.

The Indian real estate market is currently grappling with a double whammy, one from the cash shortage caused by the impact of demonetisation and the second by the imminent introduction of the Real Estate Regulator (RERA).   This, along with the increasing refinancing risk, would shake-up the sector, with developers with high leverage losing out. The sector also needs to undergo a structural change in the way it does business and move towards a model where projects are completed before sale. Such a structure would favour real estate companies having better access to funding. Larger players with access to multiple funding sources, such as NBFCs, PE funds and FDI in addition to banks are likely to have an advantage. This could lead to consolidation, which may be in the form of land sales or joint development of land with larger organised and well-funded developers.

This will usher in a new phase for the sector which is overcrowded with plenty of players with weak financials. We are likely to witness a series of joint developments and joint ventures between landowners and financially weak small developers with bigger, better-funded, better-organised players or weaker developers getting taken over by well-funded larger players, and struggling developers cashing in their land banks by selling them to players with stronger balance sheets and appetite for growth.

Set up Regulator for Real Estate Sector, demands BJP MP

NEW DELHI: Lok Sabha today saw a member demanding setting up of a regulator to fix the rates of construction materials like steel, cement, sand and bricks, saying it will insulate home buyers from exploitation by real estate firm.

Raising the issue during the Zero Hour, BJP MP Sushil Kumar Singh said the time has come for setting up a regulator to fix the rates of construction materials as real estate sector was growing at a fast pace.

He said the appointment of the regulator will streamline price variation help the overall construction sector.

“It can be set up on the lines of TRAI (Telecom Regulatory Authority of India) and Electricity Regulatory Commissions,” he said.

The MP from Bihar said the regulator for the construction sector will also complement Prime Minister Narendra Modi’s vision of affordable housing.

Banshilal Mahto, Singh’s party colleague from Chhattisgarh, raised the issue of closure of several industrial units in his home state and sought Centre’s intervention.

Mentioning about MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) scheme, Congress member K C Venugopal raised concerns about the decision to cut down the number of working days under it.

“The situation is very, very bad…,” he said, adding that there were also pending dues under the scheme.

Making a submission about illegal migrants from Bangladesh, Tarun Gogoi (Cong) said such people must be identified and deported, irrespective of their religion.

During Zero Hour, Congress member Adhir Ranjan Chowdhury spoke about the Centre’s pact with NSCN-IM and wanted to know the “truth” about it.

There have been reports about certain alleged claims being made by the group regarding territorial integration of Naga-inhabited areas.

Ram Prasad Sarmah (BJP) said the people of Assam would never accept the idea of a ‘Greater Nagaland’.

Meanwhile, P K Sreemathi Teacher (CPI-M) urged the government to set up fast track courts for speedy trial of cases related to rape and sexual abuse of women and children.

GST on Real Estate: Land leasing, Renting, EMIs for under-construction houses to be Taxed

NEW DELHI: Come July 1 and leasing of land, renting of buildings as well as EMIs paid for purchase of under-construction houses will start attracting the Goods and Services Tax.

Sale of land and buildings will be however out of the purview of GST, the new indirect tax regime. Such transactions will continue to attract the stamp duty, according to the legislations Finance Minister Arun Jaitley introduced in the Lok Sabha yesterday for approval.

Electricity has also been kept out of the GST ambit.

GST, which the government intends to roll out from July 1, 2017, will subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services.

The Central GST (CGST) bill — one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.

Also, any lease or letting out of the building, including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services as per the CGST bill.

The GST bills provide that sale of land and, sale of building except the sale of under construction building will nether be treated as a supply of goods not a supply of services. Thus GST can’t be levied in those supplies.

‘Goods’ in earlier drafts of the bills were defined as every kind of movable property other than money and securities but includes actionable claim. ‘Services’ were defined as anything other than goods. It was thought that GST may be levied on supply of immovable property such as Land or building apart from levy of stamp duty.

But the bills presented in Parliament have now clarified this position.

Tax experts said that currently service tax is levied on rents paid for commercial and industrial units, although it is exempt for residential units.

Deloitte Haskins Sells LLP Senior Director M S Mani said: “While service tax is applicable at present on sale of under construction apartments, it is levied on a lower value as abatement allowed. The abatement is ostensibly to take care of the value of the land involved in the construction of apartments”.

He said the GST Rules, which will come up for discussion in the Council meeting on March 31, would help ascertain whether a lower rate of GST is proposed for such transactions or whether a similar abatement procedure would be prescribed.

“This would also be dependent on the rate fixation committee which is expected to finalise its recommendations in April,” Mani said.

Experts said service tax is currently levied on payments made for under-construction residential houses after providing abatement, which brings down the effective rate from 18 percent to around 6 per cent.

“The government is trying its best to make GST litigation free. The bills very clearly specify that GST would be charged on any lease of land or letting out of the building or construction of a complex, building, civil structure or a part thereof, where whole or any part of consideration has been received before issuance of completion certificate or its first occupation,” Nangia & Co Director Rajat Mohan said.

Experts said the GST subsumes central levies like excise and service tax and local levies like VAT, entertainment tax, luxury tax. However, it does not subsume Electricity Duty.

Since the GST Constitution Amendment Act does not provide for subsuming ‘electricity duty’ under GST, it will continue to be levied by the respective state governments.

Certain states like Delhi exempt residential properties from electricity duty but levy it on commercial and industrial units.

No info about the impact of GST on Real Estate sector, says Govt

Housing and Urban Poverty Alleviation is the ministry for implementing affordable housing scheme

There is no information available with the Ministry of Housing and Urban Poverty Alleviation about the impact of GST on the prices in the real estate sector, the government today said.

In a written reply to Lok Sabha, Minister of State for Housing and Urban Poverty Alleviation (HUPA) Rao Inderjit Singh said “No such information (about the impact of GST on the real estate sector) is available with the Ministry”.

HUPA is the nodal ministry for implementing the affordable housing scheme – Pradhan Mantri Awas Yojana (Urban).

Real estate experts feel in case of a negative impact of the GST on the sector, it may derail the Modi government’s flagship programme which aims to provide housing to all by 2022 in the urban areas.

To make the houses more affordable, Singh said the Ministry has suggested to Finance Ministry to continue with the exemption of service tax for affordable housing under Goods and Services Tax (GST).

Singh, however, said the response of Finance Ministry is awaited.

He said the ministry has also requested the state and UTs to consider rationalisation or waiver of stamp duty for affordable housing projects.

The minister informed that Madhya Pradesh government is providing reduced rates for stamp duty to Economically Weaker Sections (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) for houses made by Development Authorities and Housing Board.

Haryana government has rationalised stamp duty from 12.5 per cent to five per cent. Further a reduction of two per cent stamp duty is being granted in case of women and a complete exemption in case of transfer of property between family members.

No stamp duty for affordable housing is being charged in Andhra Pradesh, he said.

Madras High Court restrains L&T Realty stake sale in Township Project

Developments comes in a petition filed by Aditya Birla Real Estate Fund

CHENNAI: The Madras High Court has restrained L&T Realty Limited from selling its stake in L&T South City Projects. The development follows a petition by Aditya Birla Real Estate Fund, a shareholder in the project.

L&T Realty Limited executed a share purchase agreement for the sale of its 51 per cent stake in L&T South City Projects Private Limited to Pragnya Group, an investment firm. The stake sale was estimated to be around Rs 190 crore. Limited scalability of the business in the project for L&T Realty Ltd was the rationale behind the sale, said the company.

Meanwhile, the company in a disclosure to the Stock Exchanges said that the third shareholder, Aditya Birla Real Estate Fund, has filed an application under Section 9 of the Arbitration & Conciliation Act 1996 in the High Court of Madras.

The Court has passed an interim order restraining the company from giving effect to the transfer of shares by L&T Realty to Pragnya till disposal of the arbitration proceeding in the High Court. The company has also been barred from holding a board meeting, till counters are filed by L&T Realty Ltd and Pragnya Fund-I.

The company said though the documents pertaining to completion of share transfer along with the filings to the exchanges were submitted to the Court, they have not been duly considered in the interim order.

The share transfers were completed prior to the interim order along with prayer for vaction of the order, L&T Realty said.

L&T South City Projects is engaged in the development of a 92-acre residential township at Siruseri, one of the IT hubs located at Old Mahabalipuram, Chennai.

The net worth of the SPV was Rs 134.05 crore as on March 31, 2016.

The buyer, Pragnya Group, is an investment firm that focuses on fund management, property development and asset management.

The Group has been involved with L&T South City Projects and the development of the Siruseri project since its inception.

Indians rule the roost in UAE’s Realty market with $3.2 Billion in investments

High capital gains, great return on investment keep Indian investors hooked

DUBAI: Indians have emerged as the top foreign property investors in Dubai, spending over $3.2 billion last year alone, according to the Dubai Land Department.

The total real estate investments last year reached Dh 91 billion ($24 billion) from 55,928 investors and Indians were ranked highest in terms of both volume and value among foreign investors with Dh 12 billion ($3.2 billion) worth of property transactions from 6,263 buyers.

In an effort to attract more investments from Indians, the 13th edition of the International Property Show will be held from April 2-4 this year.

“The UAE’s safe haven status, stable economic growth and bottomed out prices have been the key factors for attracting Indian realty investments in Dubai. In addition, many Indians find Dubai as their base for business between India and the wider Europe and Middle East,” said Dawood Al Shezawi, CEO, Strategic Marketing & Exhibitions, organisers of the International Property Show.

Dubai is increasingly becoming a favourite destination with Indians for a number of reasons, including high capital gains, great return on investment, tax-free environment, proximity to India, and transparent deals amongst many others.

“The profits on properties in Dubai in the form of rents and resale are high,” Al-Shezawi said.

The 13th edition of the International Property Show is expected to be the biggest since its return, with over 200 exhibitors from 50 countries to participate.

It was noted that while the investments from Indians spearheaded the Dubai realty market, GCC citizens contributed Dh 35 billion ($9.5 billion) from 12,768 investors, of which 3,294 investors from Saudi Arabia made transactions worth Dh 8 billion ($2.1 billion).

Gulf Cooperation Council’s (GCC) member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

Pakistan contributed Dh 4.4 billion ($1.1 billion) from 3,372 investors, while British investments amounted to Dh 5.8 billion ($1.5billion) from 3,372 investors.

CCI rejects complaint against realty firm Lodha Group

The Competition Commission has dismissed the allegations of abuse of dominant position against realty firm Lodha Group with regard to clauses in the sale agreement of a flat.

The complaint was made by one Pune-based Rajeev Nohwar, who had booked a flat with the firm.

It was alleged that the terms and conditions in the sale agreement were one sided and that the company had abused its dominant position.

For the case, the Competition Commission of India (CCI) considered “market for the provision of services relating to development and sale of residential flats in Pune city” as the relevant one.

In a recent order, CCI said there are several other major as well as small realty players in the relevant market.

The services offered by these developers “pose competitive constraints” upon Lodha Group in the relevant market, the regulator said.

Upon finding that Lodha Group is “not dominant in the relevant market”, CCI said that “no case is made out against the Opposite Party (Lodha Group) for contravention of any of the provisions of Section 4.

Section 4 of the Competition Act pertains to abuse of dominant position.

Mahindra Lifespace fixes rights issue price at Rs.292 per share

MUMBAI: Realty firm Mahindra Lifespace Developers today fixed the issue price at Rs 292 per share for its Rs 300-crore rights issue programme.

The rights committee of the company in its meeting today approved issue of 10,273,600 equity shares of face value of Rs.10 each at a price of Rs.292 per equity share, including a premium of Rs 282 per share, Mahindra Lifespace Developers said in a BSE filing.

A total of Rs 299.98 crore is proposed to be raised through issue of shares to eligible equity shareholders of the company in the ratio of 1:4 (one rights equity share for every four fully paid-up equity shares held), it added.

The company further said March 31 has been fixed as the record date for determining shareholders eligibility to apply for the rights equity shares in the issue.

Earlier this month, Mahindra Lifespace Developers had received capital markets regulator SEBI’s approval for the rights issue.

The proceeds from the issue will be primarily used for redemption of non-convertible debentures. ICICI Securities Ltd is the sole book running lead manager for the offer.

Falling sales to affect refinancing of Realty Sector: Report

MUMBAI: Falling sales have dimmed the hopes of cash-strapped real estate developers for refinancing their debt obligations in FY18, says India Ratings and Research.

The sector has mainly relied on refinancing to meet debt servicing obligations given the negative cash flows, and is unlikely to witness a revival in sales in FY18 and refinancing will increasingly become difficult, it said.

“Such refinancing has provided a cushion for developers to hold prices despite slowing sales, and the high prices will further delay recovery in sales and cash flows,” the rating agency said in a statement issued here.

Realty players have been less reliant on bank credit, and the growth in banking credit to the commercial real estate sector slowed down in FY17, with a growth of mere 0.4 per cent since the start of the FY17 till January 20, it said.

Also, a significant interest had been observed from non-banking finance companies and private equity investors for refinancing debt in the last three years.

“Finances of real estate developers continue to remain stretched due to elevated inventory and debt. It is estimated that debt levels will further rise given the negative operating cash flows,” the agency said.

It noted that the Indian realty market is currently grappling with a double whammy: cash shortage caused by the impact of demonetisation and the imminent introduction of the Real Estate Regulator (RERA).

