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Most Indians plan to switch from renting to owning Assets: Study

12/30/2021 11:58:00 AM

Mumbai: Three out of every four Indians now prefer asset owning over renting to secure their future in the post-pandemic world, a study by Godrej Housing Finance (GHF) revealed on Wednesday. The study, Post 'Generation-Rent' was commissioned by Godrej Housing Finance (GHF), to gain insight into the shift in consumer's preference and the factors thereof that drive the decisions for considering property purchase, asset creation, and investment avenues by Indian consumers to secure their future in a post-pandemic world. Industry experts predict a continued uptick in the coming months, easing the long period of pent-up demand across sectors. The survey validates the sentiments as most of those surveyed stated they are now more open to investing in a property of their own against the earlier notion of being labelled as the 'Generation-Rent'. ‘Generation-Rent’ is a well-documented phenomenon associated with Millennials across the world who prefer to rent over asset ownership of consumer durables and even housing. In stark contrast to earlier assumptions, around 62% of Indians highlighted that they now preferred purchasing their furniture, car, home, and wedding apparel rather than renting them as this provides them with greater stability in future. The Post ‘Generation-Rent’ study by Godrej Housing Finance revealed that almost half of Indians (49.13%) had started making headway in their house-hunting aspirations and reaching out to housing finance companies in the past year. Nearly 33% believe that buying a new house is the best investment option at present, while 16% mentioned owning a house is a top priority as work from home is the new normal. The study also found that 25.5% of the Indians consider owning a home the second-most important aspect defining 'personal security', with job security leading the chart with 40.6% voting for it. "The pandemic has brought about a clear shift in preference amongst Indian consumers. They are gravitating towards future-proofing through long-term investments. With affordability at an all-time high, there has probably never been a better time to buy a house, which is both an important element of asset allocation and a key pillar of financial security. That said, customers believe that this change requires enhanced support from their financial partner to advise and guide them through this long-term commitment," Manish Shah, MD & CEO, Godrej Housing Finance, said. The study further revealed that flexibility on policy, credibility and transparency of the brand, digital offerings, and relative turnaround time for processing are the top factors that drive the selection of financing partner. This can be attributed to consumers becoming accustomed to the on-demand gratification of their requirements aided by digital technology. The study also found that digital-first and frictionless processes are perceived as both an advantage and a starting point for consumers while choosing today's financing brands. Companies and services that offer end-to-end digital solutions gain an edge in consumer preference over more traditional financing models. Source: Live mint.com India

Commercial realty market likely to touch 32 million sq ft in 2022 if Omicron impact is mild

12/29/2021 12:56:00 PM

The first quarter of 2021 saw office occupiers adopting a cautious approach while reviewing commercial real estate requirements. With increasing fears of a resurgence in the Covid- 19 pandemic in the second half of March, certain occupiers went into wait-and-watch mode. The leasing momentum subsequently picked up after the second wave. A report by Knight Frank India said that the total number of office transactions in the eight India markets in Q3 2021 reached 83 percent of the 2019 quarterly average level. Among the larger markets, Chennai, Bengaluru, and the National Capital Region (NCR) recorded the highest recovery in the third quarter of 2021, with transactions reaching the 123 percent, 112 percent and 93 percent levels, respectively, of the quarterly average in 2019. The Information Technology sector was the largest consumer of space during the quarter and took up 34 percent of the space transacted. The heightened transaction activity from this sector is an extremely encouraging driver for office demand as it is the most prolific occupier category in the office market. Occupiers also took up nearly 23,500 co-working seats across the eight markets during the quarter, the highest this year, the report said. According to JLL’s Office Market Update Q3, 2021, the mass vaccination drive and unlocking of the economy has aided in the revival of the office market. The net absorption in Q3 2021 surpassed the net absorption recorded in Q1 2021 by 12 percent, painting a clear picture of improved market sentiments and growing confidence among occupiers, the report said. The Bengaluru, Delhi-NCR and Hyderabad markets accounted for nearly 60 percent of the net absorption during the quarter. Net absorption includes fresh leasing in completed buildings and pre-commitments in buildings that become operational during the time being reviewed, and excludes exits/terminations, churns, renewals, and pre-commitments in future supply. Mirroring 2021 Experts say that while 2022 is expected to sustain the gradual recovery, it will be far from the levels in 2019 as the requirements from occupiers will be judicious and calibrated. Co- working is expected to thrive owing to the flexibility it offers in these times of uncertainty. The experts say that while it is still too early to predict the impact of the Omicron variant on the commercial market, it is likely that 2022 will be similar to 2021. The demand for managed office spaces and players will continue to remain strong in 2022 as well. An analysis by ICICI Securities has said that pan-India net absorption of 18.5 msf (million square feet) is expected in CY21 (11.5 msf achieved in 9MCY21) and there may be a recovery in CY22E with net absorption of 26.8 msf. The key risk is a significant delay in return-to-office plans of corporates owing to any fresh Covid wave. According to Samantak Das, chief economist and head of research, JLL India, the net absorption in 2021 is likely to be more than 25 msf and this is a number comparable to the average of 2020, which saw commercial real estate bear the brunt of the first wave of the pandemic. The average for the last five years except last year was around 32 msf of net absorption. “There is a likelihood of the commercial market touching the 32 msf figure in 2022 provided the impact of the Omicron variant on the economy and the real estate sector is milder than the second wave,” he adds. Factors that will weigh in The hybrid model, work from home, work near home and work from anywhere will prevail in the medium term, especially for those sectors that can be managed by a hybrid model. The impact on REITs, too, is likely to be marginal as some sectors such as health and insurance may grow faster overall, reducing the impact on total net leasing. Since quality assets are important for REITs, there is expected to be traction in terms of green buildings. Also, many more buildings may get upgraded in the coming quarters. Upgradation is expected to take place in case of both Grade A and Grade B buildings, Das said. In terms of institutional funds flowing into real estate, 2021 may see anywhere between $3.8-4 billion. This is lower than the last couple of years during which more than $5 billion of investments were recorded annually. “We expect this to be achieved in 2022,” he adds. Sanjay Dutt, MD and CEO of Tata Realty and Infrastructure Limited is of the opinion that there will be “a surge in demand for Grade A offices, flexible/hybrid office spaces … with big companies planning to bring their workforce to offices. Additionally, leasing of large-quality office space is likely to increase as companies are increasingly hiring thus boosting the demand for commercial spaces across all cities”. Venkat Narayana, CEO At Prestige Group, said that as far as the office sector is concerned, in 2021, leasing activity gained momentum and witnessed decent growth. However, net absorption across the top seven cities is yet to reach pre-Covid-19 levels. With office demand making a significant come back post the pandemic, new office completions across the top 7 cities have also improved. “We believe that demand for office space is set to strengthen backed by the increasing rate of vaccinations, affordable rentals, businesses resuming their expansion plans and Work from Office for many employees ami Covid protocols.” Naveen Nandwani, MD, Commercial Advisory & Transactions, Savills India, is of the opinion that while it is a “little early to predict the occurrence of a third wave, it is likely that 2022 will be similar to 2021 for the real estate sector. The demand for managed office spaces and players will continue to remain strong in 2022 as well. As corporates continue optimising their real estate capital and operating costs, they will either re-negotiate in their existing spaces or relocate to comparable alternatives.” Also, most employees have opted for a three-day work week from office with an option to continue working from home. This flexibility and a possible decentralisation of the tech industry will lead to the development of smaller cities as satellites for bigger companies. Changes in the way businesses operate will drive the growth in demand for commercial spaces in many tier-2 cities, he said. Commercial leasing in 2021 After the second wave, most corporates had planned to get employees back in office, which resulted in an upsurge in renewals for office space. Office space renewals accounted for 23 percent of the leasing post March 2020, up 8 percentage points from the pre-pandemic level, a report by Colliers and Propstack said in October. Occupiers’ decisions are quicker than in 2020, with the focus on new-generation offices, said the Colliers and Propstack report, titled Evolving Office Space Trends in a Post Pandemic World. The BFSI sector’s leasing has increased, with the thrust from Bengaluru, Chennai and Mumbai. Fresh leasing post pandemic was at 67 million sq ft, which is a drop of 45 percent from the pre-pandemic level, said the report. Demand for new leases has improved significantly due to the robust hiring plans of firms in the IT-BPM, BFSI and manufacturing sectors looking to set up new global in-house centres, said Bhupindra Singh, Managing Director, Regional Tenant Representation and Office Services, North India, Colliers. Salesforce leased 7 lakh sq ft of commercial IT space in Hyderabad for about Rs 5 crore a month. The lease was registered in October 2021. KPMG Global Services Pvt Ltd leased commercial space in Mumbai for five years at a rent of Rs 37 lakh per month.The consultant has leased 24,788 sq ft of space at Nesco IT Park from October 1, 2021, to September 31, 2026. According to the documents, the rent-free period of four months is from October 1, 2021, to February 1, 2022. The lock-in period is for three years, the documents showed. The company has leased the 13th floor, Central B wing at NESCO IT Park from NESCO Ltd. The leave and licence agreement was registered on October 29, 2021. Co-working segment expected to gain traction in 2022 Co-working is expected to thrive owing to the flexibility it offers in these times of uncertainty. Amit Ramani, founder and CEO of Awfis, said that the co-working segment is expected to witness incremental demand in 2022. The company is diversifying by partnering with hotels and malls to expand its base in other parts of the country. “Along with this, we have also diversified our product line to cater to end-to-end workspace requirements of large occupiers, including workspace design, management and FM services,” he said. He agrees that the past two years have been unprecedented and riding the third wave will definitely be a challenging hurdle, across sectors. Source: Money Control INDIA

Independent floors emerging as most sought-after residential assets post COVID-19

12/28/2021 10:27:00 AM

The COVID-19 pandemic has re-imagined the way we live, work and play. Amid the extended work from home scenario, our homes have emerged as the fulcrum of our daily activities. COVID-19 has also reaffirmed the significance of a home as a safe address and stable asset class instead of living in rented properties. Purchasing a home has been traditionally considered a milestone in Indian ethos. The average age of buying a home in India has reduced drastically from approximately 50 years to 30 years in the past three decades. An Anarock consumer sentiment survey in 2019 has revealed that at least 37 percent of participants serious about buying homes fall in the age bracket of 35-45 years. The pandemic has further triggered the millennials to consider owning a home versus renting. The rising disposable incomes, extensive travel, and exposure to the global lifestyle have made customers more aware and conscious about their choices. As a result, today’s discerning homebuyers are willing to go the extra mile to ensure superior quality. The COVID-19 pandemic has further strengthened this trend; the focus, however, is now on a wholesome experience rather than only an excellent product. Developers have also responded to this trend by offering a wide gamut of residential choices – apartments, villas, independent floors, etc., uniquely tailored to buyers’ preferences and budgets. According to a 2021 Anarock survey, 85% of buyers in NCR purchased their first homes between July 2020 and March 2021. Furthermore, a SquareYards 2021 report points out that Gurugram has emerged as the most sustainable city to live in amid the pandemic due to low population density, high open area ratio, and higher number of healthcare institutions per unit area. One of the dominant trends is the renewed interest towards independent floors in metropolitan cities. The extended work from home culture has blurred geographical boundaries and necessitated staying connected with family to beat stress amid such unprecedented times. The concept of independent floors offers a plush lifestyle at a comparatively lesser cost than villas and bungalows. With more space at one’s disposal, it allows a blend of privacy and community by living in the vicinity of like-minded people with similar aspirations, tastes, and priorities. These independent floors are often inhabited by families who wish to re-establish themselves at an upscale location without compromising their privacy. A 2021 JLL report highlights that independent floors have witnessed a surge in demand in Gurugram. The recent policy of the Haryana government permitting up to four floors on a single plot to be sold individually has also provided a fillip to this trend. The salient features of such offerings are aesthetically-designed residences by eminent architects of global repute; best-in-class amenities such as gym, spa, gym, kids’ play area & leveraging of cutting-edge technology to ensure a superior experience. In addition, working from home has also led to a reconfiguration of residences to accommodate a distinct office space. Due to travel restrictions, independent floors located in gated townships are being increasingly preferred by homebuyers as these townships serve as a self-sustainable oasis with healthcare, banking, education and recreation facilities in the vicinity. As a result, location, connectivity, ticket size, design, and technology have become the key parameters influencing homebuyers’ decisions. The second wave of coronavirus in 2021 had a minor impact on the industry; nevertheless, the residential market managed to recover from the onslaught of this pandemic. According to a 2021 Knight Frank report, residential sales witnessed an uptick by 44% Y-o-Y in Q1 2021, bolstered by the revival in sentiment. It is a testament to the segment’s resilience, a trend which is expected to continue on the back of declining cases, strong economic fundamentals, and push by the government. Source: Financial Express INDIA

