LATEST NEWS


Read More

I want to assure homebuyers, says Nirmala Sitharaman on govt’s real estate push
12/10/2019 5:08:00 PM

Union finance minister on Saturday assured homebuyers whose houses are stuck in stalled projects that the government understands their problems and is pulling out all the stops to solve them. “I want to assure homebuyers, who have been left in the lurch for a very long time, who have taken EMIs, borrowed from the banks, who are also paying rents. We understand your problems and you are getting the results for your long-pending demands,” she said at the 17th Hindustan Times leadership Summit. “Even as we announced the last-mile connectivity money to be given by an alternative investment mechanism that we brought in, there were more than 150 projects which approached. They have all been vetted for what they are, for how much they would need, they have all been vetted to make sure that RERA compliance and everything else is in right place” she said. On November 6, Sitharaman had announced a plan to set up a Rs 25,000 crore alternative investment fund (AIF) to revive 1,600 housing projects and 458,000 housing units that are stalled to provide relief to distressed homebuyers and boost sentiments in the ailing realty sector. While the government will invest Rs 10,000 crore in the fund, the remaining Rs15,000 crore will come in from State Bank of India, Life Insurance Corporation of India and other institutions. “By December 15, which is ‘T plus 40th day’, T is the time that I announced, money will go to escrow account towards completing these projects,” she said on Saturday. Around 200,000 of the stalled housing units are in the National Capital Region (NCR) alone, around 100,000 in Mumbai and the rest in smaller cities, according to analyst estimates. By February she hopes that the process of channeling funds to distressed housing projects will be comprehensive. “We start with 5, we start with 10 and then we go on. Hopefully, by February and this is not just Delhi and Mumbai we have got list from Hyderabad, Bengaluru, Guwahati and Patna, so all over the country list of incomplete projects are coming,” Sitharaman said. Property developers have been struggling with dwindling sales, piling inventory and falling prices, even as funding for projects has dried up, with banks reluctant to lend to real estate projects fearing defaults. The prospects of the industry have turned worse since demonetization in November 2016 and the implementation of the goods and services tax in July the following year. Source: Hindustan Times Chandigarh

Read More

Co-living, student housing generate higher rental yields than traditional formats: Report
2/21/2020 12:41:00 PM

The report delves into these highly promising new Indian real estate asset classes and explores their growth drivers as well as the underlying opportunities for investors and other real estate stakeholders. Sunshine sectors co-living, co-working and student housing have 7-11 percent higher rental yields than the 3 percent national residential average rental yield of traditional housing formats, as per a report by CII and Anarock. "Co-living, student housing and senior living are the next evolutionary step in the residential real estate domain, while co-working has evolved from traditional office real estate. The drivers behind this evolution are changing social dynamics, a highly enabled start-up environment, rising interest in higher education by migratory student population, and the need for quality housing solutions for senior citizens," said Anuj Puri, Chairman &ndash 2nd CII Real Estate Confluence & Chairman - ANAROCK Group. The report delves into these highly promising new Indian real estate asset classes and explores their growth drivers as well as the underlying opportunities for investors and other real estate stakeholders. Data centres with a potential of 10-14 percent rental yield are drawing high investor interest. Major players prefer Mumbai, Pune and Bengaluru, the report said. Senior housing growth primarily in top cities’ outskirts and tier-2 and 3 cities like Bhiwadi (NCR), Neral (Mumbai), Talegaon (Pune), Devanahalli (Bengaluru), Mysuru and Coimbatore, the report titled Emerging Asset Classes: The Future Looks Promising, said. The report said that a majority of millennials today prefer co-living over traditional rental models. The top six players alone now have 1.18 lakh beds, and are drawing investments from both domestic and global institutions. From seed funding to subsequent rounds of financing, private equity players, developers and individual investors have backed this segment. Startups have particularly benefitted from the infusion of funds and are scaling up operations in multiple cities. While co-working as a segment has flourished in India, there are interesting differences in how local and global players address it. As of today, domestic co-working operators have restricted their presence to tier I cities, while global players are also penetrating into tier 2 and 3 cities, the report said. Meanwhile, the government's efforts to make data localisation mandatory will ensure a promising future for data centres in the country. The Budget proposal to roll out a new policy for building data centre parks underscores the importance and relevance of this promising asset class. Currently, the major data centre companies prefer Mumbai, Pune and Bengaluru. As many as 451 million active internet users, 1,173.75 million mobile subscribers, the rapid rise in digital transactions, Smart Cities Mission and Personal Data Protection Bill will boost demand for data centres. The report also noted that senior living has immense potential in India largely because life expectancy here has improved to 68.8 years in 2018. Moreover, the population aged above 60 years has already breached the 100 million mark Apart from holistically dedicated senior citizen spaces, many developers are also launching integrated townships with a proportion of units dedicated to senior living. Most of these projects will thrive in tier-2 and 3 cities. Source: Money control Chandigarh

Read More

Flexible space leasing touches all-time high of 10.8 million sq ft in 2019: Report
3/6/2020 10:16:00 AM

