LATEST NEWS


5,500 housing units get delivered in top 7 cities as lockdown eases

7/10/2020 10:07:00 PM

Even as the woes of real estate intensified during the lockdown imposed across the country in view of the Covid-19 pandemic, and the construction activities almost came to a standstill because of the stoppage of work due to the reverse migration of workers, some developers continued to deliver their projects and were even able to launch some new ones amid the ongoing crisis. As per ANAROCK research, the April to June quarter of 2020 &ndash of which most part was under the lockdown &ndash saw new launches of just 4 residential projects &ndash 2 in Bengaluru and one each in Pune and Kolkata. However, one major positive outcome of the minimal new launches in the top 7 cities in the quarter was that developers were able to shed their previous unsold stock by as much as 5% in a year. Further, ANAROCK data also suggests that the top 7 cities saw delivery of as many 5,500 units most recently. “These units were at the last leg of their delivery before cities went into lockdown and as soon as we saw relaxations, these have been delivered to the homebuyers. We need to understand that those who have been able to complete their projects and deliver it despite the prevailing challenges are certainly at an advantage, given that demand for ready homes is at its peak. Delivery of projects during the prevailing challenges definitely sends out a positive signal and helps regain homebuyers’ trust also given that the government had extended the delivery timelines by at least six months for developers,” says Anuj Puri, Chairman, ANAROCK Property Consultants. The Gurgaon-based M3M Group is one such developer which claims to have delivered two of its projects — M3M Urbana Retail, and M3M One Key Resiments — this month with a total sales value of Rs 900 crore. Both these projects are located at Sector 67, Golf Course Extension Road, Gurugram. M3M One Key Resiments offers 170 managed studio apartments, having both one and two-bedroom apartments, priced at Rs 13,700 per sq ft. M3M Urbana Retail, on the other hand, already houses prominent brands, including HDFC Bank, Axis Bank, and several F&B and retail outlets. These two projects are part of the sprawling 17-acre master development, M3M Urbana. Talking about the delivery of projects, Pankaj Bansal, Director, M3M Group, said, “We at M3M India are committed to the timely delivery of our projects and the company is on a fast growth track, undeterred by the pandemic. Standing by our commitment, we are proud to state that two of our commercial projects have been delivered this month and are 100% sold.” As per a company spokesperson, this announcement is a testament to the focused approach and timely delivery by the company amidst tough times wherein several real estate projects have been hit hard due to the pandemic. Source: Financial Express Chandigarh

Cabinet approves development of affordable rental housing complexes under PMAY

7/9/2020 4:49:00 PM

The Union Cabinon Wednesday approved development of Affordable Rental Housing Complexes (ARHC) for urban migrants and poor that will make housing available at affordable rent close to the place of work, the government said. As part of ARHC, existing vacant government-funded housing complexes will be converted into Affordable Rental Housing Complexes through "concession agreements" for 25 years, an official statement said. Affordable Rental Housing Complexes is a sub-scheme under the Pradhan Mantri Awas Yojana-Urban. The concessionaire will make the complexes livable by repair or retrofit and maintenance of rooms and filling up infrastructure gaps such as water, sewer, sanitation, road and related work. An expenditure of Rs 600 crore is estimated in the form of "technology innovation grant", an official spokesperson said on Twitter after the Cabinet meeting. States and territories will concessionaire through transparent bidding. Complexes will revert to the urban local bodies after 25 years to restart the next cycle like earlier, or run on their own, the statement said. Special incentives such as use permission, 50 per cent additional floor area ratio or floor space index, concessional loan at priority sector lending rate and tax relief at par with affordable housing will be offered to private and public entities to develop ARHCs on their own available vacant land for 25 years, it said. Announced by Union Finance Minister Nirmala Sitharaman on May 14 this year, the scheme seeks to fulfil the vision of 'Aatma Nirbhar Bharat', the statement observed. Referring to the benefits of the scheme, it said government-funded vacant housing stock will be converted into ARHCs for economically productive use. "The scheme (AHRC) would create a conducive environment for entities to develop AHRCs on their own vacant land, which will enable new investment opportunities and promote entrepreneurship in rental housing sector," it explained. Official sources said more than 3.5 lakh people will benefit under ARHCs. ARHCs will create a new ecosystem in urban areas making housing available at affordable rent close to the place of work and will cut down unnecessary travel, congestion and pollution, they said. Source: ET Realty Chandigarh

Revenue share emerges as preferred structure for co-living operators, property owners

7/6/2020 3:04:00 PM

Delivery of projects during the prevailing challenges sends out a positive signal and helps regain homebuyers’ trust given that the government had extended the delivery timelines by at least six months for developers. Even as the woes of real estate intensified during the lockdown imposed across the country in view of the Covid-19 pandemic, and the construction activities almost came to a standstill because of the stoppage of work due to the reverse migration of workers, some developers continued to deliver their projects and were even able to launch some new ones amid the ongoing crisis. As per ANAROCK research, the April to June quarter of 2020 – of which most part was under the lockdown – saw new launches of just 4 residential projects – 2 in Bengaluru and one each in Pune and Kolkata. However, one major positive outcome of the minimal new launches in the top 7 cities in the quarter was that developers were able to shed their previous unsold stock by as much as 5% in a year. Further, ANAROCK data also suggests that the top 7 cities saw delivery of as many 5,500 units most recently. “These units were at the last leg of their delivery before cities went into lockdown and as soon as we saw relaxations, these have been delivered to the homebuyers. We need to understand that those who have been able to complete their projects and deliver it despite the prevailing challenges are certainly at an advantage, given that demand for ready homes is at its peak. Delivery of projects during the prevailing challenges definitely sends out a positive signal and helps regain homebuyers’ trust also given that the government had extended the delivery timelines by at least six months for developers,” says Anuj Puri, Chairman, ANAROCK Property Consultants. The Gurgaon-based M3M Group is one such developer which claims to have delivered two of its projects — M3M Urbana Retail, and M3M One Key Resiments — this month with a total sales value of Rs 900 crore. Both these projects are located at Sector 67, Golf Course Extension Road, Gurugram. M3M One Key Resiments offers 170 managed studio apartments, having both one and two-bedroom apartments, priced at Rs 13,700 per sq ft. M3M Urbana Retail, on the other hand, already houses prominent brands, including HDFC Bank, Axis Bank, and several F&B and retail outlets. These two projects are part of the sprawling 17-acre master development, M3M Urbana. Talking about the delivery of projects, Pankaj Bansal, Director, M3M Group, said, “We at M3M India are committed to the timely delivery of our projects and the company is on a fast growth track, undeterred by the pandemic. Standing by our commitment, we are proud to state that two of our commercial projects have been delivered this month and are 100% sold.” As per a company spokesperson, this announcement is a testament to the focused approach and timely delivery by the company amidst tough times wherein several real estate projects have been hit hard due to the pandemic. Source: Financial Express Chandigarh

Best time to buy a house for end use, say realtors

7/3/2020 1:11:00 PM

The COVID-19 crisis has dealt a major blow to the real estate sector. The home buying cycle has been massively impacted, and transactions continue to remain low. This has, however, not impacted the prospective buyers’ sentiment much. According to a recent survey by 99acres.com, close to 60% of the Indian homebuyers who were looking for buying a house before the pandemic are still planning to buy their homes within a year. However, 40% of the buyers have postponed their plans. The major contributor to delaying the purchase decision is uncertainty in the market (52%), followed by financial reasons (30%). Real estate demand & supply mechanics On one hand, industry experts foresee prospective demand for the residential properties and on the other hand, homebuyers seem hesitant to lock deals over virtual site tours and give a rain check on their purchase decisions. Nevertheless, the recent survey by 99acres.com revealed that (31%) respondents still believe real estate the best option to invest, followed by fixed deposit (24%), gold (24%), and stock market (21%). Commenting on the same, Siva Krishnan, Managing Director &ndash Residential Services at JLL India, said activity levels in Bangalore are much better than any other city. He said, “Cities that have IT/ITeS or pharma clusters are indeed showing marked improvement in terms of demand for housing. As far as the enquiries are concerned, interestingly, they have gone up and the virtual site visits have come down to an extent. People are more than willing to come and visit the sites. Simultaneously, the conversion rate from site visits has gone up. The customers are actually calling up and enquiring about properties. Things are warming up better than anticipated.” Developers believe that the COVID-19 crisis has paved the way for new opportunities and business trends. Rohit Gera, MD, Gera Developments, said, “Online enquiries have grown as people want to narrow down their choices to only a handful of projects for actual site visits.” Since site visits are still an inevitable step, therefore, developers are ensuring safety for the buyers at the site and are encouraging buyers for a site visit. Gera said, “We are also encouraging people for site visits so that they get the exact look and feel of the property. We have disinfected our sites and have installed proper cleaning systems to ensure the safety and well-being of our clients. We have a ‘free look period’ of seven days where customers can visit the property, look at it, and if they want to cancel the deal, they can do so without any question asked and loss of pay. This has helped us build trust among the buyers that they will get their money back in case they dislike the property during the site visits.” Property Prices & Projections Developers do not foresee any major cut in property prices in the post-Covid world, which was also highlighted at a Realty Buzz webinar conducted by 99acres.com. Mohit Goel, CEO, Omaxe Ltd, said, “There are primarily two questions which have been raised during the COVID-19 crisis &ndash why should I buy now, and would property rates fall? Apart from homebuyers asking these questions, demand has more or less remained the same as at the pre-COVID-19 times. So, I would say, none of the brands who have been able to continue their construction work during the crisis would slash prices. I would advise homebuyers to be careful if any developer is willing to cut prices by 15-20 per cent.” Industry experts also believe that there is hardly any room for reduction in property prices. While sales have been low in the recent past, the market has not been great. Moreover, policy reforms, such as RERA, GST and demonetisation have impacted the market to a great extent. Krishnan said, “The outbreak of COVID-19 is yet another major blow to the industry. If you take into consideration the rate of inflation over the years, the prices have actually gone down. The developers are already working at low margins. Despite all odds, they have still been providing 7-8 per cent price cuts in order to facilitate cash flows.” Timing to Invest Matters Industry experts feel that this is the right time to buy a house because buyers are likely to get better deals and prices may go up in the near future. Goel said, “It definitely is a great time to buy since we are sitting at home loan interest rates which are at an all-time low. While a price correction is highly unlikely, especially with branded developers, it would be a good time to grab a good deal in the loan market.” In the survey of 99ares.com, homebuyers showed a strong affinity towards ready-to-move-in properties. 85% of buyers believed ready- to-move homes are safer than an under-construction property. “This is the best time to buy a property, especially for end-users. While the interest rate for the housing loan has gone down, the affordability has increased over the years. Moreover, the prices have not increased much from the last 6-7 years. As anticipated, the prices might go up in the ensuing months due to an increase in the sales velocity,” said Krishnan. Source: Financial Express Chandigarh

About 35 lakh houses handed over to beneficiaries under PMAY-U: Housing Minister

7/3/2020 12:50:00 PM

Thirty-five lakh houses have so far been delivered to beneficiaries under the Pradhan Mantri Awas Yojana (PMAY-Urban) while 65 lakh houses are currently under construction, Union Minister Hardeep Singh Puri said on Thursday. Puri said an estimated 3.65 crore jobs would be generated in the construction of all sanctioned houses under the mission and of these, about 1.65 crore jobs would have already been generated. The government has set a target of 1.12 crore houses in urban areas by 2022 under PMAY - ''Housing for All'', one of the flagship programmes of the Narendra Modi government. The Union Housing and Urban Affairs minister was addressing a webinar to mark the 5th anniversary of PMAY (U), Smart Cities Mission (SCM) and Atal Mission for Rejuvenation and Urban Transformation (AMRUT). He said India has undertaken one of the most comprehensive planned urbanisation programmes in the history of the world. According to the ministry, the houses built under PMAY(U) and earlier schemes of the Ministry of Housing and Urban Affairs (MoHUA) have served as a boon in the fight against COVID-19. Presently more than 22,000 houses are being dedicatedly used as COVID-19 facility units in various states and Union Territories, Puri said. Talking about another Mission - AMRUT, the minister said the ministry has so far provided 79 lakh household water tap connections and 45 lakh sewer connections in the country. "Seventy-six lakh conventional streetlights have been replaced with energy-efficient LED lights which have led to energy savings of 167 crore units per annum, resulting in a reduction in CO2 emission by 13 lakh tonnes per annum," he also said. About the Smart Cities Mission, he said the Integrated Command and Control Centres (ICCC) developed under the mission have helped cities in their fight against COVID-19. Forty-seven operational ICCCs became war-rooms and have played an effective role in COVID response, the minister said. He added that 5,151 projects worth over Rs 2 lakh crore were identified in 100 smart cities. "So far, the mission has tendered around 4,700 projects worth Rs 1,66,000 crore which is about 81 per cent of the total projects proposed," Puri said. Source: ET Realty Chandigarh

Construction community to train, engage local youth

7/1/2020 12:36:00 PM

“Though work hasn’t started in full force since we have to have all our raw materials ready and some suppliers are in areas where transportation is presently not possible, we are keen that we have our workforce ready,” said Agarwal. “When we witnessed this large exodus we realised that it is important to have our workers from nearby areas in Pune. To do that we have launched a training programme where we aim to train our rural youth in different skills like masonry, plumbing, electrician, among others,” said Agarwal. “In any case, we have been doing that over the years all over India. But now our focus is going to be on the men and women from in and around Pune,” he said. To recruit jobless youth from the villages around Pune NAREDCO has tied up with Bharatiya Mazdoor Sangh that has a large network in a majority of the talukas in Maharashtra. Chandrakant (Anna) Dhumal, president, Bharatiya Mazdoor Sangh, Maharashtra, said, “We have always focused on the well being of our contractor workers and we have our presence in more than 70 per cent of all the talukas in Maharashtra as well as India. We have set up help desks in every taluka that aims to help them with legal and other issues that the members may have.” “When NAREDCO informed us of their intention we have now sent out a circular to all the help desks with their offer,” he said. “We think it’s a great idea since in my estimate every taluka has at least 5,000 to 10,000 youths who are jobless. We will put out this offer where they can get training in various constructions fields like electricians, plumbers, tiling, POP work among others and then get employed,” said Dhumal. Despite the construction industry employing on contract workers that the Sangh is not in favour of, Dhumal feels that “They will at least learn a skill. And with that skill, they can find employment easily on other projects or even become entrepreneurs if they so choose. It is a good thing for our young men and women.” For NAREDCO this is a long term plan. Says Agarwal, “The training modules are from one month to three, but we are in no hurry as such. If we can get at least 40 per cent of our workers from near Pune we are happy. At least you don’t get stranded like we are now. Source: Hindustan Times Chandigarh

Indian Real Estate Prepares For Re-Entry To The Next Normal Economy: JLL

6/30/2020 12:58:00 PM

India's real estate will experience a paradigm shift as the national economy feels the impact of COVID-19 pandemic, according to JLL India. Real estate occupiers and investors will receive some respite due to the government's 270 billion dollar relief package, said the professional services firm specialising in real estate and investment management. But they will need to reconsider pre-crisis priorities and accelerate new strategic initiatives to adapt to the next normal in the economy. All segments of real estate will be impacted in some form or the other due to COVID-19 but the economic contraction will lead to some pre-crisis trends and themes that will have to be fast-tracked, said JLL's report titled 'The Next Normal -- Real estate in a post-COVID world.' The report stresses that broader adoption of industry megatrends will reshape and reinvigorate the sector for long-term growth. "As we reopen our businesses in a staggered manner, let us brace ourselves to the short-term jolts and be ready to embrace the impending prospects of growth in the medium to long term," said Ramesh Nair, CEO and Country Head (India), JLL. "Real estate as an asset class is here to stay. However, reinvention is important to remain relevant in the next normal world. We are seeing fast-paced adoption of technology and artificial intelligence and these are most likely to be the new catalysts of growth in the next normal," he said. Nair added that the focus on health, sustainability and wellness is also seeing a renewed vigour and is becoming the leitmotif across asset classes. In the last decade, said the JLL report, India's real estate sector has experienced several disruptions led by technology and changing preferences. However, these disruptions have only expanded the gamut of real estate offerings while redefining the way we live and work. On one hand, consolidation of the residential market is likely to further gain momentum with a strong emphasis on credibility and financial strength and on the other, de-densification and splitting up of offices are likely to gain centre-stage. The report said office market fundamentals are strong with low vacancy, steady rentals and limited upcoming supply. It is expected to recover the fastest once the outbreak is under control. The residential market's revival hinges on the intensity and duration of a pandemic. As consumer sentiments improve post the lockdown period, sales in the affordable and mid segments expected to show initial green shoots of recovery towards the end of 2020 with the onset of the festive season. While annual investments crossed 5 billion dollars in the last three years, 2020 started on a weaker note. The time period between January to March saw a 58 per cent decline in investments year-on-year with transactions paused. A nationwide lockdown meant no face-to-face meetings, site visits, legal due diligence and financial closure, therefore leading to transactions coming to a standstill. "Income stability, indispensable business operations and occupational density are expected to be the key determinants for investment evaluation. Data centres, logistics (including warehousing), critical office outsourcing facilities and global in-house centres are expected to attract capital," said the report. In the short term, the institutional investors are expected to be risk-averse and cautious over the next few quarters leading to extended investment cycles. Institutional investors are expected to assess the progress in each sector and are likely to focus on asset management and support projects that require last-mile funding in the short term, the report added. Source: BW Business world Chandigarh

COVID-19 impact: Smart cities in India to get cycling-friendly with Cycles4Change Challenge

6/29/2020 1:18:00 PM

The housing and urban affairs ministry has launched the India Cycles4Change Challenge to support smart cities to implement cycling-friendly projects in response to the COVID-19. In the first phase, 10 cities will be selected and will receive technical support from the Centre and also a reward of Rs 1 crore each. “The portal would be launched on July 10,” Durga Shanker Mishra, secretary, housing and urban affairs, said on June 25 at a webinar to mark the 5th anniversary of PMAY (U), Smart Cities Mission (SCM) and Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The demand for personalised form of transport has gone up as a response to COVID-19 and as a result several countries around the world are now embracing quick and temporary cycling interventions. Milan is in the process of transforming 35 km of streets to pedestrian and cyclist priority lanes while Paris is creating 650 km of pop-up cycle-ways. Britain has decided to invest £2 billion in cycling and walking in response to the coronavirus. India Cycles4Change Challenge is an initiative of the Smart Cities Mission, ministry of housing and urban affairs, to support Indian cities to quickly implement cycling-friendly initiatives in response to COVID-19, Mishra said. The India Programme of the Institute for Transportation and Development Policy (ITDP) will be the knowledge partner of the Smart Cities Mission to assist the Mission in conducting this challenge and guiding cities in developing and implementing their proposals. A recent survey by the ITDP India Programme showed that cycling would increase by 50-65 percent as cities come out of lockdown. This was corroborated by the actual response on the ground with a sudden spike in the use of cycles. “With most of us working from home, the traffic on the road is lesser and has given us an opportunity to reclaim the space for cycling and reduce the pressure on public transportation. This cycling challenge looks at giving cities the knowledge and building the city’s capacity to do quick transformation but across a vast part of the city so that the investment is low but transformation is overnight. People will reap faster benefits,” Aswathy Dilip, Senior Programme Manager, ITDP India Programme, told Moneycontrol. Cycling can be a sustainable alternative to private motor vehicles. Cycling provides equal access to jobs, education, recreation, and other everyday activities for all sections of society – rich, poor, children, women, and others, she said. The challenge aims to help cities connect with their citizens as well as experts to develop a unified vision and initiatives to promote cycling. In addition to creating extensive cycling-networks through low-cost interventions like pop-up cycle lanes and traffic-calmed or non-motorised zones, cities could launch programmes such as community-led cycle rental schemes that increase the availability of cycles to citizens and promote the usage of cycling through public events and outreach, transport experts said. In the longer term, the Smart Cities Mission would encourage cities to convert temporary interventions into permanent. The India Cycles4Change Challenge will have two stages. As part of stage 1, cities would have to register for the challenge after the launch of the portal on July 10. They would have about 10 days for the same. “The aim of stage 1 is to encourage cities to initiate and implement quick interventions and promotional activities to encourage cycling and further develop a conceptual scale-up plan. The municipalities would be given 10 days to register and would then be given three months to apply for the challenge with a concept plan of interventions to encourage cycling in their cities and neighbourhoods. To be able to qualify for stage 2, cities should have piloted at least one intervention to promote cycling," said Dilip. Citizen collaboration will be a key metric in the evaluation of proposals submitted by the cities. The Smart Cities Mission, with the assistance of the ITDP India Programme and a panel of experts, will review the submissions and shortlist the first set of cities which will move into Stage 2. The cities that do not clear the first stage are encouraged to revise their proposal and re-submit for selection to stage 2. The timelines for the submission of the revised proposal will be shared with the cities at a later date, experts told Moneycontrol. The ‘India Cycles4Change Festival’ will be launched in October to showcase the entries of the shortlisted cities as a virtual exhibition. In October-January, shortlisted cities would be hand-held to further develop and commence the implementation of the concept scale-up plan submitted in Stage 1 with inputs from national and international experts. They would be provided support through online workshops to review designs, peer-to-peer workshops to share learnings. Where would the funding come from? Funds for this urgent COVID-19 recovery measure would be made available through the Smart Cities Mission. More details are awaited on July 10. Chandigarh