Real estate most preferred store of wealth; digital only 4%

12/26/2021 11:07:00 AM

At the level of the global economy, the historical link between the growth of wealth, or net worth, and the value of economic flows such as GDP no longer holds. These were the findings of a McKinsey report that borrowed a fundamental tool from the corporate world — the balance sheet — to take stock of the underlying health and resilience of the global economy. Net worth is the store of value that determines wealth and supports the generation of future income. At the consolidated global level, net worth is equivalent to the value of real assets because all financial assets are matched by corresponding liabilities so that they net out. The study done by McKinsey’s Global Institute focussed on 10 countries that together account for about 60% of global GDP, namely, Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States. Researchers looked at the state of the global economy after two decades of turbulence, notably the 2008 financial crisis and its aftermath, more than a decade of ultra-low interest rates and heavy central bank intervention, punctuated by the Covid-19 pandemic. Moreover, as economies turn digital and intangible, paradoxically brick-and-mortar make up most of the global net worth at 68%, of which land contributes roughly half at 35% and dwellings and non-residential real estate contribute 33%. Meanwhile, balance sheets have expanded rapidly over the past two decades, even as economic growth has been tepid. Despite the rise of digitisation, intangibles are just 4% of net worth. Fixed assets, excluding buildings and intangibles, account for 17%; and inventories at 8%. A large proportion of savings has struggled to find investments offering sufficient economic returns and lasting value to investors, the report says. They have instead found their way into real estate, a traditional asset class, or into corporate share buybacks, driving up asset prices. Only about 20% of net worth was invested in other fixed assets. Net worth tripled between 2000 and 2020 to $510 trillion, or 6.1 times global GDP, with China accounting for a third of global growth. Households are the final owners of 95% of net worth, half in the form of real assets, mostly housing, and the rest in financial assets such as equity, deposits, and pension funds. Net worth per capita ranged from $46,000 in Mexico to $351,000 in Australia. In China and the United States, the top 10% of households owned two-thirds of wealth. This has raised questions about whether societies store their wealth productively. The value of residential real estate amounted to almost half of global net worth in 2020, while corporate and government buildings and land accounted for an additional 20%. Assets that drive much of economic growth — infrastructure, industrial structures, machinery and equipment, intangibles — as well as inventories and mineral reserves make up the rest. The Case in India “That certainly is not happening here in India,” says Rohit Sarin, co-founder of Delhi-based multi family offices firm, Client Associates. Experts say that Indian money – a lot of it new age and retail — is deflecting from real estate, attracted more to asset-light tech businesses. This is a distinct divergence from the findings of the McKinsey report focused on our western counterparts. “In India the incremental flows of real estate are decreasing,” says Sarin, “in fact people are disinvesting, or buying homes they can live in.” He says if they do sell, they are monetising and acquiring more wealth and assets for self- use and not for storing their wealth. “In continental Europe, real estate is preferred because for them protection is a bigger goal than growth. Whereas in the U.S., growth is more important than protection and equities provide more growth than any other asset, even real estate,” says Sarin. Sanchit Gogia, the chief analyst, founder and CEO of Greyhound Research, says money in the country is entering an array of assets and only select real estate sectors. “Indians are investing in so many things. Real estate is selling but in pockets. For instance Hyderabad (SEZ, commercial), or lets say Gurugram (commercial) in certain sectors. But a lot of money is going in mutual funds, retail investing (and these are new age investors), angel investors. All the IPOs for some of the larger companies like Paytm, etc. — most of their investors are retail investors.” “People are flushed with savings as they stayed at home over the lockdowns. People are investing in gold, where the prices are on an all-time high. In cars, where there is a demand supply constraint; in digital start-ups. I'm not sure it’s real estate-centric. I think it is more IPO-centric,” Gogia explains. He says the new age money is coming from the new breed of tech investors. “They are liquidating their equity. The startup guys in Bangalore have almost nothing to do with real estate. The other lot is the more traditional investors who don't understand tech, or start-ups. They will invest in businesses which are asset-backed or physical assets like real estate. They also happen to have more money and so the larger chunk will always flow into the more traditional asset-backed businesses.” Pointing to a virtuous circle he talks about an observation, “a lot of the retail money is coming to the market because of tech and tech-backed businesses.” Source: Fortune India INDIA

Luxury housing uptick expected to continue in 2022

12/24/2021 2:59:00 PM

For the uber rich, a high-end property deal is no more than a number, particularly when it comes to homes in the range of Rs 80 crore to Rs 1,000 crore. While Delhi had its own share of super luxury bungalows being lapped up by industrialists, pandemic or no pandemic, India’s commercial capital continued to epitomise this syndrome in 2021. Real estate experts say the trend is likely to continue in 2022. Several transactions were registered in the Mumbai market until March 31, the day the Maharashtra government decided not to extend the stamp duty waiver. And yet, the trend of industrialists, diamond merchants and start-up owners purchasing luxury ready-to-move-in properties has continued right until the end of the year. In Delhi, too, several bungalow transactions were finalised in Delhi’s Lutyens’ zone and other luxury markets such as West End and Vasant Vihar. More recently, two branded players — Godrej Properties and Tata Realty and Infrastructure — said they had plans to launch projects in the segment. While Tata Realty and Infrastructure has plans to develop an ultra-luxury residential apartment project near Hailey Road in Delhi and is expected to invest close to Rs 200 crore by 2023, Godrej Properties said it has entered into a joint venture with the TDI Group to construct a luxury housing project in the Connaught Place area. “This is likely to be a trend going forward as most homebuyers in these posh markets prefer branded developers who adhere to RERA guidelines and GST norms. Of late, there have been massive delays by local developers active in these markets,” points out Amit Goyal, CEO at India Sotheby’s International Realty. Developers of high-value independent floors in some South Delhi markets have been avoiding registration under the RERA Act, leading to violations. The developers claim that they have been adhering to Section 3(2) (a) of RERA, which provides for exemption from registration if the land proposed to be developed is less than 500 sq. metres in size or less than eight apartments are proposed to be developed on the property. “While there are some challenges with regard to the supply of high-end floors in the Delhi market due to delays, the outlook for the super luxury market in 2022 remains robust. Having said that, the noose should be tightened around these builders and circle rates should be rationalised and more categories created. A mere 20 percent reduction of circle rates across all categories until December 31, 2021 has not served any purpose,” he said. “Most of the buyers buying properties in India are taking advantage of the lower mortgage rates and all-time-high equity market. Some of them are reinvesting to save capital gains from sale of equity shares or a stake in a start-up or property,” said Goyal. Big deals Recently, Anil Gupta, promoter of KEI Industries, a housing wire and cable maker, bought a property spread across 2,000 square yards in Delhi’s posh Shanti Niketan area for Rs 140 crore. The sale deed was executed on October 8, 2021. Earlier this year, the owner of a leading electronics contract manufacturer bought a house in New Delhi’s Lutyens bungalow zone for Rs 170 crore, in what is believed to be the priciest residential transaction in the city after the lockdown. This month, Mumbai-based Godrej Properties (GPL) announced that it has formed a joint venture with TDI Group to develop an ultra-luxury residential project over 1.25 lakh sq. ft in Connaught Place. Tata Realty and Infrastructure is planning to invest around Rs 200 crore to develop ultra-luxury residential spaces near Hailey Road in Delhi. The Hailey Road project, which is likely to be launched in 2023, will comprise around 40- odd luxury apartments spread over 100,000 sq. ft of built-up area across a 0.9 acre plot. Speaking to Moneycontrol, Tarun Mehrotra, Business Head, North & East India, Tata Realty and Infrastructure, said: “We have not applied for DUAC approvals yet. We had applied for multi-storey approvals and those, in principle, we have received. Now, we will be preparing building plans and applying for DUAC approval. Once DUAC clears we will apply to the NDMC.” The company had bought the Hailey Road plot way back in 2012 for Rs 218 crore and had earlier announced plans to build four villas on it. Low-density bungalows, luxury ‘jodi’ flats sell big in Mumbai The year 2021 saw ready-to-move-in luxury apartments in Mumbai being lapped up by high networth individuals (HNIs). The year started with the mega bucks bungalow deal inked by D’Mart founder Radhakishan Damani and his brother Gopikishan Damani for an Rs 1,001-crore independent house in Mumbai’s posh Malabar Hill area. The registration took place on March 31, the last day of the reduced 3 percent stamp duty on housing units in Maharashtra. In another bungalow deal, a company owned by Surat-based diamond merchant Ghanshyambhai Dhanjibhai Dholakia bought a bungalow at Worli Seaface in Mumbai for Rs 185 crore. The 19,886 sq. ft property, called Panhar Bungalow, and comprising a basement, ground floor and six other floors, was bought by Hari Krishna Exports. The seller of the property was Arkay Holdings, which is owned by Essar Group. The property deal was registered on July 30. The per sq. ft cost worked out to around Rs 93,000 per sq. ft. Pandemic influence Real estate experts say that demand for independent houses in the uber-luxury segments, especially above the Rs 100 crore range, picked up in Mumbai, particularly during the two waves of the pandemic. “Due to limited availability of such bungalows in a city such as Mumbai, decent appreciation of such properties is expected over a period of three to five years,” said Ritesh Mehta, Head Residential Property Sales, JLL. Later, in one of the biggest high-rise deals in India, the promoters of Mumbai-based real estate major K Raheja Corp decided to keep possession of three floors of their ritzy project in Mumbai — sprawled over 60,000 sq. ft and worth Rs 426 crore. The project, named Artesia, an iconic standalone 45-storey tower, is located in Worli and has an expansive view of the Arabian Sea and the Bandra Worli Sea link. Mehta points out that demand for ready-to-move-in luxury units that are now few and far in between is expected to continue into 2022. The segment picking up these units includes industrialists, corporate houses, stockbrokers and even those who have made money from recent IPOs. “Besides demand for bungalows, there is enormous traction in the case of Jodi apartments or one family buying the entire floor comprising four units. Families want to be together during the pandemic. Earlier, they would pick up luxury units in different projects but now they are buying apartments on the same floor. It is therefore not surprising that in a tower of 180 units there are not more than 100 families,” he explains. Taller buildings by the sea The luxury home inventory is only going to increase in the years to come with the Coastal Zone Management Plan (CZMP) for Greater Mumbai receiving approval by the Union Environment Ministry. This will lead to taller structures coming up near the seashore as developers will receive two-and-a-half times the construction rights on such plots. Earlier, construction was restricted because of their proximity (500 m) to the coast under Coastal Regulation Zone (CRZ) II rules. It was therefore not surprising that in October, Imperial Infra, a Boman Irani-led Rustomjee Group firm, concluded a sale agreement with the Bandra Parsi Convalescent Home Trust for a 1-acre plot near Taj Land's End Hotel. According to media reports, the Trust received Rs 234 crore from the sale, with part of the proceeds going to the suburban collector as the collector's fee. Luxury residential towers can come up on this plot, say real estate experts. “With this, the entire Bandra seafront is expected to open up for construction and redevelopment. This will lead to construction of more luxury stock in the next five to six years and that will help rationalise prices going forward,” explains Mehta. IPOs and fund raising propel the luxury property market The luxury story does not end here. If one were to look at the registration data of luxury properties in 2021, there were around 25 property deals priced over Rs 50 crore and worth Rs 2,936 crore that were registered in Mumbai in 2021, data shared by Zapkey.com showed. As many as 21 such deals worth Rs 1,235 crore were registered in Mumbai in 2020 despite restricted registration activity on account of the lockdown. And in 2019, 14 luxury deals worth Rs 886 crore were registered and that too before the pandemic and without the stamp duty waiver. “It is pertinent to note here that in 2021, there was one large-value deal worth over Rs 1,000 crore by the Damanis due to which the total luxury sales touched Rs 2,936 crore this year indicating massive growth despite there being no stamp duty waiver for almost nine months,” said Sandeep Reddy, co-founder, Zapkey.com Wealth created through stock markets, IPOs, private fund raises, finds its way into real estate, especially in high-end apartments, explains Reddy, adding this trend will continue in 2022. A case in point is the property bought by Siddharth Shah, founder of online pharmacy chain PharmEasy, which acquired Thyrocare. He bought an apartment in Mumbai’s Khar West for Rs 40 crore in August 2021. In Delhi too, soon after India’s biggest online-education startup Byju’s signed a deal to acquire tutorial chain Aakash Educational Services for $1 billion in April, the latter’s founder JC Chaudhary, bought a 2,000 square yard property in south Delhi’s Vasant Vihar area for over Rs 100 crore. He later also purchased a 5-acre farmhouse in south Bijwasan area for around Rs 96 crore. Source: Money Control INDIA

India’s co-living market likely to double by 2024: Colliers

12/23/2021 12:23:00 PM

Driven by reopening of offices, record vaccination and reopening of colleges in a phased manner, the shared economy or popularly known as the co-living segment in the country is expected to see a recovery in 2022. Though the pandemic marred the growth story of the co-living sector in 2020, it has already witnessed a sharp recovery in 2021. The co-living segment is expected to have 4,50,000 beds mainly driven by organized players by 2024 as opposed to 2,10,000 beds by the end of 2021, according to a Colliers report, titled ‘Future of Co-living in India.’ While there are various factors that contribute to the demand for co-living spaces, factors such as increasing workforce, migration to urban centers and dearth of good bachelor living options serve as major demand drivers for the organized modern co-living model. Nearly 10 million youth join the workforce every year and this further results in an increased demand for affordable living options near the Central Business Districts (CBDs). Furthermore, with migration in India touching the 9 million mark during 2011-2016, the market has seen a consequent increase in requirement of residential stock in urban centers across the country. “With the situation improving rapidly, the sector has recovered substantially and is looking more optimistic. The primary contributor to the recovery is the growing rate of vaccination. The unemployment rate is down to 7% in November 2021, a gradual dip from 11.84% in May 2021. Also, amidst the pandemic, hiring by IT companies has gathered pace followed by robust performance of the sector which will only add on to the demand for the Co-Living in coming quarters,” said Ramesh Nair, CEO, India, and Managing Director, Market Development, Asia, Colliers. The concept of ‘Shared Economy’ got severely tested during the peak of the pandemic. Factors such as uncertain economic conditions resulting in loss of jobs, work from home and the shift of migrant population to their respective hometowns in the wake of the Covid-19 outbreak brought the evolving Co-Living sector to an immediate halt. Between December 2020 and March 2021, the occupancy in most Co-living facilities crossed the 45 – 50% mark as the market improved and 60-70% in Q4 of 2021. However, the second wave proved to be a dampener from Q2 onwards as occupancy dipped sharply. The Co-living segment is further expected to witness recovery in occupancy in 2022 with factors such as increasing workforce, migration to urban centers for jobs, the unorganized shared living sector and the growing student population increasingly looking for the organized modern co-living model. “Co-Living has a strong long-term potential in the metro cities. However, the current market scenario has presented an opportunity to consolidate and reconfigure the market. While many players have exited the business as they could not sustain the financial stress of the previous year, others have capitalized on the opportunity to strengthen their position by strategic acquisitions and expansion in prime locations in metro cities,” said Subhankar Mitra, Managing Director, Advisory Services, Colliers India. The shift in perception amongst millennials to ‘sharing’ instead of ‘owning’ has made the co-living concept popular. For all groups – corporate occupiers, start-ups, entrepreneurs, and millennials – renting offers flexibility and savings. Co-working offers cost savings of 20-25 per cent compared to traditional office space leasing. Many investors already actively pursue options in the market to create flexible co-living facilities. The lucrativeness of a higher yield compared to a traditionally rented house has resulted in an influx of new players every year where this trend is expected to continue for the next few years. Co-living offers attractive returns; 2-4 times higher than the traditional residential yield of 2-3 per cent. However, Co-living in India is still in its nascent stage and the operators are constantly updating their metrics. The Covid-19 pandemic has further pushed the operators back to the drawing boards to reinvent their strategy to provide an attractive and safe housing solution. Source: Financial Express INDIA