“This, along with the increasing refinancing risk, would shake up the sector, with developers with high leverage losing out. The sector also needs to undergo a structural change in the way it does business and move towards a model where projects are completed before sale. Such a structure would favour real estate companies having better access to funding,” it said.

Housing.com launches new Platform for Real Estate developers

MUMBAI: Realty portal Housing.com today said it has introduced a new platform to help real estate developers and brokers manage their prospective buyers and business.

The new platform ‘Housing Partner’ is a web-based dashboard that will help property sellers to monitor and manage leads in an effective manner, all within a single and convenient interface, Housing.com said in a statement.

In January, Housing.com merged with The News Corp-backed realty portal PropTiger.com.

The latest technology-powered product is aligned with its objective of becoming a preferred digital platform for all stakeholders within the real estate ecosystem, it said.

Through this product, developers would be able to enhance productivity by being able to view leads, purchase qualified leads and accordingly customise their offerings.

“Technology has always been in the DNA of all products offered by Housing.com and with Housing Partner, we have once again redefined the role of technology within the real estate industry,” said Mani Rangarajan, Chief Business Officer – Platform Business Unit, Housing.com.

Puravankara sells 19 acre Land in Hyderabad for Rs.475 Crore

Puravankara Ltd has already launched housing projects on 20 acres of land parcel in Hyderabad and is also constructing commercial projects on over three acres of land.

HYDERABAD: Realty firm Puravankara has sold a 19 acre land parcel in Hyderabad for Rs 475 crore to pharma company Hetero group as part of strategy to monetise assets and cut debt.

Bengaluru-based developer had bought this land way back in 2007-08 for Rs 403 crore.

“We have completed the exit of investment in 19.19 acre of land asset held in our wholly owned subsidiaries for Rs 475 crore. This is in line with the company’s strategy to monetise assets,” Puravankara Ltd MD Ashish Puravankara told.

The proceeds of this transaction would be largely utilised for reduction of net debt which is currently around Rs 2,300 crore, he added.

Puravankara said the company is in talks with land owners for forming partnership to develop projects in Hyderabad property market that has a huge potential.

The company has already launched housing projects on 20 acres of land parcel in Hyderabad and is also constructing a commercial projects on over 3-acres of land.

“We are targeting to launch projects on additional 50-100 acres through joint ventures (JVs) and joint development agreements (JDAs),” he said.

Puravankara Ltd is a leading real estate company in India, with presence in Bengaluru, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Mumbai and Pune.

The company has over 20 million sq ft of projects under development with additional about 80 million sq ft in projected development over the next few years.

Puravankara posted 15 per cent increase in its net profit at Rs 20.09 crore for the quarter ended December as against Rs 17.43 crore in the year-ago period.

Revenues fell to Rs 277 crore in the third quarter of this fiscal from Rs 385 crore in the corresponding period of previous year.

Godrej Properties enters into Development Agreement with Shivam Realty

To develop residential group housing project in Kandivali, Mumbai

MUMBAI: Godrej Properties has entered into a development management agreement with Shivam Realty to develop a residential group housing project off the Akurli cross road at Hanuman Nagar, Kandivali East, Mumbai.

Spread over 5 acres, the project will offer approximately 93,000 square meter (1 million sq. ft.) of saleable area and will be developed as a modern residential development comprising of apartments of various configurations. The project is strategically located with easy access to the Western Express Highway. The location offers extremely well developed social and civic infrastructure with multiple schools, hospitals, retail malls and residential and commercial spaces in close proximity.

Godrej Properties Managing Director & CEO Pirojsha Godrej said, “We are happy to add this new project in Kandivali. This strengthens our development portfolio in Mumbai and fits with our strategy of deepening our presence in key markets across India’s leading cities. We will seek to ensure this project delivers an outstanding lifestyle for its residents.”

Godrej Properties, the real estate arm of the Godrej Group, is currently developing residential, commercial and township projects spread across about 12.93 million square meters (131 million square feet) in 12 cities.

Shares of the company declined Rs 2.25, or 0.56%, to trade at Rs 397.60. The total volume of shares traded was 8,014 at the BSE (10.09 a.m., Monday).

Shapoorji Pallonji elevates two Executives

This comes at a time when it is expanding its Realty business by launching residential projects
From left: Venkatesh Gopalkrishnan and Cyrus Engineer

MUMBAI: The construction giant, Shapoorji Pallonji, has elevated Venkatesh Gopalkrishnan as chief executive officer of Shapoorji Pallonji (SP) Real Estate. Gopalkrishnan, who was president and chief investment officer of SP Real Estate, will take charge from April 1. The current incumbent Kekoo Colah will move to the group centre.

Shapoorji has also promoted Cyrus Engineer, chief sales & marketing officer of its real estate arm, managing director of SP International Property Development. Engineer was head of sales and marketing at Tata Realty earlier.

The promotions come at a time when the group is aggressively expanding its realty business where it is looking to launch a dozen residential projects with an area of 13 million sq ft across mid-income and high-end properties in the country.

It has three property ventures — Shapoorji Pallonji Real Estate, Joyville by Shapoorji Pallonji and SD Corp, a redevelopment joint venture. The three entities are developing about 30 million sq ft.

“The elevation is a part of the planned succession in our real estate development business. Kekoo Colah who has, in the past seven-eight years, successfully grown our real estate franchise will continue to play a strategic role in various group initiatives and corporate social responsibility. Both Venkat and Cyrus come with a successful track record in their current roles and are ready for greater responsibilities,” said Jai Mavani, executive director at the group.

“Historically, the Shapoorji group has always encouraged young talent and we are confident that they will continue to consolidate and grow the business,” he said.

The group has a high-end residential development in progress in downtown Dubai, close to Burj Khalifa. Mavani added there would be another project in the mid to high segment in Dubai Healthcare City

Shriram Properties to invest Rs.15,000 Crore on Realty Projects

CHENNAI: Shriram Properties will invest Rs 15,000 crore over the next 7-8 years for the development of around 30 ongoing projects, largely residential, across six major cities.

Chennai-based Shriram Properties, the real estate arm of financial giant Shriram Group, has also decided to focus on affordable housing after the government’s decision to accord infrastructure status to this segment as well as provide other tax sops and interest subvention to home buyers and builders.

“We have completed and delivered about 15 million sq ft and are currently developing 25-30 projects comprising 60 million sq ft area in Chennai, Bengaluru, Hyderabad, Vizag, Coimbatore and Kolkata,” company’s Managing Director M Murali told

Vivek Oberoi ropes in three Popular Celebrities from varied fields for affordable Palghar Real Estate project

Vivek Oberoi joins hand with cricketer Suresh Raina and choreographer Remo D’Souza

PALGHAR: Vivek Oberoi recently announced his affordable real estate project in Palghar and the actor has been taking extra efforts to make this project a grand success. Besides that, the philanthropist that he is, Vivek is going all out to ensure that the housing project has something for everyone.

Vivek Oberoi has joined hands with three popular celebrities from varied fields in order to add to the quality lifestyle that he is aiming at. He has collaborated with cricketer Suresh Raina to start a cricket academy, choreographer Remo D’Souza for a dance academy as well as musician Suresh Wadkar for a singing institute around the area.

Confirming the news says Vivek Oberoi, “This initiative is not only to provide affordable homes, but also quality lifestyle to the residents. We are happy to have such great collaborations. With this, the common man will have the opportunity to pursue their passion and dreams. We are launching a project of almost 5,000 houses and through that, trying to build a community so that people from middle class background can ensure a secure future for their children”.

Besides setting the foundation of his business as an entrepreneur, Vivek Oberoi is foraying into production and playing an antagonist in an upcoming Tamil film, Vivegam.

Altico to provide Rs.300 Crores to Phoenix Group for projects in Hyderabad

Non-banking finance company Altico Capital has announced that it will provide a Line of Credit of upto Rs 300 crores to Phoenix Group, which the realty player plans to use to fund the construction of two of its projects in Hyderabad and to refinance some existing lenders

HYDERABAD: Non-banking finance company Altico Capital, on March 23, 2017, said that it will provide a credit line of upto Rs 300 crores to realty player Phoenix Group. “The funding, which shall be made in tranches, is proposed to be used by Phoenix, largely towards refinancing of some existing lenders and for construction funding across two of its projects in Hyderabad,” Altico said in a statement.

Phoenix is developing a residential project ‘Halcyon’ at Jubilee Hills and a commercial project at Hafeezpet, in Hyderabad. Recently, Altico Capital had also invested in a residential project of Bengaluru-based Mantri Group, in Hyderabad. “Altico will be looking at similar transactions in the commercial real estate segment, including logistics and warehousing in the next financial year, to complement its existing real estate book, as part of its diversification strategy,” Altico Capital’s chief executive, Sanjay Grewal said.

He said availability of land, favourable government policies and robust infrastructure, are a few of the reasons that will lead to growth of the real estate market in Hyderabad.

“We are evaluating multiple opportunities in Hyderabad, across the residential and commercial space and plan to deploy another Rs 750-1,000 crores during the next financial year” he added.

Hyderabad-based Phoenix Group has so far delivered over 7 million sq ft of residential and commercial space. Recently, the Group signed up with Embassy Group, to develop 7 million sq ft of commercial SEZ, in the IT corridor of Gachibowli, Hyderabad on a joint venture basis, it added.

Real Estate may soon come under GST, says Jaitley

NEW DELHI: Real estate, which does not form a part of Goods and Services Tax, may soon come under its ambit as most of the black money is parked in this sector, Finance Minister Arun Jaitley said on Thursday.Petroleum products, a contentious issue between the Centre and states, however, form part of the GST but the Centre will not impose the tax until all states agree on it, Jaitley said.

“The GST Council has decided to consider the proposal of bringing in real estate into its ambit within one year of its roll out,” Jaitley said, adding the Council found merit in the argument of Chief Economic Adviser Arvind Subramanian and the Delhi government.

The two have given an extensive presentation before the Council, about the need to tax land and real estate.

“Petroleum products have been included in the Constitutional Amedment Bill. It is a part of the GST. But until all the states and the GST Council agree, we won’t start imposing tax on it,” he said.

“If sometime in the future, the GST Council decides that petroleum products and gas should be taxed under the GST regime, we would not have to go to Parliament for that as the provision has been made already,” Jaitley said in his reply on a debate on Finance Bill.

He said taxation of alcohol too remains with states at present, as it garnered revenue for them. States get their highest VAT revenues from petrol and diesel but once included in GST there will be uniform tax rates all over the country.

The government is expected to table the enabling GST laws in Parliament next week for discussion. The discussion is expected to start from Monday. On concerns about price increase under GST, Jaitley said the commodities which atrracted zero taxation will remain same under the GST regime too.

Emami Infrastructure launches luxury project in Mulund: Stock jumps on strong volumes

MUMBAI: Emami Infrastructure is up sharply after the company announced the launch of is ultra luxury project Montana in Mulund. At Rs 78.80, the stock, which rose to Rs 82.95 earlier in the session, is up nearly 5% from its previous closing price. The stock has moved up on impressive volumes with nearly 2.7 lakh shares changing hands at the counter so far in the session, about 17 times the average daily volume of 16,000 shares the counter has clocked in the past couple of weeks.

On the National Stock Exchange, the Emami Infrastructure counter has clocked a volume of almost 1.2 million shares so far in the session.

Emami Group’s Emami Infrastructure Limited and Sheth Group, among the top names in the realty space, have formed a partnership for this luxury project.

The project will showcase the expertise of renowned international architect James Law. World-renowned HBA Singapore as the interior designer and TROP landscape designer from Bangkok are also teaming up for the project.

The Montana project, which is spread over seven acres, is located on the arterial LBS Road in Mulund. With its strategic location giving access to other parts of Mumbai, Mulund is among the most preferred real estate destination for home buyers.

Spread over 7 acres, the project comprises of four towers and will house apartments of 2, 3, 4 and 5 BHK configurations.

“We are already present in Mulund with our project Vasant Oscar and Vasant Garden. With this project, our association with Emami Group, James Law, HBA Singapore and TROP will be stronger and long-lasting,” said Sheth Group Chairman and Managing Director Ashwin Sheth.

Sheth Group has a portfolio of 70 projects and over 20 million square feet developed and delivered.

Emami Group Joint Chairman RS Agarwal, said, “Montana is our third project with Sheth Corp”.

Emami Group has so far delivered over 24 residential and commercial projects, comprising 36 million sqft area, primarily in Kolkata.

Maharashtra CM Devendra Fadnavis approves Real Estate Act (RERA)

RERA came into force last May, 2016 and since October, states began issuing their version of the rules under the central act

MUMBAI: The Maharashtra chief minister Devendra Fadnavis approved the Real Estate (Regulation and Development) Act (RERA) that will come effect from May 1, 2017. The state housing department had prepared the rules and guidelines and submitted to the chief minister Fadnavis for his final approval. RERA came into force last May, 2016 and since October, states began issuing their version of the rules under the central act.

The Maharashtra government published the draft rules in December and had sought suggestions and objections from various stakeholders. “We had received over 650 suggestions and objections. There are several bodies which has given the multiples suggestions so we clubbed them. The final rules are now approved and it will come in effect from May 1, 2017,” said senior state govt.