NRIs to drive demand for residential property in India

6/27/2020 2:33:00 PM

There is no denying the fact that the outbreak of Covid-19 has had a deep impact on the realty market in India. Additionally, questions like – is it a good time now, and if at all one should look at investing in real estate — are worrying the potential buyers. Historically, the Indian real estate market has been resilient, and in spite of the slowdown that the industry witnessed towards the end of March and the beginning of April, in the past few weeks buyers have become more active and intriguingly the demand continues to grow from the NRI clientele. Time and again, the real estate industry has proven to be an attractive asset class with healthier relative returns, and with improved affordability in the current scenario, it has gained attention of both locals and NRIs across the world. With dollar gaining strength against rupee, a competitive marketplace with negotiations tougher than ever, and a sense of moving back to homeland, being a few among many reasons, developers have experienced a sudden spike in enquires from international buyers, even while the industry faces the toughest quarter in the past two decades. With thousands of international brands now looking at India over China as their preferred destination for production and business going forward, India is gearing up for some major influx of global investments, that will have an impact across various industries, directly or indirectly. The NRI investors have always been the first to forecast such trends and enjoy the first moved advantage, disregarding the general sentiment. Who is this customer? In the current scenario, while many are considering to move their bases back to India to be a part of this growth story, some purely want to invest in their home cities, to feel a sense of security in a known territory. As per one of the leading real estate advisory firms, NRI investments in India will hit an all-time high of $13.1 billion in FY 21. Over the years, this cluster with higher disposable income compared to local buyers has become an important driving factor of the real estate market in India. Especially since the establishment of RERA, international buyers have gained confidence to invest in India, more than over, through a more transparent format of engagement, with reliable developers and properties that are registered under RERA, which secures their investment, even while settled abroad. Where are they coming from? Predominantly, UAE, USA, UK, and Canada are the biggest source of NRI investment in India, with 42% of the total inflow coming from GCC alone. As per the Ministry of External affairs, nearly 8.9 out of 12 + million Indians living abroad are based in West Asia alone, of which there are 3.3 million in the United Arab Emirates, 2.6 million in Saudi Arabia and 2.9 million in Kuwait, Oman, Qatar and Bahrain. GCC contributes close to $40 billion annually as international remittance to India. Even after having spent a significant part of their work life in these countries, citizenship is not an option available to the Indians based in the Gulf region, which brings them back to India when it comes to investing in assets like a house. Also, with Dirham gaining value against the rupee, NRI enquiries from Dubai have been among the highest and they are expected to make big-ticket investments in the housing projects in the coming months. In the past while the investment decision has been across residential, commercial, and retail real estate, largely to benefit from returns in form of rentals, but today most enquiries have come around residential properties and primarily for end-usage. Also, today the demand is not limited to luxury properties only, buts cuts across segments starting from affordable and mid-segment housing to premium, luxury and super-luxury properties, especially for cities in Southern states of India, followed by New Delhi and Mumbai. What are they looking for? The ambiguity which is likely to loom over the next two quarters, has created a sense of urgency and commitment in the minds of these investors. As a result, today there are more serious buyers in the market, who are looking at ready-to-move-in units that are in condominiums, which are well protected and widely enabled with facilities and luxury within the premise. There has been a steep rise in demand for ready-to-move-in inventory in projects that offer safety and protection in addition to ensuring availability of lifestyle essentials. Rise in demand for ready to move in houses or near-completion projects has largely surfaced from the deferred deliveries related to under-construction units. Also, with no Goods and Services Tax (GST) payable on resale flats, the demand for ready-to-move-in houses has soared. An NRI customer is not just looking for great property, but also a reliable brand name. Credible developers with a proven legacy to deliver on commitments will have an advantage in today’s marketplace. How to turn these NRI leads into sales? The lockdown has demonstrated the challenges the industry will face going forward, not just with the way they deal with their customers, but also run their operations internally. Real estate has always been extremely dependent on face-to-face buying and selling method. But today’s reality is that tech-enabled real estate firms will gain maximum market-share in this decade, especially when it comes to successfully converting international clients. Digitally-enabled sales tactics will empower brands to replicating physical interaction and creating an evocative experience. The rise of a digital model – for both interaction and transaction – will demonstrate more flexibility with better outcomes. And this new form of engagement will continue to be relevant and practiced even in a post-Covid world, once the lockdown is over. While all these hypotheses remain speculative at this point, we are optimistic about the future of the industry. Organisations that are nimble, adaptable, strong at core and can align themselves to this new altered reality, are the ones that will survive this wave and come out to be tougher. Source: Financial Express Chandigarh

India’s Real Estate Sector Isn’t Too Worried About Curbs On Chinese Imports

6/26/2020 3:01:00 PM

Indian builders don’t expect to be affected by the government’s proposal to increase duties on imports from China amid a deadly border standoff. The real estate sector, which contributes nearly a tenth to India’s gross domestic product, imports around 10% of its materials, most of which is from China, according to Niranjan Hiranandani, national president of Naredco, a real estate body. That includes tiles, elevators, steel panels, electric switches and nails, among other items. The developer lobby Credai has urged its 20,000-odd builder members to shun Chinese goods. We appeal to our member developers to embrace “Swadeshi” or “Made in India” way of life and business, Satish Magar, president of Credai National, was quoted as saying in a statement. “Credai requests all the 250 allied industries which are linked to the real estate sector to manufacture these products locally, especially the ones which are currently being imported from China.” The Bureau of Indian Standards is finalising tougher norms for at least 370 products to ensure items that can be locally produced aren’t imported, Bloomberg reported on Thursday citing unnamed sources. Some of these products include steel, electronics, heavy and industrial machinery, glass, rubber and metal articles, pharmaceuticals and fertilisers. That comes when armies of the world’s two most-populous nations are engaged in their worst border conflict unseen in over four decades. Most of the raw materials being used, according to the Credai statement, are already being made by India’s small and medium-sized businesses. Imposing higher tariff on imports from China will impact supply chain in the real estate sector to an extent, according to Anuj Puri, chairman of Anarock Property Consultants. “However, since construction activity at the moment is not in full swing, many players may have the time to consider getting such materials from other sources. As with most things Chinese, ease of access and have been considerations.” Hiranandani said import substitution will impact the sector at two levels. “First, where we substitute imported products with similar products ‘Made in India’, and secondly, where we may not have domestic production capacity available to supply in the volumes required,” he said. “The first scenario is welcome and real estate as an industry supports the same”. Nayan Shah, president of Credai-MCHI, the Maharashtra unit of the developers’ lobby, and chief executive officer of Mayfair Housing, said many developers have already started looking at solutions. “There will be a substantial deduction in imports from China, he said. “However, certain raw or construction materials for which is there are no other alternatives like high-speed MEP (mechanical, electrical, plumbing) or elevators will have to be imported from China.” The national president of Naredco agreed. “The company manufacturing the product may be from any other country, but in most instances, the actual production and dispatch point was China,” he said. “If Indian companies are unable to match requirements in terms of quantum of production required, this may create a situation where a call will have to be taken—and, this may translate into an opportunity to source similar material/ products from manufacturing hubs other than those in China, in the short term. The ultimate aim, Hiranandani said, is to have production facilities in India. If the switchover results in some delays, we will deal with the same, he said. Source: Bloomberg Chandigarh

Co-living operators might take over unsold housing societies

6/25/2020 4:11:00 PM

Real estate developers and co-living operators are in talk to use unsold housing society as a co-living facility in order to reduce burden of unsold inventory on developers, leading consultants said. According to international property consultant JlL, co-living revenue shared opportunities could increase, with developers looking to monetize their unsold asset. “For a co-living operator, it is a good opportunity as they don’t have to invest in construction of the building. It’s a win win situation for both the developers and operators,” said Siva Krishnan, Managing Director - Residential Services, JLL India. Stanza Living, a manager accommodation provider said that it has been receiving requests from developer to take the building and convert it into a co-living facility. Anindya Dutta, Managing Director and Co-Founder of Stanza Living said that managed living offers developers the potential to earn higher yields on their assets. “We have received strong inbound interest from real estate players and developers in the last few months for collaboration to cater to the accommodation needs of the young migrant millennials including students and working professionals. We are in active discussions with a group of these developers to forge mutually beneficial, long-lasting partnerships,” said Dutta. “We have already partnered with a few reputed developers across Bangalore, Pune, Chennai for large-scale managed accommodation projects. We are in ongoing discussions with other reputed developers who are looking to collaborate with us for their built-to-suit projects or converting existing inventory into managed accommodation options, as these are in line with our growth story,” he added. According to a report by EY India, the student housing sector may consolidate in the next few months, with some smaller operators exiting, resulting in stronger operators with sustainable financial and operational model. “In the ‘new normal’ of a world in which we co-exist with COVID-19, there are many challenges which are from the pre-COVID-19 era unsold inventory is one such challenge, but the solutions will have to be in sync with the ‘new normal’. So, in terms of efficiency and being cost-effective, yes, co-living spaces will work out as one of the possible solutions to unsold inventory, so long as you understand the ‘new normal’ of a COVID-19 world. As long as appropriate social distancing discipline and norms are followed, co-living can emerge as a viable solution to unsold inventory,” said Niranjan Hiranandani, President, National Real Estate Development Council (NAREDCO). Source: The Economic Times Chandigarh

Focus on affordable housing, infra projects to grow by 7 per cent plus, says Niranjan Hiranandani

6/24/2020 3:57:00 PM

Every Indian was vexed by the idea that millions of migrants, which included kids, had to walk miles and miles before they reached their destination during the COVID-19-induced lockdown. While many stated the reason for this move was dominated by the fear of starvation, Niranjan Hiranandani, National President, NAREDCO and National President, Assocham has a different take. Hiranandani believes while hunger is one reason, the other reason is the lack of adequate shelter. He hopes that he is able to do his bit in helping provide homes to these less-privileged people in cities, Hiranandani said this at a webinar organised by FPJ-IIM Indore, supported by Big FM and Monelylife. In this webinar, moderated by Free Press Journal’s RN Bhaskar and IIM Indore’s Himanshu Rai, other than highlighting the migrant issue, Hiranandani spoke about issues worrying the real estate sector. He was speaking at the second last session in the ‘India After COVID-19’ series of discussions. Given below are edited excerpts. Position of Real Estate Real estate has been going through a traumatic experience in the last two years. Realty saw the first shakeup at the time of Demonetisation, followed by the introduction of Goods and Service Tax (GST) and Real Estate (Regulation and Development) Act (RERA) all this hit the industry badly. While RERA was a good law, the industry took time to cope with it. This was followed by Insolvency and Bankruptcy Code (IBC) that again shook up the industry. The IL&FS debacle compounded the impact. This is because 50 per cent of the credit that the industry raises is financed by NBFCs. With IL&FS collapsing, funding to the real estate sector was a hit. In January 2020, the industry got a glimpse of recovery. The industry was beginning to think that happier times are back, but then COVID-19 struck the industry real bad. The COVID-19 impact was felt across the industry, but in the case of the real estate sector, what compounded the impact was the movement of migrant labour. Real estate and construction sites employ 15 per cent of the labour of the country and together contribute to 7 per cent of the GDP. Between the devil and the deep blue sea In the NCR region, there are more than 3.50 lakh building blocks under construction which were sold about ten years ago but have not been delivered. One of the companies that is responsible is Unitech which is one of the largest listed companies in India. Unfortunately, the government of India as per the order of the court had to take over Unitech. The Supreme Court has appointed me as one of the members of the board for the company. So, I am given the responsibility to turnaround the problem of the company and get delivery of almost 16,000 apartments which have not been delivered. This is just one company but there are many such companies. There have been multiple problems the real estate business has witnessed and we have to find ways to resolve them. Over the years, real estate has become the most heavily taxed industry in India more taxed than tobacco. About 35-40 per cent of the value of an apartment consists of direct and indirect taxes, so it is natural that properties will become expensive. At the local, state and central levels, the taxation structure should be resolved. Another issue plaguing the industry is the issue of liquidity. Here the Reserve Bank of India (RBI) can intervene. It is very unfortunate that the industry has to avail of credit with much difficulty. We will be meeting Finance Minister Nirmala Sitharaman to find ways that will help the industry recover in the best possible manner. Bring change for good At the Reserve Bank of India level, the intervention around credit policy would be a relief to the real estate industry which is also floundering. Other than a credit policy intervention, we have requested for one-time rollover of debts, like the exercise announced during the 2008 Lehman crisis. While RERA is a good law, there is a section in the act which is causing liquidity issues for a developer. As per the act, a developer cannot use funds raised from one project to invest in another project. In the COVID-19 times, RERA will have to permit some flexibility in order to balance some imbalanced equations in business. To revive projects that are stuck in the country, there is a need for last-mile funding. SWAMIH Investment Fund, which is set-up by the Finance Minister Nirmala Sitharaman, is managed by the State Bank of India and is worth Rs 25,000 crore. Of this, Rs 10,000 crore is contributed by the government and the rest is contributed by various funds. Unfortunately, due to COVID-19, the limit of this fund should ideally be Rs 1.50 lakh crore. Many financial institutions are ready to put up such funds. Now, we are seeking the finance minister’s approval to set up such funding. Post COVID-19, the rent policy will bring about a revolutionary change in the industry. The draft of the rent policy is already put up on the website of the housing ministry. At present, due to the COVID-19 crisis, work around this policy has slowed down. However, the housing minister, Hardeep Puri, has been taking proactive steps to make this draft policy a reality. The aim of this policy is to provide premises at affordable rents. At present, it does not make sense for developers to actually build residential houses on rent. However, there are many commercial places that are built and then be rented out across the country especially in major cities. With the arrival of the new rent policy, the developers will see the value in building homes, which will lead many developers to look at building residential houses which can then be given out on rent. Due to this policy, more homes will be available for rent, which will make renting homes affordable to the general public. This will also resolve the housing needs of migrants and other labourers. Focus on real estate and witness growth If the government is able to push the housing-for-migrants story further, it will support the Indian economy. An impetus to real estate combined with infrastructure projects envisaged by Union Minister, Nitin Gadkari will be major drivers of economic growth. It is possible to achieve a GDP growth of 7 per cent plus if the government focuses on housing in terms of policies, and liquidity issues around the real estate sector and thus gets infrastructure projects moving. The real estate and construction sector can, directly and indirectly, affect 269 industries. The countries that have had a GDP growth of 10 per cent were able to achieve that by focusing on road development, real estate and infrastructure. A safe dwelling place for all Home is where the heart is. The size and shape of these houses might change, but it is the place you feel safe. The labourers did not feel safe in a city where they lived for more than 10-20 years and decided to head back to their villages. This is because they do not have a home they can call their own. This is mainly because the place they took shelter in, is not home. If you turn all the slums of Mumbai into ownership places, there will be a sense of pride even if it is a small dwelling. While many migrants were walking for days to reach their homes from cities, I hope this does not happen every again in the country. We will have to make sure that it is not repeated, maybe in the form of an amendment in our constitution or having a system in place that it is not repeated. I belong to an industry that has not been able to do justice to the people of India. I do hope in the rest of my life, I am able to make up for the loss of time for not being able to do justice to them for so long. The policymakers are working towards providing shelter to these migrants but the process is too slow. We cannot pride ourselves on having the largest slum in Asia it is not a good feeling. I would rather say it was the largest redevelopment in the entire world. Source: The Free Press Journal Chandigarh

Office sector expected to lead post-Covid-19 recovery in real estate sector: Report

6/23/2020 1:51:00 PM

India’s real estate sector –both the residential as well as the commercial segment – has been impacted by the Covid-19 pandemic. The industry will need to reconsider pre-crisis priorities and accelerate new strategic initiatives to adapt to a “next normal”, according to a report by global realty firm JLL. “Real estate as an asset class is here to stay; however, it is inevitable to reinvent, to stay relevant in this new paradigm. It is indisputable that the pandemic induced disruption is changing the rules of the game, but also accelerating the increased adoption of technology and artificial intelligence (AI) in processes ranging from marketing and sales to loan modelling and data management,” said Ramesh Nair, CEO and Country Head (India), JLL. While the office sector is expected to lead the recovery cycle in the real estate sector, the green shoots of recovery in residential sector will be in tandem with overall economic growth, said the report titled “The Next Normal - Real Estate in Post COVID World,” released on Monday. The pandemic has resulted in homebuyers putting on hold their decision to buy houses which led to a 30% decline in sales in the first quarter of 2020, said the report. According to top developers surveyed in residential sector, there are Indications of price rationalization in Delhi NCR, Bengaluru, Chennai and Kolkata. Construction activities are expected to gradually resume nationwide and in major cities, projects are resuming. The report says that sales in affordable and mid segments are expected to start recovering towards the end of the year. “Residential market’s revival hinges on intensity and duration of the pandemic. As consumer sentiments improve post the lockdown period, sales in the affordable and mid segments are expected to show initial green shoots of recovery towards the end of 2020, with the onset of the festive season,” the report pointed out. For the office real estate market, the JLL report said that as a result of the pandemic, re-negotiation of contracts between landlords and occupiers is the underlying trend in the short term as the first quarter of the year saw the net absorption fall by 30%, ie, to 8.6 million sq ft, mirroring the moderation of quarterly economic growth to 3.1%. According to top developers surveyed in the office sector, many are looking at Common Area Maintenance (CAM) charges discount or waivers. This has emerged as a significant trend where landlords / developers are either agreeing or reviewing the same with occupiers. In addition, the larger markets of Delhi-NCR and Mumbai, developers are open to discuss extra rent free period in cases of new deals. Similar trend seen in Chennai and Kolkata.. The report added that in the medium to long-term, occupiers and developers will re-evaluate their strategies. Office demand will remain robust in the medium to long-term. “The office market fundamentals are strong – with low vacancy, stable rental growth and limited upcoming supply. It is expected to recover the fastest once the outbreak is under control.” It added that majority of the construction activity has largely resumed across the cities except Chennai where it has been slow. Source: Hindustan Times Chandigarh

Rental policy to bring a revolutionary change in the real estate industry: Niranjan Hiranandani

6/20/2020 11:20:00 AM

The much-awaited rental housing policy will bring about a revolutionary change in the real estate sector, stated Niranjan Hiranandani, President, NAREDCO. He said this during a webinar organised by The Free Press Journal and IIM Indore, supported by BIG FM and Money Life. Speaking on the rental real estate, Hiranandani, Co-Founder and Managing Director, Hiranandani Group, said, “Post COVID-19, the rent policy will be the next revolutionary thing.” The ministry of housing and urban affairs (MoHUA) has posted the draft policy on their website and it is awaiting feedback from the general public. He added the Housing minister Hardeep Puri has been proactively looking at developing this policy. Hiranandani, who is also National President, Assocham, added that this policy will help rental home seekers to get dwellings at an affordable rent. The focus of the new policy would be to help reduce housing shortages in urban areas and also encourage renting of homes which lie vacant across the country. Hiranandani stated that currently, it makes no sense for institutions or developers to actually build residential houses on rent. On the contrary, there are many commercial places that are built for being rented out. Hiranandani strongly felt that this rental policy will be of help to all those aspirational migrants who come to the cities for better living standards but end up in homes that are not liveable. He stressed on the need to have social security for these migrants. If they had homes, they might not even leave the cities they dwell in, he explained. He added that if the governments give impetus to the concept of housing for migrants and other labourers, it will be helpful in not just providing homes but also driving the growth story of the country. This impetus to housing along with a boost to infrastructure projects could easily result in a GDP growth of 7 per cent plus by March 2021, but “only if the government focuses on housing in terms of policies and RBI sorts the liquidity issue along with the Gadkari-led infrastructure projects. Then this growth is achievable.” He also mentioned how taxation has impacted the sector. He added that over the years, real estate has become the most heavily taxed industry in India. “More taxed than tobacco.” If 35-40 per cent of the value of the apartment one is buying is in terms of direct and indirect taxes, then it is natural that housing is going to be expensive, he stressed. Source: The Free Press Journal Chandigarh

Realty remains preferred asset: survey

6/19/2020 11:25:00 AM

Homebuyers to slowly return to market in six months Real estate remained the preferred asset class for investment (35%) followed by gold (28%) and fixed deposits (22%) and stocks (16%), as per the findings of a survey by Housing.com and National Real Estate Development Council (NAREDCO). As per the survey, homebuyers are likely to slowly return to the market in the coming six months. Price points of residential realty, though having remained muted for the past few years, are still a key deterrent, according to half the respondents. A majority of respondents surveyed (73%) comprise ‘first-time homebuyers’, who are looking to buy a ‘ready-to-move-in-house’ for end-use and are from the age group of 25-45 years. While 60% of the respondents opined that for the next six months, they would prefer a ready-to-move-in property, 21% said they were okay with a property that came with a delivery timeline of a maximum of one year. The survey was conducted in April and May 2020 among 3,000 potential homebuyers. Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com, said, “Our survey clearly shows that potential homebuyers, who were searching for flats, have pressed a pause button for the time being because of the liquidity concerns and the uncertainty over the COVID pandemic. But, a majority of them will gradually start returning to the market in the coming months." Niranjan Hiranandani, national president, NAREDCO said, “The pandemic has not only shaken up the economy, it has further added to the distresses of real estate. In the current scenario, we can see a change in consumer behaviour and perception of owning a house with safe and secure surroundings, which will be the driving force for demand.” Source: The Hindu Chandigarh

Real Estate Remains Preferred Asset Class For Investors: Housing.Com-NAREDCO Survey

6/18/2020 4:15:00 PM

Despite subdued consumer demand amid an economic slowdown, real estate is still perceived as the preferred mode of investment, according to a report jointly released on Wednesday by Housing.com and National Real Estate Development Council (NAREDCO). Nearly 35 per cent of respondents perceived real estate as the preferred mode of investment followed by gold (28 per cent), fixed deposits (22 per cent) and stocks (16 per cent). Homebuyers are likely to slowly return to the market in the coming six months, said the report. The survey was conducted in April and May through a random sampling technique for a fair representation across regions. The insights entirely represent the view of more than 3,000 potential homebuyers. "The real estate consumer remains positive with regard to the economic scenario and income stability for the coming six months," said the report titled 'Concerned, yet positive -- The Indian Real Estate Consumer (April to May 2020).' Price-points of residential realty have remained muted for the past few years but are still a key deterrent with the perception of being still unaffordable. This was the response from nearly half of the potential homebuyers surveyed who are currently staying in rented accommodation. A majority of respondents surveyed (73 per cent) comprise first-time homebuyers who are looking to buy a ready-to-move-in-house for end-use and are from the age group of 25 to 45 years. While 60 per cent of respondents opined that for the next six months, they would prefer a ready-to-move-in property, 21 per cent said they were okay with a property with a delivery timeline of maximum one year. Going forward, NAREDCO believes real estate will be positive for both end-users and investors in the post-COVID-19 world. Those living in rental homes have realised the importance of being in their own homes while NRIs facing challenging times in their present domiciles are looking at creating a safe haven 'back home' in India. Demand for additional space for home offices is on the rise with a need for more efficient layouts. The importance of common amenities, business centres and more open spaces will be an inherent part of the new demand criteria in the post-COVID-19 world, said the report. "We are witnessing volatility in equity markets globally but the value of properties in the real estate market has managed a stable stance," said Ram Raheja, Director of S Raheja Realty. "This is because unlike other asset-classes, real estate is tangible in nature and this strengthens the factor of security and better return on investments." (ANI) Source: Business World Chandigarh

Coronavirus may break real estate’s slowdown curse residential sales picked up after realtors

6/17/2020 4:41:00 PM

The real estate sector may finally come out of slowdown gloom in the aftermath of the coronavirus pandemic. In fact, sales have already started to pick up in some segments such as residential areas with developers pushing promotions. “From almost Nil sales in April, residential sales are up to 25-50% of pre-COVID levels as per management commentary in the media. Developers have used a combination of online sales promotions, financing schemes,” Jefferies said in a research report on Tuesday. Affordability also led to rise in sales of the mid-income housing segment which indicates that the current pricing is largely being accepted. While construction activity has also touched 25-50% of pre-COVID levels, new launch activity is expected to remain standstill with both developers and customers focusing on finished inventory. “New launch activity is yet to revive, with both developers and customers looking for existing completed or near-completion inventory. We expect new launches to start in 2Q, led by the mid-income segment, but pick-up pace only in Q3,” the report said. These inventories are concentrated in the mid to mid-premium segment of the market and the traditional buyer of these inventories is salaried employees who have seen limited impact on their income levels. However, the realty companies may look into offering 2-5% limited discounting in the mid-segment. As far as high-end sales are concerned, they may take longer to revive as availability of home-loans is also an issue with income disruptions. Real estate has been facing a prolonged slowdown with various issues dampening the sales for developers. The woes of the realty sector were aggravated by a liquidity crunch with the fall of NBFCs and then by economic slowdown which also trickled to automobile sales and FMCG demand such as oil, soaps and biscuits. Certain government measures such as the compliance costs of policy initiatives and reforms (such as demonetization and GST) haven’t helped either, Pankaj Pal, President — Business Development & Strategy, AIPL, wrote recently in Financial Express Online. All of these factors combined translated into lacklustre demand and pent up inventories pan-India. Source: Financial Express Chandigarh