Govt may change SEZ rules in Budget to ease compliance burden

12/22/2021 1:44:00 PM

The government plans to amend the SEZ Act in the upcoming Budget to reduce the compliance burden and allow companies operating within the conclaves to accept payments in Indian rupees, according to two people familiar with the development. The government could also allow entities that don't wish to avail benefits to be treated on a par with others located outside the SEZ, said two people aware of the development. Several stakeholders have raised concerns that as tax holidays come to an end, many companies will move out of SEZs due to the restrictions and these places could end up as ghost towns. "Many companies that have leased properties inside SEZs are looking to move out as there is a huge compliance burden, including that around net foreign exchange earning obligation. Although the infrastructure within SEZs is very good, for most companies, it doesn't make economic sense to continue operations," a person aware of the development said. The government is looking to make these changes in the upcoming Budget that will lead to companies not having to show import revenues or submit detailed operational information. As a corollary, the companies could continue to operate from SEZs like any other place without having to comply with all the elaborate compliance requirements. The commerce ministry is already working on such a proposal, another person aware of the development said. "If any SEZ wishes to be de-recognised, even that could be allowed. The government could also bring in a change whereby SEZs could offer additional commercial and residential holdings within their premises," the person said. Many SEZs had sought an extension of the direct tax holiday, especially on account of the Covid-19 pandemic. The primary attraction of setting up entities within an SEZ was the favourable taxation structure. Many SEZs had even approached the government to discuss the tax sops this year, but the government didn't relent. "The government representatives told us clearly that no tax sops or tax exemptions are possible this year," a person part of an industry association that met the government said. An email sent to the ministry of commerce and industry did not elicit any response till press time on Monday. Source: The Economic Times INDIA

Residential real estate likely to fare better in 2022: ANAROCK

12/21/2021 9:55:00 AM

2020 had been a tough year for the Indian residential market as the first wave of the pandemic had brought everything to a standstill. Nevertheless, all industries — including the real estate sector – emerged from the nationwide lockdown in 2020 with a valuable sense of resilience, damage-limiting skills and a new way of envisioning the business environment – especially in terms of technology adoption. As such, confidence at the beginning of 2021 was high and real estate developers as well as brokerages were well-prepared to face any possible future disruptions. According to an ANAROCK study, in 2020, 1.28 lakh units of new residential supply were added across the top 7 cities of India, while sales were clocked at 1.38 lakh units. From the previous peak of 2014, supply was down by 77% and sales were down by 60%. This large-scale decline indicated that the Indian residential market had bottomed out in 2020 and was likely to enter a long-term upcycle from 2021 onwards. “Reviewing the overall performance of the Indian residential real estate market in 2021 shows a definite upswing. Between Jan and Sep 2021, 1.63 lakh units of new residential supply were added across the top 7 Indian cities – 27% higher than 2020 full year supply – and 1.45 lakh units were sold – 5% higher than in the whole of 2020. While this depicts a cumulative trend, the Indian residential real estate sector’s comeback after the 2nd wave in Q2 2021 was phenomenal, sharp V-shaped one,” says Anuj Puri, Chairman, ANAROCK Group. In 2021, a bull run was witnessed not only in real estate stocks but also in the broader market. Ample liquidity targeted the stock markets on the back of satisfactory ROI expectations. The arrival of the Omicron strain towards the end of 2021 has slowed this movement to some extent; however, mid-to-long term prospects remain highly positive as COVID-19 has been reined in to a large extent in India, and most businesses are back on track. “Overall, real estate stocks boomed in 2021 as developers garnered good sales and were actively launching new projects. After the 1st wave, the real estate sector’s recovery was pronounced and improved even further after the 2nd wave as the sector imbibed new learnings to overcome challenges,” says Puri. In a visible consolidation mode, the sector now has large players commanding a significant share in overall housing sales. Housing demand remains high as Indians continue to spend considerable time at home due to WFH and remote working. Also, the macro conditions support home purchases with the interest rates on home loans are at a decadal low (starting at 6.5%) and the overall employment scenario looks secure enough to support long-term financial decisions. The positivity around physical indicators such as new launches and sales is reflected in the stock markets. Outlook for 2022 The Indian residential real estate market seems to have embarked on a long-term upcycle, and 2022 is very likely to fare better than 2021. With COVID-19 now having become a more accepted part of life and Indians getting used to the new normal, businesses are looking to expand. Compared to 2021, the residential real estate market in 2022 will see lower volatility. Source: Financial Express INDIA

Real estate outlook 2022: Investment volumes into realty to match those of 2021

12/18/2021 12:31:00 PM

Investors are positive on property market fundamentals, supporting high real estate allocations across the Asia Pacific, Americas, Europe, the Middle East, and Africa (EMEA). This demonstrates the continued allure of the asset class, enabling 2022 investment volumes to at least match those of 2021. There has been a rapid acceleration in the number of transactions closing in third quarter, which is expected to continue well into 2022, a new report by Colliers has said. Investments in the Indian real estate sector have remained resilient despite the headwinds triggered by the pandemic, adversely impacting the economy and business climate. For the nine months ended September 2021, investments were recorded to the tune of $3.5 billion, almost 75% of the quantum seen in 2020, it said. Residential and industrial and warehousing sectors have emerged as major beneficiaries this year, garnering a combined 36% of the investments. Core and core-plus office spaces are the top global strategy picks, with 60% of investors stating these assets as their investment preference, while industrial and logistics (I&L) assets will be the most coveted, it said. Their appeal not only stems from the realisation that office demand is here to stay, particularly in cities supported by strong transport infrastructure and high amenity values, but also the ease of large-scale capital deployment that office assets represent. The rising cost of construction, viewed by four in five (81%) investors as a pain point, could limit new builds, renovations, and retrofit projects, amplifying the demand for existing quality office assets, it noted. “While the office will continue to remain a dominant sector, investments in residential and industrial and warehousing are likely to strengthen in 2022 aided by strong business fundamentals. Income visibility and stability, attractive valuations and identifying the dark horses will underline the investment ethos in 2022”, said Ramesh Nair, CEO, India, and Managing Director, Market Development, Asia, Colliers. Across Asia Pacific (APAC), more investors are prepared to put into action their ambitious plans that have been delayed by COVID-19. Cross-border capital flows are also likely to return, as travel and business activity progressively returns. “The pandemic has accelerated a number of structural trends and will have lasting changes on the nature of real estate business in India. This presents several opportunities for investors looking to future-proof their portfolios or recalibrate their strategy towards growth sectors. This is already evident in the rapid investment being allocated towards the residential, increasing development of data centres, Industrial, Office as well as the evolution of the life science sector,” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India. Overall, industrial and logistic assets will be the most sought-after real estate assets in the region, with more than 20% of investors anticipating capital value gains of 10%-20% in value-add I&L assets in 2022, supported by tailwinds and large-scale economic transformation. Significant interest continues to surround core-plus offices, which remain a popular asset class for regional investors in Tier 1 cities like Singapore, Sydney, and Tokyo. 63% of the respondents indicated that they plan to invest in these assets, versus 54% last year. Multifamily/built-to-rent (BTR) properties are also an increasingly sought-after asset class, with investors targeting both core and development projects. In Japan, this is a sector that is well established and has long attracted foreign core capital, whereas in Australia, it is an emerging asset class with development opportunities. Investors see significant potential for the appreciation and repurposing of retail assets. Around a third of the investors mulling retail allocations are targeting opportunistic (including change of use) investments. In addition, hotels are also an opportunistic target, with 38% of investors looking at this sector. Specialised assets, particularly data centres, life sciences, and healthcare, are expected to help boost investment volumes in 2022, with student housing also poised for a comeback as Australia, the region’s main market, opens up to international visitors, the report said. The report also shows ESG (environmental, social, governance) considerations remain prominent, with nearly three in four investors surveyed globally integrating environmental factors into their strategies. This desire to invest with intent is both a means of future-proofing their assets and responding to the stakeholder and societal pressures requiring them to respond to the climate crisis. Source: Money Control INDIA

India's real estate sector expected to see healthy demand in 2022: Report

12/16/2021 10:49:00 AM

Knight Frank India, an international property consultant, on Thursday said in a report that 2022 may prove to be a more stable year for the pandemic-hit sector both for commercial as well as the residential sector. In its ‘2022 Outlook Report', Knight Frank India said residential segment could see upto 5% rise in values in 2022. "With physical offices here to stay, portfolio optimization and hybrid working are expected to be the dominant themes going forward driven by incremental demand from IT/ITes firms and the rebond of flexible office operators. For the residential sector further demand revival is expected with strong end-user interest aided by government impetus and incentives by developers ensuring buoyancy. The warehousing segment that has been risk averse during the pandemic will maintain the growth run rate driven by demand from the ecommerce and 3PL players," the report said. “The real estate sector recorded a smart recovery despite the pandemic exigencies in 2021 with segments like residential outperforming others. The disruption caused by the pandemic is slowing settling and the real estate market is expected to gain back its rhythm in the next two to three quarters, albeit, the threats of the new variant is adequately contained with minimum disruption in the early part of the new year. Should we be able to continue at this pace, the real estate sector will see adequate recovery to match or indeed cross the pre- pandemic levels.” Shishir Baijal, Chairman and Managing Director at Knight Frank India said. The key findings of this report highlights 2022 trends and dynamics across various real estate segments in India. Residential segment to witness around 5% capital value growth in 2022. Many of the supply and demand-side factors, assessed over the last decade, have started putting upward pressure on house prices. Residential sales momentum is expected to continue in 2022 as prospective homebuyers’ preferences for bigger homes, better amenities and attractive pricing will keep them interested to seal the deals. The Top 5 IT companies’ incremental demand for office space based on robust hiring in the last eighteen months is estimated at 11.67 mn sq ft, spread out over the next one to two years. Co-working sector will benefit as pandemic reinforces the need for agility like never before. Agility, a keyword associated with the co-working sector, will drive the demand rebound for flexible office spaces despite the return of normalcy. The recovery in the office sector and flight-to-quality trend is expected to keep rents stable to increasing in 2022. Transactions for warehousing segment, riding on the boom of the e-commerce sector, is projected to grow at a CAGR of 20% from 31.7 mn sq ft in FY 2021 to 45.9 mn sq ft in FY 2023. E-commerce share in total transactions projected to increase to 36% from 31% during this period Indian Data Centre market currently houses an estimated 445 MW of critical IT capacity, and with a significant approx. 290 MW addition in 2022, the total count will scale up to 735 MW by end of next year. Mumbai houses approximately 193 MW of India’s current 445 MW data centre capacity. Mumbai’s total capacity is estimated at 1,006 MW with 258 MW under construction and 555 MW in various stages of planning Resilience of Indian REITs during the pandemic and growing popularity with retail investors will help pave the way for other commercial real estate REITs. Source: Business Standard INDIA

Greater Noida authority to develop a Connaught Place-like commercial market

12/15/2021 12:00:00 PM

The Greater Noida Authority has begun preparations to develop a commercial market complex on the lines of Delhi’s Connaught Place near Sector Chi-Phi. Yet to be named, the market complex is expected to come up in an area of about 4-5 acres and will have 2-4 floors. From the many designs that were invited, the final approval was given to a private consultant. While the area has many residential and commercial units in its vicinity, it is also barely a kilometre from the Yamuna Expressway, and is expected to gain momentum with the commencement of the Jewar airport operations. Work on it is expected to formally start next year post-UP assembly election, officials have said. Narendra Bhooshan, the Authority CEO, told TOI, “There were plans to have a big commercial hub in Greater Noida as part of its development plan. Under that, we plan to build a circular commercial hub on the lines of Delhi’s Connaught Place near Sector Chi-Phi which has big wide roads on four sides and an open space for a big roundabout.” According to Bhooshan, there were many designs that were invited for the commercial hub. “But the final approval was given to a private consultant. We held a competition among select leading architects and selected one of their designs,” he said. “The plan to build the commercial circle was taken up since the demand for it increased in the area following the announcement of the Jewar airport.” Officials said the commercial circle may be developed in quartets, where more than one firm will be hired. “The proposed area where the commercial circle is to come up has wide roads on four sides. So, we have to decide whether we should go with everything in one go or take it up one by one and develop it in four parts like quartets. For this, we may float four different tenders to maximise the desired result,” he said. While the Authority will work on the costing and tender details before the UP assembly polls, officials plan to float the first tender by April 1, 2022, and “construction work will begin after the election results”. Source:ET Realty INDIA

RBI keeps repo rate unchanged at 4%

12/8/2021 2:56:00 PM

The Reserve Bank of India (RBI) on Wednesday kept borrowing costs at a record-low for the ninth consecutive time as it decided to continue supporting economic growth amid uncertainty over the impact of the Omicron strain of the coronavirus on the economy. The six-member Monetary Policy Committee (MPC), which has paused rate changes since August last year, unanimously decided to keep the benchmark repurchase rate at 4 per cent and voted 5-1 to retain its accommodative policy stance as long as is necessary, reflecting a continued bias to support economic growth given that inflation was not a big worry. The reverse repo rate -- the level at which it absorbs excess cash from lenders-- was kept unchanged at 3.35 per cent. It kept the GDP growth projections unchanged at 9.5 per cent for the current fiscal and retained the inflation forecast of 5.3 per cent for the full year. While the Indian economy has literally hauled itself out of one of the deepest contractions in April-June, it is not yet strong enough to be self-sustaining and durable. "Given the slack in the economy and the ongoing catching-up of activity, especially of private consumption, which is still below its pre-pandemic levels, continued policy support is warranted for a durable and broad-based recovery," Governor Shaktikanta Das said. "Our motto is to ensure soft landing that is -timed." There, however, has been no guidance on the rate trajectory. RBI had slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the coronavirus pandemic and tough containment measures. This is on top of rate cuts to the tune of 135 bps since the beginning of 2019. The central bank struck to its principle of 'gradualism' since the downside risks to a durable growth trajectory have clearly increased due to the spread of of the new COVID variant Omicron. On inflation, the central bank took comfort from the excise tax cuts in petrol and diesel and the steps taken by the government to moderate prices in food categories such as edible oil and pulses. Das said the central bank will continue rebalancing liquidity conditions and will use VRRR (Variable Rate Reverse Repo) auction as the primary tool for liquidity management, shifting away from the fixed reserve repo rate. The RBI will raise the amount of cash it absorbs through the 14-day VRRR to Rs 6.5 lakh crore on December 17 and subsequently to Rs 7.5 lakh crore on December 31. At the same time, the auctions will have a higher proportion of 28 days vis-a-vis the primary tenor of 14 days. Excess cash in the banking system hovered at around Rs 9.2 lakh crore, close to a record high. The surplus liquidity is seen as a risk to consumer prices, already under pressure from a rise in vegetables and fuel costs. More steps are being taken to normalise the excess liquidity by reducing the additional quantum that was eligible under Marginal Standing Facility (MSF). Further, banks have been permitted to prepay any of their Targeted Long Term Repo Operations (TLTROs) withdrawals to optimise their liquidity position. "The MPC regarded the accentuation of headwinds emanating from global developments as the main risk to the domestic outlook, which is now somewhat clouded by the omicron variant of the COVID-19," he said. Source: ET Realty INDIA