As per this act, it will be mandatory for the developers to register and submit the approved to the RERA authority.

“Everything will be transparent and in black and white now. Whatever apartments, the developers are selling that they have to upload on the website so that the buyers will be briefed about the sale and vacant apartments. If the 60% apartments of any buildings or the project is sold, then it is the mandatory for the developers to register the society. And the make the conveyance deed within six months from the date of the registration. If the developers fail to do that then severe action will be taken the developers,” said officials. Shailesh Puranik, MD at Puranik Developer welcomed the decision.

“The RERA is very good for the consumer. We as the developer must keep 70% amount in the escrow account. It will help us to complete the project on time. Besides, the fly by night developers will run away that will be good for the real estate,” said Puranik.

He also said that due to the RERA the property prices will go northward.” Ramesh Pranhu, chairman at Maharashtra Welfare Society Association (MSWA) said that given the present market conditions, all the flat buyers of ongoing projects are looking for the implementation of RERA in Maharashtra.

“The best part is RERA covers all ongoing projects need to be registered under RERA. Any buildings which are not having OC are covered as ongoing projects. Having approved the Rules and Regulatory Authority being appointed for Maharashtra, the deadline prescribed by the Centre will be met,” said Prabhu. Niranjan Hiraman, chairman at Hiranandani Group said this new act will bring back the confidence in the market. “We are only concerned about the liquidity crunch. If the liquidity dries up, then we may face the problem while commencing the project,” said Hiranandani.

Satra Properties arm divests 49% stake in Satra Realty and Builders

Satra Properties India’s wholly owned subsidiary – Satra Property Developers, has divested its 49% stake in Satra Realty and Builders, its wholly owned subsidiary. The share purchase agreement is executed on March 20, 2017.

“Satra Property Developers Private Limited Wholly Owned Subsidiary of the Company has divested its 49% stake in Satra Realty and Builders Limited its Wholly Owned Subsidiary” said the company in a filing to the Bombay Stock Exchange.

The share purchase agreement is executed on March 20 2017.

Satra Properties India is a real estate development company in India and its primary business is the development of commercial, retail, hotel and residential properties.

Meanwhile shares of the company were trading at Rs 5.55 apiece up 2.78 per cent from the previous close at 12:38 hours on BSE.

Puravankara to exit Rs.403 Crore investment in Karnataka

BANGALORE: Realty firm Puravankara today said its board has approved exit from a Rs 403 crore project at Raidurg in Karnataka.

In a filing to the BSE, the Bengaluru-based developer said its board has passed “an enabling resolution for exit from the investment of Rs 403 crore at Raidurg, Panamaktha Village”.

The exit would involve the sale of its entire shareholding in the company’s three wholly owned subsidiaries.

“The transaction has been authorised on a condition that total inflow should not be less than a sum of Rs 475 crore,” the company said.

Falling sales to affect refinancing of Realty Sector: Report

MUMBAI: Falling sales have dimmed the hopes of cash-strapped real estate developers for refinancing their debt obligations in FY18, says India Ratings and Research.

The sector has mainly relied on refinancing to meet debt servicing obligations given the negative cash flows, and is unlikely to witness a revival in sales in FY18 and refinancing will increasingly become difficult, it said.

“Such refinancing has provided a cushion for developers to hold prices despite slowing sales, and the high prices will further delay recovery in sales and cash flows,” the rating agency said in a statement issued here.

Realty players have been less reliant on bank credit, and the growth in banking credit to the commercial real estate sector slowed down in FY17, with a growth of mere 0.4 per cent since the start of the FY17 till January 20, it said.

Also, a significant interest had been observed from non-banking finance companies and private equity investors for refinancing debt in the last three years.

“Finances of real estate developers continue to remain stretched due to elevated inventory and debt. It is estimated that debt levels will further rise given the negative operating cash flows,” the agency said.

It noted that the Indian realty market is currently grappling with a double whammy: cash shortage caused by the impact of demonetisation and the imminent introduction of the Real Estate Regulator (RERA).

“This, along with the increasing refinancing risk, would shake up the sector, with developers with high leverage losing out. The sector also needs to undergo a structural change in the way it does business and move towards a model where projects are completed before sale. Such a structure would favour real estate companies having better access to funding,” it said.

L&T Realty sells stake in L&T South City Projects to Pragnya Group for ₹190 Crore

L&T Realty exits from Chennai township projects, sells 51% stake in L&T South City Projects for Rs 190 crore

CHENNAI: L&T Realty Ltd, a wholly owned subsidiary unit of engineering giant of Larsen & Toubro Ltd, has sold its entire stake in L&T South City Projects to Pragnya Group, an investment firm associated with the project, for ₹190 crore. The company has executed a share purchase agreement for the sale of its 51 per cent stake in L&T South City Projects Private Limited to Pragnya Group, an investment firm.

L&T Realty holds a 51 per cent stake in L&T South City which is developing a 92-acre residential township at Siruseri, a suburb to the south of Chennai. Limited scalability of the business in the project for L&T Realty Ltd was the rationale behind the sale, said the company.

The share sale transaction was agreed today and is expected to be completed by March 30, L&T informed the BSE. Pragnya South Opportunity Fund and Pragnya Fund II of the Pragnya group are the purchasers. The group partners with reputed developers and has a presence in India, Sri Lanka and Africa.

The deal for the stake in L&T South City Projects Pvt. Ltd is worth Rs 190 crore ($28.7 million), Larsen said in a stock-exchange filing on Tuesday. L&T South City is developing a 92-acre residential township in Siruseri, Chennai. The transaction is likely to be completed by the end of March, Larsen said.

The statement said that Pragnya South Opportunity Fund and Pragnya Fund II, funds managed by the PE firm, bought the stake.

Focused on India and Sri Lanka, Pragnya Group invests across residential, commercial and industrial real estate in Tier I and II cities. According to its website, it prefers to comes at an early stage in the project development cycle and collaborate for land acquisition and approvals. However, it is open to reviewing investment opportunities across different stages of the project cycle.

Pragnya Group and L&T Realty have collaborated for many projects over the years. The PE firm has investments in L&T Tech Park and L&T Eden Garden. Its portfolio also includes residential project Hazel in Chennai, Habitat Crest in Bangalore and Genexx Towers and Exotica in West Bengal.

L&T Realty, which has a strong presence in southern and western Indian markets, has been selling its stakes across projects lately. VCCircle reported last year that Blackstone Group, one of the largest owners of commercial real estate in India, bought into a retail-cum-commercial project of L&T Realty in one of the biggest transactions of the year. The PE giant had also shown interest to acquire some of the ongoing projects of the developer in Hyderabad.

L&T also sold its retail property – Elante Mall – in Chandigarh to Carnival Group last year.

Tata Housing hopes to reach 100 mn Sqft Mark in FY18

Company is planning to develop second homes segment in luxury real estate market, says Rajeeb Dash

MUMBAI: With nearly 70 million sqft of projects under development, realty player Tata Housing Development Company is hoping to reach 100 million mark in FY18, a senior company official said.

“We have already delivered around 25 million sqft and nearly 70 million sqft is under various stages of construction across our three segments — residential, commercial and retail. We will be adding few more projects in the next few months, so we feel that in FY18, our total portfolio will touch 100 million sqft,” Tata Housing Head (Marketing) Rajeeb Dash told.

“We will have big projects coming up this year. Some township projects for developing affordable housing stock and along with that Tata Housing will continue to do a couple of luxury projects as well,” he said.

Dash further said some of the projects that are currently under construction will get delivered in FY18 and the rest will be delivered in the next 2-2.5 years.

The company has projects in major metros, including Mumbai, Delhi NCR, Bengaluru and Kolkata, among others.

“Our residential projects form a major part of our portfolio. We will continue to grow in our luxury residential as well as affordable housing space, which we execute under Tata Value Homes brand,” he said.

The company is also expecting to grow by 20-25 per cent at the topline in the next fiscal, Dash said.

“We are exploring various options when it comes to adding new projects. Apart from green field development, we are also looking at development manager model and we have done a couple of projects under this,” he said.

Dash further said with the GST and RERA coming in, there will be a lot of mergers and acquisitions in the sector.

“The development manager role may play a big thing in this situation. Lot of developers will take branded players like us as a partner. We are getting a few proposals and we are evaluating them. But we will take only those projects that have received all clearances and also if they are financially sound,” he said.

Dash said the company is evaluating around 10 such proposals.

Dash also noted that the company is planning to develop second homes segment in the luxury real estate market.

“I think the second homes is a big market, in terms of the luxury segment, which has not been explored very much in terms of branded players. We have projects in Goa, Kasauli, Talegaon and Lonavala. In Goa, we have delivered the first project and we are doing a second one. We are exploring other new markets as well,” he added.

RMZ, My Home to invest USD 1 billion in Hyderabad

HYDERABAD: Real estate developer RMZ Corp.Has announced a strategic partnership with Hyderabad-based business house, My HomeGroup to develop premium commercial office spaces in the city with an investment of over USD one billion.

Spread across 10 million Sft, the office space project would be jointly developed and managed by RMZ Corp. And My Home Group, a joint statement said.

The first phase of this project covering 3.5 million sq. Ft is already underway here. This commercial property is expected to be delivered by December 2018, it said.

Manoj Menda, Corporate Chairman, RMZ Corp said, “We are pleased to enhance our portfolio in Hyderabad through this 50:50 joint venture with My Home Group, as this is a strategic business accelerator and demonstrates the fundamentals of our assets.”

“This project is a location of choice for many multinational companies and is earmarked for technology, research and development and high value added knowledge intensive companies,” Menda added.

Rameswar Rao, Chairman My Home Group, said, “The joint venture with RMZ will accelerate and drive rapid commercial development in Hyderabad. We are positive about the future and look forward to more such strategic partnerships.

Women in real estate: “I did it my way”

“I can’t think of a better career choice” believes Surabhi Arora, Senior Associate Director – Research, Colliers International, Gurgaon.

GURGAON: “I can’t think of a better career choice” believes Surabhi Arora, Senior associate director – research, Colliers International, Gurgaon.

Surabhi Arora leads the India research team at Colliers International. She specialises in real estate economics and is well-versed with the market dynamics across the main cities in India. Arora’s responsibility in Colliers, includes sector analysis, forecasting, financial modelling, strategic planning, project-level analysis, pre-sales and brand building. She has played an active role in the growth and development of the research team. Arora joined a real estate-centric Singapore-based venture capital fund in 2005. Being a chartered financial analyst, her entry into the real estate industry was an unplanned one.

“The industry was growing at a very fast pace at that time. I could not have chosen a better career than this. The last 12 years in the real estate sector, have been fantastic for me,” says Arora. The challenges faced by women in this industry, are not much different from those in any other industry, feels Arora. “Hard work and self-confidence, helped me to cope with obstacles. Balancing work and home has not been a difficult task for me. My son is 10 years old now. Although it is difficult to spend enough time with him, I ensure that I am there with him for important events,” she elaborates.

“People will look beyond your gender, if you are hardworking and clear about your objectives” Pushpa Bector, Executive VP and head, DLF Premium, Delhi NCR.

Pushpa Bector was instrumental in creating the DLF Mall, which is spread across 2 million sq ft in Noida. Bector heads the premium malls portfolio for the real estate company, including Mall of India in Noida, DLF Place (Saket), Cyber Hub (Gurgaon) and City Centre (Chandigarh). In almost 11 years with DLF, she also revamped and DLF Promenade (Vasant Kunj) into a prime fashion destination in India and set up the F&B division for DLF malls. Bector has two decades of experience in the retail and mall business and has several accolades to her credit, including the ‘Most Admired Shopping Centre Professional of the Year’ at the Asia Shopping Centre and Mall Awards 2014 and ‘International Women Leadership Award for the Excellence in the Retail Industry’ organised by CMO Asia in 2013.

“Retail management is a human-centric profession. In the last few years, women have been seen in large numbers in the retail industry. Women have good communications skills to persuade and influence the consumer, which helps in marketing. I strongly believe that if you are clear about your objectives and if your work speaks for itself, then, people look beyond gender,” Bector maintains.

“My two children are grown up and they are my biggest support. They look upon me as their role model. I have faced gender discrimination when I was a junior-level executive. I have always dealt with such issues firmly,” says Bector, who graduated in hospitality from the Oberoi School of Hotel Management and was associated with Domino’s Pizza. “In today’s competitive global economy, knowledge and one’s capability are the ingredients for success. If women have ambition and skills, there is no stopping them from succeeding,” she states.

“I feel happy to play a small role in helping home owning aspirations of women from lower segment” Deepali Shinde, Unit head of MALA (Mahila Awas Loan Division) of Aspire Home Finance Corporation Limited, Mumbai

Deepali Shinde heads Aspire Home Finance Corporation Limited’s (AHFCL’s) Mahila Awas Loan Division – MALA (Mahila Awas Loan from Aspire). MALA is an initiative to bring financial inclusion to low-income, salaried and self-employed women and offers housing finance as well as advisory assistance. Shinde’s experience in housing finance includes more than a decade in the financial and services industry.