Real estate in India to realign post-COVID crisis

6/16/2020 4:24:00 PM

As global economies grapple with an economic fall-out in the wake of COVID-19 pandemic, and the clamour for a stimulus package for economic revival grows India’s response so far has been more focused on ‘saving lives’. Industries across the Indian economy &ndash including real estate &ndash have supported the government’s steps consider the decision on imposing the lockdown as also extending it. Now, with the situation looking grim and bleak, the focus needs to re-shift from saving lives’, it is now the right time to also focus on ‘saving livelihood’. Perhaps, the biggest takeaway in terms of ‘the way forward’ is that demand for owned houses will grow. Those living in rental homes have realized the importance of being in their own homes NRIs facing challenging times in their present domiciles are looking at creating a safe haven ‘back home’ in India those who have faced challenges in terms of investments losing value in the aftermath of the pandemic in paper market are seeing the obvious advantage of shifting to real estate as the asset class of choice. So, real estate will be ‘positive’ for both end users and investors. The reputed developers with better credit ratings and best delivery track record will gain traction with an enhanced confidence level among the potential home buyers in the back of this crisis. As an industry, real estate will adapt to a tech-savvy future in terms of digital platforms for sales and marketing as also adopt enhanced automation at sites, given the obvious challenge of being dependent on migrant labor. Work from Home (WFH) has created the need to tweak architecture design. The ideal demand coming up for additional space for home offices is on the rise with more efficient layout. Also, the importance of common amenities, business centres and more open spaces will contribute to the new demand criteria’s post Covid world. Proximity to the workplace will be highly valued as Work from Home may be just stop gap arrangements. Commercial real estate is likely to witness larger floor space keeping social distancing and safety aspects as new normal. The industry has already stepped ahead to adapt and adopt best practices to imbibe new normal norms which is a matter of survival of crisis. From an internal perspective, joint ventures and developments will be the way forward. ‘Reasonable and practical’ will be the ‘mantra’ as industry players consolidate and work together. The obvious way forward in terms of funding will be equity instead of debt, and translating theory into actual practice is a direction laid forward. The real estate business has been going through challenging times over the past few years, liquidity crisis tops the painstaking issues, and unsold inventory is a problem that needs solutions while last mile funding issues have created stalled and delayed projects. The economic reform and stimulus package announced by the RBI and the Government of India will surely help sectors in lurch with reinvented thrust. The economic reforms with the stimulus package announced by FM will be beneficiary to the MSME and other micro sectors in the long run. However, industry feels a lack of an immediate curing measure for the ailing economy. However, supply-enhancing measures have been take care of, we seek demand revival booster by quick reduction in GST rate across the economy for an stipulated period of time, reduction in stamp duty combined with low home loan interest rates to help convert fence-sitters into actual home buyers while enhanced tax benefits on home loan EMIs would also help. The industry awaits positive developments on these aspects, which will make it easier for a consumer to make a purchase. To sum up, for the end user, this looks like being the best time to buy, given the positives which buying one’s own home translates into. Having said this, developers will have to factor in aspects like job security as also salary cuts for the home buyer, these will need hand-holding to help the buyer through the difficult times. We will see a redesign the new paradigm will be a home that also powers WFH while homes in peripheral areas will get a boost. The best medicine for COVID-19 in the present scenario is one’s own home, and going forward, this adage will hold true. Source: Financial Express Chandigarh

Real estate can revive economy after COVID-19: DLF chairman emeritus KP Singh

6/14/2020 10:23:00 AM

Mushrooming urban slums and the exodus of migrant workers during the two-month lockdown period highlight the failure of urban planning in India, says billionaire realty mogul KP Singh, adding that real estate business can be a major driver for reviving the economy in the post-COVID world. "One of the most important sectors of the economy, which is called urbanisation, includes real estate, construction and urban infrastructure. Now these all three are the most highly neglected sectors. Unfortunately, these should be the most important sectors of the economy," Singh told PTI in an interview last week. Wrong urban development policies and inaccurate assessment of urbanisation by the Planning Commission led to creation of slums that eventually caused the migrants crisis, he said just before stepping down as chairman of India's biggest real estate firm DLF Ltd, handing over his post to son Rajiv. Singh is now chairman emeritus of DLF. A major structural change is required to set things right, and Prime Minister Narendra Modi is in the best position to do it because he has the capacity and the mandate, said the 90-year old industry veteran. Singh rued that the real estate, construction and urban infrastructure sectors have been completely neglected in India, unlike other nations such as America where the growth of these industries are considered as major economic indicators. The government, he said, should give importance to the real estate sector, even more than the MSMEs, as it has the potential to absorb a large number of unemployed people and revive the economy when it has been crushed by the COVID lockdown since March 25. He pitched for tax incentives as well as ease in taking home loans at lower interest rates to boost both demand and supply in the housing segment. Asked about his assessment of the multi-year slowdown in the realty sector, Singh said the demand slowdown was not because of the demonetisation, the GST and the new realty law RERA but due to wrong urban development policies. He said that the real estate and construction sectors generate most direct and indirect employment and is a biggest multiplier of the country's GDP. "You construct more houses. More cement is required, more steel is required, more paints are required, and more labour, skilled and unskilled, is required. So, the problem is not the GST or the demonetisation. The problem is our entire urban policies in India are completely wrong," Singh said. He added that it requires major structural changes to correct mistakes committed over several decades. Unlike in other industries, he said it is not easy to correct mistakes in the real estate where construction of buildings has taken place and one cannot demolish it. Singh said the government's urban policies should have facilitated development of satellite towns by private sector players to cater to the migration of people from rural to urban areas. "...urbanisation means visionaries to plan for several decades, sometimes centuries ahead," he said. In a democratic country, Singh said people will have aspirations for better lives, in search of which they migrate to big cities. He said that the urban policies failed to cater to this influx of migration. "The urban policy involves catering for those teeming millions and millions of workers who come from villages in search of jobs. Now, the first principle of that is to cater for them. These are visions. You think not 10-20 years ahead, but 50-100 years ahead," he observed. Singh said that the satellite towns should have been developed for the workman or migrant, with proper facilities of accommodation and fast transportation network to reach their workplace. "Now this was completely neglected. As a result, what you find today 60 per cent of India is in slums. Why should we have Dharavi? Why should you have slums, because they never catered for that there is something called workmen class," he said. To accommodate these workmen class, Singh said satellite towns should have been created. "This has been completely neglected. That is why you see the faces of migration people going...this is the tip of the iceberg. It is going to explode in a big way," he said. Asserting that it was not GST and demonetisation that were responsible for slow demand, Singh said: "It is a basic flaw in urbanisation policy of the government and time is there to have a complete new look and new structure. I will say therefore, there has been a complete failure of our Planning Commission. They did not envisage this invasion of urbanisation," he said. Urbanisation and infrastructure of urbanisation are big issues which should be examined and set right. "Only a person like PM Modi can do it. Because he is a man who means action. He has a mandate and he has the capacity to do something which is unusual because others could not do but he has the capacity," Singh said. He said one should learn lesson from past mistakes and restart again more intelligently. "So, all you people, everybody says GST and demonetisation. No, not at all. This is a small thing. The larger picture is reorient and restructure urbanisation policy," he said. On the housing demand, he said globally the highest importance is given to construction and real estate business. Singh cited the example of China, which is focusing a lot on construction activities to revive its economy post COVID-19. In America and many other countries, he said the number of new houses being built is an economic indicator. To create housing demand in India, he said it should be very simple for anyone to go to any bank and get home loans. "Like what happens abroad, a mortgage loan is at ridiculously low, low rate. Second, so easy that you go to a bank and within a week you get it because banks do not give money like this one, there is an insurance set up of the government which guarantees the bank for any mortgage loan given," Singh said. He said the government should offer tax incentives on home loans to boost housing demand. More tax sops should be provided for purchase of second homes if the same is let out, he said, adding this would give a great push to rental housing. Singh said in the UK the general tax is 42 per cent but if one rents out property it is 18 per cent. On the concept of affordable housing, he said, "What is affordability? What is not affordability? These are all artificial barriers. Marketplace decides what is affordable." He said that the supply should be incentivised to give people choice and buy according to their affordability. "Developers will only construct those items, which market will absorb. They will never construct something for which market is not there," he said. He also termed it as "strange" that the government has removed input tax credit on the GST as it has led to an increase in unit cost. Singh felt that the real estate should be given "greater priority than MSMEs". "Whatever wrong has gone. You cannot set it right overnight. That is a different story. What I'm saying in future you can rev it up by reorienting, restructuring the entire real estate construction industry. If you do that, take it from me. It will have an immediate multiplier effect. Migrant labourers will come back," Singh concluded. Source: The New Indian Express Chandigarh

Real estate builds wealth more consistently than other asset classes: Hiranandani

6/12/2020 10:52:00 AM

Covid-19 has ensured that paradigms are set to change in the real estate sector with the industry evolving in new ways, according to Niranjan Hiranandani, Co-Founder of realty major Hiranandani Group. The executive says the fundamental assumptions of CEOs and executive teams about markets, customers, supply chains, the workplace, technology and other factors underpinning the business model are undergoing a sea change. “Right from architecture to planning, all will be entirely on digital platforms. Sales and marketing will see very minor human interface, while transactions will move to technological platforms like block-chain with payments moving to digital and online,” Hiranandani, also the Assocham National President, told BusinessLine. Better investment The Managing Director of the Hiranandani Group insists investor confidence on realty continues to be high, with real estate building wealth more consistently than other asset classes. The pandemic has only turned the spotlight again on this asset class. “During the lockdown, real estate has come across with flying colours, when compared to other options. If one looks at different asset classes, equities and mutual funds as also similar ‘paper options’ ― they all lost value in the aftermath of the pandemic-induced lockdown. Similarly, bullion and precious metals have seen swings in values,” said the official. The high volatility in the stock market brought on dwindling investor confidence. The only steady investment in these troubled times has been real estate, continued Hiranandani, as it has proved to be “the best solution to the pandemic ― being safe within one’s own home”. As for those who opt to just invest in real estate and not actually live in the same, the official said it offers both capital appreciation and rental income. “In the Covid-19 pandemic, real estate has offered stability and steady value to investors. These, to my mind, are reasons to opt for real estate as an investment class,” the official said. The impediments which the real estate sector faces have been around “since the tsunamis of economic, taxation and industry reforms were introduced”, said the official, and the primary impact of these have been slowdown in sales as also some issues with unsold inventory. “What is required is a single window for clearances and time-bound and speedy permissions and clearances. It is also about the need for easy availability of low-interest credit, a one-time roll-over to reschedule debt, and extension of regulatory deadlines and timelines,” added the executive. New normal Covid-19 has highlighted increased demand for new workplace design, including more digital and flexible solutions. The economy also will have to adapt to the “new normal”, said the official. “Going ahead, it will be about new buyer segments, with specific requirements which will have to be adopted. The whole concept of ‘work from home’, for example, will translate into a changed layout for new homes, a half room will be added as the workplace. It will soon be 1.5, 2.5 (BHK) and so on, which will be the new home segments,” said Hiranandani, adding internal layouts of work spaces (at offices) will need to be spaced out so that social distancing norms can be implemented. Source: The Hindu Business Line Chandigarh

JK to formulate 'Real Estate Policy 2020'

6/11/2020 10:09:00 AM

In 2018, then State Administrative Council had approved Real Estate Regulatory Act for J&K. However, under the provisions of the J&K Reorganization Act 2019, that Act was repealed as it allowed only state-subjects to buy properties in the erstwhile state. Now according to sources, the new policy will pave way for outside developers to invest in J&K. The committee to be headed by VC Srinagar Development Authority will have VC Jammu Development Authority as member-secretary, and Commissioners of SMC, JMC, MD Housing Board, Directors of Urban Local Bodies, Chief Town Planners of Jammu and Kashmir as members. The committee constituted by the Housing and Urban Development Department shall formulate the Real Estate Policy 2020 and building bye-laws. The committee has been given a timeframe of 15 days to come up with the policy document, which will then be examined by the Administrative Council. The government in J&K has powers to notify Real Estates Regulatory Act. A senior government official said that the real estate policy is aimed to safeguard interests of both the developers as well as the investors. “Except Jammu & Kashmir and Ladakh, all other states and UTs have Real Estate Regulatory Act which mandated constitution of Real Estate Regulatory Authority to oversee the implementation and grievance redressal,” he said. He said the move is aimed at promoting planned development of real estate and to ensure sale of plots, apartments, buildings and other real estate projects, in an efficient and transparent manner and to protect the interests of consumers. The RERA would ensure a fair and just treatment of the buyers and protect them from any unscrupulous builders. The Real Estate (Regulation and Development) Act, 2016, is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes a Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016. The Act came into force on 1 May 2016. The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months. The Act makes it mandatory for each state and UT to set up its own real estate regulator and frame rules to govern the functioning of the regulator. It is aimed at encouraging greater transparency, citizen centricity, accountability and financial discipline in the sector. Source: Greater Kashmir Chandigarh

Housing finance companies have adequate liquidity: ICRA

6/10/2020 9:56:00 AM

As housing finance companies raised approximately Rs 34,000 crore through debt market route and from National Housing Bank (NHB) during April and May 2020, it is expected that most of the HFCs will maintain an adequate liquidity profile for meeting their debt obligations even with lower collection levels (50-80%) in the portfolio, according to ICRA Ratings, a rating agency. ICRA said that HFCs weighted average on balance sheet cash and liquid investments stood at about 7% of the AUM as on March 31, 2020 and at 12%, including the sanctioned funding lines. The available liquidity is sufficient and could typically cover about two months of debt repayments of most HFCs, while access to the sanctioned funding lines could enhance the cover to three months. Supreeta Nijjar, vice president, Financial Sector Ratings said, “Around 31% of the HFCs’ portfolio was under moratorium for 2-3 months as on April 30, 2020. Further most of the HFCs have not applied for a moratorium from their lenders. While the HFCs in the affordable housing segment have a higher share of portfolio under moratorium owing to the relatively marginal borrower profile, which may have been impacted more during the lockdown, they are carrying adequate liquidity to service their debt obligations till August 2020”. ICRA expects the inflows from advances not under moratorium to likely support the liquidity profile of HFCs. However, RBI’s extension of the moratorium till August 31, 2020 could lead to an increase in the share of portfolio under moratorium thereby reducing the liquidity cover. Based on rating agency’s estimates, the total maturing debt for FY2021 is estimated to be Rs 2.9-3.2 lakh crore of which Rs 1.4 lakh crore is accounted by debt markets. Incremental funding requirement on this account would largely be met through refinancing by banks and primary issuances by HFCs in debt markets. Source: ET Realty Chandigarh

Government Stimulus Underlines A Self-Reliant India, Major Boost For The Real Estate Sector

6/9/2020 10:56:00 AM

The INR 20 lakh crore (USD 266 billion) economic package announced by the Prime Minister is heartening. Estimated to be around 10% of India’s GDP, the stimulus will not only provide relief but will also ensure a faster turnaround. The emphasis on a ‘self-reliant’ India is based on the potential and the inherent strength of the country’s domestic demand. These five pillars &ndash stronger economy, better infrastructure, technology driven system, vibrant demography and demand &ndash will position India on a stronger footing in the long run. Over the past three days, the Finance Minister has enlisted several measures as part of this package &ndash covering micro, small and medium enterprises (MSME), non-banking financial companies (NBFC), micro finance institutions (MFI), housing finance companies (HFC), farmers and migrant labourers amongst others. Although the overall stimulus announced by the Prime Minister includes the INR 1.7 lakh crore relief package for the poor provided previously it is amongst the largest financial packages announced by governments across the world to deal with the economic disruption caused by the COVID-19 pandemic. Some of the key measures announced are as enclosed: Construction / Housing Sector The finance ministry has provided certain incentives to the construction and housing sector to reduce the stress it is currently under. It has extended all central agencies’ contracts by up to 6 months (without costs to the contractor), with the agencies asked to partially release bank guarantees to the extent contracts have been partially completed, so as to ease cash flows for contractors. Further, COVID-19 would be treated as an ‘Act of God’ and ‘Force Majeure’ can be invoked to secure a six-month extension of registration and completion timelines for all RERA-registered projects whose registration was expiring on or after 25 March 2020. This will provide relief to the developer community which was facing issues due to labour migration and lack / delayed supplies. The government further strengthened the affordable housing segment by extending the Credit Linked Subsidy Scheme (CLSS) for the middle-income group up to March 2021. In addition, it opened a new investment class in the form of an affordable rental accommodation scheme for migrant workers and urban poor under the PM Awas Yojana. Under this scheme, government-funded housing in cities would be converted into Affordable Rental Housing Complexes (ARHC), while at the same time the government will provide incentives to manufacturing and other industries to build affordable housing units. NBFCs, MFIs and HFCs The government’s relief package for these three sets of companies has come at an opportune time and will especially benefit the real estate sector as these companies are one of the largest lenders for the industry. As part of its relief measures, the government has launched an INR 30,000-crore special liquidity scheme for NBFCs, MFIs and HFCs &ndash which will involve investment in both primary and secondary market transactions in investment-grade debt papers of these companies. This is likely alleviate the short-term liquidity woes of these companies. The government has also extended a pre-existing partial guarantee scheme for NBFCs to cover borrowings such as primary issuance of bonds. The government will bear the first 20% of the loss incurred papers rated AA and below will also be eligible for investment. MSMEs MSMEs are the backbone of the Indian economy and one of the most severely affected segments due to the COVID-19 pandemic. This is why, the government opted to focus on this sector in the first tranche of its relief measures. Collateral-free automatic loans worth INR 3 lakh crore will be provided to these enterprises with a time frame of four years and a 12-month moratorium. Combined with the INR 20,000- crore subordinate debt, these measures will go a long way in providing liquidity to stressed MSMEs and enable them to retain employees as well as kick start production. The government also provided them an INR 50,000-crore fund of funds through ‘mother fund-daughter fund’ to enable them to expand capacity &ndash this will benefit about 25 lakh stressed MSMEs (according to the MSME ministry). Outlook While this package is expected to provide much-needed liquidity to the economy, the extension of project completion timelines and other statutory compliance's is welcome news for the real estate industry. We are hopeful that more measures will be announced by the government to support the industry in the coming few days. Source: Businessworld.in Chandigarh

Offers to homebuyers keep realty afloat

6/4/2020 2:31:00 PM

Low mortgage rates coupled with a wide range of offers from developers appear to have enticed a section of home buyers out of their lockdown blues. City-based developers and brokerage firms claim they have managed to carry out 30-60 per cent of their average transactions, mostly by way of initial booking, during the last two months. Promise of price protection for 6-12 months on the downside and easy exit option with no penalty till the end of the lockdown were some of the offers almost every developer extended to homebuyers during April-May when work at the construction sites came to a standstill and cash flow nearly dried up. Some developers such as Godrej came up with easy payment schemes where buyers only have to pay 10 per cent of the total cost now and the rest 90 per cent after three years. Sanjay Jain, managing director of Siddha, said his company managed to bag almost 60 per cent of its pre-lockdown average business in the last two months. The company, which has multiple projects in affordable and a few in the premium segments, was apprehensive that initial bookings would not translate into concrete transactions. Instead, it was pleasantly surprised. “My team is very confident that there will be only a minuscule cancellation. Most of the buyers who have booked are from stable private sector jobs (IT, education, healthcare) or from PSUs and the government sector. More than half the buyers do not live in Calcutta,” Jain said. NK Realtor, the largest city-based realty broking and consulting firm, said it managed to get 159 bookings in May, higher than 120 in April and 128 in March. As traditional means of promotion — print media and outdoor advertisement — were not in the play during the lockdown, the brokerage focused on digital presentations and virtual tours of properties and apartments, to acquire new customers. “Our strategy has worked. The number would have been even higher in May but for Amphan, which knocked out a week. The result shows that home is an essential item,” Pawan Agarwal, director of NK Realtor, said. Respondents to a survey, carried out by NK during the lockdown, among 500 homebuyers in Calcutta and Hyderabad overwhelmingly preferred real estate over other asset classes. They are also now looking for bigger homes considering the possibility of working from home for a long time, the survey revealed. Rafikul Islam, a Murshidabad resident, who recently booked a flat near Joka, agrees. “I am looking at it as an investment, which can be for self-use if my kids want to settle down there,” he said. The 56-year businessman has taken the 10:90 scheme from Godrej as he thinks it would give abundant time to assess the evolving pandemic situation. “If the going gets tough, I may look at exiting before making the final payment after three years,” Islam added. Jitendra Khaitan, chairman and managing director of Pioneer Properties, said low home loan interest rate is fuelling demand. “There is definitely interest in properties up to Rs 75 lakh. After the crash in stocks, people are looking at property as a safe haven,” Khaitan said. His firm also got a reasonable number of bookings during the lockdown. The next six months, however, will be anything but easy as cash flow has dried up. “We need a bit of extra push from the state and the Centre. Limited period discount can be considered on stamp duty or GST on under construction properties to spur demand,” Siddha’s Jain suggested. Source: The Telegraph Chandigarh

Housing sales bookings of top 9 listed realty firms up 2% at nearly Rs 5,800 crore

5/24/2020 6:24:00 PM

Housing sales bookings of top 9 listed real estate developers rose 2 per cent to nearly Rs 5,800 crore during the third quarter of this fiscal year, according to property consultant Anarock. Sales bookings of DLF, Sobha, Puravankara, Prestige Estates, Brigade Enterprises, Mahindra Lifespace Developers, Godrej Properties, Oberoi Realty and Kolte Patil have been taken into account. "Housing sales revenue of the top 9 stock exchange-listed developers continued to grow steadily in the last festive quarter. Despite all headwinds, their collective revenues in third quarter of fiscal 2020 stood at a little less than Rs 5,800 crore, increasing 4 per cent on a quarterly basis and 2 per cent in a year," Anarock said. The first three quarters of fiscal 2020 indicate that the overall sales bookings of the top 9 developers was close to Rs 16,500 crore as against Rs 15,730 crore during the corresponding period of the previous year. Godrej Properties, Prestige Estates and Sobha were the top three players with maximum sales revenue during the first nine months of fiscal 2020. Together, they accounted for a 55 per cent share of the total sales revenue of Rs 16,500 crore. "The trend of developers deliberately restricting new supply continues, as increasing launches at this juncture can lead to more unsold stock and reflect negatively on cash flows," the consultant said. New launches by the top 9 listed developers (excluding DLF) more than halved during the period from 31 million sq ft area in April-December fiscal 2019 to nearly 15.71 million sq ft in the corresponding period of fiscal 2020. Source: The Economic Times Chandigarh

Kolkata: Tall residential buildings pass wind test unscathed

5/24/2020 4:38:00 PM

All the tall buildings in the city passed the Amphan test with only ornamental features like metal cladding and canopies being blown away by the express velocity winds. But two buildings in particular — the city’s only skyscraper The 42, and The Atmosphere which has a deck hanging between the twin towers, 152m above the ground — underwent a litmus test when Amphan came calling. And both passed with aplomb. All tall buildings are designed to sway in high velocity winds to prevent the pressure from buckling under the force. So when Amphan roared in at 133km/h, they swayed merrily for an hour. That left the building unscathed but left residents giddy with motion sickness. The swaying should have been considerable on the 61st floor of The 42, leaving residents violently sick. But a technology incorporated in the building was put to test on Wednesday evening. And it worked perfectly to ensure that the building didn’t rock. On the eve of the cyclone, a tank on the top floor was filled up with 120 tonne water. “The tower being very slender, it naturally sways quite a bit when there is heavy wind pressure or earthquake. But that would leave residents in extreme discomfort. To address the problem, a tuned liquid damper (TLD) tank was constructed at 246m, on the top most floor of the building. The TLD tank consists of two tanks, one atop the other separated by an intermediate baffle wall of 50% porosity. These tanks are filled with 120 tonne water. If the tower moves in a cyclone or earthquake, the water contained within the tank sloshes in the opposite direction of the tower’s movement due to rules of inertia. The load of the tank at the top of the tower thus compensates for the sway of the building,” explained Yashaswi Shroff of Alcove Realty, one of the companies in the consortium that developed the 250m building on Chowringhee. While several slim skyscrapers around the world use such TLD tanks, The 42 is the first building in Kolkata to put the technology into use. The building’s facade, including balcony railings and glass, held up in the wind whose speed would have reached 150km/h in the floors above. The facade was designed after wind-tunnel tests were carried out by RWDI, Canada and Windtech Consultants, Australia. “Façade design firm BES Consultants used the data to determine the structural strength required for various parts of the façade. After the cyclone, it’s completely intact,” said Shroff. At The Atmosphere, developer Rahul Saraf knew the cylone would test Deya, the triple deck hanging club in the air. But what he was concerned most was whether the palm trees atop could weather the storm. On Tuesday, the palms were reinforced. “The morning after the storm, it was devastating to see so many trees uprooted in the city. But thankfully, the palms had all survived,” said Saraf. Source: ET Realty Kolkata