Chandigarh administration okays adoption of model tenancy act

12/7/2021 10:52:00 AM

The UT administration has okayed the adoption of Model Tenancy Act approved by the Union cabinet in June this year. UT adviser Dharam Pal said that they have considered all objections and suggestions, and the file will soon be sent to UT administrator Banwarilal Purohit for final approval. The UT will then issue a final notification, he said. The administration has started the process to implement Model Tenancy Act in October 2020. The administration had sought objections and suggestions from the public on the draft of the Act. With the implementation of the Act, a rent authority will be established for regulating renting out of premises and to balance interests of owner and tenant by establishing adjudicating mechanism for speedy dispute redressal. A rent court and a tribunal will be set up to hear appeals and related matters. The rent authority will have exclusive jurisdiction over tenancy issues. All rent agreements will have to be submitted to it. The landowner and the tenant will have to separately file particulars within a month of signing the agreement. At present, these can be registered at the subregistrar’s office. In 2019, the administration had sent the Centre’s Model Tenancy Act, 2019, and the draft of the Chandigarh Tenancy Act, 2019, to the ministry of home affairs to take the final call on the tenancy Act to be to be implemented in the city. In June 2019, the UT had prepared a draft of the Tenancy Act based on the Centre’s Model Tenancy Act, 2015. But the Centre proposed a new Model Tenancy Act in August 2019. Source: ET Realty INDIA

Noida: Homebuyers rejoice as registration of flats now to be done on carpet area

12/4/2021 11:05:00 AM

The Noida authority has issued an order mandating that the registry of flats will now be on the ‘carpet’ area, much to the relief of thousands of homebuyers who have long been demanding that the registry of a flat should not be determined by the ‘super area’--a factor that gives the scope to a developer to escalate the cost of an apartment. The new order has paved the way for apartment owners to pay less to a developer and also a lesser registration fee for a flat to the stamp department. Since 2016, when the Real Estate Regulatory Authority (Rera) Act came into being, homebuyers intensified the demand for registry or sale of a flat on carpet area. Even before the Rera Act, homebuyers, citing the provisions of UP Apartment Act, used to demand that a flat’s rate be determined by the carpet area but the developers kept objecting to the demand. According to the provisions of the UP Rera that came into effect on May 1, 2016, the carpet area means the net usable floor area, excluding the area covered by external walls, service shafts, balconies, verandahs and open terraces. Buyers said the ‘super area’ refers to the common area that developers add to the actual size of the flat, thereby increasing the size of the unit to make more profit. “According to RERA, the developer should sell a unit on the basis of carpet area and not on the super area. The developer should make an agreement with a buyer based on the carpet area; if he does the registry of a flat on the super area, it is against the law. Be it agreement, sale or registry, if it is not determined by the carpet area, then it is illegal. Since Noida authority is a party in the sub-lease deed process, its circular (on registration of flats) will benefit customers. It was much needed to put an end to all confusions,” said Rajive Kumar, chairman of UPRera. “After a long battle, the Noida authority has finally issued an official order, sending a copy of the same to UP RERA, the stamp department and other agencies in this regard. We are delighted with this order as it will benefit scores of homebuyers, who are looking to buy an apartment or get a flat’s registry done. The move will bring down the overall cost for each flat by upto 28% ,” said Chakresh Jain, a homebuyer, who has been fighting for this demand for the last six years. Homebuyers had first raised this issue of developers charging more in the name of ‘super area’ of a flat before officials of the UP stamp and registration department in Noida on December 20, 2010. Subsequently, the administration had written to the Noida authority asking it to stop the sale of flats on ‘super area’ as it affects buyers. “From the model guidelines issued in 2018 by the UP Rera, it is clear that the sale/purchase or sub-lease deed should be executed on carpet area. In future, sale/purchase or sub-lease deed should be executed only on carpet area basis,” said Neha Sharma, additional CEO of the Noida authority. There are at least one lakh apartments, whose registry has to be executed in Gautam Budh Nagar. Developers also welcomed the move of the Noida authority. “The move will benefit homebuyers, who otherwise had to pay more in stamp duty at the time of registry. If the carpet area of a flat reduces, it will automatically bring down the cost of the flat, which in turn will benefit homebuyers,” said Subodh Goyal, secretary of Confederation of Real Estate Developers Association of India (CREDAI), a builders group. S S Pal, assistant inspector general of UP stamp and registration department in Noida, said, “We are ready to implement this order if the Noida authority has agreed on doing the registration of a flat based on the carpet area. Our duty is to execute registry on the basis of details provided by the Noida authority, buyer and the developer.” Source: Hindustan Times INDIA

Real estate sector revival to continue into 2022

12/2/2021 10:42:00 AM

The real estate sector has made an impressive revival despite disruptions and market upheavals during the pandemic. Analysts have a positive outlook that this revival will continue into the New Year. The sector has transformed into a buyer’s market, and today, with an evolved sense of preference, buyers are focusing on customised offerings to make ideal investment decisions. As per a recent report, nearly 80 percent of prospective home buyers prefer to purchase properties that are ready to move in or nearing completion. While work from the office has re- emerged, ‘work from home’ may not entirely go away as it is now an integral part of long-term work strategy. Moreover, a blend of positive factors like low home loan interest rates, customer-centric regulation, affordable property prices, developer offerings on new products and payment flexibility has prompted even fence-sitters to make the purchase decision, sooner than later. Thus, buoyed by strong economic fundamentals and a conducive business climate, 2022 is expected to unlock a plethora of opportunities for Indian real estate. We can see significant changes in consumer behaviour and market sentiments in real estate as the pandemic continues to ebb. Buyers are first researching projects digitally and are gaining more knowledge about them before physically visiting the projects and making decisions. Homeownership has become a priority, with businesses focusing on remote work – and homebuyers’ need for bigger spaces. Hence, customer-centricity is defining the Indian real estate sector and it is important to recognise this shift in their outlook towards property purchase. The positive performance of the residential sector followed by good execution in recent times are important signs that momentum in home buying will continue to persist in the near future. With pent-up demand, an upswing in the job market, the mass rollout of vaccines and the lowering of infections, the real estate industry is bouncing back. These factors will play a key role in boosting demand and pave the roadmap for a vibrant housing ecosystem. The festive season too has added to the already positive outlook that home buyers have been exuding in recent times. In fact, the industry has shown positive recovery with great momentum, taking the sales to pre-COVID levels within months after cities have returned to normalcy. A recent report has announced new residential unit launches increased by 90 percent in Q3 2021, a significant recovery compared to launches last year.In this renewed demand, ready-to-move-in spaces are the top priority among discerning customers who do not want to wait endlessly for their properties given the background of the pandemic. These homes are a safe investment option in today’s world where preferences are changing rapidly. While buying a home, customers are also now increasingly looking for reputed developers with an excellent track record, execution capabilities and quality projects. Developers are also increasingly relying on emerging digital technologies to deliver smarter experiences. The real estate segment has remained the safest investment option and will continue to attract investors keeping market sentiment buoyant. The increase in demand is organic as it is driven by the realisation among buyers that owning a home in the midst of the pandemic is invaluable. The trend of demand remaining buoyant can be attributed to several other factors, including the overall improvement in the job market, resumed economic activity, pent-up demand and an increasing desire to own physical assets during times of unprecedented uncertainty. The realty sector in India is one of the pillars of the economy and is the second-most elevated business generator in the country after agriculture as the sector is interlinked to 250+ allied industries. The sector represents almost 6-7 percent of the economy and is set to increase to around 13 percent by 2025. All in all, the future will be a harbinger of positive growth, innovation and investment for the residential real estate sector. Source: CNBCtv 18 INDIA

Real estate companies urge government to raise the criteria of affordable houses to ₹65 lakh

12/1/2021 11:47:00 AM

Real estate companies have urged the government to increase the criteria for affordable houses to ₹65 lakh from ₹45 lakh with the overall cost of cement and other construction materials going up substantially. While the recent Covid resurgence has posed challenges, the rising vaccinations, low home loan rates and developer incentives have been driving steady growth in housing demand, especially for affordable and mid-segment projects. According to the recent JLL India report, new launches have increased by 38 per cent till September to 93,873 units compared to last year. Ashok Chhajer, Chairman and Managing Director, Arihant Superstructures said the cost of construction has increased by 50 per cent in recent times and criteria for affordable housing should be revised to ₹65 lakh. The demand for affordable housing will get further boost if the concession of one per cent GST is extended for flats sold at ₹65 lakh and above from ₹45 lakh, he added. Growth in demand The demand for mid-size and affordable segment has gone up substantially across the country but was more pronounced in the southern markets as IT companies offered special bonus to attract fresh talent. Subhankar Mitra, Managing Director, Colliers India, an advisory services firm said Bangalore is the largest housing market in south India and key factors driving growth in City are their proximity to economic hubs including industrial areas, good infrastructure and upcoming metro lines. In recent times the supply in Hyderabad is skewed to properties of above ₹40 lakh while the demand is for cheaper homes while the south and south-west corridors of the Chennai region have witnessed much of the growth for affordable projects, he added. With remote working, the requirement for affordable housing in Tier 1, 2 and 3 cities, priced in the range of ₹40-50 lakh are expected to rise, resulting in a location-specific demand surge. Anuj Puri, Chairman, ANAROCK Group said though it is too early to gauge the impact of Omicron virus on the real estate sector, the second wave injected fresh demand into the housing sector as it emerged an important asset during pandemic. Given the present inflationary trends of input costs such as cement and steel, buyers are aware that developers will increase prices and genuine buyers are trying to seal deals before the price hike. Interestingly, the primary demand for affordable housing this year is emerging from the age group between 28 and 45 years. Millennials buying homes has gone up from 49 per cent to 63 per cent during the pandemic tenure. In the affordable segment, Chennai and Mumbai witnessed maximum launches and in the mid-range, Bengaluru, Hyderabad, Mumbai and Pune contributed over 81 per cent of total projects. Mid segment continued to account for the maximum share of 54 per cent in new launches, followed by the affordable and high-end segments with shares of 26 per cent and 19 per cent, according to JLL Research report. Source: Hindu Business Line INDIA

New Delhi slips to 38th rank in Knight Frank’s Prime Global Cities Index Q3 2021

11/30/2021 12:36:00 PM

The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices in local currency across more than 45 cities worldwide using Knight Frank’s global research network. New Delhi is ranked 38, Mumbai 39 and Bengaluru 42 in Knight Frank’s Prime Global Cities Index Q3 2021. Bengaluru moved down one spot up against the previous quarter in the index as the quarter registered a 1.1 percent YOY price fall in the prime markets. Mumbai moved up to the 39th position in Q3 2021, against its 40th rank in the previous quarter, as prices fell marginally by 0.1 percent YOY. Mumbai, Delhi and Bengaluru’s prime residential market is witnessing price stability on a QoQ basis. Delhi is ranked 38th with a stable price level for the period Q3 2020 – Q3 2021. Mumbai ranked 39th with a marginal -0.1 percent annual change for the period Q3 2020 – Q3 2021. Prime residential properties in the city registered a price appreciation of 0.2% in Q3 2021 compared to the previous quarter, the report said. Bengaluru ranked 42 with a -1.1 percent annual price change for Q3 2020 – Q3 2021. The city witnessed no price change in Q3 2021 compared to the previous quarter. Prime residential property is defined as the most desirable and most expensive property in a given location, generally defined as the top 5 percent of each market by value. The Prime Global Cities Index is a valuation-based index tracking the movement in prime residential prices in local currency across more than 45 cities worldwide using Knight Frank’s global research network. According to Knight Frank’s research analysis, 39 cities witnessed a rise in prime residential prices between Q2 and Q3 – 2021. Fifteen cities registered double-digit priced growth. The Prime Global Cities Index, an unweighted price index of prime residential prices across 45+ cities, increased by 9.5 percent in the year to Q3 2021 compared to 8.2 percent in the year to Q2 2021. “As India’s economy recuperates from the impact of the pandemic and lockdown, the up-market segment of luxury homes is witnessing a surge in demand. The drivers for this demand are bottoming out of the prices across Indian cities along with various fiscal measures, which has made the overall environment very conducive for the residential sector. As developers and other industry stakeholders hold a positive sentiment, the segment is expected to record improved levels of activity,” said Shishir Baijal, Chairman and Managing Director at Knight Frank India. Miami was the best performing city in the index during the period, where luxury home prices appreciated 26.4 percent. According to the report, 84 percent of the global cities registered positive yearly price growth; while Miami leads the index this quarter for the first time since 2007 recording 26.4 percent rise in the year to Q3 2021, Jakarta was the weakest performing market with a decline of - 4.2 percent. Source: Money Control INDIA