“The low-income group women include salaried women (working in private companies, small scale industries, nursing and housekeeping staff, maid servants, cooks, etc.), as well as self-employed women (such as vegetable vendors, women with home-based business like papad making, running small kitchens and tailoring). These women have equal share in the income of the household and in many cases, are the only source of income at home. However, their search for financing towards home buying has often gone unanswered. So, we have tied up with builders, to provide property options to our women customers, at below-market offerings. We also offer counselling on the entire process of home buying and home loans,” Shinde explains.

“My mother, who was not educated, worked very hard and did odd jobs to ensure I was educated. So, I can understand the difficulties of these women. They are committed in their repayment, unless there is any exigency. This segment faces more than 90% of the total housing shortage in India and hence, can also be viewed as a business opportunity,” points out Shinde.

MALA offers loans starting from Rs 2 lakhs to Rs 12 lakhs and AHFCL currently covers 42 locations in Maharashtra, Madhya Pradesh, Gujarat and Telangana. “We aim to provide housing finance assistance to more than 1,000 women customers in the current financial year. I feel happy to play a small role in fulfilling the home-owning aspirations of women from the lower segment,” says Shinde.

“Women have a high emotional quotient” Darshana Parmar Jain, Deputy MD, Ishwar Parmar Group, Pune

Darshana Parmar Jain, has a master’s in Software Science from the United States, with 12 years’ experience in the Information Technology industry in India, the US and the UK. She has incorporated information technology as an important driver for growth in the 40-year-old Ishwar Parmar Group – one of the largest developers of slum rehabilitation projects in Pune.

“The success of a real estate company, depends on the product and delivery. When it comes to home buying, the decision maker is often a man but the influencer is a woman. Being a woman is a huge advantage in this field. Women have a high emotional quotient and can appeal to consumers. With the government focusing on improving the ease of doing business and the real estate industry becoming more organised, there are now greater opportunities for ambitious and hardworking women in the industry” maintains Jain, who handles various departments, such as marketing, sales, recovery, legal and liaison.

“In fact, CREDAI Maharashrta has decided to launch a ‘Women’s Wing’ in all cities, to encourage more women to get involved in real estate. Cities like Pune, Aurangabad, Pandharpur, Satara and Nashik have already setup this wing,” adds Jain, who is Women’s Wing convenor for CREDAI Maharashtra and CREDAI Pune metro.

“For any woman to scale new heights in her career, she needs a supportive family. I have tremendous support from my in-laws, my parents, my husband and my children. Hence, I am able to balance everything and meet deadlines, by sharing the workload” says the mother of two.

“Being a woman in this field is an advantage” Gita Ramanan, Co-founder and chief design and HR officer, Design Cafe, Bengaluru.

Gita Ramanan is an architect, who also has an Entrepreneurial Management Certification from ISB, Hyderabad. She worked has with several design firms, designing restaurants, five-star hotels and homes, before co-founding Design Cafe in 2011, with her partner Shezan Bhojani. Design Cafe is an award-winning design firm, with projects across the country. Ramanan has experience in client management, employee hiring, accounts, networking, marketing, retention and research. “This business needs one to be very hands-on. We constantly implement better processes and engage with the right people, to manage the challenges that arise,” explains Ramanan, who has been a TEDx speaker and national athlete.

Ramanan considers herself lucky to belong to a family where getting educated and making a career was natural. Two generations of women before her, managed their families, as well as their careers. “I am also fortunate to have a life-partner, who knows and understands me and honors my choices and intelligence. I try not be a ‘super woman’ and instead, focus on the quality of life,” she adds.

“While I face numerous challenges as an entrepreneur, architect and designer, being a woman, is not one of them. I certainly am not diminishing the challenges that women face in today’s workplace and in maintaining a balance between their personal and professional lives.

Nevertheless, being a woman in this industry is an advantage, as we naturally possess patience and determination. Our empathy, holistic viewpoint and attention to details, allow us create a sense of calm in this frenetic field,” Ramanan explains.

“A higher level of integrity and commitment, are my greatest strengths as a woman in this field” Nazia Yusuf Izuddin, President, SN Group, Uttarakhand

Nazia Izuddin is the founding president of SN Group of Companies, which is a business house based in Uttarakhand. The Group consists of infrastructure companies, hospitality companies and asset banks. Izuddin started her career as a finance lawyer in New York and thereafter, worked in Dubai and London. She moved to Dehradun in 2008 and along with her husband, started SN Group with two key laterals – hospitality and real estate. Their flagship hospitality project in Dehradun is the World Integrity Center, India. The Group is currently developing Aures Valley, one of the largest residential developments in Dehradun, spread across 40 acres.

Izuddin, a Fulbright scholar and Harvard and Aligarh Muslim University alumnus, feels that the acceptance towards women has increased and this has helped them to make inroads and build allies and networks faster, especially in entrepreneurial ventures such as real estate.

“Gender decimation can be emotionally torturous, especially for those who are educated and experienced, points out Izuddin. “There may be a constant attempt discredit one’s merit. This disturbs productivity, because half of one’s energy goes into establishing relevance. I deal with one situation at a time. I believe in god and good and this keeps me going. I am a great believer in experiences. If the experience is wholesome, it has a natural balance. Home, work, family, friends and clients, all balance out naturally, because as a person, I am not compartmentalised – all my experiences stem from the same being. Intuition and aesthetic and utility sensibilities are my strengths, which help me in designing real estate and hospitality products. A higher level of integrity and commitment and the ability to value things beyond its financial aspect, are my greatest strengths as a woman in this field,” concludes Izuddin.

Demonetisation-hit Bangalore Realty Sector gets no balm in the Budget

BANGALORE: Chief Minister Siddaramaiah has not proposed any measures to boost the realty sector in his 2017-18 budget, though demonetisation of high-value notes has hit the sector hard.

Document registration, including sale deeds and agreement deeds, has come down by 25% from November last year, when the Centre demonetised Rs 500 and Rs 1,000 notes. Revenue from the stamps registration department has, as a result, decreased by Rs 1,350 crore. The government had fixed a Rs 9,100-crore target in the current financial year.

The sluggishness in the sector is likely to continue in the coming financial year also. Hence, the chief minister has set a moderate revenue target of Rs 9,000 crore from the department in the coming fiscal year.

Various associations of real estate companies had urged the chief minister to bail out the sector. They had asked the government to reduce stamp duty on registration of immovable properties, joint development agreements, affordable housing units to help the sector overcome sluggishness.

Siddaramaiah has, however, proposed to amend the Karnataka Stamp Act, 1957 to rationalise imposition of stamp duty on purchase and sale of stocks through agents or brokers.

The chief minister severely criticised the Centre on demonetisation in his budget speech. “Demonetisation caused a huge amount of distress to the public but the Union government is yet to disclose what it has achieved by it. The entire cooperative sector that is so critical in servicing the farmers and the rural folk, virtually came to a stand still. The manner of implementation betrayed a lack of preparedness, with the banking system just not geared up for this responsibility given to them (sic),” he stated.

The Centre and the Reserve Bank of India should have foreseen the exigencies and should have taken appropriate steps to insulate the common man from its effects, he added

SBI creates wholly-owned Subsidiary to manage Real Estate

MUMBAI: The country’s largest lender State Bank of India has incorporated a specialised firm – SBI Infra Management Solutions Pvt Ltd (SBIIMS) – that will manage its premises and real estate property across the country.

The primary role of the new entity will be to handle transaction management/advisory services, project management, facility management and implementation of policies and initiatives. The decision to incorporate separate entity is implemented to save time of banks’ executives who were involved in managing this non-core business, so that these executives can instead focus on core banking services, SBI said.

The move is seen as public sector banks’ efforts to exit non-core activities to improve balance sheet as they have piled up huge bad assets over the past few years.

With strict guidelines from government, many state-owned banks are exiting their non-core activities as well as selling their bad loans to asset reconstruction companies and other financial entities.

SBI said that the new entity has been established to save time of banks’ executives who are involved in managing these non-core businesses.

“The primary role of the new entity will be to handle transaction management/ advisory services, project management, facility management and implementation of policies and initiatives,” SBI said in a statement today.

With this, the officers who were involved in non-core activities would be better utilised for core banking services, it said.

“We realised that the job of acquisition, construction and maintenance of owned and leased premises, which is a non-core activity, were being looked after by 1,100 officials of the bank including 200 technical officials. Hence, it made sense to create separate entity employing much lesser number of employees,” Arundhati Bhattacharya, Chairman of SBI said.

She said the new subsidiary will have 400 dedicated officials to handle premises and real estate related jobs.

SBIIMS will have its circle office in each local head office centre of SBI, and about 100 zonal offices at administrative office centre of SBI on a pan-India basis. Initially, this subsidiary will look after work related to premises and estate of SBI group only, the bank said.

“SBI is having valuable properties under its possession since the days of Bank of Bengal. We realised that the job of acquisition, construction and maintenance of owned and leased premises, which is a non-core activity, were being looked after by 1,100 officials of the bank including 200 technical officials,” SBI Chairman Arundhati Bhattacharya said.

“Hence, it made sense to create a separate entity employing much lesser number of employees nearing about 400 who will handle premises and estate-related officials more effectively and efficiently,” she said. Initially, this subsidiary will look after work related to premises and estate of SBI group only.

Jodhpur’s Ashiana Dwarka honored as “Budget Apartment Project of the Year”

JODHPUR: Ashiana Housing Ltd., one of the renowned real estate developers in India, bags another accolade in its kitty.

Ashiana Dwarka, the 8.8 acre project situated in Jodhpur has been declared as “Budget Apartment Project of the Year” in Tier two cities by NDTV Property Awards, one of the most coveted real estate accolades.

The awards honored and acknowledged excellence in India’s real estate, recognized real estate leaders and outstanding performances in a wide range of categories which cover everything from Environmental Friendly Projects to Residential Apartment Projects to Township Projects and Commercial Projects. Nominees for the NDTV Property Awards were judged based on criteria including all around excellence, timely delivery, facilities, value for money and customer’s post handling maintenance etc.

Receiving the award, Ankur Gupta, Joint Managing Director, Ashiana Housing Limited said, “It’s a proud moment for Ashiana Housing Ltd. being recognized on a prominent and credible platform like NDTV, cemented our position as a real estate leader across a range of comfort homes segment.

Getting recognition of this level is a matter of pride not for the developers alone, but the entire residents of Ashiana Dwarka who helped us to be here today.”

“We are committed to build high quality projects for our customers and this award will only encourage us to raise the bar and deliver more world class projects in the future.” he added.

Spread over 8.8 acres, Ashiana Dwarka is located on Pal Sangariya Link Road. The project offers various facilities which are required for comfortable living like landscaped parks, wide roads and kids play area, jogging tracks, club with modern amenities. After the timely possession of low rise apartments in Phase-I, now the project offers high rise apartments in Ashiana Dwarka phase II. The company has been instrumental in setting high standards in creating world class projects in residential projects since its inception.

Besides, Ashiana Dwarka, the company has one another finest living destination in Jodhpur i.e Ashiana Amarbagh which is on Pali road. The project has villas and low floor apartments which is fully occupied.

Coldwell Banker is one of the most respected real estate brands in the world

Coldwell Banker is one of the most respected real estate brands in the world.

Their focus on training and technology that will significantly improve the agent’s ability to service their customers was the reason we decided to join hands,” – Anupam Sinha, CEO of Favista.

As a part of this acquisition, Anupam Sinha will take on the role of Chief Product Officer for Coldwell Banker India in addition to managing sales and operations.

About Coldwell Banker India

Coldwell Banker India is the Indian arm of the legacy Coldwell Banker, a global leader in the real estate franchising and provider of real estate advisory services. It is part of the $5 billion Realogy Holding Corporation. Coldwell Banker India owns and manages Coldwell Banker,

Coldwell Banker Previews International Program and Coldwell Banker Commercial marks in India, and has exclusive rights to appoint franchisees to develop the Coldwell Banker brands in the Indian subcontinent.

About Favista

Favista is a real estate advisory company providing services across residential and commercial real estate transactions. Favista was founded in 2012 by Anupam Sinha, Vishal Bhargava with a vision to create a credible and professional Tech based real estate advisory company in a market that has largely been fragmented and disorganized. Favista had been funded and incubated by Veddis Ventures.

For More Details, contact

Ishan Dhatrak
Manager – Marketing and Communications Coldwell Banker India
Ishan.dhatrak@coldwellbanker.in
+91-9970276849
GSV 03101756

Piramal Realty to invest Rs.1800 Crore in Mumbai project

MUMBAI: Piramal group’s real estate firm Piramal Realty will invest Rs 1,800 crore to develop a new project in Mumbai.

The 8-acre project, Piramal Revanta, is located at Mulund.

“The ultra-modern towers, billed to be up to 60 storeys, will become the next referral point in Mumbai’s skyline. Sales for over 200 units of Piramal Revanta are open from March 11, 2017,” the company said in a statement.

Piramal Realty has pegged its investment for this project at “approximately Rs 1,800 crore, including land, and project development & execution costs.”

The company has awarded the construction for the project to Eversendai, a leading global organisation in undertaking turnkey contracts, delivering high-rise buildings, and infrastructure across the Asian and Middle Eastern regions.

Eversendai is best known for its work on Dubai’s Burj Khalifa, Malaysia’s Petronas Towers, and Qatar s Olympic stadium.

Piramal Realty has procured the Commencement Certificate (CC) for this project and excavation of the site is complete.