PGs: A thriving business option in Zirakpur

2/26/2020 5:55:00 PM

In Zirakpur, a hub of affordable housing with several real estate housing projects, turning a house or a floor as a PG accommodation seems to be a lucrative business option here. PGs here provide an economical, safe and easy option of residence to thousands of young professionals. However, a majority of these accommodations don’t follow norms. Those residing as paying guests, students, especially boys, don’t mind sharing the rooms with others to reduce their share of rent. Scores of owners in the town have not registered their PG’s with any authority to avoid charges at commercial rates. In the absence of any check, most of the house owners charge as per their wish. According to sources, illegal PG accommodation business is flourishing in the city as over 50 per cent of the owners of such accommodation have failed to register themselves with the nearest police station. Every other house seems to be rented out to students, fully or partially, in certain pockets of the town, including Baltana, Dhakoli and other areas in Dera Bassi. As per norms, it is mandatory for PG house owners to get their houses registered at the concerned police station. Police verification of tenants is also necessary, but PG house owners are giving this norm a miss, too. Employees at Sewa Kendra said about 50 per cent of the applications they received get rejected due to wrongly attached proofs. They alleged that suppose one is residing in Zirakpur for six months and then he shifts to other PGs they attached the old proof with them and its get difficult to trace them. Though the city police hold drives against illegal PGs but after a few days, it again business as usual. Aashika Jain, holding additional charge of the Mohali DC, said, “We will be conducting inspection drives in the entire district to ensure guidelines and regulations are complied with.” She added that orders have been passed under section 144 under which the owners are supposed to report to the nearest police station if they are keeping any paying guest. Source: The Tribune Chandigarh

US, UAE and Singapore firms top investors in Indian real estate sector

2/24/2020 6:39:00 PM

While Indian real estate attracted more than $5 billion in private equity inflows in 2019, firms from US, UAE and Singapore remain bullish on the sector even as Japanese and South Korean investors are evaluating options in 2020. As per data made available by Anarock Capital, US-based Blackstone remains bullish on Indian real estate and pumped in over $1.8 billion in 2019 over $1.1 billion in 2018. Others included US-based Hines, UAE-based ADIA and Lakeshore and Singapore-based Xander Group. A few Japanese investors or corporates have been evaluating the Indian real estate investment options and we can expect them to get into gear in 2020, along with pension and insurance funds, it said. The interest of the Japanese firms is not limited to Mumbai alone but is also in other top cities such as Delhi-NCR. Bengaluru, Hyderabad, Pune and Chennai. Interestingly, South Korean companies may also be evaluating the Indian commercial market. South-Korea-based Mirae Asset Financial Group is showing interest in Indian commercial market but it’s still too early to say when and where, experts said. As per data from Anarock Capital, the momentum of equity investments from foreign investors into real estate restarted from 2014 onward. Since then, Indian real estate sector has received $16.6 billion worth of foreign investments. "In this period, investors’ focus has remained largely on big-ticket income-yielding commercial and retail assets – 72 percent in aggregate. This period also saw the entry of significant Canadian pension funds into Indian real estate, either directly or through platform deals with Indian counterpart. While Singapore-based funds led by GIC remained very active in this period, US-based funds led by Blackstone continued their love affair with India real estate and invested more than 5.7 bn dollars in the same period," said Shobhit Agarwal, MD & CEO – ANAROCK Capital. In 2020, funding focus is expected to remain on Grade A income-generating assets along with last-mile funding opportunities in residential projects. "A few Japanese investors/corporates have been evaluating Indian real estate investment options and we can expect them to get into gear in 2020, along with pension and insurance funds. These funds are inherently patient and come with longer investment tenures. As such, they will play a significant role in providing the long-term solutions Indian developers now need. In fact, 2020 promises to be an action-packed year for Indian real estate funding," he said. MMR and NCR were the top favourites for private equity investors in 2019; together, the two regions received close to $2.7 billion worth of PE funds, comprising a whopping 53 percent overall share. Previously in 2018, rather than NCR, it was Hyderabad that was on top in the radar of private equity investors, Anarock Capital said. The commercial segment continued to lure investors in 2019, with total PE inflows crossing $3.3 billion - though reducing by 13% on yearly basis. Meanwhile, both the retail and residential segments saw an uptick in investments in 2019 against the preceding year, it said. The residential sector received PE inflows of 395 mn dollars in 2019 against 265 mn dollars in 2018, the report said. The high potential of logistics and warehousing notwithstanding, this segment attracted about 200 mn dollars PE funds - a drop of nearly 50 percent against the previous year. Mixed-use developments saw inflows of approximately 155 mn dollars in 2019, as against 310 mn dollars in 2018, it said. "Total PE inflows in Indian real estate remained more or less the same in 2019 against 2018. However, NCR once again emerged as a major hotbed for private equity activity in 2019. Besides office real estate, the retail sector helped NCR gain traction from both foreign and domestic funds," Agarwal added. Source: Money Control Chandigarh

Non-metro cities are becoming the new realty hotspots

2/23/2020 6:36:00 PM

Lower prices, bigger homes and better returns on investment — paired with government incentives for affordable housing — have seen markets outside the prime metro cities pick up considerably over the past five years. According to a survey by property consultancy Anarock, 26% of property seekers looking to invest in real estate in 2019 listed cities like Ahmedabad, Lucknow and Chandigarh as their top preferences. Kochi and Bhubaneshwar in the east have seen steady growth over the last five years too. For a city like Ahmedabad, a growing realty investment hub, rapid infrastructure growth and industrialisation have been big factors driving this interest, says Santhosh Kumar, vice-chairman at Anarock. “Good connectivity and hubs like the Gujarat International Finance Tech-City have helped considerably.” The key impetus for markets in non-metro and non-prime metro cities has come from the government’s push for affordable housing. “Since 2015, more than half of all units launched nationally have been in the segment priced at less than Rs 40 lakh,” Kumar says. The incentives announced in 2014 included tax rebates that work better, in fact, in non-metro cities, says Pankaj Kapoor, managing director at realty research firm Liases Foras. “Tier 1 cities have registered 28% growth since 2015, whereas in Tier 2 cities the growth has been around 42%, according to our research. In the latter — cities like Jaipur, Bhopal or Lucknow — affordable housing projects get way more potential buyers as they can be built in prime locations because land prices and construction costs are lower. In cities like Mumbai, such projects are difficult to conceive of anywhere close to the central districts. They are always in far-flung areas,” Kapoor says. Another factor that has worked for the smaller cities is that, as the gaps in infrastructure and lifestyle have narrowed, businesses have moved in, drawing migrant professionals, creating a melting pot culture that is more cosmopolitan and urban, and eventually drawing people back home to those cities from prime metros. “People who had been working in metros are coming back for a similar lifestyle, at a lower cost, and the chance of a home of their own that they couldn’t dream of in the cities they had migrated to,” Kapoor says. UPS AND DOWNS The growth remains erratic, though, as demand and supply grow in spurts rather than a smooth upward graph. Office projects in Mohali have large vacant spaces, while in cities like Indore and Jaipur, rental rates are growing unusually fast as supply falls short of current demand, says Rohan Sharma, research head for India at the realty services firm, Cushman and Wakefield. A large potential area for growth is in the east, adds Neha Naidu, senior manager for retail at realty consultancy, Knight Frank India. “Thus far, eastern India has been considered one of the most conservative realty zones in the country. However, this is changing. The region is in the midst of being transformed from a traditional customer demographic to a product-aware, brand-savvy market,” Naidu says. An indicator is the entry of retail brands like Inox, Westside, Pantaloons and Spencers in cities like Bhubaneswar in Odisha and Dhanbad in Jharkhand. “With airports, IT hubs and multiple institutes of higher education in the region, it has a lot of factors working for it,” Sharma says. Source: Hindustan Times Chandigarh

Co-living, student housing generate higher rental yields than traditional formats: Report

2/20/2020 6:32:00 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

How infrastructure push will impact real estate sector

2/20/2020 6:29:00 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. Sources Financial Express Chandigarh

USD 5 Trillion Economy – Indian Real Estate as Key Contributor

2/17/2020 6:46:00 PM

Union Budget 2020-21’s almost pointed negligence of the real estate sector was most puzzling – especially since the previous budget had envisaged an ambitious blueprint for the country’s economic future. For realizing the vision of making India a USD 5 trillion economy by FY 2024-25, the development and growth of its real estate sector is imperative. Across developing and developed economies, real estate and economic growth are inseparable concepts. Real estate is a key driver of economic growth, and by laying the groundwork of making it more organised and transparent, the government has already made it a more secure and attractive investment environment. The fact that the latest budget gave no more than a cursory glance at real estate is a missed opportunity to build further on this groundwork. To propel the Indian economy into the top league of global economies, the growth engine of real estate cannot be ignored. Realty’s Contribution to GDP to Double Despite global headwinds and slow economic growth in the country, the India Brand Equity Foundation expects India’s real estate sector to grow to a market size of USD 1 trillion by 2030. It is also likely to contribute 14% of the country’s GDP by 2025 – almost double its current contribution of 7-8%. Over the years, real estate growth – particularly in housing – has been crucial in driving the Indian economy. Regulatory reforms such as RERA, GST and IBC and relaxation in foreign direct investment have already made the industry more transparent and credible, leading to increased end-user demand. It was expected that Union Budget 2020-21 would aim to keep this momentum going and thereby emphasise economic growth. To achieve this, radical changes in the taxation system and as well as regulatory policies are of paramount importance. Infrastructure Creation – Driving Growth While the latest Union Budget did not provide any real boosts to real estate other than in terms of affordable housing, it did continue to focus on infrastructure. Real estate development goes hand-in-hand with infrastructure as the latter opens up peripheral areas and creates new avenues of growth. Earlier, the government had already allocated INR 100 lakh crores for infrastructure investments to improve transport efficiency over the next five years. Multi-modal infrastructure development such as roads, rail and metro improves living conditions and spurs demand for residential, commercial, retail and warehousing real estate. Supporting Job Creation Union Budget 2020-21 failed to give clarity on the deployment of the previously-announced INR 25000 Cr alternate investment fund. Completing and handing over these stuck projects will increase buyer and investor confidence and help usher in a strong revival for the housing sector. Improved sales will lead to a strengthened housing supply pipeline and create jobs across the entire white-to-blue-collar segments of real estate development. This factor cannot be ignored. After agriculture and manufacturing, the real estate sector has the most potential for large-scale job creation. Associated with over 200 allied industries including cement, steel and sand, housing development has a multiplier effect on several allied sectors. According to the National Skill Development Council, there is a requirement of 109.73 million skilled manpower by 2022 in 24 key sectors. The building, construction and real estate sector alone is expected to generate 76.55 million jobs by 2022. The government’s mega initiative of ‘Housing for All by 2022’ itself promises to be a major employment generator – and, by direct implication, an overall economic growth dynamo. In the second phase of PMAY-G, during 2019-20 to 2021-22, 1.95 crore houses are expected to be provided to eligible beneficiaries. This effort alone can and will create large-scale employment for skilled and unskilled labourers. The Need for Investor Participation Major reforms such as GST, RERA, Insolvency and Bankruptcy Code and Benami Property Transaction Act have had a lasting impact on the real estate sector. Despite the initial churn and pain, they have increased financial discipline and a healthier ecosystem. By instilling renewed confidence in home buyers and domestic investors, these landmark reforms have improved the perception for India as a global hub for investments. As per ANAROCK data, private equity investments in India’s real estate sector clocked in at over USD 5 billion in 2019, of which commercial segment comprised the lion’s share at over USD 3.3 bn, followed by retail sector with USD 970 mn and residential of USD 395 mn. A large chunk of these investments came from foreign private equity funds like Blackstone, Hines, Ascendas and Brookefield. However, housing remains an unpalatable investment category for smaller domestic investors. The Union Budget was an ideal platform from which to announce initiatives to boost private investor participation. Currently, India’s housing sector is riding almost exclusively on end-user sales, which are not enough to revive residential real estate and its related benefits of furthering the Housing for All by 2022 goal and generating increased employment. As the second-largest employer and a major contributor to the country’s GDP, the real estate industry is one of the Indian economy’s strongest pillars. It cannot remain a neglected stepchild – it must become the apple of the government’s eye. A convincing revival of the Indian real estate sector is essential for the economy to move out of its current slow phase and achieve the mammoth targets – Housing for All by 2022 and making India a $5 trillion economy by FY 2024-25. Source: APN News Chandigarh

US, UAE and Singapore firms top investors in Indian real estate sector

2/17/2020 6:04:00 PM

While Indian real estate attracted more than $5 billion in private equity inflows in 2019, firms from US, UAE and Singapore remain bullish on the sector even as Japanese and South Korean investors are evaluating options in 2020. As per data made available by Anarock Capital, US-based Blackstone remains bullish on Indian real estate and pumped in over $1.8 billion in 2019 over $1.1 billion in 2018. Others included US-based Hines, UAE-based ADIA and Lakeshore and Singapore-based Xander Group. A few Japanese investors or corporates have been evaluating the Indian real estate investment options and we can expect them to get into gear in 2020, along with pension and insurance funds, it said. The interest of the Japanese firms is not limited to Mumbai alone but is also in other top cities such as Delhi-NCR. Bengaluru, Hyderabad, Pune and Chennai. Interestingly, South Korean companies may also be evaluating the Indian commercial market. South-Korea-based Mirae Asset Financial Group is showing interest in Indian commercial market but it’s still too early to say when and where, experts said. As per data from Anarock Capital, the momentum of equity investments from foreign investors into real estate restarted from 2014 onward. Since then, Indian real estate sector has received $16.6 billion worth of foreign investments. "In this period, investors’ focus has remained largely on big-ticket income-yielding commercial and retail assets &ndash 72 percent in aggregate. This period also saw the entry of significant Canadian pension funds into Indian real estate, either directly or through platform deals with Indian counterpart. While Singapore-based funds led by GIC remained very active in this period, US-based funds led by Blackstone continued their love affair with India real estate and invested more than 5.7 bn dollars in the same period," said Shobhit Agarwal, MD & CEO &ndash ANAROCK Capital. In 2020, funding focus is expected to remain on Grade A income-generating assets along with last-mile funding opportunities in residential projects. "A few Japanese investors/corporates have been evaluating Indian real estate investment options and we can expect them to get into gear in 2020, along with pension and insurance funds. These funds are inherently patient and come with longer investment tenures. As such, they will play a significant role in providing the long-term solutions Indian developers now need. In fact, 2020 promises to be an action-packed year for Indian real estate funding," he said. MMR and NCR were the top favourites for private equity investors in 2019 together, the two regions received close to $2.7 billion worth of PE funds, comprising a whopping 53 percent overall share. Previously in 2018, rather than NCR, it was Hyderabad that was on top in the radar of private equity investors, Anarock Capital said. The commercial segment continued to lure investors in 2019, with total PE inflows crossing $3.3 billion - though reducing by 13% on yearly basis. Meanwhile, both the retail and residential segments saw an uptick in investments in 2019 against the preceding year, it said. The residential sector received PE inflows of 395 mn dollars in 2019 against 265 mn dollars in 2018, the report said. The high potential of logistics and warehousing notwithstanding, this segment attracted about 200 mn dollars PE funds - a of nearly 50 percent against the previous year. Mixed-use developments saw inflows of approximately 155 mn dollars in 2019, as against 310 mn dollars in 2018, it said. "Total PE inflows in Indian real estate remained more or less the same in 2019 against 2018. However, NCR once again emerged as a major hotbed for private equity activity in 2019. Besides office real estate, the retail sector helped NCR gain traction from both foreign and domestic funds," Agarwal added. Source: Moneycontrol.com Chandigarh

Residential realty sees early signs of green shoots

2/13/2020 6:39:00 PM

The country’s residential real estate market is beginning to look up. India's top 35 property markets, including tier I and II, recorded 3% year-on-year and 5% sequential growth in sales during the quarter ended December, data from Liases Foras Real Estate Ratings & Research shows. Of these, 27 cities saw an upward momentum in sales in the quarter ended December, while new launchesan indicator of confidence among builders to start marketing their projects—climbed 38% from a year ago. The dominance of affordable housing continued on both the counts, driven by government incentives which have not only made housing projects attractive but also bolstered the confidence of end users. Apartments priced below Rs 50 lakh accounted for over 58% of the sales in the December quarter. This cost segment saw 66% new launches, according to Liases Foras Real Estate Ratings & Research. “The year 2018-19 had seen marginal decline in both sales and launches. The downward slide has now been arrested and the trend is reflecting an upward movement,” said Pankaj Kapoor, managing director, Liases Foras Real Estate Ratings & Research. “Time correction has improved home buyers’ affordability, and with inquiry levels going up, builders have garnered confidence to launch more projects.” Apart from government incentives, home loan rates have also been on a decline. Over the last one year, the Reserve Bank of India has reduced the repo rate by 135 basis points. In December, State Bank of India (SBI), the country’s largest lender, reduced its external benchmark rate by 25 basis points. The revised effective benchmark lending rate of 7.8% came into effect from January 1, 2020 and new home buyers have been getting loans at an interest rate starting from 7.9%. "Gradually, the sentiment among the industry stakeholdersbe it developers with new launches, fence sitters turning into the actual home buyers, or investors returning back to the sectorshows signs of resuming confidence with cascading effect of a slew of positive economic measures by the government," said Niranjan Hiranandani, national president of National Real Estate Development Council (NAREDCO). Project launches are increasing as response from homebuyers has been improving. For instance, property developer Sunteck Realty sold 125 apartments worth over Rs 200 crore at its project in Mumbai’s Goregaon suburb in December. The company recently launched another project in Naigaon near Mumbai. On Monday, Piramal Realty also announced it is selling over 300 apartments, with sales value of Rs 200 crore, at its Thane project that offers apartments starting at Rs 57 lakh. The highest supply in the affordable housing segment during the quarter was in Pune, followed by MMR and NCR, where the segment accounted for 75%, 49% and 82% of the total new supply, respectively. During the quarter, unsold stock in 35 cities increased by 4% from a year ago to 1,315,000 units. This increase can be attributed to the high number of new launches this year. Weighted average price across these markets showed a marginal of 1%, both on sequential and annual basis. Prices declined marginally in 16 cities and increased in seven cities, data shows. The government recently extended by a year the tax holiday for new affordable housing projects, a move which is expected to increase supply in this segment. Source: The Economic Times Chandigarh

It’s official: Chandigarh’s Manimajra is now Sector 13

2/10/2020 6:29:00 PM

City Beautiful now has Sector 13. The UT administration has notified the renaming of Manimajra as Sector 13, along with renaming of certain other colonies and villages as sectors. As per the notification, apart from Manimajra, Sarangpur Institutional Area will be renamed Sector 12 (West); Dhanas, including Milk Colony and Rehabilitation Colony, as Sector 14 (West); Maloya and Dadumajra as Sector 39 (West); and pocket number 8 below Vikas Marg as Sector 56 (West). Industrial Area Phase 1 and 2 will be designated as Business and Industrial Park 1 and 2, respectively. Under the Chandigarh Master Plan-2031, the reference area for planning constitutes 144 square kilometres, including 60 sectors in the sectoral grid as well as the peripheral areas around them. French architect Le Corbusier’s Phase 1 plan was divided into a grid of 30 sectors with Capitol Complex as well as Civic Centre as its focal points, while the Phase 2 layout included Sectors 31 to 47. Phase 1 comprised 30 low-density sectors spread over 9,000 acres (Sectors 1 to 30) for 1.5 lakh people, whereas Phase 2 consisted of 17 considerably high-density areas (Sectors 31 to 47) spread over an area of 6,000 acres for a population of 3.5 lakh. Thereafter, nine more sectors were added (Sectors 48 to 56). WHY SECTOR 13? The residents of Modern Housing Complex (MHC), Shivalik Enclave and Uppal Marble Arc had for long been demanding these areas to be included in the sectoral grid of the city. Col Gursewak Singh (retd), president, Resident Welfare Association, Modern Housing Complex, said, “In February 2019, we again wrote to the UT administrator and adviser to grant the status of Sector 13 to these areas. Administration was not sure about using number 13, so they had offered to rename the area as Sector M.” This, however, was rejected by residents. “Residents don’t consider number 13 inauspicious. In fact, it will be a fitting tribute to Guru Nanak on his 550th birth anniversary, as he shunned all forms of superstition and propagated true meaning and value of ‘tera’ (13) in his teachings,” Singh said. ADMN HAD SOUGHT SUGGESTIONS The administration had issued a public notice seeking objections and suggestions from residents regarding renaming several areas not covered under the sectoral grid. Residents were allowed to submit their suggestions/objections by December 16 to the UT chief architect office at Sector 9. In response, the UT administration had received around 60 objections and suggestions. Source: Hindustan Times Chandigarh

Delhi Chandigarh lead among UTs in national e-governance service delivery assessment