Low mortgage rates, stagnant prices boost housing demand in Tier-II cities too

11/26/2021 11:29:00 AM

The recovery in housing demand is being driven by a growing demand for homeownership, which is being fueled by historically-low mortgage rates, stamp duty waivers in several states, and stagnant prices. According to the JLL – Residential Market Update: Q3 2021, “in Q3 2021, sales witnessed an upward trajectory, increasing by 65% on a sequential basis, with 32,358 apartment units sold during the quarter against 19,635 units in Q2 2021.” Developers eagerly launched new home projects with an eye on the festive season as economic growth returned in tandem with the gradual return to normalcy. According to data collated by Housing.com, 65,211 units were launched in Q3 2021 — a jump of 199% compared to the Q2 2021 period when 21,839 units were launched. Sales in the real estate sector are also increasing due to people’s revived interest in real estate assets. As per Housing.com, 55,907 units were sold in Q3 2021 compared to 15,968 in Q2 2021. Tier-II cities had a similar story. According to realtors operating in the TriCity (near Chandigarh) market, the region also had a healthy movement. “In the post-pandemic scenario, people are preferring developers with a good track record. The demand for luxury homes is on the rise in this market, and also the definition of affordable housing has changed as people want home with full amenities like security, safety, recreation, and shelter all at once. Apart from this, the demand for commercial projects has also increased because people have realized the financial stability of such assets,” says Prateek Mittal, Executive Director, Sushma Group & IIT Alumnus. The rise of surrounding areas such as Mohali and Zirakpur in Punjab was prompted by high real estate prices in the main city. “Infrastructural development is also adding to the sustainability of the Tricity market as people prefer buying properties near areas that can provide good connectivity; that is why people are thronging to real estate projects in Mohali and Zirakpur; this is attracting investments from NRIs,” adds LC Mittal, Director, Motia Group. Developers are offering various discounts such as straight-up price reductions, delayed payment arrangements, and other incentives to attract fence-sitters and prospective homeowners as the holiday season is fast approaching. The realtors here maintain that Chandigarh has long been on the realty map for NRIs; the opening of properties in neighbouring regions such as PR7 Airport Road has provided them with the opportunity to expect exceptional returns on their investment. It also boasts a high level of living, making it a popular location for buying and investing. Similarly, Mohali offers a diverse range of real estate prospects supported by robust infrastructure development. The recently constructed 200-foot Mega Airport Road has increased the value of properties in Mohali. Then there’s Zirakpur, which is seeing continuous real estate growth in Chandigarh. People are increasingly choosing larger, more secure homes, and this consumer trend has paid off handsomely for Zirakpur. Source: Financial Express INDIA

IT companies among largest consumers of realty space during Sept quarter

11/25/2021 11:31:00 AM

Notwithstanding the work from home trend emerging for most tech companies during the Covid-19 pandemic, information technology (IT) companies continue to be among the largest consumers of real estate space during the September 2021 quarter, according to a new report. The report, titled Real Estate Industry: Outlook and Challenges released by Infomerics Valuation and Rating Pvt Ltd, said IT remains the largest consumer of space during the quarter, occupying 34 per cent of the space transacted. Overall, the commercial segment, which is relatively a more formal segment (with big players involved), has seen an influx of investment. Among dominant markets, Bengaluru, Chennai, and the National Capital Region (NCR) recorded largest recovery in the September 2021 quarter. The report mentions that post-pandemic, the real estate industry has been witnessing drastic change over the past two years. While the Covid-induced ‘work from home’ model reduced the demand for commercial spaces, it increased the demand for residential spaces. However, commercial investments augur well, given the scope of business activity in India and this can be clearly witnessed with the on-going developments in the Indian business space; more companies are being formed as they touch greater heights of expansion with need for working spaces. Moreover, about 88 crore people are expected to live in urban areas in India by 2051 as against the current 46 crore people. Therefore, this trend-setting pattern is sure to be salubrious for the real estate industry along with government interventions and new schemes rolling in, in urban house spacing. Growth drivers Factors driving the growth of the real estate industry in India include low interest rates, favourable government policies, revised circle rates in Delhi, more ready-to-live projects, etc. The report also highlights the fact that more than 58 per cent of people consider property as a mode of safe investment, with a notion that the prospects for real estate are likely to get an upswing once the pandemic recedes. Source: Hindu Business line INDIA

Shimla, Coimbatore, Chandigarh top Niti Aayog's first SDG Urban India Index

11/24/2021 11:11:00 AM

Shimla, Coimbatore and Chandigarh have topped the Niti Aayog's first Sustainable Development Goals (SDG) Urban India Index, while Dhanbad, Meerut and Itanagar have emerged the worst performers. The SDG Urban index and dashboard developed by Niti Aayog in collaboration with GIZ and BMZ, and under Indo-German Development Cooperation, has been released. Out of 56 urban areas ranked in the index, 44 have a population of above one million, and 12 are state capitals with a population of less than a million. The ranking has been done based on 77 SDG indicators across 46 targets of the SDG framework. The data on these indicators have been sourced from official data sources such as NFHS, NCRB, U-DISE, data portals of various ministries, and other government data sources. The SDG framework was first released in 2015 by the United Nations, with 17 SDG goals which include no poverty, zero hunger, gender equality and clean water and sanitation, 244 indicators that track the progress of these goals, and 169 targets. Each country is encouraged to design their own framework, based on its national priorities. “Cities are fast becoming engines of growth. The SDG Urban index and dashboard, a product of innovative partnership between NITI Aayog and GIZ, will go a long way in instituting a robust SDG monitoring system in our cities, and is a milestone step in our SDG localisation journey,” said Rajiv Kumar, Vice Chairman of NITI Aayog during the launch. For each SDG, the urban areas are ranked on a scale of 0-100. A score of 100 implies that the urban area has achieved the targets set for 2030; a score of 0 implies that it is the farthest from achieving the targets among the selected urban areas. Overall or composite urban area scores are then generated from the goal-wise scores to measure aggregate performance of the urban area. The index highlights the strengths and gaps of urban local body-level data, monitoring and reporting systems. "The index and dashboard will further strengthen SDG localisation and institute robust SDG monitoring at the city level," the statement said. Top ten urban areas in SDG Urban Index and Dashboard 2021-22 are Shimla, Coimbatore, Chandigarh, Thiruvananthapuram, Kochi, Panaji, Pune, Tiruchirapalli, Ahmedabad and Nagpur. The bottom ten on the index and dashboard are Dhanbad, Meerut, Itanagar, Guwahati, Patna, Jodhpur, Kohima, Agra, Kolakata and Faridabad. The areas with ranking between 0 and 49 have been ranked as aspirants, those with 50-64 are termed performers, those with 65-99 are called front- runners, and the ones with a perfect score are called achievers. Source: Money Control CHANDIGARH

India affordable housing offers $0.62 trillion investment opportunity in next 5 years

11/23/2021 10:56:00 AM

India’s affordable housing offers funding opportunities worth $0.62 trillion for private funds over the next five years in the backdrop of the government’s push for this segment. However, it is yet to become a major theme for the funds in the country with very few private equity funds dedicated to financing affordable homes, said industry experts. The affordable housing segment in India has so far witnessed private equity (PE) investments worth nearly $2.60 billion or 17% of the total PE investments in residential real estate since 2011. “The total investment required globally to meet the current demand for affordable housing is $5.8 Trillion of which my country India needs about $0.62 Trillion. These are by no means easy numbers to achieve for global investors and governments and there is no single solution to the challenges of creating affordable housing,” said Shishir Baijal, CMD, Knight Frank India while speaking at a conference organized by the Asia Pacific Real Assets Association (APREA). The Ministry of Housing and Urban Affairs demand-based assessment, which is based on an assessment of the number of houses which the households will choose to occupy given their preferences and ability to pay (at given prices), has pegged the affordable housing demand at around 11.22 million houses. Urban India comprises 35% of the country’s population and is witnessing unprecedented rates of migration leading to rapid urbanisation resulting in demand preceding the supply. “As early as 2014, we were convinced of the affordable housing story as an attractive investment proposition. Further, increasing the supply of affordable housing is the need of the hour, not only in India but across the globe, and the positive social impact it creates cannot be quantified. Substandard housing/slums continue to rise as the supply of affordable housing has failed to keep pace with the migration of people in search of economic opportunities,” said Vipul Roongta, MD and CEO of HDFC Capital Advisors. HDFC Capital Advisors (HCARE fund) has raised $1.1 billion and is the largest of such funds operational in India. It is primarily used for long-term financing of affordable housing projects across 20 cities in the country. The fund is committed to financing 1.71 lakh homes in India and developing 180 million sq ft. According to Roongta, the positive government policy interventions have encouraged private players to participate in increasing the supply of affordable homes in India. Private equity funds have increasingly started to focus on financing the development of affordable housing, leading to positive social impact, without losing sight of stable risk-adjusted returns sought by sophisticated investors. Around 57% of the world’s total population lives in urban areas and almost a third of this population of nearly 1.3 billion lives in substandard housing. This has translated to a housing need-gap of 325 million homes globally, of which India contributes to 11%. It’s estimated that by the year 2030 more than 40% of the Indian population will live in urban India as against the current figure of 35%, which will create additional demand for affordable units with huge investment opportunities for private equity players. Nearly $1.66 billion worth of funds have been invested with a focus on the development of affordable homes in India in the last 3 years. To address this housing crisis, various funds and institutes have stepped into the affordable housing segment. These funds have focused their investments on the development of affordable housing while providing liquidity and credit to credible developers while using asset management to hedge risks. With the adoption of the PMAY policy in 2015, the government of India has targeted to meet a demand of 11.22 million homes. Since the launch of the policy to 31st March 2021, 11.3 million houses have been sanctioned, out of which, 4.8 million have been completed to date. The need for affordable housing in the growing urban sprawls of India has caught the attention of many developers, who are seeking to exploit this growing demand. Over 50% of all India residential launches in the top eight cities in the last 5 years have been in the sub-Rs 50 lakh segment. Source: The Economic Times INDIA

Affordable housing rates revised in Haryana, dearer by ₹200 per sqft

11/19/2021 12:06:00 PM

For the first time in seven years, the Haryana government on Wednesday revised the rate of affordable housing projects, increasing them by ₹200 per sqft. According to the new directions, the rate of affordable housing flats in hyper potential zones will now be ₹4,200 per sqft, in high potential zones, the rate will now be ₹3,600 per sqft, while in other areas, the rate will now be ₹3,200 per sqft. The cost of a balcony in affordable flats, which was earlier fixed at ₹500 per sqft, has been increased to ₹1,000 per sqft. The affordable housing policy was launched in 2014 with fixed rates, which are being revised for the first time, officials said. The Haryana government has divided districts into hyper potential zones, high potential zones, medium potential zones, and low potential zones based on demand and rates. Directorate of Town and Country Planning (DTCP) officials said that the rates were revised due to an increase in the prices of raw materials and labour. “The decision to increase the price has been taken across the state, keeping in view the change in the cost of input,” said Sanjeev Mann, senior town planner. In another move, the government has also linked 75% of the payment to the status of the construction of the project. The license of an affordable housing project can now also be renewed after four years, which was not allowed earlier, the notification by DTCP said. Pankaj Tomar, a real estate expert, said that the price increase will have an only nominal impact on the buyers as the area of affordable flats is between 400 to 800 sq ft. “The price rise will be somewhere between ₹1 lakh and ₹1.60 lakh per flat. Buyers can still easily afford these flats,” he said. Developers who build affordable projects welcomed the move, but said that they had expected more from the government. “The increase in rate is a positive step, given an almost 50% increase in the price of cement, steel, labour cost and other raw materials. However, we expected more as the rate was not revised for the last seven years,” said Pradeep Agarwal, managing director, Signature Developers. National Real Estate Development Council, which has been pursuing this matter with the Haryana government, said that the costs of raw material and labour increased several times in the last seven years, and the increase should have been higher. “The cost of construction has risen and the rate of increase should have been proportionate, but this is a step in the right direction,” he said. The price increase was approved in a Cabinet meeting on November 2, and the notification was issued by DTCP on Wednesday. Gurugram has over 100 affordable housing projects under construction, in which around 40,000 units are in various stages of development. The affordable housing projects have gained traction, particularly during the Covid-19 pandemic as a large number of people are buying their own homes. Source: Hindustan Times INDIA

Property prices may go up by 10-15% due to sharp rise in raw materials cost: CREDAI

11/17/2021 11:58:00 AM

NEW DELHI: The Confederation of Real Estate Developers' Association of India (CREDAI) has expressed concern over the sustained increase in price of construction raw materials including cement & steel. Historically, prices of almost all materials & commodities shoot up whenever there is a consistent increase in fuel price but the prices of construction raw materials have been increasing consistently since January 2020. Add to this the delays in construction caused by lockdowns, curfews, shortage of labour leading to increased labour cost leading to a direct increase in construction cost anywhere between 10% to 15% in the last 18 months. Developers highlight that this is a multifaceted issue as RERA doesn’t allow the flexibility to escalate selling price even if the construction costs go up substantially. Last year, CREDAI wrote to various central government departments expressing concern over the steep hike in prices of materials and has been highlighting the issue on multiple platforms. If the prices of a higher raw materials do not start decreasing in the immediate future, there is a high probability that the prices of residential properties will go up by 10 -15% to offset the increased cost of construction. Harsh Vardhan Patodia, president, CREDAI National, said, “We have been consistently witnessing sharp increase in the raw material prices over the last one year and they don’t seem to be decreasing or stabilising in the near future. The developers may not be able to absorb escalating costs and unfortunately may have pass on the burden onto homebuyers. CREDAI urges the government and relevant Ministries to address this issue and tackle the prices rise at the earliest.” CREDAI says one way of addressing this issue could be to permit escalation of prices by allowing a clause in the buyer seller agreement. Government may also consider either allowing Input Tax Credit for real estate projects and / or rationalisation of GST on various construction raw materials from their current rates as this would have a bring down the prices of residential properties immediately. If these steps are not taken immediately, property prices across all segments wiill shoot-up directly hampering the affordable housing & housing for all missions of the government. Sources: ET Realty INDIA