Global investment firms Goldman Sachs and Warburg Pincus have recently invested about USD 434 million in the company at the entity-level.

Piramal Group is one of India’s leading conglomerates with interests in pharmaceuticals, financial services, information management, glass packaging and real estate.

Bengaluru is world’s most dynamic city, Hyderabad fifth most in the world: JLL Index

Also, Six Indian cities in the world’s most dynamic list. Bengaluru is world’s most dynamic city as per JLL Index!

HYDERABAD: Hyderabad, the City of Pearls , has made it to the top 10 most dynamic cities across the world chosen by JLL City Momentum Index (CMI) 2017. It has been placed fifth with Bangalore on top of the list.

Other cities that made to the list are: Ho chi Minh City (2-Vietnam), Silicon valley (3-USA), Shanghai (4-China), London (6-UK), Austin (7-USA), Hanoi (8-Vietnam), Boston (9-USA) and Nairobi (10-Kenya).

According to the index released by the Chicago-based cities research centre, JLL measures population, connectivity, technology, research & development, education, construction, real estate investment and property prices as the main criteria for choosing the most dynamic cities.

The JLL index says that a city’s capacity to embrace rapid change determines its ability to compete in the world – today and in the future. “The overriding factors that characterise the world’s most dynamic cities are technology and innovation and cities that best absorb, adapt and leverage these drivers come out on top”, adds the report.

Although the most dynamic cities are spread across the world, more than half of the top 30 in the 2017 ranking are in Asia-Pacific. Bangalore, India’s technology centre, has taken the number one spot. In fact, India snatched the lead from China as home to some of the world’s fastest-changing cities, taking six of the top 30, compared with China’s five.

“Liveability is also surfacing as an increasingly important driver of momentum, as it is key to attracting talent. Affordability and space constraints in San Francisco (21) contributed to knocking that city out of the top 20 for the first time and Hong Kong out of the top 30. The environment is also becoming a more critically determining factor in the index. Although in the top 30, Delhi (23) and Beijing (15) were hindered by poor environmental scores”, says the JLL CMI. JLL is a financial and professional services firm specialising in commercial real estate services and investment management.

Six Indian cities in the world’s most dynamic list

Six Indian cities have made it to the world’s 30 most dynamic places that have the ability to embrace technological change, absorb rapid population growth and strengthen global connectivity, with Bengaluru topping the chart.

Cities in India, China and Vietnam, along with several in the US, head the list of world’s fastest changing cities in JLL’s fourth annual City Momentum Index.

Other Indian cities in the list are Hyderabad at the 5th position, Pune (13), Chennai (18), Delhi (23) and Mumbai (25).

Asia Pacific cities comprise half the top 30 fastest-changing cities. “India has taken over from China as home to some of the world’s most dynamic cities. Six Indian cities feature in the CMI Global Top 30, with the country’s primary technology hub, Bangalore, moving into the top spot for the first time,” JLL said.

Top 10 cities in the JLL index are Bengaluru, Ho Chi Minh City, Silicon Valley, Shanghai, Hyderabad, London, Austin, Hanoi, Boston and Nairobi.

“With more than half the world’s population currently living in cities, a proportion that is expected to grow substantially over the next few decades, the success of our cities takes on great importance,” said Jeremy Kelly, JLL Director in Global Research.

The report noted that dynamic labour markets help fuel some ‘Emerging Megacities’ such as Chennai, Manila, Delhi and Mumbai. However, this group faces significant infrastructure and quality of life issues, with high levels of inequality, congestion and pollution hindered by weak city governance.

In all, 134 cities were assessed by CMI using 42 variables including recent and projected changes in city GDP, population, corporate headquarter presence, commercial real estate construction and rents.

Realistic pricing key to market revival in 2017: Colliers International’s India Property Outlook

Residential Real Estate Sector

In 2016, about 89,000 residential units were launched across the six major cities in India, which is 34% less than the units launched in 2015.

Out of the total new launches, Bengaluru (Bangalore) accounted for 28%, Mumbai for 25%, Pune for 23%, the National Capital Region (NCR) for 15% and Chennai for 9%. The decrease in the number of new launches indicates the waning interest of buyers in the primary market.

The certainty of implementation of the Real Estate (Regulation and Development) Act (RERA) and consumer activism in the form of various protests over timely completion of projects, have pushed developers to focus on completion of existing projects. Institutional investors maintained a strong interest over 2016, in financing of Grade A residential projects under-construction, helping developers to complete their existing projects. We expect a similar trend, at least in H1 2017.

Although many forecasters predict a decrease in capital values, we maintain our earlier prediction that capital values will remain stable in the primary market, while due to a few distressed deals, the secondary market may see a correction of 5%-7% in 2017. We advise buyers intending to purchase for self-use, to look out for options, as they can obtain attractive discounts and feasible payment plans.

In the wake of demonetisation in November 2016, many banks have cut home loan rates to 8.25%-9%, which is the lowest level in the last eight years. The government has also announced an interest subsidy of 3%-4% for first-time affordable housing buyers in 2017. The 2017 Union Budget should also bring more incentives for home buyers, in the form of tax cuts and interest subsidies. In addition, while Indian interest rates are at an all-time low, various economists predict another modest cut over Q1 2017, which will further reduce home loan rates and hence, the cost of buying. All these initiatives should help entice buyers back into the residential market.

See also: Ready properties to see more demand in the short term: Colliers International

We expect demand for quality stock in areas with good connectivity and social infrastructure, to revive in the near term, especially in mid-segment housing. However, realistic pricing will be the key to an early revival as right now, both, buyers and sellers are hanging on in the hope of achieving optimum prices.

Mumbai

While the Mumbai residential market started 2016 on a promising note, by Q4 it had been rocked by the demonetisation drive. In the wake of demonetisation, the gap between buyers’ and sellers’ expectations has widened and so, we expect market activity to remain slow for some time.

We anticipate a more active H2 2017, as the gap between buyers’ and sellers’ expectations narrows again.

The market should also be stimulated by a probable further cut in Indian interest rates and the implementation of the RERA reforms.

Gurugram

We expect dull demand and a limited number of new launches in H1 2017, as weakness persists in the market after the demonetisation move. Contrary to the general perception of a significant price correction, we do not believe that prices will crash.

Prices will largely remain stable, although a more noticeable correction of 5%-7% in emerging micro-markets such as Dwarka Expressway and Golf Course Extension Road, looks probable due to the high inventory available in the secondary market.

Noida

The entry of reputed developers is likely to boost market sentiment in the short term. With land prices escalating, we will see more strategic partnerships between developers and private equity players.

We anticipate that the equity infusion will revive stalled projects and Noida will continue to see significant completions in 2017.

Bengaluru

With the state government gearing up to implement the RERA, end-user confidence is strengthening. Although sales have come down moderately, Bengaluru was one of the major cities to be least impacted by the recent demonetisation drive. Buyers are likely to delay their purchase decisions for a time, but we predict a revival in demand shortly.

Office Sector

Office absorption witnessed sustained momentum, with Grade A absorption for the nine major cities in India totalling 41.6 million sq ft (3.9 million sq metres) in 2016, up 3.5% y-o-y and indicating robust leasing demand from occupiers.

The technology sector continued to drive the market with a 58% share of total leasing volume. Bengaluru remained on a high growth trajectory and maintained its leading status among the key cities, by retaining a 31% share of leasing volume last year, followed by Delhi-NCR on 18% of the total. Hyderabad and Chennai stood on 13% each, while Mumbai, Pune and Kolkata accounted for 14%, 9% and 2%, respectively.

In 2016, 27.2 million sq ft (2.53 million sq metres) of new office space was released into the Indian market. This was insufficient to cope with the very strong demand, especially in markets such as Bengaluru, Hyderabad and Pune and resulted in a significant fall in vacancy levels and an increase in office rents in most of the micro-markets in these cities.

In the technology-driven markets like Hyderabad, Bengaluru, Pune and Chennai, we anticipate that the demand-supply gap will remain a concern in the coming quarters. While a few Grade A office buildings are likely to see completion towards end-2017, we expect upward pressure on rents, at least over H1 in these markets.

Tenant appetite for higher quality offices, has been reflected in new leases being executed at above-market rates, in select Grade A buildings in these cities. Expecting a similar trend in 2017 as well, we think there will be a slight shift in demand, to cities such as Gurgaon and Noida, due to the availability of quality supply. With 10%-12% annual growth in the IT sector likely to persist till 2020, demand for office growth should remain strong for the next few years in the technology-driven markets.

In traditional commercial markets such as Mumbai and New Delhi, we expect average rents to stay stable or decline slightly over 2017, with rents under pressure in older and strata-titled buildings in particular.

However, limited new supply in prime locations means rents may move upwards in the top areas in these cities, over the next few quarters.

As more companies realise the importance of adopting a flexible working strategy at the core of their business plans, use of co-working space is gaining popularity in India, as well. This trend was pioneered by start-ups, entrepreneurs and freelancers, to fulfil their need to work in a suitable cost-effective environment. Now, large occupiers have also started exploring this option for their transitional office requirements. We believe this trend will pick up further in 2017.

Organised realty players to tap affordable housing segment

The participation of organised real estate developers would increase in the affordable housing segment with various tax incentives announced in the Budget, the rating agency ICRA said today.

“The thrust of the measures announced in the Union Budget 2017-18 for promotion of the housing sector have been focused on the affordable segment. This segment which has high demand potential has been underserved on account of inadequate supply and limited credit availability,” the agency said in a report.

The key measures taken include giving infrastructure status for affordable housing segment, relaxation of criteria for eligibility for tax benefit under Section 80IBA and higher allocation for the Pradhan Mantri Awas Yojana (PMAY).

“The budget accorded infrastructure status to affordable housing projects, which can help developers in accessing credit at lower rates and longer tenures, including from sources such as external commercial borrowings. The cost savings from these benefits would further incentivise projects in the affordable segment,” the report said.

ICRA said that it expects that the availability of tax exemption would spur many developers in the organised sector to enter the affordable housing segment.

“For a representative affordable housing project with execution cycle of 3.5 years and profit before tax (PBT) margins of 16 per cent, the tax exemption would result in a boost to the equity IRR (internal rate of return) by around 3 per cent.

“The incremental returns estimated are moderated by the fact that minimum alternate tax (MAT) would be payable on the book profits from the project, notwithstanding the income tax exemption under Section 80IBA,” the report said.

ICRA, however, said that the 3 per cent incremental return estimated does not factor in benefits, which could be available to the developer by way of offsetting MAT credit against taxes arising out of other projects on the same balance sheet.

To boost demand for affordable homes, ICRA said the government has taken steps to improve affordability for the end consumers, especially in the economically weaker section (EWS) and lower income group (LIG).

The credit linked subsidy available through the PMAY is expected to play a substantial role in providing subsidised credit facilities to consumers in the lower income groups.

The government had announced an expansion of the income limits for the beneficiaries under the credit linked subsidy programme of PMAY in December 2016, thereby further increasing the target customer base and expanding it to the middle income group (MIG). The earlier income limit for beneficiaries in the LIG segment was Rs 6 lakh per annum.

“Eligible beneficiaries in the MIG category (first time buyers only) can have a maximum annual income of Rs 18 lakh and will receive interest subsidy of 3 per cent for principal up to Rs 12 lakh for 20 years. This move is expected to significantly increase the number of people eligible for receiving credit linked subsidies and drive demand for affordable housing projects,” the report said.

Altico Capital infuses Rs.180 Crore in Sheth Corp.

NEW DELHI: Non-banking financial company (NBFC) Altico Capital today said it has infused Rs 180 crore in Mumbai-based realty developer Sheth Corp.

The money will be utilised predominantly for the construction of a residential project ‘Project Zuri’ in Thane.

The project has received a good response in its recent pre-launch sales which establishes the marketability of the product, Altico Capital said in a statement.

“Sheth Corp secured Rs 180 crore in long-term debt funding from Altico Capital,” it added.

Altico Capital is a NBFC sponsored by Clearwater Capital, Abu Dhabi Investment Council and Varde Partners. It has been a consistent lender to the real estate segment and plans to deploy Rs 3,000-4,000 crore on an annual basis into the residential and commercial real estate sectors across tier-I cities in India.

It has also recently announced that it will deploy about Rs 1,000-1,250 crore in the NCR market in the current financial year.

India’s Real Estate sector outlook Negative for FY’18: India Ratings

MUMBAI: India Ratings and Research (Ind-Ra) has maintained a negative outlook on the real estate sector for FY18, based on the expectation of a continued slump in the sale of residential units. This will result in continued negative cash flows and a further increase in already-high debt levels, resulting in weakening of the sectoral credit profile.

Realty sector’s outlook remains negative for the next fiscal with housing sales expected to be muted due to high prices and significant delays in completion of projects, according to India Ratings and Research.

The sale of residential units has been falling since FY14 due to the continued high prices of residential units making them unaffordable to end-users and the significant delays in the completion of under construction projects (sometimes by even more than three years), thus impacting consumer confidence in the sector. The sale of units to individuals who purchase residential units for investment purposes is also likely to be severely curtailed by the demonetisation exercise, the implementation of the Prohibition of Benami Transactions Act and the proposal to restrict set-off of loss on rented properties against other income heads introduced in the union budget 2017-2018.