2/9/2020 6:26:00 PM

Delhi, Chandigarh, Daman and Diu administration have emerged leaders among Union territories across all parameters for national e-governance service delivery assessment (NeSDA), according to an official report released here on Saturday. The assessment is done broadly for four categories – Union territories, remaining states, union territories and central government ministries websites. Haryana and Rajasthan are the leading states in the assessment under the "remaining states" category comprising 18 states. Among the north-east and hill states, Nagaland has got the first rank with its service portal having an average compliance of more than 45 per cent to the criteria assessed across all seven parameters, including ease of use, end service delivery and content availability among others, according to the report released by Minister of State for Personnel Jitendra Singh at the 23rd National e-governance Conference here. The conference, which is being jointly organised by the Department of Administrative Reforms and Public Grievances (DARPG), Government of Maharashtra and the Ministry of Electronics and Information Technology, was attended by various senior functionaries of the state and central government, including V Srinivas, Additional Secretary, DARPG. The website of the Central Board of Direct Taxes (CBDT) under the finance ministry is the winner under the assessment of central ministry service portals category. Whereas, the ministry portals of health & family welfare, and human resource have emerged leaders across "all parameters", the report said. The NeSDA framework primarily assessed all the service portals (state/UT and central ministry service portals) on seven key parameters, namely accessibility, content availability, ease of use, information security & privacy, end service delivery, integrated service delivery and status & request tracking. The framework covers six sectors, namely finance, labour & employment, education, local government & utilities, social welfare (including agriculture & health) and environment (including fire) sectors. Giving details of the assessment of the Union territories, it said data related to Andaman and Nicobar Islands, Lakshadweep, Chandigarh, Delhi, Dadra and Nagar Haveli and Pondicherry were reviewed. Of these, the portal of Andaman and Nicobar Islands has been adjudged first on the four parameters, viz., accessibility, content availability, ease of use, and information security and privacy, the report said. "Delhi, Chandigarh and Daman & Diu are the leading UTs with their service portals having average compliance of more than 10 per cent to the criteria assessed across all seven parameters," it said. Delhi and Chandigarh are the leading UTs with their service portals having average compliance of more than the prescribed criteria under integrated service delivery parameter. Under the "remaining states" category, Haryana and Rajasthan are the leading states with their service portals having average compliance of more than 60 per cent to the criteria assessed across all seven parameters. Haryana has got first position and Rajasthan secured second rank in the category. The remaining states category included West Bengal, Uttar Pradesh, Madhya Pradesh, Gujarat, Chhattisgarh, Telangana, Punjab, Bihar, Odisha, Maharashtra, Karnataka, Jharkhand, Kerala, Goa, Andhra Pradesh and Tamil Nadu. In the north east and hill states category, Himachal Pradesh, Tripura and Assam are leading states with their portals with more than 60 per cent compliance to the criteria assessed across all the assessment parameters, including accessibility, content availability and ease of use. "Nagaland is the leading state with its service portal having average compliance of more than 45 per cent to the criteria assessed across all seven parameters," it said. The north east and hill states included Himachal Pradesh, Tripura, Assam, Nagaland, Arunachal Pradesh, Sikkim, Meghalaya, Mizoram and Manipur. The web portals of CBDT, Central Board of Indirect Taxes and Customs (CBIC), Ministry of Labour and Employment, Ministry of Human Resource Development, Ministry of Social Justice and Empowerment, Ministry of Health and Family Welfare, Ministry of Agriculture, Ministry of Rural Development and Ministry of Environment, Forest and Climate Change, were also assessed in their effectiveness in e-governance service delivery. "Ministry portals of health & family welfare and human resource development are the leading portals with compliance of more than 60 per cent to the criteria assessed across all the assessment parameters," it said. The CBDT portal has been ranked first under the assessment of central ministry service portals, according to the report. Source: The Week Chandigarh

MSME policy a big draw for investors in Mohali

2/7/2020 6:26:00 PM

The micro, small and medium enterprises (MSMEs) scheme for the industry is proving to be a big draw for investors in Mohali. In two years since the launch of the revised industrial policy, as many as 134 units have registered themselves for starting business here, which is expected to bring Rs 300 crore in investments. Major sectors of interest are information technology (IT); agro and food processing; automobiles and auto parts; textiles; engineering; pharmaceuticals; electronics; sports; hand tools; and leather industry; which will be set up in various industrial areas of Mohali. Harjinder Singh Pannu, general manager, district industries centre (DIC), Mohali, said, “We have given regulatory clearance to most of the units which are in the process being set up. With this, around 50,000 jobs will be created.” “Moreover, to boost MSMEs in the state, the Punjab government has already launched Punjab MSME Awards,” he said. Infra, norms conducive to growth One of the IT investors, who did not wish to be named, said, “Mohali has great potential for MSMEs due to the international airport and proximity of other states. I have already got an approval and the unit will be set up within six months.” Sibin C, Director Industries and Commerce, Punjab, said, “Mohali is becoming a hub for MSMEs. We are improving the infrastructure in focal points and trying to provide all the facilities to entrepreneurs. Also, under the new Right to Business Act, MSMEs do not need any permission to start initially for three-and-a-half years.” Under the Industrial and Business Development Policy 2017 of Punjab government, besides having competitive power tariff of ₹5 per unit, MSMEs also get 100% reimbursement of GST incentive for seven years; up to 100% FCI on inter and intra state sales; 100% exemption in electricity duty for seven years; 100% exemption/reimbursement of stamp duty and additional incentives, with a focus on diversification. Need for more The industry in Mohali began in 1978 with just 10 units, but today, it has about 10,000 units, including the manufacturing and IT/ service industry. These industrial units fall under three heads – Phase 1 to 4 fall under Greater Mohali Area Development Authority (GMADA), Phase 7, 8-A and 8-B under Punjab Small Industries Export Corporation Limited (PSIEC) and Phase 9 industrial area falls under Punjab Infotech. Two decades have passed since the industrial focal points were created, but basic amenities are still missing in the area. In the absence proper eating joints and recreational spots in industrial area of Phases 7, 8, 8-A and B, which is being projected as an IT hub, most professionals have no choice but to depend on roadside eateries. Non-functional streetlights, inadequate parking spaces, choked drains, waterlogging, and heaps of garbage due to lack of a regular clearing system in place, are the bane of the industrial area. Yogesh Sagar, president of Mohali Industries Association, said, “It is good that more MSMEs are coming up, but at the same time, the state government should improve the basic infrastructure, for which a special purpose vehicle was notified but rejected by the MC. I urge the authorities to sort out the matter for the welfare of industrial areas.” Source: Hindustan Times Chandigarh

Affordable housing gets further support as Budget extends tax holiday

2/4/2020 6:17:00 PM

Affordable housing has received a further boost as supply of these projects is expected to increase further as the government has proposed to extend the tax holiday for new such projects by one more year. Realty developers are expected to launch more affordable housing projectsthe segment that has been leading demand pattern since last 18 monthsto claim 100% tax deduction on profits from such projects. Last year, the government had extended the timeline for approval of such projects on or before 31 March 2020. An extension in the dateline is likely to ensure continued interest from realty developers’ side to launch and build more affordable housing projects helping the government achieve the “Housing for All” objective. “The extension of the tax holiday for affordable housing projects will provide more room for additional launches of these projects. However, the demand could have been better if the buyers’ sentiment had also been taken care of,” said Satish Magar, President, CREDAI National. However, he also added that the sector’s impending demand for rollover of loans could have helped the realty industry given the ongoing liquidity concerns. The government has also extended the deadline for the first time homebuyers’ to avail additional Rs 150,000 interest deduction on home loans by a year till 31 March 2021. Currently, loan interest payment of up to Rs 2 lakh is allowed as tax deduction for all segments of housing, while housing loan principle repayment up to Rs 1.5 lakh exempted. The move is expected to prompt demand from first time homebuyers. “Considering that majority of home buyers fall in the lower and mid-income segments, this tax benefit will boost demand substantially. This will significantly benefit first time home buyers who enjoy the benefits of interest subvention under the CLSS (Credit Linked Subsidy Scheme) and the extended tax benefits,” said Ramesh Nair CEO & Country Head, JLL India. Last year, the government had allowed this additional tax deduction for interest paid on housing loans taken between April 1, 2019 and March 31, 2020. This is applicable for houses priced below Rs 45 lakh in tier II, III and peripheral parts of metro cities. The Finance Minister has also proposed increasing the limit of difference between circle rate and transaction value for taxing income from capital gains to 10% from current 5%. Following this, if the transaction value is less than circle rate by over 10%, the difference will be counted as income for buyer and seller. “The direction of the Budget is excellent. However, on one hand the buyers want prices to come down, but the government is limiting the reduction in prices,” said Niranjan Hiranandani, National President, NAREDCO while adding that rental housing should have been given some attention by the government to support Housing for All. Source: The Economic Times Chandigarh

Budget 2020: FM proposes 5 new Smart Cities

2/3/2020 6:09:00 PM

In her Budget speech, Finance Minister Nirmala Sitharaman has proposed the setting up five new Smart Cities. The government in 2020 has allocated Rs 6,450 crore for the Smart Cities Mission for the year 2020-2021. There has been no change in allocation from what was budgeted last year. “There is a case for maximising the benefits of three separately developing economic activities: (1) the upcoming economic corridors (2) revitalisation of manufacturing activities and (3) Technology and the demands of aspirational classes. We have to benefit from their convergence. Hence, it is proposed to develop five new smart cities in collaboration with States in PPP mode. Such sites would be chosen that offer the best choices in terms of aforementioned principles,” the finance minister said in her Budget speech. Experts have welcomed the announcement. “Focus has been retained on urban development by committing to five additional smart cities,” said Anurag Mathur, chief executive officer, Savills India. In 2019, a sum of Rs 6,450 crore was allocated for the Smart Cities Mission for 2019-20 against Rs 6,169 crore in 2018-19. The government in 2018 had proposed over 50 percent increase in the allocation for smart cities from Rs 4,000 crore for 2017-2018 to Rs 6,169 crore for 2018-2019. Under the SCM, 100 Smart Cities have been ed in four rounds based on an all India competition. All 100 cities have incorporated Special Purpose Vehicles (SPVs). Since the launch of the mission, 5,151 projects, worth more than Rs 2 lakh crore, have been identified for implementation which are at various stages of implementation. As per statistics made available by the ministry of housing and urban affairs, the value of tendered smart city projects is over Rs 1,62,000 crore, the value of work orders issued is around Rs 1,20,000 crore and the value of all completed projects is more than Rs 25,000 crore. The Smart Cities Mission was launched on June 25, 2015. The first list of 20 cities announced on January 28, 2016. A fast-track list of 13 cities was announced on four months later. The second list of 27 cities was announced on September 20 2016. The third list of 30 cities announced on June 23, 2017 and the final list was announced in January 2018. Under the mission, the Centre allocates Rs 500 crore to each of the cities for implementing projects proposed by it. This amount is matched with a grant of the same amount by the respective state. Source: Moneycontrol.com Chandigarh

Budget 2020: Fund allocation for housing sector up 18.39%

2/2/2020 6:06:00 PM

Budget 2020 saw the Housing and Urban Affairs Ministry outlay touch Rs 50,039.90 crore, a nearly 18.39 percent increase from the revised estimate of Rs 42,266.72 crore for 2019-2020. In 2020, the outlay for the flagship scheme of the government – the Pradhan Mantri Awas Yojana – has been granted Rs 27,500 crore as against the revised estimates of Rs 25,328 crore in 2019-2020, nearly an 8.5 percent increase. The government in 2020 has allocated Rs 13,750 crore for the Smart Cities Mission and AMRUT for 2020-2021 against Rs 9,842 crore in 2019-2020, which is about 40 percent more than the amount set aside last year. Under the SCM, 100 Smart Cities have been selected in four rounds based on an all India competition. All 100 cities have incorporated Special Purpose Vehicles (SPVs). Since the launch of the mission, a total of 5,151 projects have been identified for implementation by the cities worth more than Rs 2 lakh crore which are in various stages of implementation in the 100 cities. The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme that is targeted at upgrading urban infrastructure across 500 towns and cities. The Metro has received an allocation of Rs 17,482 crore, a .73 percent decrease from the revised estimates of Rs 17,612 crore last year. In 2019, the Delhi Metro Rail Corporation (DMRC) had been given Rs 414.70 crore grant as against Rs 50 crore in 2018-19. This was almost an eight-fold increase. The Housing for All by 2022 initiative was launched by the Modi government within five months of assuming office. It’s all about ensuring a home for every Indian by 2022. To boost affordable housing and achieve the vision of Housing for all by 2022, the government (Central and State) have undertaken several initiatives, such as Pradhan Mantri Awas Yojana (PMAY) that aims to build 1 crore homes in urban and rural India by 2022. Affordable housing has also been accorded infrastructure status, ensuring that developers in this segment have access to cheaper loans. The Credit Linked Subsidy Scheme for the Middle Income Group (CLSS for MIG) was announced by Prime Minister Narendra Modi on December 31, 2016 and was earlier extended twice till March 2019. The government in the last week of December 2018 extended the interest subsidy scheme till March 2020 for first time urban home buyers who have annual income between Rs 6 lakh and Rs 18 lakh. The carpet area of a housing unit was initially revised to up to 120 sq m and up to 150 sq m for MIG I and MIG II respectively in November, 2017 and further enhanced to up to 160 sq m and up to 200 sq m for MIG I and MIG II, respectively in June, 2018. As per data shared by ministry of urban affairs and housing, out of a validated demand of 1.12 Cr houses in urban areas, 1 crore houses have already been sanctioned under PMAY (Urban). Further, a total of 57 lakh houses are in various stages of construction of which, nearly 30 lakh houses have been completed. The houses sanctioned so far under the Mission involve an investment of about Rs. 5.70 lakh crore with Central assistance of Rs. 1.6 lakh crore. The Central Government is contributing Rs.1.00 lakh to Rs.2.67 lakh for each house under different verticals of the scheme. As on date, nearly Rs. 60,000 crore of Central Assistance has already been released. Presently, works of about Rs. 3 lakh crore is ongoing and by the time Mission accomplishes its target of 1.12 crore houses, the entire activity will trigger an investment of more than Rs. 7 lakh crore. In order to supplement the additional requirement of providing the Central Assistance, over and above the budgetary support, Government had made a provision for raising Extra Budgetary Resources (EBR) to the tune of Rs 60,000 crore of which, Rs 38,000 crore have already been raised and disbursed. The government has also created an Affordable Housing Fund (AHF) worth Rs 25,000 crore has been set up to aid stuck housing projects. The Credit Linked Subsidy for the Middle Income Group (MIG) was introduced for the first time in the housing sector with effect from 1 January 2017. The MIG beneficiaries with annual income upto Rs. 18 Lakh are eligible for claiming interest subsidy on their housing loans. For the MIG, the Government has increased the area of house up to 200 sq m. The government has developed a web based real time monitoring system called CLSS Awas Portal (CLAP) to ensure peoples’ participation and transparency leading to efficient delivery and minimising grievances. Land is the biggest challenge for implementing this scheme. Its current shortage in major city-centric areas prevents the development of affordable housing in areas where it is most direly needed. The cost of land currently accounts for as much as 30-50 percent of the cost of a project within city limits. However, RBI regulations do not allow banks to fund land purchase. Source: Money Control Chandigarh

IIM-Amritsar to set up centre near Chandigarh

1/31/2020 6:03:00 PM

The Indian Institute of Management-Amritsar (IIM-Amritsar) is planning to establish a management development centre in the vicinity of Chandigarh to offer self-financing MBA courses. The premier management institute started in Amritsar in 2015 is looking at Chandigarh, Mohali and adjoining areas for the off-campus centre proposed to be set up over three to five acres of land. It plans to offer master of business administration (MBA), short-term executive education courses and part-time evening programmes in specialised fields such as data mining and data analytics for professionals. “As Chandigarh and Mohali have information technology (IT) parks and lots of other industries in various sectors, we are examining the viability of establishing the centre to cater to their needs as well as provide an opportunity to professionals in and around Punjab who want to upgrade their skill in management education. These will be self-financing courses,” IIM-Amritsar director Prof Nagarajan Ramamoorthy said. He said the institute was looking at a few sites for the project but no final decision had been taken. “A lot will depend on the financial feasibility of the location. We will finalise it in a month or so,” he said. MOHALI LIKELY LOCATION The management institute is already in touch with the state government for allotment of land for the management development centre in the institutional area. Additional chief secretary, investment promotion, industries and commerce, Vini Mahajan said the IIM had recently written to the department for land. “There are two-three plots of land available in Mohali which is fast emerging as a major educational hub of our region,” she said. Mohali is already home to the Indian Institute of Science Education and Research (IISER), Indian School of Business (ISB) and the National Institute of Pharmaceutical Education and Research (NIPER), with Amity Group and Ashoka University also coming up with campuses in the city. BIDS INVITED FOR MAIN CAMPUS The IIM, which is currently operating out from Government Polytechnic College near the Guru Nanak Dev University campus, is expected to move to its permanent campus at Manawala during the academic year 2022-23. Ramamoorthy said the bids were invited by the Central Public Works Department (CPWD) on January 21 for construction of the permanent campus on turnkey basis in the first phase at a cost of approximately ₹320 crore. “With a completion period of 22 months, the campus should be ready by January 2022,” he said. Starting with a batch of 44 students, the institute has grown to 254 students. Source: Hindustan Times Chandigarh

Railways identifies six routes for high-speed, semi high-speed corridors

1/29/2020 5:58:00 PM

The Railways has identified six sections for high speed and semi-high speed corridors, Railway Board Chairman VK Yadav said on Wednesday, adding a detailed project report on these sections will be ready within a year. The new corridors will join the under-construction Mumbai-Ahmedabad high-speed route. Trains can run at a maximum speed of over 300 km/hr on a high-speed corridor, while on a semi-high speed corridor, the maximum speed can go beyond 160km/hr. In a briefing ahead of the Union Budget, Yadav said the six corridors include the Delhi-Noida-Agra-Lucknow-Varanasi (865 km)and the Delhi-Jaipur-Udaipur-Ahmedabad (886km) sections. Other corridors are: Mumbai-Nashik-Nagpur (753 km), Mumbai-Pune-Hyderabad (711 km), Chennai-Bangalore-Mysore (435 km) and the Delhi-Chandigarh-Ludhiana-Jalandhar-Amritsar (459 km) sections. "We have identified these six corridors and their detailed project reports (DPR) will be prepared within the year. The DPR will study the feasibility of these routes which includes land availability, alignment and a study of the traffic potential there. After these things are studied, we will decide if they will be high-speed or semi-high speed corridors," said Yadav. India's bullet train project between Mumbai and Ahmedabad, the country's first high-speed corridor, will be completed by December 2023, he said. Yadav also said that 90 per cent land acquisition work for the bullet train project will be completed in the next six months. "We need 1,380 hectare of land for the project. 1,005 hectare was private land of which we have acquired 471 hectares. 149 hectare was state government land of which we have got 119 hectare. The remaining is 128 hectare which is railway land which has been given to the high-speed corporation," he said. Yadav also said that five bids for civil engineering work which includes track work and tunnels will be opened in March and finalised within six to eight months thence. Source: Business Standard Chandigarh

Chandigarh’s second government medical college in the works

1/29/2020 5:54:00 PM

Even though a detailed plan for the new government medical college is yet to be prepared, UT administrator VP Singh Badnore will be presented the proposal of the project on Wednesday. A senior UT official on the condition of anonymity said, “On January 29, UT administrator VP Singh Badnore will be presented the proposal for his in-principle approval. After getting his nod, the administration will fill an online performa and send it to the central government for approval. The detailed plans for the project will also be prepared thereafter.” UT adviser Manoj Kumar Parida had announced a new medical college for the city in his Republic Day speech at parade ground in Sector 17 on Sunday. NEW COLLEGE HAS TWO BLOCKS The college will have two branches—one at the existing Government Multi-Specialty Hospital in Sector 16 (GMSH-16) and another in Sarangpur. This is the second medical college to come up in the city after the Government Medical College and Hospital, Sector 32. The medical infrastructure of GMSH-16 will be utilised to run the college, and other facilities like the hostels, administrative wing, and additional classrooms will be housed in a facility to come up in Sarangpur. “The GMSH-16 is already equipped with medical and health facilities required for a medical college. These will be fully utilised for the running of the medical college. Additional infrastructure in the existing compound can also be created on spare land. Rest of the infrastructure required for running the college like office spaces will come up in Sarangpur,” said the UT official. “The upgraded GMSH-16 will have 50 seats. After the projects starts, there is a plan to seek additional 50 seats. The existing medical college, GMCH-32, has 150 seats,” the official added. GMSH-16, earlier known as General Hospital, is the oldest hospital in the city. CENTRAL APPROVAL EXPECTED SOON The administration expects Centre’s approval relatively quickly. “Though we cannot set a timeline on Centre’s approval, as the instruction to examine the need for a need medical college or upgrading of the existing hospital to a medical college in the city came from the Centre, we expect the approval to come soon,” said the official. While waiting for requisite approvals, the administration is also working on finalising the site. “The exact site for the new campus in Sarangpur is yet to be demarcated, but the health department has requested around 15 acre land for the purpose. The land in Sarangpur will be allotted by the administration. With land free of cost from the administration, cost of the project will be limited to constructions costs,” said the official. Source: Hindustan Times Chandigarh

Realty sector in consolidation mode even as it awaits stable recovery

1/27/2020 5:51:00 PM

About five years ago, the managing director of a leading property firm in south India had said at a realty sector convention outside the country that future meetings of developers would take place in boardrooms, and not in ballrooms. He made the remarks after sensing the government’s mood and view about the realty sector at that point in time. His prediction of a lesser number of players in the sector appears to have come true. The real estate industry in the country is seeing a consolidation now. Three major reforms &ndash demonetisation, GST and Real Estate (Regulation and Development) Act, 2016 (RERA) &ndash have had a significant impact on the realty sector, leading to the exit of numerous small players. GST and the stringent regulatory regime RERA marked a paradigm shift for real estate developers. With transparency and accountability becoming new watch-words, there are no short cuts anymore. The realty sector has been forced to follow rules and norms. The bigger and smarter players managed to tweak their business to adjust to new rules, while smaller and unorganised players struggled to formalise their business, and faced huge challenges. M Murali, Chairman & Managing Director, Shriram Properties, agrees that the realty sector has been going through a consolidation mode. “We estimate not more than 50-60 real estate developers in the country going forward. These will take care of 95 per cent of the market. There will be another 1,000 players serving the remaining 5 per cent of the market. This is what we see now. Every city may have 10-15 big players serving most of the demand,” he added. Ramesh Nair, CEO and Country Head, JLL India, also points out that the number of developers operating in the Indian market had been reduced by nearly 50 per cent in the past four to five years. Reputed developers with healthy balance sheets sailed through 2019, while the smaller ones faced extreme financial constraints. This has driven non-serious players out of the market while other smaller players joined hands with larger developers, he added. However, Niranjan Hiranandani, National President, National Real Estate Development Council (NAREDCO), felt that it would be difficult to term the ‘churn’ of developers to contractors and vice versa as ‘consolidation’. “Traditionally, we have seen contractors try and scale up their work and to become developers. Similarly, developers with spare capacity tend to take up contracting work for others. So, those who are over-leveraged would, in any case, have to merge with or be taken over by fiscally-sound companies RERA has probably speeded up the process,” he stated. In addition to key major reforms, the liquidity crunch caused by the IL&FS crisis also adversely affected most of the developers, resulting in the rationalisation of business operations. On the other hand, housing demand was impacted by the prolonged economic slowdown that led to muted consumer sentiments with slower growth in residential sales. While regulations have been a major factor in triggering consolidation in the realty space, changing buyer needs have also played a vital role. Hence, realty players who couldn’t keep ‘in sync’ with buyer requirements and couldn’t adapt to the new customer requirements had to leave the market, pointed out Hiranandani. Homebuyers have become more informed and cautious while making their home purchase decisions. They now prefer buying in projects by developers with established track record in terms of transparency, quality and timely execution, said Nair. Amid all this, the realty sector appears to be seeing a revival in demand. Though it is not even, many markets have seen a spike in housing sales, and unsold inventory is getting reduced. In 2019, housing sales witnessed a 6 per cent growth year-on-year. New housing project launches grew 25 per cent in the top eight cities in the mid- and low-ticket size category during the December 2019 quarter. Even as the industry awaits some sops in the upcoming Budget to drive housing demand, the industry believes that the new mantra is ‘perform or perish’. RERA lays down the framework under which one has to perform. Those who adapt to the new system will remain in business, it is that simple. Source: The Hindu Business Line Chandigarh