Sustainable living along with personal workspace: The emerging new asset class

11/16/2021 11:02:00 AM

The residential real estate segment has witnessed a tectonic shift in recent times due to the socio-economic impact of the COVID-19 pandemic. Homebuyers are now recalibrating their preferences in line with the new normal. Real estate has been traditionally regarded as a safe haven and sound investment asset in the Indian ethos. COVID-19 has further accentuated the priority of buying homes against living with insecurities in rented accommodation. Residential properties are increasingly being perceived as a stable asset class due to assured and steady returns among HNIs, NRIs, and millennials mulling to invest in their homeland. Also, the stock market and gold have seen their run giving investors a reason to plough their money into residential real estate. The extended work from home has heralded a shift in consumers’ preferences towards residential offerings with a distinct workspace. This trend has prompted the redesigning of conventional residences with 2-BHK and 3-BHK configuration while considering workstation as an additional component in their product offering. These residences perfectly suit the ‘work from home’ (WFH) lifestyle for both Indians working with global firms and the expat communities. COVID-19 has also prompted developers to rethink their offerings to align with the tastes of discerning Indian homebuyers. Residences located in self-sustainable oasis and endowed with state-of-the-art amenities, such as a gym, spa, a private space for weekend meetups, a kids’ play area, among others, have emerged as sought-after realty offerings. Location, ticket size, pleasing aesthetics and thoughtful design and cutting-edge technology are among the key factors influencing homebuyers’ decisions. Homebuyers now consider their dream home as an address and a space of their ‘belonging’ to meet their psychological, emotional, and social needs. With some Indian and global organisations mulling a permanent ‘work from home,’ geography is no longer a constraint for homebuyers. It has pivoted the focus towards homes located on the outskirts of cities that have witnessed rapid infrastructural developments. Holiday homes or second homes to enjoy ‘staycation’ and ‘workcation’ are also gaining traction to escape the monotony of work from home. The health, hygiene and wellness concerns have also reaffirmed the significance of residences set amidst lush greenery and endowed with eco-friendly amenities such as green building certification, provision for harnessing solar energy and rainwater harvesting, etc. With customer-centricity gaining currency, real estate developers are customising their product offerings as per homebuyers’ requirements. Customisation of space has been extended to such an extent that developers are offering complete open floors with the possibility of designing them as per homebuyers’ requirements from a range of standout design options. Residential real estate projects that are already in development or the planning phase are considering the ‘space’ element with a new approach, keeping in mind renewed choice of homebuyers. The health and wellness concerns also imply that robust facility management will be an essential factor for homebuyers while choosing their home. With the customers prioritising values such as ethics, transparency and accountability, bridging trust deficit and maximising the customer experience will be the key priority for developers. It will invariably lead to the consolidation of the industry in favour of organised players with sound credentials and excellent track record. Homes with a provision of a workspace have emerged as the new asset class and will continue being one of the most sought-after offerings in the post-COVID era to cater to the compact families of the Indian millennials and exemplify convenience and value-for-money propositions. The COVID-19 pandemic can be regarded as an inflexion point that has unlocked opportunities for Indian real estate to reform itself for a bright future. Bolstered by enabling government policies, initiatives by developers and robust infrastructure, we foresee a quick rebounding of Indian real estate in line with the new normal and contribute towards achieving the dream of a 5 trillion dollar economy by 2024. Source: Financial Express INDIA

Housing sales jump 46% QoQ to 50,000 units in Q3 2021: CBRE

11/12/2021 10:47:00 AM

Housing sales jumped nearly 46% QoQ to 50,000 units in Q3 2021 and sales rebounded significantly by approximately 86% YoY on a year to date basis. Led by sustained attractive mortgage regime and government incentives, housing sales jumped nearly 46% QoQ to 50,000 units in Q3 2021 and sales rebounded significantly by approximately 86% YoY on a year to date (YTD) basis, according to CBRE South Asia Pvt Ltd’s ‘India Market Monitor – Q3 2021′ report. As per the report, office leasing activity reached 13.5 million sq ft in Q3 2021, growing at about 140% QoQ, with the YTD number reaching 25 million sq ft for the key cities. With 3PL and E-commerce fuelling demand, the Industrial & Logistics leasing activity crossed 9 million sq ft in Q3 2021, growing at about 6% QoQ and touching 23 million sq ft for 9 months 2021. Commenting on the same, Anshuman Magazine, Chairman & CEO, India, South East Asia, Middle East & Africa, CBRE, said, “India’s real estate market has proven to be extremely resilient over the last year. The overall outlook for the Indian real estate continues to be positive – back of an accelerated vaccination drive, policy reforms, and increasing urbanization.” Abhinav Joshi, Head of Research – India, Middle East & North Africa, CBRE, said, “With ease of restrictions post-COVID’s second wave, the real estate industry has witnessed steady growth. The green shoots of recovery have been observed across sectors – including office, residential, retail, and industry & logistics — which is likely to sustain momentum for the next few months.” Residential Sustained attractive mortgage regime and government incentives led to strong sectorial recovery: # Pune led housing sales in Q3 2021 with 33%, followed by Mumbai (23%), Bangalore (17%) and Hyderabad (13%). # At 47% and 31%, mid segment and affordable/ budget respectively were the dominant growth driver of sales in Q3 2021. # New project launches jumped by nearly 37% QoQ to reach 48,950 units in Q3 2021. Market Outlook: # Mid-end and affordable segments to continue driving sales; state government incentives and an enabling mortgage regime to reinforce upward momentum. # Rental housing to get a boost post the implementation of the Model Tenancy Act, thereby creating an alternate asset class for developers; fillip expected for co-living and student housing segments. # Increased appetite from millennials and first-time home buyers; larger unit sizes and plotted developments to gain momentum. # Project execution capabilities and cashflow management would be critical; stress funds to witness increased traction. # Appreciation of commodity and asset prices as well as hardening of interest rates – key risks that could limit growth in sales. Office Recovery strengthened as occupier decision making picked up. Supply addition in Q3 2021 touched nearly 13.5 million sq. ft. growing by about 30% QoQ: # Small- to medium-sized deals (up to 50,000 sq.ft.) dominated space take-up with a share of almost 80% in Q3 2021. # Hyderabad, followed by Delhi NCR and Mumbai, dominated supply, with a combined share of 84%. # Hyderabad, Bangalore and Mumbai closely followed by Delhi-NCR led demand and accounted for over 80% of total absorption. Market Outlook: # As mobility improves and a comeback to the physical office environment picks up, overall absorption is expected to grow. # As occupiers recognise the significance of the physical office as a centre for collaboration, connection and culture; a shift in workplace design is likely with more allocation to ‘we’ space over ‘me’ space. # Occupiers are expected to incorporate more flexible spaces while re-optimising their portfolios with the realignment of ‘core + flex’ themes. # Despite an increased appetite for hybrid work, the frequency of remote working is anticipated to be low (such as once a month); occupiers are also likely to determine their remote working eligibility post ‘return-to-office’ strategies. # Developers are expected to enhance existing assets through better amenities, sustainability and health & safety measures, technological upgradation to improve occupancies. # Investors are expected to take note of strong occupiers’ expansion intentions and monitor working patterns in their assets I portfolios; office assets to continue to remain high on the investor radar. Source: Financial Express INDIA

Land pooling policy for Chandigarh villages on cards

11/11/2021 11:26:00 AM

The UT Administration plans to implement a land pooling policy in a village on a pilot basis. The Administration is preparing the policy to utilise vacant land in the city. Initially, the policy will be introduced in a UT village for the development of available land. After the success of the pilot project, the land pooling policy would be implemented in other villages, said UT Adviser Dharam Pal. Facing a shortage of large chunks of vacant land, the Administration is also considering giving resettlement option to owners of commercial and residential properties in the villages, he said, adding that broad contours of the land pooling policy were discussed at a meeting with officials of different departments here today. Directing the officials to prepare a step-wise process of the policy, Dharam Pal said, “The situation is far more complicated in Chandigarh as large chunks of vacant land are not available and we cannot do anything in the green area as per the Chandigarh Master Plan-2031.” “As the development has to be restricted to certain areas being used for commercial and residential purposes, resettlement options can be given to people under the land pooling policy, he said, adding that things were entirely different in Chandigarh as compared to neighbouring districts of Panchkula and Mohali where large tracks of land were available. Recently, UT Administrator Banwarilal Purohit had asked the Administration to utilise available vacant land in the city. The UT Administration has also roped in Bengaluru-based Indian Institute of Human Settlement to formulate a land aggregation and pooling policy to help the UT utilise surplus land for development works in the city. A consultant of the Indian Institute for Human Settlement had already presented a draft policy for aggregation of land for villages and peri urban areas in Chandigarh, after studying best practices of this area in Punjab, Haryana, Gujarat and Maharashtra. On the issue of the Lal Dora extension, the Administration has decided to mark it using the LIDIR technology. Pilot project After the success of the pilot project, the land pooling policy would be implemented in other villages, said UT Adviser Dharam Pal. Submit details of land, depts told The Administration had asked different departments to submit details of available and encroached land. The authorities are mulling a number of land pooling models for the development of villages and peripheral areas. One of the models being considered is giving land development rights instead of land rights. Source: Tribune INDIA

Festive fervour to perk up real estate, boost housing sales

10/29/2021 11:14:00 AM

Spurred by record low interest rates, stable housing prices, stable employment scenario and growing homeownership sentiment, residential sales and new launches have surged in recent months. As per a recent report by PropTiger.com, for instance, home sales and new launches have both shown a significant improvement during July and September 2021, indicating that a turnaround for the realty sector might be around the corner. In fact, a total of 55,907 new housing units were sold in India’s eight leading markets during the three-month period, showing an upswing of 59% when compared to the same period in 2020. Likewise new supply also saw a remarkable upswing in Q3, showing a three-fold jump of 228% to 65,211 units when compared to Q3 2020. Knight Frank India’s Real Estate Update (July – September 2021) has also revealed that housing sales volume across the eight major cities of the nation grew by a considerable 92% YoY to 64,010 units, while new residential unit launches increased by 90% YoY to 58,967 units in Q3 2021. These reports indicate that the second wave of pandemic has had a limited impact on housing sales and new launches across the country, mostly because the sector was better prepared this time. Also, with the festive season in full swing and consumer sentiment at a record high, industry experts and developers are expecting housing sales to gain further momentum. “Home sales across the country have surged significantly despite the pandemic. Homeownership has become a priority, with businesses focusing on remote work – and homebuyers’ need for bigger spaces. This, backed by the government’s initiatives to make housing affordable for all, has aided a strong recovery for the residential sector across the country. With the government’s mass vaccination initiatives, we can expect further growth in the residential sector in the festive season,” says Gaurav Kumar, Managing Director, Capital Markets & Residential Services, CBRE India. “Historically, the festive season in India has always been considered an auspicious time to make home purchases, aided by lucrative schemes by developers. This, coupled with reduced interest rates, can be expected to further boost demand for housing properties in this festive season,” adds Kumar. Industry experts say the festive season has always been the harbinger of increased sales in the Indian realty space. Despite the second wave of COVID-19 pandemic hitting the sector hard, the sector is buoyed as there is a pent-up demand for owning homes, banks are offering home loans at attractive interest rates and thereby the spending capacity of the middle class homebuyers has also improved. Ashish Narain Agarwal, Founder & CEO, PropertyPistol.com, says, “The consumer sentiment is at an all-time high this year as people have realised that owning a home with better amenities is more important than ever. The sector has also been witnessing consolidation and large corporates are looking at opportunities to leverage business in the realty space in India. The trust and confidence from home buyers earned by the corporates will further add up to the growing demand for homes and thereby improve the sector immensely not just during the festive period but otherwise too.” Going by the current trends, developers too are bullish about the growth prospects of the realty sector during the festive season. “Unlike the previous years, this festive season is expected to see a paradigm shift in the psyche of the Indian buyer, who is more cautious, however, smarter than before and plans strategically before investing. Thus, the eyes are laid on the real estate sector, which has seen a significant increase in the residential sales despite spiralling Covid-19 cases and is expecting a jump in sales in the festive season. However, in contrast to the previous years of an impulse purchase, this year will be regulative to the pocket strings of the buyers. The trend and efforts by the developers along with the sudden pique in the interest of investors in real estate clearly indicate a positive outlook for the RE industry this festive season,” says Karan Kumar, CMO, DLF Ltd. Pankaj Bansal, Director, M3M, says, “With people being confined to homes in the new normal for a long period, the demand for homes with ultra-modern amenities will undoubtedly catapult in the festive season. In the offing, we have planned low rise developments (2.5 bhk and 3.5 bhk) with all the benefits of a condominium which basically means a low rise format but with all the condo features like security, open landscaped terraces, new age tech features. In the commercial segment, we are providing pre-leased investment opportunities with attractive propositions like 9 years lease, 3 year lock-in period, in one of the largest mixed-use developments – M3M Corner Walk, in SPR that we have just delivered and also signed up more than 200 leading brands.” Mohit Goel, CEO, Omaxe Ltd, says, “Factors like all-time low home loan interest rates, bottomed-out real estate prices, discounts and government incentives have given wings to homebuyers to fulfill their dreams. This in turn has given a boost to the real estate sector not just in metros but in state capitals and tier 2/3 cities also. The positive market sentiment coupled with the festive season also bodes well for the sector.” Developers believe that this festive season against the backdrop of the regaining momentum of economic activities augurs well for real estate. The economic fundamentals are already strong, marked by a swift revival in demand, aiding the recovery of some segments. “We foresee the festive season to set the pace for buoyant demand in the residential segment in the coming quarters. The festive season has undoubtedly uplifted the consumer sentiments in the residential sectors. For instance, our flagship project – Krisumi Waterfall Residences, located in Sector 36A Gurgaon, off NH-8 – has witnessed a surge in inquiries and footfalls in the past few weeks. At Krisumi Corporation, we have come up with lucrative offers such as a complimentary golf session at ITC’s Country Club & resort, a gold voucher worth Rs 2 lakh, an ITC Gift Voucher on every booking for a limited period, to make the festive season even more special for our patrons,” says Ashok Kapur, Chairman, Krisumi Corporation and Krishna Group. Mukul Bansal, Director, Motia Group, says, “The real estate market has done well in the previous quarter and is expected to maintain its growth momentum during this festive season as well. At present, several favorable factors are playing their role in encouraging first-time home buyers. Various offers and schemes have been rolled out during the festive season for them. The growth pattern is not only witnessed in the metro cities, but tier 2 and tier 3 cities are also getting increased traction.” Notably, along with the residential space, some segments of the commercial space have also started gaining pace post the pandemic. “With strengthened consumer sentiment and buoyancy in the market, the real estate sector is quite optimistic during this festive season. The sector has been riding strong for the last couple of months and is likely to maintain this momentum. The office space segment has been gaining traction from IT/ITES, BFSI, startups and boutique companies. Amidst the trend of work from home, hybrid model, flexible office space and other possibilities, various companies are mulling over their expansion plans and bringing workforce back to office. This indicates positive signs for the demand of grade-A offices and flexible workspaces,” says Abhishek Pandey, Vice President-Customer Engagement & Distribution, Viridian RED. Source: Financial Express INDIA