The continued fall in sales is likely to curtail liquidity, which will be further impacted by the likely implementation of theReal Estate (Regulation and Development) Act, 2016 during 1HFY18. While the sector has largely relied on refinancing to meet its debt servicing obligations, Ind-Ra believes refinancing will increasingly become difficult with revival in sales unlikely.

Ind-Ra believes that the sector needs to undergo a structural change in the way it does business to revive itself and move towards a model of unit sales post completion of projects. Such a structure would favour large organised real estate companies having better access to institutional funding and lead to consolidation in the sector. However, a single window system for time-bound approvals is imperative for the success of any such structural changes in the system and for the sector’s long-term survival and growth.

The negative cash flow would lead to further rise in the debt levels and weakening credit profile of the real estate sector, it added.

“This will result in continued negative cash flows and a further increase in already-high debt levels, resulting in the weakening of the sector’s credit profile,” it added.

The agency pointed out that the sale of residential units has been falling since the 2013-14 fiscal due to the continued high prices of housing units, making them unaffordable to end-users.

It said that the significant delays in the completion of under construction projects, sometimes by even more than three years, has also impacted consumer confidence in the sector.

“The sale of units to individuals who purchase residential units for investment purposes is also likely to be severely curtailed by the demonetisation exercise, the implementation of the Prohibition of Benami Transactions Act and the proposal to restrict set-off of loss on rented properties against other income heads introduced in the union budget 2017-18,” it said.

The liquidity would be further impacted by the likely implementation of the Real Estate (Regulation and Development) Act during the first half of next fiscal.

While the sector has largely relied on refinancing to meet its debt servicing obligations, the agency said that the same would increasingly become difficult with revival in sales unlikely.

India Ratings suggested that the sector should undergo a structural change to revive itself and move towards a model of selling homes after completing the projects.

“Such a structure would favour large organised real estate companies having better access to institutional funding and lead to consolidation in the sector. However, a single window system for time-bound approvals is imperative for the success of any such structural changes in the system and for the sector’s long-term survival and growth,” the agency said.

Sensitivities

Improvement in Demand: A price correction and the consequent revival in consumer demand, resulting in a positive free cash flow and a reduction in debt levels could result in a stable outlook for the sector.

Asset Monetisation: Sale of land and commercial property assets, leading to a substantial reduction in debt levels could be a positive driver for issuer ratings.

Tata Housing announces two New Projects in Maldives

MUMBAI: Realty arm of Tata Group – Tata Housing, today announced expansion in Maldives real estate market with launch of two luxury housing projects in Male.

The company, which is the real estate arm of the Tata group, has launched two high-end property developments at Odeon and Nadhee.

“The projects will be developed by Apex Realty Pvt Ltd, a joint venture between Tata Housing Development Company Ltd and SG 18 Realty Pvt Ltd,” Mumbai-based Tata Housing said in a statement.

Tata Housing, which entered Maldives market about 5 years ago, has already completed a social housing project in the island country in partnership with the Maldives government.

The project Luxa One at Odeon will be the first project in Male. “Located at the retail and residential luxury hub of the island, Majeedhee Magu, Luxa One is spread across 10,000 sq ft comprising of 54 luxury, 3-bedroom apartments,” it said.

The second project at Nadhee is built across 21,000 sq ft, located in the exclusive residential area of Sosun Magu and comprises of 72 luxury, 3-bedroom apartments and retail areas.

Commenting on this development, Tata Housing Spokesperson said: “We are pleased to announce the launch our luxury projects at Odeon and Nadhee. These project are designed to endorse the beauty of its island capital, Male and we believe these would emerge to be the new landmark for Male.” “I am happy that Tata Housing, one of the strongest brands in the Indian Real Estate sector with offerings across various segments, is coming to Male. I am sure this association between the two countries will go a long way and strengthen the bonds between people of both the countries,” said Akhilesh Mishra, Ambassador of India at Maldives.

Tata Housing is currently developing over 70 million square feet of real estate and has a pipeline of 19 million square feet.

Sisodia writes to Jaitley for including Real Estate under GST

NEW DELHI: Delhi Deputy Chief Minister Manish Sisodia has pitched for the inclusion of real estate under the ambit of the proposed Goods and Services Tax (GST).

In a letter to Union Finance Minister Arun Jaitley, Sisodia praised him for piloting the ambitious tax reforms even as he pointed out the “mistake” of keeping land and real estate out of its scope.

Sisodia, who also holds the Finance portfolio, said doing so would only weaken the fight against black money and cited a recent newspaper column by chief economic adviser Arvind Subramanian’s to buttress his point.

Supporting the points raised by Subramanian, the Deputy Chief Minister said land and property transactions can be made more transparent by including real estate in GST.

“All the political parties are showing much willpower when it comes GST . Maybe more willpower is needed to bring real estate under its ambit. I believe if it does not happen now it will never happen. I want you to discuss this issue once again,” he wrote.

India Realty Sector needed professional Property Managers

With continued migration of residents both within the country and abroad, investors in real estate have constantly found it difficult to manage their properties during their absence. There were few options except to rely on relatives or friends for such needs.

But times are changing, especially with India liberalising investment norms by foreign companies. One area that has caught the attention of the foreign companies involved in property management is the huge potential available at metros and secondary towns.

The property management wing of the real estate sector is growing very fast in India. Property managers provide a range of services to property owners including property maintenance, renting, renovating, and security of a residential or commercial property.

A property manager liaisons with owners, tenants and contractors to make the owning/renting process seamless and generate highest possible return for property owners.

The main factors responsible for leading the booming growth of property management services in India includes the following:

One stop solution for property owners

Only owning a property is not enough to earn a good rental income. Instead you need proper management and care of the property. A property owner needs to refurbish the property in case of damages, look for a good tenant when property is vacant, ensure safety of property and fulfill all dues, including pay bills and taxes on time.

All these tasks are taken care of by property management firms on behalf of a property owner on very nominal charges.

Property management firms deal with the tenant and help in completing all legal documents including police verification and rent agreement.

They collect rent, pay the bills and taxes and keep track of each and every important thing associated with the property.

Increasing demand for residential real estate

There might be several disruptions in the growth of real estate sector in India but the fact is that growing middle-class needs houses. According to one estimate, approximately 60 crore people in India would be living in cities by 2030. These numbers speak of the kind of demand we are going to see in the residential real estate market.

As more and more people move into cities demanding houses, the demand for property management services is bound to go up.

Currently, this trend is visible in various metropolitan cities where the property owner doesn’t have time to look after properties due to other important obligations. Such people take the services of property management firms like Propdial.

In India, the real estate sector is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. It comprises four sub sectors – housing, retail, hospitality, and commercial.

The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space, as well as urban and semi-urban accommodations.

The Indian real estate sector has witnessed high growth in recent times with demand for office and residential spaces booming. Property management services have also grown rapidly in the last few years.

The property manager is the owner’s partner in maximising the return on investment. Management companies deal directly with prospects and tenants, saving you time and worry over marketing rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions.

Many real estate professionals have looked at property management and changed their minds when the scope of the management tasks and record keeping are fully understood.

Although hiring a property management company has many advantages, using one can be expensive. Apart from the cost, relying on a property management company is not for everyone.

There are an estimated 30 million NRIs living in 130 countries around the world. Even PIOs are keen to invest in the growing opportunities available in Indian real estate market.

But doubts linger about land grabbers, tenants not vacating the premises and inadequate manpower to maintain the property back home.

Remittances continue to rise in India, from $49.6 billion in 2009 to $55 billion in 2010. Overseas Indians are keen to look at investment opportunities in real estate. (The writer is the founder of Propdial)

Demand for Co-working Office Space rising on affordable rent: JLL

The cost per seat is in the range of Rs 7,000-Rs 15,000 per month.

Affordable rents and flexible working options are driving the demand for co-working space in Delhi-NCR with the numbers of such business centres expected to rise over 40 during this year, according to a report.

There are currently over 30 co-working business centres, with more than 2,500 seating capacity, across the national capital region, property consultant JLL India said.

The small and medium enterprises, along with start-ups, are the biggest target clientele for the companies operating these co-working business centres. The cost per seat is in the range of Rs 7,000-Rs 15,000 per month.

“Co-working spaces are rapidly popping up across Indian metros and tier-II cities. Through these, start-ups get flexible working options at affordable rents. These spaces offer desks at cheaper rentals in an office-like environment,” said Nitish Bhasin, Managing Director – Markets, JLL India.

Business nomads, expats or those travelling to the country for a few months also prefer such options instead of working out of coffee shops, he added.

The increasing number of freelance professionals and consultants in today’s globalised workforce are driving this phenomenon. These centres are also in great demand with corporates looking for flexibility in work locations.

“Delhi-NCR is definitely among the more prominent regions witnessing this global trend. In 2016, the number of co-working spaces in Delhi-NCR was more than 30; this year, it is expected to go over 40,” Bhasin said.

The average occupancy share of co-working office spaces across NCR is about 70-75 per cent, but this would go up once the recent seat additions get fully leased.

Of all micro-markets, the central business district (CBD) of Delhi has the lowest vacancy in this segment at 8-10 per cent, while all other micro-markets have vacancy levels in a range from 20-35 per cent.

The number of players specialising in co-working office spaces across India is expected to surpass 100 sooner rather than later. Some of the major co-working spaces in the Delhi- NCR are run by firms like 91 Springboard, Awfis, Investopad, Innov8 and Alt F, among others.

Apart from freelancers and consultants, some corporates offer flexible working options to their staff by leasing a few desks in some of these establishments.

To reduce their financial burden and simultaneously motivate and retain talent, more corporates could turn towards co-working spaces in the future, the report said.

Developers, too, are now starting their own co-working offices to provide incubation spaces, or divide large floor plates for smaller occupants.

“There is currently very limited supply of co-working spaces – but once this situation improves, the demand for them will skyrocket. As bigger co-working players enter India and more such facilities crop up across cities, this category can prove to be a major disruptor on India’s commercial real estate market,” Bhaisn said.

KONE eyes up to 6 pc growth in 2017; banks on Realty revival

Leading elevator manufacturer KONE India is targeting 5-6 per cent sales growth this year on the back of new products and likely revival in the property market.

KONE India, a subsidiary of the Euro 8.8 billion KONE Corporation of Finland, posted a muted growth of 3-4 per cent in 2016 as sales and new launches of real estate projects fell sharply following demonetisation in November.

“The elevator and escalator market in India is currently about 50,000 units per annum. Escalator market is very small.

Our market share was over 20 per cent in 2016,” KONE India Managing Director Amit Gossain told

Ansal brothers should get judicial permission to leave country: Police to Court

The Delhi Police on Saturday asked a local court to pass an order against real estate tycoons Gopal Ansal and Sushil Ansal to get permission from the court before leaving country. The police, in an application filed said it is demanding that the Ansal brothers involved in the case of the 1997 Uphaar cinema hall fire tragedy in which 59 people were killed should get permission from the court before leaving country. The next hearing for the case will on March 16 in the Patiala House Court.

The duo also accused of tampering with evidence in the case, pending since 2006. The apex court sentenced Gopal Ansal to one-year jail term on February 9 where on the other hand, elder borther Sushil was ordered to skip prison term citing old age and ill-health. At least 59 people died of asphyxia and over 100 others were injured in the stampede after fire broke out in Uphaar cinema on June 13, 1997, during the screening of J.P. Dutta’s film “Border”.

Real Estate sector outlook Negative for FY’18: Ind-Ra

The negative cash flow would lead to further rise in the debt levels and weakening credit profile of the real estate sector, it added.

Realty sector’s outlook remains negative for the next fiscal with housing sales expected to be muted due to high prices and significant delays in completion of projects, according to India Ratings and Research.

The negative cash flow would lead to further rise in the debt levels and weakening credit profile of the real estate sector, it added.

“India Ratings and Research (Ind-Ra) has maintained a negative outlook on the real estate sector for FY18 (2017-18), based on the expectation of a continued slump in the sale of residential units,” India Rating said.

“This will result in continued negative cash flows and a further increase in already-high debt levels, resulting in the weakening of the sector’s credit profile,” it added.

The agency pointed out that the sale of residential units has been falling since the 2013-14 fiscal due to the continued high prices of housing units, making them unaffordable to end-users.

It said that the significant delays in the completion of under construction projects, sometimes by even more than three years, has also impacted consumer confidence in the sector.

“The sale of units to individuals who purchase residential units for investment purposes is also likely to be severely curtailed by the demonetisation exercise, the implementation of the Prohibition of Benami Transactions Act and the proposal to restrict set-off of loss on rented properties against other income heads introduced in the union budget 2017-18,” it said.

The liquidity would be further impacted by the likely implementation of the Real Estate (Regulation and Development) Act during the first half of next fiscal.

While the sector has largely relied on refinancing to meet its debt servicing obligations, the agency said that the same would increasingly become difficult with revival in sales unlikely.

India Ratings suggested that the sector should undergo a structural change to revive itself and move towards a model of selling homes after completing the projects.

“Such a structure would favour large organised real estate companies having better access to institutional funding and lead to consolidation in the sector. However, a single window system for time-bound approvals is imperative for the success of any such structural changes in the system and for the sector’s long-term survival and growth,” the agency said.