6 key trends that will shape real estate in India in 2020

1/24/2020 5:48:00 PM

The New Year may be more than promising for developers and home buyers where the growth is led by the positive change in the business ecosystem. The real estate industry is in the cusp of transformation and the past decade has played a crucial role in shaping the sector. The realty sector and its ancillary industries witnessed a series of structural reforms with advent of RERA, policy change, industry consolidation, fast proptech growth, and so on, which has helped increase transparency and trust between builders and buyers. Furthermore, the clarion of ‘Housing for All’ has brought the mid-income housing and affordable housing sector to the foreground. The real estate industry has certainly evolved from brick and mortar to a service-driven product offering and the growth of the sector will be largely driven by ever-evolving customer requirements, technological transformations, and a favorable policy environment allowing it to flourish in the coming years. As reported by the Indian Brand Equity Foundation, the real estate sector in India is expected to reach a market size of US$1 trillion by 2030 and contribute 13 per cent of the country’s GDP by 2025. 2020 will certainly be a positive year for the real estate market. Here are a few major trends that will lead to the growth of the sector. 1. Both residential and commercial sector to grow 2020 has a great potential for both residential and commercial real estate business. In the last few years, the office space gained traction in most cities with IT/ITeS players contributing to majority of the leases. Also, the warehousing sector will gain traction. Rapid urbanization and white-collar migration will ensure strong growth for the commercial sector, which in turn will translate into higher residential demand. With concepts like ‘Housing for All’, affordable housing will continue to be the key growth driver. 2. Sub-urban cities to get more traction Markets such as Pune, Chennai, Hyderabad and Bangalore have seen a steady rise in demand for homes and we are optimistic that this trend is set to continue in FY21 as well. The affordable housing segment will create demand in secondary markets like Goa, Coimbatore and the likes. 3. Co-living and co-working spaces will continue to rise Over the past few years, there has been a significant change in the buying behaviours of customers, especially the millennials. They are more inclined towards co-living spaces that is more dynamic as compared to the usual rented space. On the other hand, the rise in gig economy led to high demand in co-working spaces in major cities like Bangalore, Hyderabad and Pune markets. This trend is set to grow in 2020. As per Knight Frank, ‘In India, the co-living concept is gaining widespread acceptance and though the concept is novel, it’s here to stay. This trend is giving impetus to an organised rental market in cities such as Bengaluru, NCR and Pune in the same way as co-working spaces did for shared office space.’ 4. Technology reshaping the sector Smart tech and innovation in the sector is no longer a distant future. In terms of construction, the key players will adapt to the latest technology – data gathering, artificial intelligence and machine learning which will play a key role in redefining the realty sector in India. With improving the quality of construction, the technology will also help boost timely completion of the projects. Smart homes will continue to be the choice of customers. The real estate market will tap this space with ambitious projects and according to industry estimates, the Indian smart home market is currently valued at about $893 million and is expected to grow by leaps and bounds in the next five years. 5. Sustainable and green living will be widely accepted Both developers and home buyers have been supporting green technology. This will continue to grow with developers focusing on technological advancements in procuring raw materials that are eco-friendly and sustainable designs that are environment sensitive. The customers as well are opting for smart homes which make way for sustainable living. 6. Luxury housing will be redefined The traditional concept of luxury housing will witness a major shift effected by the demands of the new age home buyers. The luxury housing will evolve to accommodate a holistic and elevated living experience that the developers will have to incorporate. 2019 has been a year of reforms in the industry with an increased focus on transparency and customer centricity by both, policy makers and developers. The regulatory framework has helped regain the trust in the industry. Also, the systematic implementation of the government reforms will definitely help in rekindling consumer sentiment, which will eventually push the growth of residential segment in the coming quarters. We expect the New Year to be more than promising for developers and home buyers where the growth is led by the positive change in the business ecosystem. Source: Financial Express Chandigarh

Delhi-NCR, Mumbai, Pune biggest markets for student housing in India: Report

1/22/2020 5:39:00 PM

Delhi-NCR, Mumbai and Pune are the three biggest markets for student housing in the country, and these cities require an additional 4.75 lakh beds from organised co-living operators to meet the current demand, according to a report. Cushman & Wakefield (C&W), in association with the Student Accommodation Providers Forum of India (SAPFI), on Wednesday released a report “Exploring the Student Housing Universe in India City Insights”. The report has identified education clusters in the cities of Bengaluru, Delhi-NCR and Pune, the three biggest markets for professionally managed student accommodation (PMSA) operators. The report estimated 9.08 million migrant students in India, amounting to over 24 per cent of 37 million total student enrolments in the country's higher educational institutions (HEIs) for the year 2018-19. "Delhi-NCR with 7.45 lakh students enrolled in HEIs as of 2018-19 has 50 per cent outstation students. There is demand for additional 2.5 lakh beds from PMSA operators," it said. Bengaluru has the highest number of HEIs in India with student enrolments estimated at 5.38 lakh. With 60 per cent outstation students, additional demand currently stands at around 92,000 beds, the report said. In Pune, the report said student enrolment stood at nearly 4 lakh. With 60 per cent outstation students, additional capacity requirements in PMSA segment is 1.33 lakh beds. Anshul Jain, Country Head and Managing Director-India, Cushman and Wakefield, said: “The significant mass of migrant students in the higher education sector today demand and expect quality student accommodation facilities providing food, security and a range of amenities. While globally, PMSA has found its footing as part of the mainstream real estate sector, in India it is still in a nascent stage." With policy support and private investments, Jain said the student housing segment could be the next growth driver in the overall realty sector. Kaushal Mahan, Convenor, SAPFI, said, “The sector is expected to witness a huge amount of foreign direct investment inflows resulting in job creation and economic development." Mahan said this segment requires encouragement from the government for building a favourable policy ecosystem. Source: The Economic Times Chandigarh

Co-living fetches higher yields than traditional renting: report

1/21/2020 5:32:00 PM

The co-living sector is expected to become an exciting asset class for real estate investors as the demand for beds, particularly with the tech-enabled organised players, outstrips supply. A new report by PropTiger.com, a real estate advisory firm, says that co-living fetches much better yields compared to traditional ways of renting property. "Data available with PropTiger DataLabs show a property for students in Sector 125, Noida, for example, is expected to give approximately 8-9 per cent rental yield whereas, housing for professionals is expected to provide nearly 5-7 per cent rental yield on an average as compared to meagre 2-3 per cent traditionally," the report states. "As an investor, co-living sector serves as a new asset class for the investor to earn better yields," it adds. On an average, across India's top cities, rental yields of co-living spaces can go as high as 8-11 per cent, compared to the average yield of 1-3 per cent of residential properties. Not only this, the sector can potentially prove to be the light at the end of a long dark tunnel for many developers stuck with residential inventory they cannot sell. Developers can repurpose their inventory towards co-living, suggested Dhruv Agarwala, the Co-founder of Elara Technologies. The company owns brands such as PropTiger, Housing.com, and Makaan.com. He estimated that between $350 million and $400 million has been invested in the sector till date. Here are some interesting highlights from the report: There were about 37.4 million students in India pursuing higher education courses in 2018-19 - 15 million of them are migrants. The overall occupancy recorded in hostels within college campuses across India was only 6.5 million in 2019. Therefore, there is a huge demand-supply mismatch which has traditionally been met by the unorganised PG accommodation sector. "In recent years, over two dozen organised players have entered this segment to bridge this gap," the report stated. The bigger companies in the co-living segment today include OYO Life, Zolo Stays, NestAway, CoHo, CoLive, Guesture, and Stanza Living, among others. The organised players mostly offer better facilities and security, besides a community and social layer. By the end of calendar year 2019, organised companies contributed over two lakhs beds. Each bed earned Rs 12,000 a month on average. "Hence, the organised players in this segment are currently generating a combined Rs 2,880 crore ($407 million)," the report stated and predicted that the industry can grow to a Rs 2 trillion market size in the top nine cities by 2023. "As the home ownership preferences have changed since the last decade, supply side also needs to change. Migrant millennials will drive the rental housing segment of residential real estate sector, where co-living is one of the strongest sub-segment," the report stated. The Model Tenancy Act, it added would also impact on the co-living sector, once implemented. Source: Business Today Chandigarh

Real estate developers eyeing co-living for future growth

1/21/2020 2:11:00 AM

Real estate developers in NCR are venturing into the coliving segment as demand for houses continues to be sluggish. Delhi-based ASF Group, which has a residential complex in Gurgaon, has decided to construct a model tower for coliving before it considers converting the existing complex into a coliving building. According to Cushman and Wakefield, India’s coliving market size is expected to double by 2025 to $13.92 billion across top 30 cities. “Coliving is a real possibility and we expect a return of 8-9% there against 2-3% return in rental,” said Anil Saraf, chairman of ASF Group. “While we will construct a model tower keeping in mind the requirement of coliving, we can also convert the existing complex into a coliving facility.” ASF is developing an IT sector specific special economic zone (IT-SEZ) in Gurgaon and the coliving will be part of the campus. Noida-based Gaurs Group, which has delivered more than 50,000 units in 25 years, said time is changing and in the next 4-5 years coliving will be a major market. “In the next few years, rental housing and coliving is going to emerge as a major market, and since we aim to deliver another 50,000 flats in 5-7 years, we have to keep pace with the changing market,” said Manoj Gaur, managing director, Gaurs Group. A Cushman and Wakefield report on coliving has said the market for coliving in India is evolving at a rapid pace, with investments from national and international institutional investors bringing in much-needed seed capital. “Within India, the coliving model is currently catering to mostly millennials comprising single, young working professionals and students. Furthermore, as the business evolves, coliving shall transform the face of the rental housing market in urban centres,” said Anshul Jain, country head for Cushman and Wakefield. Coliving facilities are now becoming prominent in Gurgaon, driven by working professionals. “There is definitely opportunity in coliving, but players need to wait for profit. In future, we might see developers constructing flats just for coliving,” said Amarendra Sahu, cofounder of NestAway Technologies. NestAway is in the home rental market and forayed into the coliving space with its subsidiary Hello World. The cost of a private room in a coliving facility is generally lower than renting apartments in Delhi, Sushant Lok-Gurgaon, and Sector 61 in Noida, thereby making coliving an attractive prospect for millennials. Stanza Living, a shared accommodation company, has been targeting this high-demand space through a tech-enabled, service-led living solution curated for student needs. “There has been a steady increase in migrant student housing needs, as well as spending appetite for achieving better standards of living. Instead of traditional rental setups, parents and students are choosing professional operators that offer high-quality propositions curated to suit the unique lifestyle needs of new-age students,” said Anindya Dutta, cofounder of Stanza Living. The Elara Technologies that owns several housing portals has tied up with Oyo Life and Zolo to promote their co-living spaces on its platform, as it enters the co-living market. Source: The Economic Times Chandigarh

Real estate sector sentiments revive to optimistic zone in Q3: Report

1/17/2020 5:21:00 PM

Real estate sentiments in the country revived in December quarter and turned optimistic after two quarters on the back of several measures taken by the government and the RBI to boost demand, according to a joint report by Knight Frank-FICCI-NAREDCO. After staying in pessimistic zone (below 50 mark) for two consecutive quarters, Knight FrankFICCINAREDCO Real Estate Sentiment Index Q4 2019 survey showed that sentiments of real estate stakeholders in India was in optimistic zone at 53 in October-December quarter of 2019, up from 42 in the previous quarter. The future sentiment score, that had gone in the red for the first time in the preceding July-September 2019 quarter at 49, also bounced back to 59 in Q4 2019. A score over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 shows 'pessimism'. Though the sentiment is in optimistic zone now, the qualitative outlook of stakeholders remains cautious, with a majority of them opining that the sector will remain at the same levels as previously even while it will not go down further in the next six months, it added. "The real estate sector sentiments have shown improvement in its current as well as expected outlook for the market in Q4 2019. This optimism is significant in the wake of the continued downslide in India's overall economic performance," Knight Frank India Chairman and Managing Director Shishir Baijal said. "Even while the sector is working towards finding its balance, especially in the residential segment, steps by the government have kept the sector stable in 2019. However, we expect the market to remain cautious and sensitive to even the smallest change as large-scale demand is yet to pick pace," he added. The sector's optimism is far pronounced for the office sector, which has grown from strength to strength in the past few years, reaching historic highs in 2019. "In the next 8-10 quarters, if the office, other commercial including retail, warehouse and logistics and the residential sector continue to show positive growth, despite the pace of growth of Indian economy, we can expect the real estate sector to show upward curve of revival. The sector, therefore, needs to start making adequate safeguards to ensure that the demand for all segments stays positive," Baijal said. The real estate sector has been under pressure for over three years now. Weak demand, inventory overhang, developer defaults coupled with worsening of NBFC crisis has dried up funding for the sector, which in turn has increased borrowing cost and impacted finances for the already strained sector, the consultant said. Source: Business Standard Chandigarh

Real estate sector sentiments revive to optimistic zone in Dec quarter: Report

1/15/2020 5:16:00 PM

Real estate sentiments in the country revived in December quarter and turned optimistic after two quarters on the back of several measures taken by the government and the RBI to boost demand, according to a joint report by Knight Frank-FICCI-NAREDCO. After staying in pessimistic zone (below 50 mark) for two consecutive quarters, Knight Frank&ndashFICCI&ndashNAREDCO Real Estate Sentiment Index Q4 2019 survey showed that sentiments of real estate stakeholders in India was in optimistic zone at 53 in October-December quarter of 2019, up from 42 in the previous quarter. The future sentiment score, that had gone in the red for the first time in the preceding July-September 2019 quarter at 49, also bounced back to 59 in Q4 2019. A score over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 shows 'pessimism'. Though the sentiment is in optimistic zone now, the qualitative outlook of stakeholders remains cautious, with a majority of them opining that the sector will remain at the same levels as previously even while it will not go down further in the next six months, it added. "The real estate sector sentiments have shown improvement in its current as well as expected outlook for the market in Q4 2019. This optimism is significant in the wake of the continued downslide in India's overall economic performance," Knight Frank India Chairman and Managing Director Shishir Baijal said. "Even while the sector is working towards finding its balance, especially in the residential segment, steps by the government have kept the sector stable in 2019. However, we expect the market to remain cautious and sensitive to even the smallest change as large-scale demand is yet to pick pace," he added. The sector's optimism is far pronounced for the office sector, which has grown from strength to strength in the past few years, reaching historic highs in 2019. "In the next 8-10 quarters, if the office, other commercial including retail, warehouse and logistics and the residential sector continue to show positive growth, despite the pace of growth of Indian economy, we can expect the real estate sector to show upward curve of revival. The sector, therefore, needs to start making adequate safeguards to ensure that the demand for all segments stays positive," Baijal said. The real estate sector has been under pressure for over three years now. Weak demand, inventory overhang, developer defaults coupled with worsening of NBFC crisis has dried up funding for the sector, which in turn has increased borrowing cost and impacted finances for the already strained sector, the consultant said. Source: The Economic Times Chandigarh

Tenants across 6 top metros look to buy houses in 2020

1/10/2020 6:09:00 PM

After living in rented houses for the last 7 years, 29 year old techie Siddharth Rustagi’s top priority in 2020 is to buy and move into a 3 bhk house in Bengaluru in the next few and he is willing to pay upto Rs 1 crore for it. Marketing professional, Tara Shetty is looking for a Vaastu-compliant 2 bhk home for her 3-member family in Hyderabad and has a budget consideration of upto Rs 70 lakh for it this year. Realtors can look forward to a great year ahead as 64 per cent of people living in rented accommodation in Delhi-NCR, Bengaluru, Mumbai, Pune, Chennai and Hyderabad are planning to buy houses in 2020. While 85 per cent of these people prefer to move into ready-to-occupy homes, the top three most important considerations for buying homes are &ndash cost of the house, regular water supply and proximity to the workplace, according to ‘India Real Estate Report 2019’ released by real estate portal NoBroker.com. The portal conducted a survey of 14,562 people across the top 6 cities mentioned above and collated data from tenants, buyers, listings and closures on the platform from its user base of over 7.5 million customers to cull out these trends. Budget is top consideration 71 per cent of these people are looking to buy homes within a budget of Rs 60 lakhs, while 12 per cent have a budget of Rs 60 &ndash 80 lakhs and 10 per cent have a budget of Rs 80 lakh to Rs 1 crore, in 2020. One of the most important amenities that buyers were looking for is car parking with 58 per cent citing it as key. “Stagnant property prices and home loan rate-cuts has boosted consumer confidence. This is the best time to buy a house as there is a lot of unsold inventory in the market as a result of which developers are luring interested buyers with good offers. Majority of the buyers want to buy ready-to-move-in homes because builders have previously delayed delivery of homes by 3-4 years, and buyers don’t have to pay GST on ready-to-move-in properties. We see a sharp decline in preference for broker services with only 11 per cent preferring to use brokers to find houses, a decline from last year’s 14 per cent, while 28 per cent prefer to find houses on real estate websites, up from 15 per cent in 2018” said co-founder and CEO of NoBroker.com, Saurabh Garg. Buyer demographics NoBroker found that 64 per cent of buyers have bought a house before the age of 35 and 65 per cent of buyers are below 45 years of age. While residential is still the preferred choice for investment among a vast majority of the people (86 per cent), commercial properties are gaining ground with 14 per cent evinced interest in commercial properties as rental yield is higher at 8-12 per cent compared to rental yield of 1-3 per cent for residential properties. Vaastu is a major consideration for buying homes with 73 per cent admitting they check for Vaastu compliance before buying, up from 52 per cent last year. While the preference for 2bhk houses dominate, 31 per cent prefer newly constructed properties. Source: The Hindu Business Line Chandigarh

At $3.3 billion, commercial is top real estate draw for PE funds in 2019

1/10/2020 2:22:00 AM

Commercial real estate maintained its numero uno position in attracting $3.3 billion in private equity (PE) funding in 2019, against $3.8 billion in 2018. The retail realty sector was a major draw for PE funds in 2019, receiving total inflows of $970 million, against $355 million in 2018 — a rise of over 170 per cent. The residential sector received PE inflows of $395 million in 2019, against $265 million in 2018. The high potential of logistics and warehousing notwithstanding, this segment attracted about $200 million in PE funds — a drop of nearly 50 per cent against the previous year. Mixed-use developments saw inflows of about $155 million in 2019, against $310 million in 2018. In all, Indian real estate attracted more than $5 billion in PE inflows in 2019, recording a marginal drop of 2 per cent against the preceding year, revealed Anarock’s latest study. Shobhit Agarwal, MD and CEO, Anarock Capital, said: “Among the cities, MMR (Mumbai Metropolitan Region) and NCR (National Capital Region) were the top favourites for PE investors in 2019; together, the two regions received close to $2.7 billion in PE funds, accounting for a whopping 53 per cent of the overall share. In 2018, rather than NCR, it was Hyderabad that was on top in the radar of PE investors.” City-wise trends While MMR retained the top slot, it was NCR that stood out in 2019, becoming the second most attractive real estate destination for PE players. Together, the two regions received realty PE inflows of $2.7 billion in 2019, accounting for a massive 53 per cent of the total. MMR saw a 19 per cent jump in total PE inflows to $1.8 billion, from over $1.5 billion in 2018. NCR saw total PE inflows of over $845 million in 2019, against just $195 million the previous year. The IT hubs of Pune and Bengaluru attracted PE funds of about $390 million and $615 million, up 210 per cent and 47 per cent, respectively. Hyderabad, the showstopper of 2018 with $1.1 billion in PE funds, attracted just $440 million in 2019. This drop was expected as 2018 was a one-hit wonder rather than a steady trend. PE players largely steered clear of the Chennai real estate market in 2019. The city saw inflows decline by 45 per cent, from $675 million in 2018 to $370 million in 2019. Kolkata failed to garner any PE interest in 2019 as well. There were no PE investments in both the years. Source: The Hindu Business line Chandigarh

Indian real estate attracts $5 billion PE in 2019, commercial projects lead: Report

1/8/2020 6:07:00 PM

Indian commercial real estate retained its Numero Uno position and continued be a preferred destination for global institutional investors in the backdrop of robust office space take-up, falling vacancy levels and rising rentals. Indian real estate attracted more than $5 billion private equity (PE) inflows in 2019. Of this, over 66% or $3.3 billion was infused in the commercial real estate. Meanwhile, both retail and residential segments saw an uptick in investments in 2019 against the preceding year, showed data from ANAROCK Property Consultants. While the Mumbai Metropolitan Region (MMR) remained the most attractive investment destination for PE funds, it was the National Capital Region (NCR) that stood out in 2019. After Mumbai, the national capital region was the second-most attractive real estate destination for PE players. Together, the two mega regions received PE inflows of $2.7 billion - a 53% overall PE share - in Indian real estate in 2019. “Total PE inflows in Indian real estate remained more or less the same in 2019 against 2018. However, NCR once again emerged as a major hotbed for private equity activity in 2019. Besides office real estate, the retail sector helped NCR gain traction from both foreign and domestic funds,” said Shobhit Agarwal, MD & CEO – ANAROCK Capital. “Residential saw some green shoots of revival in 2019 and this will continue in 2020 as the government’s distress funds are deployed.” In sharp contrast to previous years, investors are now showing a keen interest in last-mile funding for stuck housing projects. This, along with the government support of Rs 25,000 crore for stressed projects, will go a long way in relieving residential real estate from its woes. “Given the government’s involvement, last-mile funding is one of the most sought-after products now preferred by several lenders across geographies. Apart from low execution, land title and sales risk, the segment also stands apart due to faster return of the capital with higher than moderate returns,” said Subhash Udhwani, founder of real estate-focused boutique investment bank, Elysium Capital. Notably in 2019, other than commercial real estate, retail segment also garnered considerable PE attention based on the high demand for organised retail spaces across the country. The retail sector was a major draw for PE funds during the year, receiving nearly $1 billion against $355 million in 2018, an annual rise of over 170%. Interestingly, the residential sector received relatively higher PE inflows of $395 million against $265 million a year ago. Out of major markets, MMR with PE inflows of over $1.8 billion during the year witnessed a 19% on-year jump. NCR stood out with total inflows of over $845 million in 2019 from mere $195 million in 2018. The Information Technology (IT) hubs of Pune and Bangalore attracted PE funds of around $390 million and $615 million respectively in 2019. Both cities saw inflows rise by 210% and 47%, respectively in a year. Hyderabad, the showstopper of 2018, attracted PE funds of just $440 million in 2019 against $1.1 billion a year ago. This drop was expected as 2018 was a one-hit wonder rather than a steady trend, experts said. The high potential of logistics and warehousing notwithstanding, this segment attracted about $200 million in PE funds - a drop of nearly 50% against the previous year. Mixed-use developments saw inflows of around $155 million in 2019, as against $310 million a year ago. Source: Economic Times Chandigarh

Are NRIs the next leg of investors in real estate in India?