Flexible workspace leasing in 2019 touched an all-time high of 10.8 million sq ft, up 26% from a year ago led by technology adoption, increased occupancy rates and growing investments. Among the key markets, Bangalore and Hyderabad accounted for about half of the flexible space take-up in India. The overall stock in flexible space market saw a historic increase of about 60% from around 19 million sq ft in 2018 to touch 30 million sq ft in 2019. The flexible space stock was mainly dominated by Bangalore, followed by Delhi-NCR and Mumbai, showed a CBRE South Asia report. The uptake in the flexible space leasing in 2019 was dominated by hybrid spaces and managed space (77%) followed by co-working and business centers (23%). “In today's dynamic & technology driven business environment, corporates are beginning to explore various workplace solutions which could result in capex reduction and increased agility of their real estate portfolio in the sector. Given the overall performance of the sector, we expect the demand to remain steady with an overall stock of flexible space anticipated to cross 40 million sq ft by the end of 2020,” said Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE. Many operators have been adopting specific apps that provide intergroup social platforms where occupiers can post business requirements. An innovative example of such tech incorporation is of a managed space operator that was planning to introduce robotics across its centers in the coming quarters. Increased occupancy rate was primarily a result of established corporates leasing large-sized spaces in both hybrid and managed spaces. Rising inflow of funds into this segment was witnessed in 2019, with about $140 million of funding provided by angel investors, private equity and debt funds. “Going forward, the overall share of office space leasing is expected to increase from about 14% in the 2019 to 16-20% in 2020 and touch about 10-12 million sq ft. Besides leasing space in the top three cities, operators are expected to expand in Hyderabad, Pune and Chennai in 2020,” said Ram Chandnani, Managing Director, Advisory and Transaction Services India, CBRE South Asia. The model of engagement and partnership between landlords, occupiers and flex operators would continue to evolve in 2020, as landlords create their own flexible space brands or partner with experienced operators, the report added. Source: The Economic Times Chandigarh

Read More

How infrastructure push will impact real estate sector
2/20/2020 2:09:00 PM

Infrastructure is a key driver of the economy of a country and is known to play a pivotal role in determining the value of properties in any particular region. Infrastructure is a key driver of the economy of a country and is known to play a pivotal role in determining the value of properties in any particular region. Lack of road, rail or air connectivity to any particular region results in lower property rates there as compared to areas having good physical infrastructure. And infrastructure is limited not only to connectivity alone, whose existence though is a necessary precondition for development of other kinds of civic amenities. Demand, and hence price, of real estate is directly proportional to the distance of the location from areas providing jobs, industrialisation and civic amenities. Major housing and commercial hubs have developed in the Mumbai Metropolitan Region and National Capital Region following the establishment of good connectivity options of areas on the suburbs of Mumbai and Delhi. For example, Noida, an industrial township across the Yamuna River in Delhi, developed not only as a prime residential and commercial destination but also as an institutional base following the commissioning of the DND flyway in the year 2001. Areas further south of Noida, including Greater Noida, have also been on the growth trajectory with the extension of the Delhi metro and the commissioning of the Yamuna Expressway that connects the national capital to Agra. More recently, in the National Capital Region, the commissioning of the Hindon Elevated Road has resulted in the appreciation of property rates in Raj Nagar Extension in Ghaziabad by enhancing its direct connectivity with the UP Gate on the border of Delhi. Apart from transportation networks, infrastructure also includes civic amenities like electricity and water supply, drainage, waste disposal and sewage treatment facilities. The Bharatiya Janata Party (BJP)-led Central government under the able leadership of Prime Minister Narendra Modi has been committed to the development of all kinds of infrastructure in a big way which will have a ripple effect on the overall value of properties in the real estate market in the country. These projects are also aimed at creating job opportunities through industrialisation which will further boost real estate. The Pradhan Mantri Gram Sadak Yojana, for example, aims to provide all-weather road connectivity in rural areas across the country. In order to boost industrialisation through the ‘Make in India’ policy initiative, the Central government has also begun work on establishing two defence industrial corridors, in Uttar Pradesh and Tamil Nadu, respectively. The under-construction Delhi-Mumbai Industrial Corridor project is a planned industrial development corridor project that will link several major cities of the country with the financial capital Mumbai and the national capital Delhi. The Bharatmala project aims to construct several greenfield highways across the country at a cost of over Rs 5 lakh crore. The Sagarmala project will similarly connect different ports of India along its 7,500-km-long coastline, thereby providing a big boost to the logistics sector. Similarly, the UDAN scheme of the government of India aims to provide cheap and economical air travel options to all citizens of the country. These connectivity projects are not only expected to boost existing prices of properties but will also open up hitherto unexplored real estate markets in different parts of the country. Development of civic amenities is a time-consuming process and improvement of connectivity provides good access to the existing facilities during the gestation period. For example, good road connectivity from Gurgaon or Noida enables citizens to avail world-class medical facilities provided by the government in the national capital of Delhi. The Central government has, however, also been at the forefront in establishing and extending civic amenities to the remotest parts of the country. The Saubhagya Scheme aims to provide electricity connections to over 26 million households across the country while the AMRUT scheme aims to provide water connections and sewage facility to all households. Besides, the Central government has identified 100 cities across the country for infrastructure development under the Smart City Mission. The mission is a urban renewal programme under which existing cities will be retrofitted with state-of-the-art physical infrastructure, including road networks, potable water supply systems, sewage treatment plants and electricity supply systems. In addition, basic governance services will be provided to citizens with the help of IT-enabled solutions. Greenfield areas will also be identified in each city for infrastructure development under the mission. A total amount of Rs 2 lakh crore has been estimated for development of the 100 smart cities which will ultimately result in spiralling real estate development in Tier 2 and Tier 3 cities. In December last year, the Central government further announced a National Infrastructure Pipeline to be undertaken across the country with funds generated from the Central and state governments as well as the private sector. Projects worth over Rs 100 lakh crore in the fields of energy, roads, urban development, and railways will be executed across 18 states and territories across the country under this programme over the next five years. With India aiming to becoming a $5-trillion economy by the year 2025, the National Infrastructure Pipeline programme is expected to have far reaching consequences in ensuring that the share of real estate is a major contributor to achieving the goal. In the first five years, sectors including roads, energy, urban development and railways will gobble up the majority share of the fund. The National Infrastructure Pipeline project also envisages development later in the fields of logistics, air connectivity, education, digital services, farm incomes and health services. In addition, development of commercial and retail hubs is a necessary precondition to appreciation of prices of residential properties and vice-versa. Homebuyers are attracted to housing hubs on the basis of availability of services and convenience including shopping malls, supermarkets, banks, food and entertainment zones, leisure facilities and so on. The converse theory of commercial players and retailers getting attracted to populated housing hubs is also true. Source: Financial Express Chandigarh