Current, future sentiment index in real estate at all-time high: Report

10/28/2021 12:05:00 PM

The sentiment in the real estate industry has turned optimistic and touched an all-time high during July-September and the outlook for the next six months also remains positive with recovery in the Indian economy and rapid progress in vaccination, according to a joint report by Knight Frank, FICCI and Naredco. The sentiments in the real estate market had turned pessimistic during the April-June quarter because of the outbreak of the second wave of the COVID-19 pandemic. On Tuesday, property consultant Knight Frank and industry bodies FICCI and Naredco released their ''Real Estate Sentiment Index Q3 2021'' based on the survey of developers, banks, financial institutions and private equity players operating in the sector. As per the report, both the current and future sentiments of the real estate sector have improved across all parameters in Q3 2021, on account of the economic recovery in the making and waning of the second wave of the pandemic. In Q3 2021, the current sentiment index score rose to 63 – the best ever, after the dismal score of 35 recorded in Q2 2021, Knight Frank India said. The Future Sentiment Index score rose from 56 in Q2 2021 to 72 in Q3 2021, which is also the highest ever in the history of the Index. A score of above 50 indicates 'Optimism' in sentiments, a score of 50 means the sentiment is 'Same' or 'Neutral', while a score below 50 indicates 'Pessimism'. Knight Frank Chairman and Managing Director Shishir Baijal said: "The sentiment index is a perfect reflection of the market sentiments, especially as we are amid the festive season." In Q2, 2021, he said sentiments were at the lowest, which have turned around dramatically in a matter of mere 90 days to be one of the highest in Q3 2021. "This is heartening to see, as it is reflective of the returning market confidence backed by rising demand," Baijal said. He noted that there is a strong sense of optimism due to improvements in socio-economic environment. With a robust vaccination programme and the decline in the new COVID-19 cases, the consultant said there has been a significant revival in the commercial and residential real estate market. "Regional markets in the East, West and North are seeing positive response from IT and ITeS companies as well as technology start-ups that have turned unicorns," Baijal said. He attributed the rise in demand for office space to aggressive expansion in operations of e-commerce and start-up. "High vaccine rate paired with concomitant sales from the festivities has kept the outlook for the residential sector positive," he added. Raj Menda, Joint Chairman, FICCI Real Estate Committee and Chairman and Corporate Chairman, RMZ Corp said that "... With an aggressive vaccination drive across India, the real estate sector has started showing signs of a sustainable recovery." Rajan Bandelkar President, NAREDCO India and Raunak Group said the positive outlook in the overall economy and the subsequent reduction in cases of covid, is bringing cheer to the market this festive season. Source: Business Standard INDIA

Realty sector high on revival route, housing sales rise 57% in Tier-I cities

10/27/2021 12:15:00 PM

While Navi Mumbai ranks high on several quality-of-life parameters, today it is a pale shadow of what it was intended to be. (Image via Wikimedia Commons 4.0) Housing sales across tier I cities increased 57 percent over the last year on because of increased vaccination, low interest rates for home loans and flexible payment plans, a research by Liases Foras has said. Tier I cities had recorded 66,548 units of sales in the September quarter, which is a 17 percent growth compared to the June quarter. Tier I cities witnessed a marginal increase in sales in the first half of 2021-22 from the second half of 2020-21 but soared over 80 percent over the corresponding period last year, the research said. Sales recorded maximum recovery in Bengaluru by 99 percent, followed by Pune at 69 percent, Hyderabad at 62 percent, Ahmedabad at 58 percent, Chennai at 57 percent, MMR at 56 percent and NCR at 35 percent on a year-on-year basis. In MMR, sales increased maximum in the Western Suburb (117 percent) and Thane (114 percent) followed by Central Suburb (95 percent), Western Suburb (Beyond Dahisar at 60 percent), Panvel (42 percent), Island City (41 percent), Central Suburb Extended (22 percent) and New Mumbai (13 percent) over the last year. In NCR, sales witnessed a 35 percent Increase in NCR. All suburbs showed significant amount of growth in sales when compared on YoY basis. Unsold stock shrunk in Bhiwadi by (14 percent), Ghaziabad and Greater Noida by 8 percent. It increased 15 percent in Faridabad and 6 percent in Gurugram. Unsold stock declines marginally Consolidated unsold stock in Tier-I cities declined marginally in the second quarter to 896,404 units. Inventory in Tier-I cities stood at 40 months in September, dropping from 48 months in June. Unsold stock in Tier-I cities decreased 4 percent in September, compared to the same period last year. Bengaluru witnessed the maximum decline in unsold stock (18 percent), followed by Kolkata (9 percent), Pune (8 percent), NCR (4 percent), Ahmedabad (4 percent) and MMR (3 percent). Unsold stock increased in Hyderabad by 34 percent and in Chennai by 1 percent, the research said. Prices remained stable Prices remained stable in Tier-I cities on QoQ basis and increased 1 percent on a YoY basis. Prices remained unchanged in Bengaluru, MMR, NCR and Pune. Prices in Chennai increased 3 percent and increased by 1 percent in Ahmedabad and Hyderabad, while it decreased by a percentage in Kolkata.On a year-on-year basis, the weighted average price across Tier I cities increased by 1 percent compared to a year ago. Prices increased by 4 percent in Hyderabad, 3 percent in Pune, 2 percent in Ahmedabad, Chennai and NCR. Prices dipped in Kolkata (2 percent), and Bengaluru (1 percent) but remained stagnant in MMR, the research said. Source: Money Control INDIA

Real-estate sector expected to make up 18-20% of the country’s GDP by 2030: Amitabh Kant

10/23/2021 3:27:00 PM

Real estate sector to play a critical role in supporting the 'housing for all' initiative The real estate plays a multiplier effect in the development of the economy and the ecosystem of the country. The sector is expected to reach a market size of $1 trillion and make up 18-20% of the country’s GDP by 2030, Amitabh Kant, CEO, Niti Aayog said on October 22. He also said that the Securities and Exchange Board of India (Sebi) has already given its approval for Real Estate Investment Trusts (REITs), which will create an opportunity worth Rs 1.25 lakh crore in the coming years. He was virtually addressing the 13th Edition of Confederation of Indian Industry (CII) Realty & Infrastructure Conclave 2021 organised in association with JLL as the Knowledge Partner. The theme of conclave is ‘What’s next: The future of real estate'. He said the last 18 months have been challenging for India and the economy in general, and the real estate sector was not left untouched. "However, we see a silver lining as the vaccination rate has picked up and the infections are slowly coming down," he said. Kant said that the real estate sector and its stakeholders also play a critical role in supporting the 'housing for all' initiative of the government. "The real estate sector plays a multiplier effect in the development of the economy and the ecosystem of the country. The sector is expected to reach a market size of $1 trillion and contribute 18-20 per cent of the country's GDP by 2030," he said. Booster shots The government along with several states has taken initiatives to encourage redevelopment in the sector. The smart city project with a plan to build 100 cities is a prime opportunity for real-estate companies, he noted. “A slew of measures introduced by the government including monetary and fiscal stimulus have supported businesses and industries through these challenging times. The Atmanirbhar Bharat Package 3.0 announced by the honourable Finance Minister provides tax relief measures for real-estate developers and home buyers. The government has also announced setting up of Alternative investment Fund, Affordable Housing Fund and National Housing Bank with an initial corpus of Rs 35,000 crores for micro financing of housing finance companies," he said. "Housing sales are recovering, buoyant by the decade low mortgage rates. Make in India and India’s growing might as a digital economy has spurred our warehousing and industrial segments,” he said. He noted that going forward technology will be a key game changer. India and India’s growing might as a digital economy has spurred “our warehousing and industrial segments,” he said. “India remains very committed to the Paris Agreement towards positive action climate change... The built environment will be vital in moving towards a sustainable future. Big corporates are realigning their sustainability roadmaps to speed up their net zero goals as a global movement towards more sustainable choices is underway,” he added. COVID-19 has resulted in housing demand consolidating towards branded developers: experts Towards brands, technology Addressing a session on The Future of Residential Real Estate, Abhishek Kapoor, executive director & CEO, Puruvankara Ltd, said that the pandemic made a difference in the way people looked at homeownership. “As people realised they wanted homes, the ready-to-move-in inventory came down significantly and that has led to new opportunities in the under construction and new launches segment… demand for homes going forward is definitely sustainable.” He also said that demand has consolidated towards branded and listed developers. “We are witnessing a convergence of capital and demand. Going forward, the market share of certain set of developers will consistently grow.” Reeza Sebastian, president - residential business, Embassy Property Developments, said that COVID-19 helped improve consumer perception of home ownership and that was supported by low mortgage rates and competitive pricing, adding technology is expected to become a big disruptor going forward. “Investment in technology should extend to construction technology as well to speedily deliver homes,” she added. Sriram Iyer, president & CEO, TVS Emerald, said that the real-estate sector is expected to follow the retail consumer segment and there may be revenge buying in the housing sector too but cautioned that, with commodity prices being high, prices are expected to go up. Source: Money Control INDIA

Office space leasing increased by 89% QoQ in Q3 2021: Colliers

10/22/2021 11:33:00 AM

The top six cities of India noted about, 10.3 million sq ft of office gross absorption in Q3 2021, the highest volume recorded since Q1 2020. After a devastating pandemic second wave in the second quarter, the overall absorption numbers rose by 89% QoQ as occupiers planned for a gradual reentry and closed deals that were onhold, leveraging tenant favourable market dynamics, the report mentioned. IT sector driven cities Hyderabad, Bengaluru and Pune accounted for 62% of gross absorption in Q3 2021. With increased number of fully vaccinated employees returning to their workplaces coupled with fewer restrictions on mobility, the office market is showing strong signs of revival. “The quarter has brought in much-needed cheer for the market. Large deals made a comeback, led by demand from flexible workspace operators. Decisionmaking by occupiers has become quicker than in 2020. We can expect the optimism to strengthen over the upcoming quarters, provided there is no third wave. Occupiers who were exploring renewal options have begun looking for fresh space,” said Ramesh Nair, CEO (India) and MD(Market DevelopmentAsia) Colliers. After an average performance in Q2 2021, Hyderabad emerged as one of the resilient cities in terms of demand supply dynamics. For the first time, Hyderabad had the maximum share in leasing volume at 2.5 million sq ft surpassing Bengaluru, as occupiers focussed on large block deals and even leasing entire buildings. BFSI and Flexible workplace sectors had the maximum share in leasing volume accounting for 66% of the total demand in Hyderabad. Rai Durg saw the maximum leasing traction accounting for 53% of the demand, while Hitec City contributed 40%. On a YTD basis, Bengaluru continues to be the market leader, the report mentioned. Leasing share by flexible workspace operators also rose in Q3 2021 owing to high demand from occupiers looking for managed spaces and short-term leases to tide over uncertain times. Share of flexible workspaces in leasing increased to 26% in Q3 2021. Leading flexible workspace operators focussed on signing large block deals exceeding 100,000 sq ft in almost all major cities seeing increased interest from corporates for managed spaces. Pune accounted for the highest share in flexible workspace, followed by Hyderabad, according to the report. The quarter saw the highest supply since Q2 2020 at 10.8 million sq feet in Q3 2021 with Hyderabad and Pune contributing the maximum share at 29% and 25% respectively. The second wave did not have a major impact on the construction activity. Developers continued to focus on leasing existing stock and received OCs for buildings with pre-commitments, report mentioned. Source: The Economic Times INDIA

Festive season to put realty sector on a high growth trajectory

10/21/2021 11:14:00 AM

The real estate sector has shown indomitable resilience time and again and each time, the growth has been stronger. This year, the festive season is adding zest to it. The buyers consider the festive season as an auspicious time to buy their dream homes and this is setting high growth prospects in the housing market. Besides, the pandemic has induced the realization of owning a house to ensure the safety and security of livelihood. Coupled with this, an amalgam of factors including health and wellness, comfort, security along stable and guaranteed returns over investments, have also become the determinants that are propelling housing demand in this season. According to the Industry reports, the real estate sector has made a strong rebound and housing sales have jumped over two-fold during the July-September 2021 period at 62,800 units across seven major cities. The surge was witnessed due to the better demand, driven by low mortgage rates and hiring in the IT/ITeS sector. People are also attracted towards the housing sector for investments as their savings have increased, apart from better job security along with record-low home loan interest rates, and growth in homeownership sentiments. Incentives like stamp duty cuts in some states, and the availability of multiple and easy financing options are also leading to the boost in the residential market across cities. Real estate has emerged as a viable option owing to its relative safety and assurance of stable and regular returns. The pandemic has also led to NRIs eyeing investment in the homeland amid a sense of security. Capturing the spirit of the festive season perfectly, developers are leaving no stone unturned to offer maximum satisfaction in the customer-centric market. Bigger customizations with dedicated workspace, study rooms, modern kitchenette, fitness and entertainment zones, and balconies are dominating the consumer demand and developers are incorporating all these features in their residential offerings. Modern high-rise apartments, gated townships, and luxury towers with well-managed infrastructure have become the most sought-after choice driven by interests from NRIs, UHNIs, ex-pats, corporate professionals, millennials, and business leaders, amongst others. Even ready-to-move-in spaces will continue to remain the topmost priority of the homebuyers looking for quick possessions. The current sentiments are in favour of the buyers that have enabled the fence-sitters and even first-time buyers to go ahead with their purchase decisions. For them, the housing segment has remained the safest investment option and favourable government policies, lucrative offers are keeping the sentiments of investors buoyed in the market, which is likely to continue in the coming quarters. Moreover, the emergence of organized real estate market in state capitals and tier-2 cities has greatly improved the demand-supply ratio. As realty costs in tier-2 cities are relatively low than in tier-1 cities, there is a greater demand for quality housing in these markets. As per an Anarock survey, there is a demand surge in residential properties in tier-2, 3 cities including Amritsar, Chandigarh, Lucknow, Indore, Kochi, Coimbatore, Jaipur, and Ahmedabad which are set to become the destination-next of real estate. The demand here is also fuelled by NRIs who now aspire to own a house in hometowns, which are mostly tier-2 and tier-3 cities. The future livability, growth of professional opportunities, and benefits like large open spaces, ability to stay close to family, low pollution, enhanced social and physical infrastructure, etc. are attracting homebuyers. The festive season is ushering in an auspicious period for all stakeholders with positivity and more capital to invest. The situation is under better control and the vaccination drives are giving confidence. The housing demand and supply will experience an uptick in the next quarters. The potential homebuyers can reap maximum benefits from the positive sentiments in the market supported by financial cushioning to make the best decision on their real estate investments. Source: Financial Express INDIA

Improved affordability of residential assets, lowest-ever interest rate pushing home loan demand