1/8/2020 6:04:00 PM

The real estate market in India is poised for the entry of a greater number of Non-Resident Indian (NRI) investors not only because there has been a steady strengthening of the dollar against the rupee over the past few years, but also because the inventory of properties now open for pumping in money is spread across a huge canvas across different categories. The dollar crossed the Rs 70 mark in the year 2019. It had steadily increased from Rs 59 in the year 2014 to the mark of Rs 71.60 in the last week of November last year. Financial indices point towards an even stronger dollar over the next six months with the exchange rate touching anywhere in the range of Rs 75. A strong dollar implies that an NRI investor can purchase more in the Indian market in the year 2019 as compared to five years ago. The Indian real estate market looks alluring for dollar investors because demand for institutional and commercial properties is also set to rise over the next few years with housing hubs in various parts of the country gradually getting occupied by end-users. The concurrent need for malls, shopping complexes, cinema halls, commercial buildings, office complexes and logistic and warehouse spaces is growing in tandem with increasing occupancy in residential apartments in housing hubs. For NRIs, residential projects are, therefore, no longer the only avenues for investment. The NRI can invest in shopping units in malls, office rooms, logistics spaces and other commercial spaces. Investment in co-working spaces &ndash where employees of a diverse range of firms come together to work under one roof &ndash is also an attractive destination for NRI investors. For decades, investing in the real estate sector in India was considered no less than a risk because of the lack of transparency as well as for the fact that there were operations by shady investors in properties. However, the Central government has brought about a great degree of transparency in the real estate sector in India by introducing a slew of laws and legislations. The Real Estate (Regulation & Development) Act of 2016, which is the most important legislation pertaining to the property market in the past few years, not only promises transparency but also ensures security of investments of homebuyers. It has brought to an end the operation of fly-by-night operators in the real estate sector. Each project has to be registered with the government, be it residential, commercial or institutional. There is a fixed timeline for delivery of units booked by investors failing which the developer is liable to be punished. Quality of construction is no longer an issue to be dealt with solely by the investor but each complaint pertaining to this issue has to be meticulously addressed by the developer. The investor’s money is secure in an escrow account that is meant to fund only construction activities in the project in which the investment has been made. A strong and stable government is key to economic prosperity and security from external threats. Thanks to Prime Minister Narendra Modi, at this point India has a stable political dispensation ruling at the centre by commanding an absolute majority in the Lok Sabha, which is necessary for forming the government. The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the centre has strengthened the country’s borders against external threats by investing in defence and has also ensured inland security by better mobilisation and deployment of central and state police forces. Any investment made by an NRI in India is safe against both external and internal threats. The services sector in India has been growing at a tremendous pace over the past three decades and has shown the potential for further growth. Growth in services sector industries portends greater demand for real estate, particularly in housing, commercial and institutional categories. Tier II cities, like Hyderabad, Bengaluru, Bhubaneshwar, Pune, Chandigarh or Kochi, where services industries have been flocking, have the potential for growth in these categories of real estate. NRIs are eyeing these cities for investing in under-construction projects here which are projected for very high capital returns after the next few years. Rentals against investments in Tier II cities have also been growing both across residential and commercial properties. The latter category has been offering greater returns in terms of rentals because of huge one-time capital investment on the part of the lessee to hire out a particular property as well as northward revision of rental values every year as compared to residential units where rents are revised once every three years. The influx of numerous foreign retail brands into the country has also ensured that commercial properties offer competitive rates of rents and never go vacant. The Central government has launched the ‘Make in India’ initiative which calls for greater indigenisation of industries. Various initiatives are being offered to indigenous firms to set up manufacturing units within the country with partnerships from foreign investors. If the ambitious Make in India scheme of the BJP-led NDA government fructifies to any extent, it will mean expansion of the real estate market into hitherto unknown destinations of the country. The potential for investment by NRIs grows even further with the Make in India initiative. For the NRI, home is where the heart is! Most NRIs nurse a dream of returning to their motherland and settling comfortably in their homes in the sunset years. A nest in the parent country has always been a dream for NRIs because of the need for security, comfort and attachments with family and relatives. No better time than the near future for NRIs to invest in a nest solely for themselves particularly with the real estate market offering a host of properties in many cities across the country. Source: Financial Express Chandigarh

Construction community to train, engage local youth

1/7/2020 12:23:00 PM

“Though work hasn’t started in full force since we have to have all our raw materials ready and some suppliers are in areas where transportation is presently not possible, we are keen that we have our workforce ready,” said Agarwal. “When we witnessed this large exodus we realised that it is important to have our workers from nearby areas in Pune. To do that we have launched a training programme where we aim to train our rural youth in different skills like masonry, plumbing, electrician, among others,” said Agarwal. “In any case, we have been doing that over the years all over India. But now our focus is going to be on the men and women from in and around Pune,” he said. To recruit jobless youth from the villages around Pune NAREDCO has tied up with Bharatiya Mazdoor Sangh that has a large network in a majority of the talukas in Maharashtra. Chandrakant (Anna) Dhumal, president, Bharatiya Mazdoor Sangh, Maharashtra, said, “We have always focused on the well being of our contractor workers and we have our presence in more than 70 per cent of all the talukas in Maharashtra as well as India. We have set up help desks in every taluka that aims to help them with legal and other issues that the members may have.” “When NAREDCO informed us of their intention we have now sent out a circular to all the help desks with their offer,” he said. “We think it’s a great idea since in my estimate every taluka has at least 5,000 to 10,000 youths who are jobless. We will put out this offer where they can get training in various constructions fields like electricians, plumbers, tiling, POP work among others and then get employed,” said Dhumal. Despite the construction industry employing on contract workers that the Sangh is not in favour of, Dhumal feels that “They will at least learn a skill. And with that skill, they can find employment easily on other projects or even become entrepreneurs if they so choose. It is a good thing for our young men and women.” For NAREDCO this is a long term plan. Says Agarwal, “The training modules are from one month to three, but we are in no hurry as such. If we can get at least 40 per cent of our workers from near Pune we are happy. At least you don’t get stranded like we are now.” Source: Hindustan Times Chandigarh

Govt measures to boost realty sector, job prospects, say experts

1/6/2020 6:01:00 PM

Buoyed by multiple reform measures undertaken by the government for the realty space, experts feel such steps will help in reviving the sector and generating more employment opportunities. At the same time, some of them also expressed concerns over liquidity situation and said that subdued demand may keep performance of residential realty projects muted. “There was a recent government announcement of Rs 25,000 crore special window to provide funding to stalled housing projects to revive the sector and also to help in terms of incremental jobs, that is, employment generation, revival of demand for logistics, cement, iron and steel industries and many other adjacent industries, Sudeep Sen &ndash head of industrial, manufacturing and engineering vertical, Teamlease ServicesTeamLease Services &ndash told PTI. These measures, he said, will attribute a growth of 11 to 12 per cent in the sector in the next 6 to 8 months. Funds will now be used to provide priority debt financing for the completion of incomplete or stalled housing projects in the affordable and middle-income housing sector, Sen said. On jobs front, he said the main hiring will be a mix of unskilled labour workforce (loaders, carpenters, welders, fitters) and also support function profiles, the likes of site supervisors, tele-callers, account executives, customer support staff and sales executives. Maintaining a negative outlook for residential segment and stable outlook for commercial real estate, rating agency Icra in its report had stated that liquidity crunch and subdued demand is likely to keep performance of residential realty muted. Prices, however, are likely to move on a downtrend, driven not only by the continued focus of developers on keeping average ticket sizes affordable, but also by the high inventory overhang and overall sluggishness in demand, the Icra report added. However, commercial real estate will benefit from robust demand and favourable tailwinds from successful listing of first domestic Real Estate Investment Trust (REIT), the report said. Michael Page India Director Nitin John Abraham said that even as the traditional housing sector is struggling due to a funding crisis and unsold inventories, which should see some movement, but commercial real estate is gaining momentum year on year and will show double digit growth this year as well. Also, he said, models like co-working and co-living spaces are gaining solid traction. Abraham said the traditional centres of real estate including Mumbai, Bangalore and NCR domain will generate maximum employment in the real estate sector. However, cities like Hyderabad, Pune and Ahmedabad will also create jobs in the sector, he added. Executive search organisation GlobalHunt Managing Director Sunil Goel said traditionally the real estate industry used to live and make money on spikes but the policies like RERA and large pool of availability of the units will make the industry consumer driven. “This is good for the sector because this is not beneficial to few developers only, and the sector may get converted from an investor portfolio to an end customer portfolio,” he said. The large number of transactions will create a greater number of jobs and will also bring growth to the sector compared to 2019, Goel added. Source: Financial Express Chandigarh

Investment in India's real estate sector to rise 5 pc to $6.5 bn: Report

1/3/2020 5:08:00 PM

Investment in India's real estate sector is likely to rise by 5 per cent to $6.5 billion (around Rs 46,000 crore) this year, driven mainly by huge demand for commercial office assets from IT firms, according to global property consultant Colliers. Last year, the real estate sector attracted an investment of $6.2 billion, up 8.7 per cent from 2018 as foreign investors bought many office properties. Foreign funds accounted for about 78 per cent of the total investments in 2019. According to Colliers, India's real estate sector has recorded inflows of $56.6 billion (Rs 410,000 crore) since 2008. "During 2019, investments into the real estate sector touched $6.2 billion (Rs 43,780 crore). During 2020, Colliers projects investments inflows of $6.5 billion in the real estate sector," it said in a report. The consultant expects investors to remain committed to commercial office assets over the next three years, with strong demand and outlook for further rental appreciation. "We project that the commercial office sector will account for about 40 per cent of the inflows in 2020," Colliers said. Commercial office assets accounted for 46 per cent of the total inflows during 2019 at $2.8 billion (Rs 19,900 crore). Investors interest have risen because of plethora of reforms such as enforcement of the Real Estate Regulatory Authority, introduction of the Goods and Services Tax (GST), roll-out of the Insolvency and Bankruptcy Code and a relaxation of foreign direct investment norms, the consultant said. Colliers recommended investors to look at opportunistic assets including under construction office assets, supported by strong demand dynamics in information technology (IT)-led markets such as Bengaluru, Hyderabad and Pune. "Due to the prolonged slowdown in the sector, investors should continue to adopt a more conservative approach towards residential assets in general, as compared to commercial assets," the report said. Coliving would draw considerable attention from investors as demand for rental homes rises among professionals relocating to cities having employment opportunities, the consultant said. Warehousing, retail and coworking segments are also on investors' radar. Source: The Economic Times Chandigarh

Investment in real estate up 9% at Rs 43,780 cr in 2019, led by foreign funds: Report

12/20/2019 5:09:00 PM

Investment in Indian real estate sector is estimated to have increased by 9 per cent to Rs 43,780 crore during this calendar year on higher inflow from foreign funds, according to global property consultant Colliers. Office properties attracted 46 per cent of the total inflow and received nearly Rs 20,000 crore this year. "Investment in India's real estate rose 8.7 per cent in 2019 compared to 2018, and touched USD 6.2 billion (Rs 43,780 crore)," Colliers said in a report. Foreign funds accounted for about 78 per cent of the total investments in 2019- the highest share ever. During 2020, Colliers projects inflows of USD 6.5 billion (Rs 46,170 crore) into the real estate sector. "We recommend investors to look at opportunistic assets including under-construction office assets, supported by strong demand dynamics in information technology (IT)-led markets such as Bengaluru, Hyderabad and Pune, offering ample opportunities to investors" said Sankey Prasad, managing director and chairman at Colliers International India. Commercial office assets accounted for 46 per cent of the total inflows during 2019 totaling USD 2.8 billion (Rs 19,900 crore) with the sector backed by strong demand dynamics and rental appreciation. The interest in office assets is backed by robust demand and rental appreciation. The consultants expect investors to remain focused on acquiring commercial office assets over the next three years, backed by strong occupier demand and rental appreciation. Alongside Mumbai and Delhi-NCR, Bengaluru should continue to rank among the most attractive markets. During 2020-2023, Colliers projected an annual average gross absorption at 52 million sq ft across the top seven cities, surpassing the gross absorption of the preceding five years by 12 per cent. "We expect a flurry of commercial investment activity in 2020 and 2021 as funds aggregate assets to list them as real estate investment trusts (REITs)," the report said. While the office sector is recording solid growth in investments, India's residential real estate is experiencing prolonged slowdown in investment volume, accounting for only 9 per cent of the total investments in 2019. Colliers expect investments in the residential segment to remain soft during 2020, as liquidity concerns in non-banking financial companies (NBFCs) remain. "Despite the ongoing economic slowdown, foreign funds are likely to gain a stronger foothold in Indian realty. Foreign private equity, including pension and sovereign funds, are looking at India for the long term, undeterred by the current slowdown," said Megha Maan, senior associate director, Research at Colliers International India. Bengaluru emerged to the second spot overtaking Delhi-NCR in terms of garnering investments with an investment of USD 655 million (Rs 4,650 crore) during 2019. Mumbai continued to be at the forefront of investments with a 25 per cent of the total investment inflows in 2019. The city continues to be the most sought after investment destination in the country due to a wide range of asset classes, providing diversification to investors' portfolio. Colliers has operations in 68 countries and 14,000 employees. In 2018, its revenues were USD 2.8 billion (USD 3.3 billion including affiliates), with more than USD 26 billion of assets under management. MJH SHW SHW. Source: The Economic Times Chandigarh

Investments in Indian real estate jump 9% in 2019

12/20/2019 1:25:00 PM

Investments into Indian real estate rose nearly 9 per cent in 2019 to $6.2 billion (Rs 43,780 crore) as foreign private equity (PE) investors, including pension and sovereign funds, pumped in money despite the economic slump. Foreign funds accounted for about 78 per cent of the overall investments in 2019, the highest share ever, a new research from Colliers International shows. There is more growth ahead in 2020, albeit at a slower pace. Colliers predicts that in 2020, investments inflows would total $6.5 billion (Rs 46,170 crore) or a growth of about 5 per cent. The $6.2 billion investment in 2019, however, is lower than what Indian real estate received in 2017 - $8 billion. According to Colliers, since 2008, India's real estate sector recorded overall inflows of $56.6 billion (Rs 4,10,000 crore). "After 2014, a slew of reforms included enforcement of the Real Estate Regulatory Authority, introduction of the Goods and Services Tax (GST), roll-out of the Insolvency and Bankruptcy Code, and a relaxation of foreign direct investment norms. Taken together, these have boosted investor interest in Indian real estate," the firm says. Mumbai led the investments with a 25 per cent share of the inflows in 2019. "The city continues to be the most sought after investment destination in the country due to a wide range of asset classes, providing diversification to investors' portfolio," the firm states. Meanwhile, Bengaluru toppled Delhi-NCR to claim the second spot with inflows of $655 million (Rs 4,650 crore) in 2019. "We note that the strong appetite for office assets has catapulted Bengaluru's position to the second spot in 2019. We believe that over the next two years, Bengaluru should continue to be among the top two most attractive markets for investors, as funds continue to remain concentrated in commercial office assets," Colliers states. Commercial or office real estate is booming for several reasons. The supply is steadily increasing, so have the absorption rates. Vacancies are down for the top grade buildings while rents in many markets have risen. Unlike the residential side, the office market is characterised by transparency, and in most cases, on-time delivery. "While the office sector is recording solid growth in investments, India's residential real estate is experiencing prolonged slowdown in investment volume, accounting for only 9 per cent of the total investments in 2019," Colliers states in the report. "We expect investments in the residential segment to remain soft during 2020, as liquidity concerns in non-banking financial companies (NBFCs) remain. Over the last few years, residential developers, including those with weak credit lines, were heavily reliant upon NBFCs to fund their projects. We believe that investors should continue to adopt a conservative approach towards residential assets, barring a few top-tier developers, as the demand in the sector has not fully recovered yet," the firm advises. Source: Business Today Chandigarh

Market size of co-living segment to double at nearly USD 14bn in 30 major cities by 2025: Report

12/18/2019 1:23:00 PM

Co-living segment in India is growing at a rapid pace and its market size is estimated to double by 2025 at nearly USD 14 billion across top 30 cities, according to a global property consultant Cushman & Wakefield. The demand for co-living in terms of beds is slated to grow to 5.7 million by 2025 from 4.19 million this year. In its report 'Co-living-Redefining urban rental living', Cushman & Wakefield has pegged the market size is USD 6.67 billion in 2019 and, this will grow to USD 13.92 billion by 2025 across top 30 cities. The market will witness a compound annual growth rate (CAGR) of 11.2 per cent. "Co-living is an evolving sector and is expected to grow more than two times by 2025 in the top 30 cities which are the major economic centres in the country. Within India, the co-living model is currently catering to mostly millennials comprising single, young working professionals and student population," said Anshul Jain, Country Head & MD-India, Cushman and Wakefield. Furthermore as the business evolves, co-living would transform the face of the rental housing market in urban centres, similar to what flexible working space has done to the office rental space, he added. "Co-living market in India is evolving at a rapid pace, with investments from national and international institutional investors bringing in much-needed seed capital as well as future rounds of funding thereby allowing a new business model to thrive and aim towards achieving scale," the report said. Co-living operators are tying up with developers for built-to-suit property options, an upcoming trend likely to prevail in the sector. Operators opting for ready to move in properties which are refurbished and renovated as per their requirements are showing preference for properties having at least 50-60 rooms. Pan India capacity of major co-living players as of fourth quarter 2019 stood at over 2 lakh beds and, the same is estimated to reach to 6 lakh beds by 2021. With more millennials entering the workforce and continuing to contribute towards a major proportion of the population, their lifestyle choices will contribute towards a greater need for organised rental housing. Further, limited accommodation capacity within academic institutions for students in higher education is also likely to act as a demand driver for such rent accommodation. However, the consultant said, the concept of shared rental accommodation in cities or locations offering employment and academic opportunities is not a new one. The migrant workforce and students have been availing such shared rental accommodation options for the last 3 to 4 decades. "Millennials moving into new cities for work or education are left to deal with negative perceptions harboured by landlords and home owners' about those who are single or students. "This coupled with the limited availability of quality accommodation that meets the basic requirements, makes the stay in these unorganised set-ups, (PGs/ dorms/hostels) a not so favourable option for millennials, who having higher disposable incomes are even ready to spend a little more to enjoy better lifestyle standards with experience," the report said. Cushman & Wakefield is a leading global real estate services firm with 48,000 employees in about 400 offices and 70 countries. In 2017, the firm had revenue of USD 6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. Source: The Times of India Chandigarh

Housing sales may rise marginally by 4% in 2019: Report

12/17/2019 1:20:00 PM

Housing sales are estimated to rise by mere 4 per cent to 2.58 lakh units across seven major cities during this calendar year on subdued demand because of liquidity crunch and overall economic slowdown, according to property brokerage firm Anarock. "Indian real estate was devoid of any appreciable forward momentum in 2019. Dwindling consumption, lacklustre investment appetite and the global slowdown overshadowed all possibilities for growth," Anarock Property Consultants Chairman Anuj Puri said. India's GDP growth rate slumped to a six-year low of 4.5 per cent in Q2 FY20. In its yearly round-up for the real estate sector, Anarock said that collectively, all four quarters of 2019 are likely to see housing sales of 2,58,410 units (assuming 56,200 units in Q4 2019) as against 2,48,300 units sold in entire 2018. Sales were better in the first half of this year but demand fell in the third quarter. Anarock tracks seven major cities Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Pune, Hyderabad, Chennai and Kolkata. "The real estate sector's performance - a reliable barometer of India's overall economic health - painfully reflected the macro-economic state of affairs. The liquidity crisis did not relent and dented any 'real' growth during the year," Puri said. "Multiple developers fell off the grid while others still struggle to stay viable. However, strong players with healthy balance sheets - in many cases diversified beyond real estate - sailed through 2019 and recorded decent housing sales and revenue growth," he added. For the housing sector, 2019 was a non-event in terms of sales growth and investor interest. "Sentiments remained subdued, sustaining almost solely on end-user activity focused on ready-to-move-in or almost-complete homes. Branded developers gained ground, with some listed players performing exceptionally well on sales and commensurate revenue growth," he said. For the housing sector, Puri said the only light at the end of the dark financial tunnel was the announcement of the alternative investment fund (AIF) of Rs 25,000 crore to facilitate the completion of stuck affordable and mid-segment homes. In fact, affordable housing remained upbeat in 2019 thanks to multiple government sops throughout the year. First-time homebuyers were given further tax deductions (now amounting to Rs 3.5 lakh in a year) on interest amount of home loans below Rs 45 lakh availed within FY 2020-end. Luxury and ultra-luxury segments remained limited to end-user interest, with no serious investor activity. Co-living and student housing gained momentum during the year. In the organised housing brokerage business, Noida-based Investors Clinic, Anarock, News Corp-backed PropTiger, Anil Ambani-led Reliance group-backed Square Yards, Quikr Realty, Gurugram-based 360 Realtors and Wealth Clinic are the leading players. Source: The Economic Times Chandigarh

Now, high-end millennials investing in second homes both in India and abroad

12/12/2019 1:16:00 PM

Are millennials purchasing properties or are they preferring to stay on rent, especially co-live in apartment blocks close to their workplace or continue to live with their parents? Several international property consultants have said that in 2020 as many as 65 percent of the global population will be under the age of 35 and would make up half of the global workforce. A CBRE report has revealed that one-third or 35 percent of the millennial respondents identify 'investment' as the key driver for buying a property. Overall, a majority of millennials aim to buy a home, and while placing the utmost importance on quality of life, they also refuse to compromise on the quality, size and location. There is also a category of high networth millennials, second generation business families or startup honchos who have made mega bucks from their startups or divesting their stake at high valuations. They too have started investing in second homes spread across the country in Goa, Alibaug or even outside India in countries such as Italy, Thailand, Sri Lanka, United Kingdom and even New York. The price of properties generally range from Rs 4 crore to all the way up to Rs 50 crore and more. "There are around 3 million millennials today and demand for second homes among them is growing by 10 to 15 percent across cities. Overall, there has been a 30 percent increase in the number of sales across the holiday home segment. Majority of them are from HNI families and they are buying second home properties across India and abroad with accessibility being the main factor," said Amit Goyal, CEO at India Sotheby's International Realty. There is also a sizeable population who have made their money through start-ups and some of them who have been divesting their stake at high valuation. Italy, Thailand and Sri Lanka are easily accessible destinations and perhaps the most popular among this segment scouting for second home properties. In Italy, these are available for anything between Rs 10 crore to 18 crore. In Thailand, these cost Rs 4 crore to Rs 6 crore in areas such as Phuket and Kho Samui and properties in Sri Lanka's Bentota, Balpatiya and Galle cost anything between Rs 5 crore to Rs 8 crore. Within India, these second generation business promoters, generally look for second homes in Goa, Alibag, Kasauli and even Rishikesh. The price range of properties in Goa is between Rs 5 crore and Rs 12 crore. In Alibag, these range from Rs 10 crore to Rs 15 crore. In Kasauli and Rishikesh, these are available for Rs 4 crore to Rs 6 crore but these are mostly villas. Millennials prefer new developments, he says. Most of these high-networth buyers have been educated overseas and are now back in the country to look after their family businesses. This segment therefore, may also be interested in buying into second homes in New York and London. Apartments in New York cost Rs 12 crore onwards and a 2 BHK in London anything around Rs 8 to Rs 9 crore. "When I was looking for a second home - the purpose was more experiential than actually owning a property. I decided to invest in a second home abroad due to play on currency fluctuations, capital appreciation, great rental yield and to diversify," said a buyer who has invested in a property in London. These buyers are also open to putting their houses on rent for most part of the year. Rentals in these markets has not appreciated much except perhaps in Canada. In UK, the rental yield is anything between 2.5 percent to 4 percent in Canada it is anything between 4 percent to 5 percent, in Dubai it is 6 percent to 7 percent and in Singapore it is 3 percent to 4 percent, says Goyal. Source: Moneycontrol.com Chandigarh