Why ‘Affordable Housing’ may be a Rare Bright Spot in India’s Realty

NEW DELHI: India faces an estimated housing shortage of 18 million units. If the country has to deliver on the promise of “housing for all by 2022”, it translates into completing approximately three million units a year.

Despite a widespread shortage of affordable housing in India, private interest in the space has been negligible. Private equity investors have largely stayed away from this area because of thin margins. Now news reports suggest that Tata Housing Development plans to resume building affordable homes. Is the math beginning to favour developers and can it attract serious investment in the space?

India faces an estimated housing shortage of 18 million units. If the country has to deliver on the promise of “housing for all by 2022”, it translates into completing approximately three million units a year. So the resumption of private interest is good news as, with one of the highest multiplier effects, housing can generate incremental demand for cement and other commodities, labour, white goods, electricals and the like. It has a strong impact on GDP.

Nascent interest in this space had been coming from players like Mahindra Lifespace, Shapoorji Pallonji, Assetz Property Group (Bangalore), VBHC Homes, Brick Eagle Capital etc. With mainstream real estate reeling under a range of stresses that got exacerbated by demonetisation, ‘affordable homes’ may become the new buzz for the sector.

The Union Budget played its part by according ‘Infrastructure Status’ to the affordable housing sector. This will enable developers operating in this segment to raise loans at a cheaper rate, akin to other infrastructure projects. With industry status, banks will be willing to lend more to projects in the affordable housing segment and thus create larger access to funds.

Affordable units will be eligible for 100 percent deduction of profits and gains under Section 80-1BA of the Income Tax Act. Eligibility for claims under this section has now been extended to those completing the project in five years, from three years earlier.

The sops also include developers’ tax relief on unsold stock — they will now need to pay capital gains only in the year the project is completed rather than at the start of the project. Further, the holding period for capital gains tax for immovable property has been reduced from three years to two years.

While the Return on Assets may not look enticing for affordable housing projects, the much reduced cost on debt and access to capital would translate into higher Return on Equity. The access to zero cost customer advances would be an added sweetener for the developer.

On the face of it, the perquisite for RoE expansion looks in place that should eventually encourage long-term capital.

Alongside reducing the cost of capital, the government has perhaps sweetened the deal too much by defining affordable housing by size rather than cost, thereby leaving the doors open for misuse.

The concept of carpet area (the area enclosed within the walls), overriding the dubious builder definition of built-up area (carpet area plus outer walls, balcony and other common areas) has found a place. Thus, a carpet area of 30 square meters in the four big metros of New Delhi, Mumbai, Chennai and Kolkata, and of 60 square meters in smaller cities, make for affordable units. And with this, the actual usable area has increased the benchmark by as much as 20 percent to 40 percent.

A 30-square-meter carpet-area home in a metro city like Mumbai, with loading and exemptions, translates into a 480-square-foot unit. This may entice the smarter developers to develop ‘not so affordable’ compact homes under the garb of affordable housing. The regulations have to come out on who can actually claim the battery of concessions. Otherwise, we may end up witnessing a sizeable chunk of affordable homes landing up in the hands of ‘unaffordable customers’.

Rajsanket Realty announces Board Meeting on Feb 28, 2017

Rajsanket Realty’s board meeting will be held on February 28, 2017, to consider and approve the allotment of Secured, Unlisted, Redeemable, Non – Convertible Debentures of the Company on receipt of monies, on private placement basis.

MUMBAI: Rajsanket Realty Ltd has informed BSE that the Meeting of the Board of Directors of the Company will be held on February 28, 2017, inter-alia to consider and approve the allotment of Secured, Unlisted, Redeemable, Non – Convertible Debentures of the Company on receipt of monies, on private placement basis.Source : BSE

BSEL Infrastructure’s independent directors meeting on Feb 28, 2017

BSEL Infrastructure Realty Ltd has informed BSE that the meeting of the Independent Directors of the Company shall be held on February 28, 2017, to evaluate the performance of Board of Directors and Key Managerial Personnel of the Company.

MUMBAI: BSEL Infrastructure Realty Ltd has informed BSE that the meeting of the Independent Directors of the Company shall be held on February 28, 2017, to transact the following business:

1. To evaluate the performance of Board of Directors and Key Managerial Personnel of the Company.

2. To review the performance of the Chairperson of the Company.

3. To assess the quality, quantity and timelines of flow of information between the Company management and the Board.Source : BSE.

DLF to invest Rs.3500 Crore in 2017 to complete running projects

NEW DELHI: India’s largest realty firm DLF will invest about Rs 3,500 crore this year to complete construction of almost all of its existing housing projects, a senior company official said.

DLF has 18.5 million square feet area under construction in various housing projects, and it is targeting to complete about 15-16 million sq ft by end of this year and create finished stocks amid slow sales in the residential segment.

“We have already constructed nearly 11 million sq ft in the first three quarters of this fiscal. Now, we are targeting to complete almost all of our projects this year,” DLF’s Group Chief Financial Officer (CFO) Ashok Tyagi told PTI.

Out of 18-19 million sq ft area to be constructed in the residential portfolio, he said only 2-3 million sq ft would be left for the next year.

“We will be investing Rs 3,250-3,500 crore on construction during this calendar year,” he said, adding that the company continues to focus on execution of existing projects and also to create finished un-launched inventory.

DLF has residential projects in Delhi, Gurgaon, Hyderabad, Kochi and Panchkula among others.

The company has recently started developing two new office projects in Gurgaon and Chennai, totalling 4 million sq ft of leasable area, after it exhausted all commercial stocks.

On housing sales, he said the residential market would continue to remain sluggish for the next few quarters.

“We will have an operating shortfall of about Rs 750-850 crore a quarter due to weak sales and collection,” he added.

According to an investor presentation, DLF’s sales bookings declined by 62 per cent to Rs 760 crore in the first nine months of the current 2016-17 fiscal from Rs 2,015 crore in the corresponding period of the previous financial year.

The company’s gross sales bookings were higher at Rs 1,550 crore during April-December of this fiscal, but cancellation/ upgradation worth Rs 790 crore dragged net sales.

DLF had last week reported 46 per cent fall in profit at Rs 98 crore and 30 per cent dip in net sales to Rs 2,058 crore in the quarter ended December as compared with the year ago period. The finance cost rose to Rs 758.64 crore from Rs 670.6 crore during the period under review.

DLF’s net debt increased to Rs 24,397 crore during the third quarter of the current fiscal from Rs 23,140 crore as on September 30, and borrowing is expected to rise further. The company has a total land bank of 264 million sq ft.

Strong rental market is key to Chennai Realty’s growth

CHENNAI: Chennai has grown exponentially in recent decades. It attracts an endless sea of people who keep moving in to the city, primarily for career and educational prospects. Employment and education opportunities and lifestyle prospects, are magnets that pull people into Chennai from all parts of the country.

Impact on the demand for Rental Housing in the city

High level of migration: The total migrants into the urban areas of Tamil Nadu, as per 2011 census, accounts to 12.3 million. Of this, around 47% have a duration of residence of up to 9 years.

Thus, a fair portion of citizens in Chennai are tenants, who do not necessarily want to buy a flat to live in the city.

Better quality of living: Rental housing allows residents to opt for a higher standard of living than their property purchasing power.

A new apartment in the CBD of Chennai would cost around Rs 75 lakhs, while a person earning about Rs 10 lakhs per annum, can afford a home costing Rs 60 lakhs in the more affordable suburban location. However, such an individual can afford a CBD-based home on rent within the same annual income. This makes it possible for a MIG (middle-income group) individual to live in a HIG (higher-income group) flat, while the LIG (lower-income group) individuals can comfortably afford to live in a MIG flat.

Increased affordability: Chennai continues to be an expensive city to buy a property. An average increase in property prices by 6%-7% from last year, has further constrained the affordability of owning a house. However, the rental trends in Chennai have seen only 2.5%-5% annual increase over the past 4-5 years.

Tax benefits: Rental paid saves taxable income, as almost the whole portion of the rent paid can be saved by claiming it under Section 10 as HRA.

Flexibility: Offering greater flexibility and requiring less of a financial stretch than home ownership, renting is most common among young adults, in whose lives changes in work and relationships are frequent.

Lower additional costs: Owning a house involves a down payment for the loan to the tune of almost 20% of the property value and the EMI to be paid is often 40%-50% of the monthly income. Property taxes are about 1.5% of the property value and the regular maintenance and repair costs account for 40% additional charges, as compared to a simple monthly rental for the same property.

However, hunting for a suitable rental house does come with its own set of challenges – not only to outsiders but also locals. Accessibility to the work place, quality of the neighbourhood, connectivity to other parts of the city, adequate living space, amenities, owners’ rulebooks and the budget and value for money being paid, play a significant role in while searching for a good rental flat.

Trends in the important housing rental hotspots of Chennai

IT Corridor-Old Mahabalipuram Road

OMR continues to thrive as one of the preferred destination for the city’s infotech population, due to its proximity to various IT business parks and dedicated SEZs. With a slew of residential apartments and studios for singles coming up along this corridor, the burgeoning population of IT professionals has a logical influence on real estate and rental accommodations in this locality. Being majorly occupied by bachelors (sharing accommodations) as well as families of 4 to 5 members on an average, Shollinganallur, Perumbakkam, Perungudi, Siruseri and Taramani, have average residential rental values ranging from Rs 12,000-18,000 per month for 2-BHK flats and Rs 15,000-30,000 per month for 3-BHK individual houses.

GST and GNT corridors

Dotted with apartment complexes, educational institutions, SEZs and retail outlets, the Grand Southern Trunk (GST) Road – the stretch between Perungalathur and Guduvanchery – is densely populated by a mix of working people and students. Being well-connected by road and rail to the southern cities of Tamil Nadu, this stretch is also witnessing tremendous infrastructure activity, with rail over-bridges, a proposed new mofussil bus terminus and a planned elevated 8-lane corridor.

The average rental values of spacious houses in this residential neighbourhood, with quality educational and healthcare institutions in close proximity, range from Rs 7,000-12,000 per month for 2-BHK flats and Rs 10,000-20,000 for 3-BHKs.

The Grand Northern Trunk Road – a 10-km drive down the stretch from Madhavaram Bypass to Red Hills – is strikingly dissimilar to the GST Road. This corridor is more about container terminals, warehouses and some realty activity. The steady growth in infrastructure and connectivity, as well as availability of water resources, have encouraged leading industries to set up their bases along GNT Road.

However, there is a lack of road infrastructure projects and a perception of north Chennai and the IT hub at Ambattur, as having very little impact on this stretch. This has led to comparatively less enthusiasm among people to move to this location. As a result, employees working in the industries along this stretch can find more affordable rental housing, in the range of Rs 5,000-8,000 per month for 2-BHK flats and Rs 10,000-16,000 per month for 3-BHKs.

Pallavaram-Thoraipakkam Road

Connecting the key corridors of OMR and GST, the Pallavaram-Thoraipakkam Road has vast employment opportunities and residential rental affordability. 1-BHK developments (with average unit size of 550 sq ft) account for about 8% of the total housing supply in this area. The yield rate in this micro market is 2%-3%. Offering a number of rental options, ranging from studio apartments to 3-BHK flats, villas and row houses, the average rental values in this micro-market falls between Rs 10,000-15,000 per month for 2-BHK flats, while 3-BHK options are rented out for Rs 12,000-25,000 per month on an average.

Moving westward

The peaking residential rental values in city’s central locations, have led people to turn to the west for affordable living. The western quadrant is predominantly driven by business people, as well as industrial and IT employees, due to its excellent connectivity to Central Chennai, Mount-Poonamallee Road and Ambattur office districts. After construction of the Outer Ring Road, connectivity has improved significantly. Expected infrastructure projects, including completion of the metro rail corridors, revival of the Maduravoyal Flyover, etc., will keep drawing occupants towards the west.

Premium residential developments and the presence of multi-national companies in Sriperumbudur and Oragadam, have also been major demand drivers in these localities. The west zone, including Porur, Maduravoyal, Manapakkam, Thiruverkadu and Poonamalle, offers decent houses with average rents in the range of Rs 10,000-12,000 per month for 2-BHK flats and Rs 15,000-25,000 per month for 3-BHKs.

The importance of Chennai’s rental housing market

Rental housing not only addresses housing needs but also helps to reduce the completed and unsold residential inventory. The reduction in this number is a clear indicator that the market is maturing. With this in mind, the recent Union Budget has levied tax on developers on the notional rental income on completed and unsold inventory after the first year.

Apart from the fact that rental housing is affordable and offers a better living standard, it can also help to achieve the government’s vision of ‘Housing for All by 2022’. The growing shortfall in housing is a serious challenge and its scale makes the success of any single approach like buying/owning a house difficult. On the other hand, housing situated far away from employment hubs and social infrastructure, is unlikely to induce much demand. Through rental housing schemes, PPP model and government subsidies, housing for the EWS (economically weaker sections) and LIG can even be made available to people drawing incomes below Rs 7,000 per month.

(The writer is local director – strategic consulting (Chennai), JLL India)

Rodium Realty raises Rs.36 Crore from Capri Global Capital

MUMBAI: Rodium Realty today said it has raised Rs 36 crore from Capri Global Capital to construct a mixed-use project in Mumbai.

The company has raised the fund in the form of structured debt. Property consultant JLL India was the advisor for the transaction.