Read More

Indian expats take a shine to commercial realty back home
5/30/2018 2:57:00 PM

When it comes to Indian real estate, the topic of NRI investments is pretty much an evergreen one. The fact that Indian developers had, in the past, launched and marketed projects with an almost exclusive eye on NRI customers is certainly no secret. There were many reasons for this, but the primary one was that NRIs — especially NRIs based in the Gulf and the US — were seen as cash cows with more money than sense. Time has proved this theory erroneous. NRIs are among the savviest property investors on the Indian market today. This is amply demonstrated by how adroitly they gauged the new investment trends on the Indian real estate market. For a long time, the return on investments that NRIs could get on residential assets were extremely rewarding, considering the significant capital appreciation whilst the rental yields have always been low. However, during the last couple of years, the market slowdown resulted in capital appreciation on residential assets no longer being as per NRI investors’ expectations. In the current market conditions, NRIs are now showing a greater preference for investing in Indian commercial properties, which offer good rental yields as well as capital appreciation. This is because there is a continuous rise in demand for commercial spaces in the wake of large-scale requirements and probability of REITs (real estate investment trusts) formation, especially for Grade A offices, IT parks and logistics centers. The preferred cities Mumbai, the NCR (National Capital Region), Bengaluru, Hyderabad, Chennai and Pune are currently the hottest cities for investments into Grade A offices, co-working office spaces and IT parks. The business being generated in these cities induces a constant upward trajectory on the demand for quality office spaces, while supply is not keeping up with this demand. That means that all available high-quality offices spaces are assured of tenancy. Meanwhile, the strong start-up culture unleashed in India is driving up the demand for shared office spaces, also known as co-working spaces. Such spaces are snapped up by start-ups which cannot afford the high cost of conventional high-quality office real estate. Of course, it is only the more experienced NRIs who have been able to gauge the Indian real estate market. Every year gives rise to new NRIs who still need some basic guidance on what they can or cannot do in Indian real estate. Here are some guidelines for NRIs who want to invest in the Indian realty market. NRIs with a valid Indian passport can invest in the Indian realty market, though there are a few pre-conditions: Citizenship: NRIs with a valid Indian passport need no prior approval unless they are citizens of a few neighbouring countries — specifically Pakistan, Bangladesh, Sri Lanka, Iran, Nepal, Bhutan, Afghanistan and China. Property Type: They can buy as many properties (residential or commercial) as they want but are not allowed to buy agricultural land, plantation properties and farmhouses. However, such properties can be gifted to or inherited by NRIs. Transactions: Transactions must be done in rupee through regular banking channels via an existing NRI account. Loans: Just like Indian citizens, NRIs are also eligible to avail of loans to purchase a property in India. The maximum loan amount is generally 80 per cent of the property value. Inherited or gifted properties: The RBI does not have any rule for immovable property which is inherited or gifted. NRIs can lease or rent such properties without any restrictions. Legal aspects for NRIs — Hire a reputed lawyer to vet property documents. — Verify the original title deed documents; ensure that the property title is in the name of the seller. — Do a thorough check to ensure that the seller has cleared all the dues related to the property. — Verify that the seller has not diluted the right to transfer the property to a buyer. — Ensure that the property is not built on agricultural land without requisite government permissions. An NRI may get into legal problems in such transactions. — In case of under-construction property, an NRI has to give a power of attorney the developer or a trusted associate. Source: Gulfnews.com India