SC allows construction work to resume during the day in Delhi-NCR

12/12/2019 1:14:00 PM

The Supreme Court on Monday partially lifted its ban on construction activities in the Delhi-NCR region, allowing work to continue between 6 AM and 6 PM, after the Central Pollution Control Board said that air quality index (AQI) level is not severe. The Apex court, which had on November 4 stopped construction and demolition in Delhi-national capital region (NCR), lifted the ban partially following an affidavit filed by CPCB. The CPCB said the ban could be partially lifted by allowing these activities during the day time subject to criteria stipulated in Graded Response Action Plan (GRAP) which mandates strict enforcement of rules for dust control at construction activities and closure of non-compliant sites during moderate to poor AQI category days. “Presently, the situation not being severe, CPCB is of considered opinion that partial ban could be in place for construction activities in as much as no construction should be permitted during night time (6 PM to 6 AM),” said the affidavit, which was perused by a bench of Justices Arun Mishra and Deepak Gupta. Additional Solicitor General (ASG) ANS Nadkarni told the bench that in pursuance of the court’s November 25 order, the Centre had constituted a high-level committee to examine the feasibility of using technology like smog towers to combat air pollution. Nadkarni said the committee has already held a meeting and is scheduled to meet next on December 11. “What about the use of technology? When will it be implemented?,” the bench asked. The ASG said that after holding meeting, the committee would give its report to the Ministry of Environment, Forest and Climate Change (MoEF&CC). The ASG said he would file it by December 13. The bench said that secretaries for environment of Delhi, Uttar Pradesh, Haryana and Punjab should also be associated with the high-level committee so that they could sit together and come out with feasible solution on the issue. Stubble burning On stubble burning, the bench asked the governments of Uttar Pradesh, Punjab and Haryana to furnish before it the updated report up to December 11. The court said it would hear the pollution matter on December 16. Regarding de-congestion at metro stations in Delhi, senior advocate Aparajita Singh, amicus curiae in the pollution matter, said though Delhi Metro Rail Corporation (DMRC) has said that it would decongest the stations, it has not yet submitted a plan. The bench asked the DMRC to place before the court the plan on how it proposes to de-congest traffic at metro stations. Source: The Hindustan Business Line Chandigarh

I want to assure homebuyers, says Nirmala Sitharaman on govt’s real estate push

12/10/2019 10:02:00 AM

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

Despite slowdown, housing sales see steady growth in tier-II cities

11/29/2019 12:53:00 PM

Amid the slump in residential sales across India, particularly in the metros, housing demand in smaller towns and cities have seen a steady growth in the last five years driven by the government's push for affordable housing. Share of over 20 tier-II cities, including Jaipur, Vadodara, Nashik and Nagpur, in the total housing sales has increased to 25% till the end of last financial year 2018-2019 as compared to 16% five years ago, according to data compiled by real estate advisory firm Liases Foras. In the second quarter of this fiscal year, these smaller cities accounted 26% to the overall sales, a marginal jump from 25% recorded in the year-ago period. However, overall housing sales across the country including major cities like Mumbai Metropolitan Region (MMR), Delhi-National Capital Region (NCR), Bengaluru, Chennai, Hyderabad and Pune declined by 2% to 91,115 units in the September quarter, as per Liases Foras. "If you look from 2014, sales of tier-II cities have jumped by 112% while tier-I cities have grown by 28%. Contribution of these smaller cities to the overall housing market is increasing. The push for affordable housing is driving this growth," said Pankaj Kapoor, manager director, Liases Foras. Apart from the government's initiatives like Pradhan Mantri Awas Yojana (PMAY), which has helped push demand in the affordable housing segment to certain extent, smaller towns and cities offer a "more conducive land" to develop low cost housing, Kapoor said. While most of the cities in the country saw a decline in housing sales in the September quarter, few cities such as Jaipur, Nashik and Ahmedabad saw a jump of 22%, 25% and 4% respectively during the period. Real estate developers and consultants said that while big cities and metros are seeing a huge supply overhang, smaller towns and cities have been less affected by any speculative activities or downturn in the past. "While the growth in the smaller cities is nothing prominent as of now, these places were less affected by the bubble which were there in the market. Some of these cities have remained very stable and have not been affected by the downturn. That’s why these cities are showing a relatively healthier position," said Sourabh Mehrotra, national director, Knight FrankFrank, a property consultant firm. According to him, lower land prices have helped developers execute low housing projects in smaller towns as they are able to bring down the capital cost by as much as 25-30%. "The mega affordable projects like 7-10 lakh have come up in smaller towns. Reasonable land prices along with government's subsidies have helped local developers to build low cost housing projects such places," Mehrotra said. However, developers feel that growth in last five years in tier-II cities is only "a green shoot" as job markets expand beyond the metros but would take few more years to similar demand in the major cities like Mumbai and NCR. "Many smaller cities in India are likely to see incremental development because of the kind of thrust that the government is giving on creating smart cities. But it is a long term story. However, some of the smaller cities in south like Mangalore or Kochi have seen significant changes in the last few years. More jobs and development will lead to offtake of residential housing in these cities," said a spokesperson with property developer Puravankara Ltd. The Bengaluru-based has ongoing affordable housing projects under the brand Provident in cities like Kochi, Coimbatore and Mangalore apart from others. Source: Live Mint Chandigarh

Affordable housing policy spurs home sales in small towns

11/29/2019 12:48:00 PM

Property markets in top metros may be caught in a grinding slowdown, but there is cheer in smaller cities. Driven by the government’s push for affordable housing, home sales in smaller towns and cities have steadily grown in the last five years, shows data from real estate advisor Liases Foras. Sales in 20 tier-II cities including Jaipur, Vadodara, Nashik and Nagpur made up 25% of nationwide sales at the end of 2018-19, up from 16% five years ago. By the end of the September quarter of 2019-20, the share of tier-II cities had risen further to 26%. In the same quarter, overall housing sales across the country including major cities like Mumbai Metropolitan Region (MMR), Delhi-National Capital Region (NCR), Bengaluru, Chennai, Hyderabad and Pune fell by 2% to 91,115 units, as per Liases Foras. “If you look from 2014, sales of tier-II cities have jumped by 112% while tier-I cities have grown by 28%. Contribution of these smaller cities to the overall housing market is increasing. The push for affordable housing is driving this growth," said Pankaj Kapoor, managing director, Liases Foras. Apart from government’s initiatives like Pradhan Mantri Awas Yojana (PMAY) which has helped push demand in the affordable housing segment, smaller towns and cities offer “more conducive land" to develop low-cost homes, Kapoor said. While most cities saw a decline in home sales in the September quarter, some such as Jaipur, Nashik and Ahmedabad saw jumps of 22%, 25% and 4%. While big cities creak under a huge supply overhang, smaller towns and cities where there is little speculative buying has seen no downturn, real estate developers and consultants said. “While the growth in the smaller cities is nothing prominent as of now, these places were less affected by the bubble which was there in the market. Some of these cities have remained very stable and have not been affected by the downturn. That’s why these cities are showing a relatively healthier position," said Saurabh Mehrotra, national director, Knight Frank, a property consultant firm. Cheaper land helps developers in smaller cities execute low cost projects as they can reduce capital cost by 25-30%, he said. “Mega affordable projects (like those costing below Rs 10 lakh) have come up in smaller towns. Reasonable land prices along with government’s subsidies have helped local developers to build low cost housing projects such places, “ Mehrotra said. However, developers say growth in the last five years in tier II cities is only “a green shoot" as job markets expand beyond the metros but would take few more years to reach similar demand in the major cities like Mumbai and NCR. “Many smaller cities in India are likely to see incremental development because of the kind of thrust that the government is giving on creating smart cities. But it is a long-term story. However, some of the smaller cities in the south like Mangalore and Kochi have seen significant changes in the last few years. More jobs and development will lead to offtake of residential housing in these cities," said a spokesperson with property developer Puravankara Ltd. The Bengaluru-based developer has ongoing affordable housing projects under the brand Provident in cities like Kochi, Coimbatore and Mangalore. Source: Live Mint Chandigarh

Rate boost for global property markets starting to wane: Reuters poll

11/27/2019 12:43:00 PM

The combined findings of the latest Reuters polls, taken this month, have implications for the effectiveness of future monetary policy in one of the most typically rate-sensitive sectors of most developed and developing economies. The era of rock-bottom interest rates is not yet over, but the powerful boost given to global property prices by easy policy since the financial crisis appears to be ending, according to Reuters polls of over 100 housing market experts. More than a decade of easy money has pushed most asset prices to record highs, including house prices, which have climbed each year at many multiples of consumer price inflation and wage gains, making many markets unaffordable for first-time buyers. The change in sensitivity to interest rates is not universal. But it is particularly notable in the United States, where the Federal Reserve has cut rates three times this year with no major boost to the housing market outlook. The combined findings of the latest Reuters polls, taken this month, have implications for the effectiveness of future monetary policy in one of the most typically rate-sensitive sectors of most developed and developing economies. That may be all the more relevant given many central banks had made scant progress in raising rates back to what would have been considered normal levels before the global financial crisis erupted more than a decade ago. "Monetary policy's ability to stimulate housing demand is far less effective than earlier in the cycle," said Scott Anderson, chief economist at the Bank of the West. Of the seven closely-watched housing markets polled by Reuters - the US, Britain, China, India, Canada, Australia, and Dubai - none were rated by analysts as fairly priced, and particularly in big cities. Broadly speaking, where house prices are rising, analysts expect them to be tame next year and to be more reliant on incomes rather than the cheap cost of borrowing. "I think the issue really in most markets is: we've had a big upward price adjustment over the past 10 years because of ultra-low rates, and that process is sort of hitting its natural limits...what needs to happen is, you need to have prices driven by wage inflation," said Liam Bailey, global head of research at Knight Frank. Analysts expect house prices in the US and the UK to rise over the next two years but at a slower pace than what was predicted three months ago. And Dubai property prices are expected to tumble further until 2021. TRADE FRICTION While each property market is naturally facing its own set of domestic challenges, a common concern is a renewed global slowdown and trade friction stemming from the US-China trade war. Part of the extra froth in property markets since the crisis has been founded in easy cross-border investment. "(Over) the last few months, we've started hearing a lot more from firms about that uncertainty having a negative impact, even if firms aren't dealing directly with China," said Scott Brown, chief economist at Raymond James, referring to how trade friction has hit the US economy. US house price inflation has slowed over the past year and a half, roughly coinciding with the opening salvos of the ongoing US-China trade conflict. Property prices and turnover in the UK have taken a knock, particularly in London, since the shock vote in 2016 to leave the European Union, and any price rises in the coming year are expected to lag inflation. In China and India, which together make up about 40% of the world's population and have some of its fastest growth rates, house prices are expected to rise by about 3% next year - barely above consumer price inflation in one and below it in the other. But the trade war and an ongoing liquidity crisis in India's banking sector will likely drag on those respective property markets. Until recent years, they were booming and made significant contributions to economic growth both through construction and transactions as well as household wealth. Median 2020 house price forecasts for Canada and India were upgraded modestly. Australia was a notable exception, where expectations for next year doubled to 5% over the last three months following a burst of activity thanks in part to Reserve Bank of Australia interest rate cuts. But even analysts there were sceptical about how long the rebound would carry on. Despite the current global economic slowdown affecting most economies, oversupply seems to be an issue largely confined to emerging markets. In advanced economies like the US and Britain, the opposite is true, most notably in the US where a dearth of new homes has been an issue for years and despite strong demand supply is not expected to improve significantly anytime soon. "The US is pretty advanced in its cycle, construction levels are peaking now but demand is pretty robust," said Jeremy Kelly, director of global research at JLL. Source: Moneycontrol.com Chandigarh

Realty attracts $14 billion foreign PE investments since 2015: Report

11/25/2019 12:40:00 PM

Foreign institutional investors have shown more confidence in Indian real estate, especially commercial real estate over the past five years, while domestic investors continued to invest largely in the residential space. Indian real estate attracted nearly $14 billion of foreign private equity between 2015 and September 2019, showed data from ANAROCK Capital. Around 63 per cent or $ 8.8 billion of this inflow of the total foreign investments backed commercial real estate. The residential sector attracted $1.5 billion of foreign private equity in the same period, trailing behind even the retail sector which saw cumulative inflows of $1.7 billion. “Foreign investors are largely attracted towards commercial real estate because this segment has been far more organized, disciplined, documented and transparent. Also, the returns on investments in commercial are fairly steady. Even though reformatory changes within the residential real estate (like RERA, GST, etc.,) over the past few years are bringing in positive changes, several other issues still loom large. Hence, commercial reale state seems to be a safer bet for them,” said Shobhit Agarwal, MD & CEO, Anarock Capital. In contrast, domestic private equity funds infused nearly $2.4 billion into Indian real estate since 2015, of which nearly 71 per cent or $1.7 billion went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult. The commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. An additional infusion of $1.6 billion between 2015 and September 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. Source: ET Realty Chandigarh

Realty attracts $14 billion foreign PE investments since 2015: Report

11/25/2019 12:36:00 PM

Foreign institutional investors have shown more confidence in Indian real estate, especially commercial real estate over the past five years, while domestic investors continued to invest largely in the residential space. Indian real estate attracted nearly $14 billion of foreign private equity between 2015 and September 2019, showed data from ANAROCK Capital. Around 63 per cent or $ 8.8 billion of this inflow of the total foreign investments backed commercial real estate. The residential sector attracted $1.5 billion of foreign private equity in the same period, trailing behind even the retail sector which saw cumulative inflows of $1.7 billion. “Foreign investors are largely attracted towards commercial real estate because this segment has been far more organized, disciplined, documented and transparent. Also, the returns on investments in commercial are fairly steady. Even though reformatory changes within the residential real estate (like RERA, GST, etc.,) over the past few years are bringing in positive changes, several other issues still loom large. Hence, commercial reale state seems to be a safer bet for them,” said Shobhit Agarwal, MD & CEO, Anarock Capital. In contrast, domestic private equity funds infused nearly $2.4 billion into Indian real estate since 2015, of which nearly 71 per cent or $1.7 billion went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult. The commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. An additional infusion of $1.6 billion between 2015 and September 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. Source: ET Realty Chandigarh

Indian real estate: $14 bn Foreign PE Flows in 5 Years, says ANAROCK report

11/22/2019 12:32:00 PM

Indian real estate attracted nearly $14 bn of foreign private equity (PE) between 2015 and Q3 2019, says the latest ANAROCK data. 63 per cent (around $8.8 bn) of the total foreign investments backed commercial real estate. Of the total $14 bn foreign investments in Indian real estate between 2015 and Q3 2019, nearly $8.8 bn went into commercial realty, followed by $1.7 bn in the retail sector and $1.5 bn into the housing sector. Logistics & warehousing drew over $1 bn, and the remaining investments went into mixed-use developments. Speaking on the findings, Shobhit Agarwal, MD & CEO at ANAROCK Capital said, "In stark contrast, domestic PE funds pumped nearly $2.4 bn into Indian real estate since 2015, of which nearly 71 per cent (approx. $1.7 bn) went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult." Shobhit went on to add that the commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. Moreover, the overwhelming response to Embassy Office Parks’ REIT launch - and its superlative performance - saw commercial real estate segments emerge as the bigger draw for investors. Several other large developers are also keen on listing their commercial assets under REITs. On commercial real estate attracting more foreign PE, Shobhit said, "Indian commercial real estate will continue to attract PE funds as there is high demand for Grade A office spaces across the top Indian cities. Earlier data indicated that the first three quarters of 2019 alone saw inflows of USD 3 bn in the commercial segment - an increase of 43 per cent over the corresponding period in 2018." He said that logistics, warehousing and retail will continue to witness considerable growth on the back of recently-eased policy norms for the retail sector, aimed at boosting growth and attracting more investments. An additional infusion of $1.6 bn between 2015 and Q3 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. For instance, in 2018, Canada’s CPPIB and India’s Phoenix Group together invested nearly $100 mn into a mall project in Bangalore. The top 5 foreign investors — Blackstone, Brookfield, GIC, Ascendas and Xander — alone contributed 75 per cent of the net foreign PE flow into Indian real estate. Interestingly, their focus was not limited to the top 7 cities and extended into tier 2 cities like Indore, Ahmedabad and Amritsar. The top 5 domestic funds — Motilal Oswal, HDFC Venture, Kotak Realty, ASK Group and Aditya Birla PE — invested nearly 54 per cent or around $1.3 bn into Indian real estate. They focused exclusively on the top 7 cities. Source: Zee Business Chandigarh

Centre urges states to get housing proposals under PMAY sanctioned by 2020

11/21/2019 12:29:00 PM

The Centre has requested states and Union territories to get their housing proposals sanctioned by March next year under PMAY (U) for their remaining demand, a move aimed at meeting the deadline of 'Housing for All' in 2022. In written reply to a question in Lok Sabha on Thursday, Union Housing and Urban Affairs Minister Hardeep Singh Puri said that the validated demand reported by states and UTs so far is around 1.12 crore. The minister said that based on the project proposals received so far from the states and UTs, central assistance of Rs 1,45,949 crore has been sanctioned for construction of nearly 93 lakh houses. According to the government, 55,40,801 houses have been grounded for construction of which 28,06,465 houses have been completed under the Pradhan Mantri Awas Yojana (Urban). "States/UTs have been requested to get their project proposals for all their remaining demand of houses sanctioned by March 2020 so that construction of all houses may progressively be completed by 2022," Puri said. Last month, the Union Housing and Urban Affairs Minister had told that all the 1.12 crore houses being constructed under the PMAY (Urban) would be occupied by beneficiaries by early 2021. "By March 2020, all the 1.12 crore houses will be sanctioned and 75 lakh houses will be grounded. Fifty lakh houses will be completed and 40-45 lakh houses occupied by beneficiaries in next five to six months. "We are fully confident that by early 2021, all houses will be occupied by beneficiaries," Puri had said. PMAY (Urban) has four components - 'Credit Linked Subsidy Scheme' (CLSS), In Situ Slum Redevelopment (ISSR), Affordable Housing in Partnership (AHP) and Beneficiary Led Construction (BLC) under which the ministry provides central assistance to beneficiaries to construct their own houses. Under CLSS, Centre provides interest subsidy of up to around Rs 2.67 lakh on home loans to individuals, which reduces the principal outstanding amount of the loan. Source: ET Realty Chandigarh

Panchkula emerging top destination for IT firms

11/20/2019 12:12:00 PM

After Chandigarh and Mohali, Panchkula is emerging as a preferred destination for IT companies. In the past six months, companies such as Click Labs (P) Ltd, Frontizo Business Services, a joint venture between Patni Group and Amazon Asia Pacific, and Esri India have commenced their commercial operations. The three companies put together would employ over 2,000 IT/ITeS professionals by the end of this year. Established in 2008, Panchkula IT Park is spread over 79 acres and has 28 plots for the IT companies besides land earmarked for commercial establishments, institutions and shops. Out of the total plots earmarked for IT companies, nine are still vacant. With entrepreneurs preferring Chandigarh and Mohali because of better connectivity, the IT Park at Panchkula had been suffering. “Out of total allotted sites, 10 companies have already started operations while the rest are at different stages of completion,” sources said. The major companies which are having operations in the IT Park include Altruist Technologies, Stylum Industries and erstwhile Idea Cellular besides over two dozen firms in the MSME space which have taken space on lease. Around May this year, Chandigarh-based technology solution provider Click Labs shifted to Panchkula IT Park. The company is employing around 800 people. Similarly, Frontizo Business Services recently set up their new contact centre in Panchkula. The new centre will see Frontizo Business Services hiring up to 1,000 people in different roles by the end of FY 2019-20. Frontizo will service Amazon’s customers in Hindi from the Panchkula site thus enabling Amazon to service Hindi-speaking customers who constitute a sizeable number of their customer base in India. After Frontizo, Esri India — the Indian arm of California-based Esri and leading Geographic Information System (GIS) Software and Solutions provider — has announced the inauguration of its latest Global Delivery Centre for GIS Data Management in Panchkula. It will provide GIS Data Management Services to global customers in sectors such as power, telecom and to government. The centre will employ data scientists, domain experts, data quality specialists and GIS analysts who will deliver GIS Data Management Services. Agendra Kumar, president, Esri India, said, “When we started looking for location for our next facility, we found the IT Park in Panchkula was most suitable in terms of infrastructure availability. This centre will also provide a good opportunity for local talent to work on global GIS projects.” This facility will hire around 150 employees and the company plans to double this number in the next 2-3 years. The launch of this centre will further encourage other GIS organisations to set up offices in this region given Esri’s global leadership position. Source: The Tribune Chandigarh

After medi-city, IT-city: Bio-Technology park to come up near Mohali

11/19/2019 12:51:00 PM

Following the setting up of medi-city, an ancillary site comprising multispeciality hospitals, in New Chandigarh (Mullanpur Garibdas) and IT-city, a site for IT companies, near airport road, the state government is set to establish a Bio-Technology park near Mohali. The government will be offering land to Bio-Technology companies, for setting up the park, in the Progressive Punjab Investors Summit 2019, scheduled to be held in December. The government has planned to acquire 84.1 acre land in Chao Majra, Chilla, Raipur Khurd and Mauli Baidwan villages for the same. The project will be located at a distance of 9 km from the international airport and 13 km from Chandigarh. A Greater Mohali Area Development Authority (GMADA) told Chandigarh Newsline that the land would be offered for companies to set up Bio-Technology park as private and state universities were also coming up in the area, which would provide ample workforce for the companies. National Institute of Pharmaceutical Education and Research (NIPER) is also near the project site. “The government has allowed setting up a mixed land use zone in Rajpura, near Mohali and the Bio-Technology park is being planned in a way that the requirements of the industry can be met at one go. A green industry is also coming up at Rajpura, which will boost the new project,” the officer added. On being asked about the response of the companies to the project, the officer said that during investors summit, a Memorandum of Understanding (MoUs) would be signed with the Bio-Technology companies, however, at present, there was no company which had showed interest. The officer said, “We have estimated that the establishment of a Bio-Technology park will generate employment for more than 50,000 youths of the state and will also provide business to hundreds of people and Small and Medium Enterprises (SMEs). The state government is working to promote medical tourism and Bio-Technology park is a part of this plan.” At present, the IT city is in its nascent stages of development, while the work for medi-city has almost reached its completion. However, the state government has not yet declared a dedicated zone for setting up the Bio-Technology park. Source: Indian Express Chandigarh

REITs to give a boost to commercial real estate in India

11/12/2019 2:05:00 PM

The launch of REIT symbolizes that the Indian realty market has become more professional and transparent. April 1, 2019 will always be remembered as a red letter day for the Indian realty sector as on this day the very first Indian REIT was listed by the Blackstone-Embassy Group. REIT or the Real Estate Investment Trust is a boon to the commercial real estate sector and is facilitating growth avenues to it. REITs have a proven and successful track record in several Asian countries such as Japan, Singapore, Malaysia, Thailand, etc. REITs enable small and mid-level investors to invest in Grade-A commercial assets. Minimum annual returns of these investments range from 7-8% and can go up to as high as 12-13%, depending on the quality of the underlying assets. The commercial sector has started showing green shoots of recovery with liquidity crisis clearing out. With REITs, the biggest advantage to the retail investors is the ease of investment. Investing in REITs is just like investing in direct equity and can be done through a DEMAT account. The other big benefit is getting an opportunity to invest in commercial properties that will earn rental income. This is a big advantage as commercial properties yield higher rental returns than residential properties. Further, REIT regulations mandate the distribution of 90% of the rental income to unit holders, while the remaining 10% can be utilized for the business purpose. Apart from the rental income, any increase in the value of units also adds to overall capital appreciation. The introduction of REITs has also promoted professionalism throughout the commercial real estate sector. Considering the increasing demand, NRI investments and interest in the sector have risen with the introduction of REITs. REITs, if encouraged for individual retail investors in India, are capable of changing the nature of property investment. They may give retail investors an easy access to the high-value property, which was a domain previously reserved for large institutional investors. Overall it can be said, being in a nascent stage in India, REITs might face a few early challenges, but in the long term, the success of REITs will have a direct impact on the success of the commercial real estate sector in India. Chandigarh