The investment is for a premium mixed-use redevelopment project in Kandivali West, Mumbai, which consists of prime retail shops and premium residences.

“The funds will be used to accelerate construction and to speed up the delivery timeline,” the company said in a statement.

Capri Global Capital Ltd (CGCL), which is a non-deposit accepting, non-banking financial company, offers various customised solutions to real estate developers and SME businesses.

“These funds from Capri will help us in timely achieving of planned cash flows, maintaining the construction pace and completing this landmark project,” said Deepak Chheda, Chairman and Managing Director, Rodium Realty.

Capri Global Capital Director Rajesh Sharma said the investment is in-line with its focus on funding to mid affordable housing segment.

Omaxe Q3 Sales Bookings up 2% at Rs.282 crore

Realty firm Omaxe Ltd’s sales bookings rose marginally by 2 per cent to Rs.282 crore during the third quarter of this fiscal on higher realisation despite demand slowdown after demonetisation move.

NEW DELHI: Realty firm Omaxe Ltd ‘s sales bookings rose marginally by 2 per cent to Rs 282 crore during the third quarter of this fiscal on higher realisation despite demand slowdown after demonetisation move.

However, sales bookings in volume terms fell 28 per cent to 0.57 million sq ft during October-December period of the 2016-17 fiscal from 0.79 million sq ft in the year-ago period.

The average sales realisation rose by 42 per cent to Rs 4,955 per sq ft, according to an investors presentation.

Out of total sales bookings, housing segment contributed Rs 202 crore while commercial segment Rs 80 crore.

During the April-December period of the current fiscal, the sales bookings fell by 41 per cent to Rs 792 crore from Rs 1,335 crore in the corresponding period of the previous year.

Sales bookings in volume terms declined by 33 per cent to 2.39 million sq ft in the first nine months of this fiscal from 3.57 million sq ft in the year-ago period.

“Area delivered during 9 months is 3.75 million sq ft,” the presentation said.

Omaxe’s gross debt reduced marginally to Rs 1,410 crore during the third quarter of this fiscal from Rs 1,428 crore as on September 30, 2016.

The company had reported 13 per cent increase in its consolidated net profit to Rs 20.59 crore for the quarter ended December against Rs 18.28 crore in the year-ago period.

Income from operations rose by 3 per cent to Rs 411 crore in the third quarter of this fiscal from Rs 399 crore in the corresponding period of the previous year.

“During the months of November and December 2016, people were facing cash crunch and it affected the entire economy including real estate sector, which remained subdued.

“However, our emphasis on affordable housing has ensured that our projects in cities like Lucknow, New Chandigarh, Faridabad, Ludhiana and Indore did relatively better as we enjoy utmost trust and confidence of customers,” Omaxe CMD Rohtas Goel had said.

Omaxe is presently developing 13 group housing, 16 townships and 10 commercial projects in 22 cities across 7 states.

Zakir Naik’s Rs.100 Crore Real Estate investments under NIA Scanner

Now, the National Investigation Agency is probing Zakir Naik’s allegedly Rs.100 crore investments in various real estate deals.

NEW DELHI: There is more trouble for controversial Islamic preacher Zakir Naik. The National Investigation Agency has found transactions to the tune of almost Rs 100 crore which were allegedly invested in real estate.

The NIA has learnt that there are 78 different bank accounts through which these transactions were made. “We are in the process of examining these accounts and once the picture is clearer, we will summon him for questioning,” an NIA official said.

The NIA is also in the process of questioning members of 23 different entities, who are alleged to be involved with Zakir Naik. The NIA officials say that there is a clear trail that the money had been invested in real estate.

It is to be seen if Naik had invested the money at the behest of some third party, the officer added. While the NIA is also probing whether Naik had influenced several youth to join terror groups, the agency says that it would be more important to get to the bottom of the exact money trail. There have been contributions or donations from abroad and we suspect that a chunk of this money has been diverted into real estate.

Prior to the NIA taking over the probe, the Kerala police had claimed that some amount of money had been used for conversion-related activities in the state. The Ministry for Home Affairs had recently banned Zakir Naik’s NGO, Islamic Research Foundation. It was banned on various counts which also included receiving foreign funds without proper documentation.

PEL inks pact with Ivanhoe Cambridge for long-term Equity Capital to Blue Chip residential developers across top metros

MUMBAI: Piramal Enterprises (PEL) has announced a strategic partnership with Ivanhoé Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec (CDPQ), to provide long-term equity capital to blue chip residential developers across the major metro cities in India.

Ivanhoé Cambridge is allocating an initial $250 million for this purpose while PEL will commit an additional amount alongside and co-invest between 25% and 50% of each transaction.

The capital will be made available to a selective list of Grade A developers who have already demonstrated a track record of execution capability, corporate governance and strong return potential. The investment focus shall include the Mumbai Metropolitan Region, Delhi (NCR), Bengaluru, Pune and Chennai, a joint release by both the companies said.

Despite the benefits it offers, coupled with recent relaxations, India has not benefited from any REIT listings

An internationally accepted concept, introduced in India in 2014, the Real Estate Investment Trust (REIT), is a platform which enables all kinds of investors, including retail and institutional investors, to come together and pool their funds in a trust structure and invest such funds in a diversified real estate portfolio to earn stable and regular returns.

Low entry-level investments, liquidity, stable income generation, capital appreciation, flexibility of exit and transparency are some of the benefits to look for in the platform. REITs’. If successful, it can transform the fragmented real estate sector in India.

Regulators have brought out significant and meaningful amendments in the REIT framework in the recent past to make it a success.

Stock market regulator Sebi has relaxed the regulations by allowing a two-tier holding structure for REITs, removing the limit on the maximum number of sponsors and expanding the definition of real estate property.

Despite the numerous benefits it offers and the recent relaxations, until today India has not benefited from any REIT listings. Success of REITs is a derivative of the yields that the investors expect, which in turn is integrally linked to the tax leakage the cash flows of the REIT may suffer from.

Globally, from a taxation perspective, REITs, are seen as pass through entities and the tax incidence arises when the income is distributed by the REITs to the unit holders. Along these lines, the Union budget 2016 exempted distribution of profits by the project companies to REITs from DDT, albeit the benefit of exemption is available only in case of direct distributions to REITs and not where the assets are held in a multi-layered structure under the REIT.

Post relaxation of Sebi regulations permitting REITs to hold assets under a multi-layered structure, industry players expected the finance minister to announce the proposals to align the tax treatment.

Given that regulatory relaxations were announced closer to the budget, it appears that the finance minister could not make the corresponding tax announcements in his speech and may take it up separately during the year.

There is a proposal to extend the levy of 10 per cent tax on dividend income for all taxpayers except domestic companies and specified charitable trusts and institutions.

Though the intention seems to be to exclude entities/institutions that are exempt from taxation, a specific mention of REITs, should be made in the list of exclusions, else it could result in an additional tax being levied on dividends received by REITs as well!

Swapping of assets by the developer into REIT is exempt from tax, where the assets are held in separate project companies.

The scope of exemption at this stage is limited and where the developers own more than one project in a company, segregation of the REIT-able property and swap into the platform by the developer, trigger both income tax and stamp duty implications.

Also, if the project is owned in partnership, the exemption is not available to swap of such partnership interests. This makes the migration inefficient since the developer would have a tax incidence without an actual liquidity event.

Finally, the taxation laws continue to accord a differential treatment to listed companies and REITs. For instance, the period of holding of listed equity is 12 months as against 36 months for units of a REIT.

Similarly, the carry forward of tax losses of a listed company is not impacted on change of majority ownership of such companies. It is time that parity in tax treatment be provided to REITs with listed companies in India.

Rather than taking small steps, it is time for the finance minister to addresses some of these fundamental asks of the sector in one shot.

It is imperative to facilitate much-needed migration of developers and existing investors from stabilised assets to a REIT framework, for the sector to see the much-awaited liquidity from a new class of investors.

Needless to say that with all the enabling factors in place and relaxations that we expect to see on the tax front, we are positive that the market for REITs will witness considerable growth in the near future.

(The writer is – Partner M&A Tax, PwC. With inputs from Kunal Jain – manager and Khyati Aggarwal – associate M&A tax, PwC)

Prestige Q3 sales bookings fall 27% to Rs 429 Crore

BANGALORE: Realty firm Prestige Estates’ sales bookings fell by 27 per cent to Rs 429.3 crore in the third quarter of this fiscal amid demand slowdown in property market post demonetisation.

The Bengaluru-based developer had achieved a sales booking of Rs 588.4 crore in the year-ago period, according to an investors presentation.

During April-December period of the 2016-17 fiscal, Prestige Estates Projects reported over 4 per cent decline in sales bookings at Rs 1,823.1 crore from Rs 1,908.7 crore in the corresponding period of the previous year.

The company had given a sales bookings guidance of Rs 3,500-4,000 crore for the entire 2016-17 fiscal, which it is unlikely to achieve. It had sold properties worth Rs 3,150 crore in the previous year.

On launches, the company informed that it has launched only 1.98 million sq ft in the first nine months of this fiscal, as against the target of 10-12 million sq ft for the full fiscal.

However, Prestige group has achieved the completion target with 11.08 million sq ft of area already completed against the target of 10-12 million sq ft.

The company is also likely to achieve the turnover target of Rs 4,000-4,500 crore for this fiscal as it has already reached 85 per cent level with total revenues of Rs 3,398.4 crore in the first three quarters of 2016-17.

Its net debt stood at Rs 5,136.3 crore at the end of December quarter.

Prestige Estates is currently developing 60 projects, of which 45 are housing, with 61.33 million sq ft of developable area. It has 36 projects in the pipeline comprising of 47.23 million sq ft of developable area. That apart, the company has a land bank of about 42 million sq ft.

Prestige group’s net profit fell to Rs 68.3 crore for the quarter ended December from Rs 278.93 crore in the year-ago period. Total income increased to Rs 1,253.52 crore from Rs 1,252.44 crore during the period under review.

International Realty hosts Global Luxury Realty Conclave 2017

NEW DELHI: North India Sotheby’s International Realty organised its first ever Global Luxury Realty Conclave in association with the Confederation of Indian Industry (CII) yesterday.

Partnered by other apex industry bodies like Royal Institution of Chartered Surveyors (RICS) and Price water house Coopers (PwC), the two-day event is debating about the real estate industry with top business minds in the Luxury Real Estate industry.

The mega conclave provided an international networking platform comprising of real estate industry experts, select international and domestic developers, tax advisories, HNIs, creative leaders as well as luxury observers and innovators.

“CII has collaborated with North India Sotheby’s International Realty to take an initiative to highlight the fast paced changes in global real estate industry which is one of the most imperative sectors of the economy. Bringing together thought leaders, industry experts and real estate stakeholders from around the world, the conclave will emphasise on Indian and International Luxury Real estate,” said Chandrajit Banerjee, Director General, CII.

The event covered an extensive range of topics of interest to the stakeholders such as ‘Impact of changing policies on Indian real estate’, ‘Evolving real-estate market and trends’, ‘Impact of international events on global real estate’, ‘Factors affecting Indians buying abroad’, ‘NRI potential across the world’, ‘Citizenship by investment’ and many more.

Amitabh Kant, CEO, NITI Aayog, discussed the impact of demonetisation on the economy and the real estate industry.

“As the Indian economy keeps getting formalised with the process of demonetisation, in the long run, there will be lower fiscal deficit, greater levels of government revenues vesting in areas like education and health, which will enable us to reap benefits of demographic transition. This will in turn enable us to invest in infrastructure projects at low rates of interest,” said Kant, revealing the importance of investment in infrastructure.

International Realty hosts Global Luxury Realty Conclave 2017

NEW DELHI: North India Sotheby’s International Realty organised its first ever Global Luxury Realty Conclave in association with the Confederation of Indian Industry (CII) yesterday.

Partnered by other apex industry bodies like Royal Institution of Chartered Surveyors (RICS) and Price water house Coopers (PwC), the two-day event is debating about the real estate industry with top business minds in the Luxury Real Estate industry.

The mega conclave provided an international networking platform comprising of real estate industry experts, select international and domestic developers, tax advisories, HNIs, creative leaders as well as luxury observers and innovators.

“CII has collaborated with North India Sotheby’s International Realty to take an initiative to highlight the fast paced changes in global real estate industry which is one of the most imperative sectors of the economy. Bringing together thought leaders, industry experts and real estate stakeholders from around the world, the conclave will emphasise on Indian and International Luxury Real estate,” said Chandrajit Banerjee, Director General, CII.

The event covered an extensive range of topics of interest to the stakeholders such as ‘Impact of changing policies on Indian real estate’, ‘Evolving real-estate market and trends’, ‘Impact of international events on global real estate’, ‘Factors affecting Indians buying abroad’, ‘NRI potential across the world’, ‘Citizenship by investment’ and many more.

Amitabh Kant, CEO, NITI Aayog, discussed the impact of demonetisation on the economy and the real estate industry.

“As the Indian economy keeps getting formalised with the process of demonetisation, in the long run, there will be lower fiscal deficit, greater levels of government revenues vesting in areas like education and health, which will enable us to reap benefits of demographic transition. This will in turn enable us to invest in infrastructure projects at low rates of interest,” said Kant, revealing the importance of investment in infrastructure.