10/20/2021 12:10:00 PM

Favourable demographics, improved affordability of residential properties and historically low mortgage rates are pushing the demand for home loans, mortgage lenders said. Several major banks, mortgage companies and housing finance companies have significantly reduced their interest rates on home loans during the festival period to encash revival in housing demand after the second wave of the COVID-19 pandemic. In some cases, the interest rate on home loans is as low as 6.5 per cent. Asked about the likely impact of its decision to cut mortgage rates for the festive season on home loan disbursals, HDFC Managing Director Renu Sud Karnad said the lower interest rate does help but it is just one of the many variables for the pick-up in demand for home loans. "Housing today is much more affordable than it ever was. In the last couple of years, property prices have more or less remained the same across the country while income levels have gone up," she noted. Karnad further said people are upgrading to bigger size apartments because of the requirements of additional space post-outbreak of the COVID-19 pandemic. "Work from home, education from home and entertainment from home due to the pandemic have also made people realise the need for an additional space at home," she said. Y Viswanatha Gowd, managing director and CEO of NSE -0.75 % Finance, said the company is positive because there is demand for ready-made houses. "Already pent-up demand is there and even the job market is experiencing an upswing. Even the sentiments of our customers are on the rise because markets are getting opened up. Vaccination comfort has given more confidence to people to move around and physically go and see properties and choose," Gowd said. Gowd expects housing demand to remain strong during this festival season and beyond, especially in the readymade home segment and in the affordable home segment. Property consultant Colliers India new CEO Ramesh Nair said several banks in India have cut home loan rates ahead of the festive season to encourage homebuyers. "This will spur demand for homes across the spectrum -- in the affordable, mid and premium segments. Already the stage is set for a revival in housing demand. This was enabled by stable housing prices, rising salaries in technology sectors, and the greater need to own homes," he said. Nair opined that the recent rate cuts by banks is a positive initiative for homebuyers, and will nudge homebuying sitting on the fence. According to Nair, as of August 2021, the disbursement of housing loans grew 9.2 per cent from the year-ago period. "This is a good sign, and home loan disbursements will further rise in the upcoming months," Nair added. Karnad further highlighted that demand for housing and home loans has improved because of various positive factors. "So a combination of factors viz., favourable demographics, improved affordability, lowest ever interest rates on home loans in India are pushing the demand for home loans," said HDFC MD. Karnad said the sentiments in the real estate market and housing finance have improved on the back of a strong recovery in economic growth and lower job losses than anticipated. "...much lower job losses against what was feared during the pandemic followed by good recovery in economic growth and sentiments have resulted in improved confidence which is very vital for one to take biggest investment decision in life i.e. buying a house," she observed. On festive season housing sales and home loan disbursals, Karnad said the festive season is considered as an auspicious time for buying a new house and it boosts the real estate market in India. "Having said that, we have seen healthy growth for home loans not just during the festive season but also during the normal course of year...," she said. V Swaminathan, CEO of Andromeda and Apnapaisa, said banks are looking to capitalise on this festive season by offering home loans at a record low interest rate. Swaminathan said the housing loan market in the country witnessed a rebound and registered a year-on-year growth of 9.6 per cent in terms of portfolio outstanding (PoS) in the third quarter of 2020-21. Meanwhile, as a part of the festive offer, Bank of India on Sunday announced a 35 basis point reduction in its home loan interest rates and a 50 basis points reduction in vehicle loan interest rates with the minimum rate now starting at 6.50 per cent against 6.85 per cent on home loans and 6.85 per cent against 7.35 per cent earlier on vehicle loans. This special rate, which is effective from October 18, 2021, till December 31, 2021, is available for customers applying for fresh loans and also for those seeking transfer of loans, the bank said in a statement. It added that processing charges are also waived for both home and vehicle loans till December 31, 2021. Source: Economic Times INDIA

Chandigarh the Happiest City in India to Buy a Home, Mumbai Least Happy City in the World: Study

10/19/2021 11:46:00 AM

A new study by Online Mortgage Advisor has revealed that India has five of the top 20 happiest cities in the world to buy a home. The study also revealed that Mumbai is the least happy city to buy a home in the world, while Surat was at the fifth spot in the same list. Online Mortgage Advisor, a UK-based mortgage broker matching service, came up with the list of the happiest places to buy a home after scraping through thousands of geo-tagged Instagram posts and then analysing the happiness levels in the faces in the photos. Using the above described methodology, the study found that the happiest city in the world to buy a home is Barcelona in Spain, followed by Florence in Italy, and Ulsan in South Korea in the second and third places. Barcelona's homebuyer photos scored an average happiness score of 95.4 out of a possible 100, which was 15.6 percent higher than than the global average happiness level of homebuyers. The happiest city in India to buy a home was Chandigarh, which came fifth in the global listing. The other Indian cities to feature in the top 20 places were Jaipur in tenth place, Chennai in the 13th place, and Indore and Lucknow in the 17th and 20th place respectively. The study also concluded that Mumbai was the least happy city in the world to buy a home. The average happiness score for Mumbai was 68.4 out of 100. This was 17.1 percent lower than the global homebuyer average. Atlanta in the United States and Sydney in Australia came in the second and third place in the list of the least happy cities in the world to buy a home. The only other city from India apart from Mumbai on the list of least happy city in the world was Surat in fifth place. How happiness was measured The study was conducted in August 2021 by sorting through thousands of geo-tagged Instagram posts from all over the world. The faces in these posts were then studied to find out how the happiness levels of an average Instagram user compared to those who have recently bought a home. When asked if consent was taken from the owners of the Instagram posts, a representative of the company said, “While permission wasn't obtained, the data is completely anonymous and the only identifiable data points were the geotags of the photos rather than the people or the photos themselves.” Two sets of photos were collected for the study - those posted with the hashtag #selfie and others was posted with the hashtags like #newhomeowner. The team behind the study scanned both the set of photos using the Microsoft Azure facial recognition tool. The tool analysed each of the photos and provided a score for each emotion displayed in the face based on prevalence - the highest scoring emotion indicating the most dominant emotion present. Cities were only incldued in the list if at least 100 AI-detectable photos were geo- tagged there. From the analysis, the team concluded that people who bought new homes recently are considerably happier than the average Instagram user who posted a selfie. Happiness was the dominant emotion in just over a third (35 percent) of the #selfies posts that they analysed. But when this number was compared to the happiness detected on the faces of recent homebuyers, the number rose to 83 percent. Source: Gadgets NDTV INDIA

Redevelopment of Chandni Chowk to revive its glory as a commercial real estate hotspot

10/14/2021 11:21:00 AM

The emergence of a revamped Chandni Chowk is not only catapulting opportunities for investors, but is also restoring the area’s lost glory as the country's most influential commercial hub. A 400-year-old legacy, Chandni Chowk’s glory as a witness to India’s history and rich cultural heritage is not hidden. Over the years, the heritage city, that encompasses immense commercial value, had remained entangled in overhead wires, dilapidated buildings, broken roads, cluttered walkways, and traffic snarls. Lack of organised commercial spaces had decelerated the growth of businesses and brands in a market with 5-6 lakh daily visitors. But now, the opening up of a newly-redeveloped Chandni Chowk is heralding a new chapter of commercial growth for investors in the heart of India’s capital. A thriving marketplace, Chandni Chowk in its new look is paving way for organised commercial spaces and is finally opening the doors of Asia’s largest retail and wholesale market for commercial real estate investment. Looking at the real estate market from an investment perspective, it is a perfect and rare combination of high returns and low risks for investors. As the economy is advancing from recovery to the growth phase, investors who have a deep understanding of real estate are finding commercial assets a better option to enhance their investors’ portfolios for higher revenue generation and stability. Industry reports too are confirming the heightened sentiments, and are saying that net leasing of commercial spaces has risen 32 percent year-on- year to 4.39 million sq. ft. during the April- June period this year. Advertisement Chandni Chowk is the most preferred destination for shopping and trading in apparel and accessories during weddings and festivals. A 400-year-old legacy, Chandni Chowk’s glory as a witness to India’s history and rich cultural heritage is not hidden. Over the years, the heritage city, that encompasses immense commercial value, had remained entangled in overhead wires, dilapidated buildings, broken roads, cluttered walkways, and traffic snarls. Lack of organised commercial spaces had decelerated the growth of businesses and brands in a market with 5-6 lakh daily visitors. But now, the opening up of a newly-redeveloped Chandni Chowk is heralding a new chapter of commercial growth for investors in the heart of India’s capital. A thriving marketplace, Chandni Chowk in its new look is paving way for organised commercial spaces and is finally opening the doors of Asia’s largest retail and wholesale market for commercial real estate investment. Looking at the real estate market from an investment perspective, it is a perfect and rare combination of high returns and low risks for investors. As the economy is advancing from recovery to the growth phase, investors who have a deep understanding of real estate are finding commercial assets a better option to enhance their investors’ portfolios for higher revenue generation and stability. Industry reports too are confirming the heightened sentiments, and are saying that net leasing of commercial spaces has risen 32 percent year-on- year to 4.39 million sq. ft. during the April- June period this year. The pre-leasing commitments are still intact, and the leasing volumes in Delhi-NCR have increased from 1.9 million sq ft in Q4 2020 to 2 million sq ft in Q1 2021. According to rating agency ICRA, growth in the real estate sector will continue to expand over time. Delhi which has a faithful footfall of customers in the market can put investors in profitable positions looking at maximum ROI. Owing to such promising results, commercial real estate has also become stronger recently. Chandni Chowk is the most preferred destination for shopping and trading in apparel and accessories during weddings and festivals. Besides, it is a huge market for gold and silver, lighting, electric equipment, spices, dry fruits, books, etc. And not to forget the food! Tourists also flock to Delhi for a shopping experience and to feel the old-world charm. The region already enjoys the presence of approx. 50k business units and smooth connectivity aided by Delhi Metro and railway station are further uplifting its commercial value. The Chandni Chowk market is fast getting converted into an organised commercial hotspot. The coming up of next-gen retail/wholesale spaces and shopping malls are expected to cater to 40 lakh serious shoppers monthly in the coming years. Sustainability is another element that is enhancing the commercial value of Chandni Chowk. The increased awareness on maintaining the aesthetics and grandeur of this heritage city has redesigned the approach towards sustainable commercial development. Addressing the traffic woes, rising air pollution levels, and lack of parking facilities, the multilevel parking facility will soon become operational here. This will not only help to make the area strictly a no-vehicle zone but will also hold 2100 + cars to reduce congestion. A next-gen shopping destination is in the offing in Chandni Chowk that has given an opportunity for businesses to serve a loyal shoppers base that has been regularly visiting the area for wedding and jewellery shopping, food, leisure activities, tourism, etc. The destination guarantees high rental yields for investors in commercial properties which will grow stronger over the next quarters. Based on both present and future rental analysis, the price of the property will show greater appreciation and the prospects of a good return and capital preservation and appreciation are also high. Commercial real estate will continue to be in a dominant position as a most sought-after investment option. Amid this, the emergence of a revamped Chandni Chowk is not only catapulting opportunities for investors here, but is also restoring the area’s lost glory as the country’s most influential commercial hub. Source: Financial Express INDIA

Delhi-Mumbai Expressway, elevated road expected to turn Sohna into next major realty hub

10/13/2021 1:14:00 PM

Completion of major road infrastructure projects is set to turn Sohna into the next big real estate hub of the National Capital Region (NCR), as evidenced by takers for the micro market despite an overall slowdown due to the Covid-19 pandemic, according to experts and realtors. With the Haryana portion of the Delhi-Mumbai Expressway and the Sohna elevated road likely to be finished by next year, experts believe that the real estate sector will get a major boost as these infrastructure will improve accessibility, create jobs and allow people to move about with ease. Developers who had invested in Sohna around five to six years ago said these two road projects will boost housing demand as it would take residents only 15 minutes to reach Rajiv Chowk in Gurugram. Vinod Behl, a real estate expert, said Sohna is centrally located in the NCR, and the growth of any real estate destination largely depends on that area’s connectivity, physical and social infrastructure, established residential and commercial developments in the neighbourhood and its proximity to corporate and industrial hubs, the major centres of employment. These key drivers significantly influence the price of a property and its future appreciation. In that respect, Sohna scores quite high as a micro market of Gurugram, he said. “The area is contiguous to south Delhi and Gurugram, besides providing access to Palwal, Faridabad and Alwar. He said connectivity to the Jewar airport in Uttar Pradesh, when it becomes operational, will enhance the area’s potential as a realty hub,” said Behl. As per the details shared by the Department of Town and Country Planning (DTCP), there are 10 affordable group housing projects, 15 projects under the Deen Dayal Awas Yojana, three commercial projects, and 19 group-housing projects in Sohna, besides six to seven commercial projects. Around 800 acres have been licensed in Sohna since 2012, with maximum licences issued in 2012, 2013, 2014 and 2019. Sohna is spread across an area of 27 square kilometres and is divided into 38 sectors for urban development by the government of Haryana. Lower plot costs, in comparison to Gurugram, is one of the reasons for developers taking up projects there over the past seven years. According to Santosh Kumar, vice-chairman of Anarock, a real estate consultancy, Sohna has witnessed significant real estate activity since 2013 and supplied around 30,000 housing units till the third quarter of 2021. “Popularly known as south Gurugram, Sohna emerged as a favourable affordable destination owing to its proximity to various business centres and industrial clusters,” he said. Data made available by Anarock reveals that the maximum real estate activities in Sohna took place in 2014, 2015 and 2017, when 12,000, 6,000 and 4,000 housing units were launched, respectively. The launch of new projects has been muted over the past four years, largely due to unfavourable market conditions. As far budget segmentation is concerned, Kumar said that 55% of the projects are in the mid-segment ( ₹40 lakh to ₹80 lakh), 26% are in the affordable segment (below ₹40 lakh) and 16% in the premium segment ( ₹80 lakh to ₹1.5 crore). The numbers also suggest that of the 29,270 units launched, 30% have been completed while 46% will be ready by the end of next year. The average property price in Sohna is around ₹4,100 per square feet (sqft), a slight increase from ₹3,798 per sqft in 2015. Mubeen Khan, a city-based real estate consultant, said that while properties in Sohna were available for ₹3,500-5,000 per sqft, the area was more focussed mid-segment housing. “In comparison, Gurugram is more about premium housing, with average price of a flat being more than ₹75 lakh,” Khan said. The developers say better connectivity with Gurugram, Delhi and other parts of the country will help this micro-market grow faster. “By 2031, around 640,000 people are going to reside in south Gurugram. With the increase in population and led by multiple government initiatives, Sohna is expected to witness heightened demand for residential spaces in the time to come. Sohna is aligned with the Delhi-Mumbai Expressway, Palwal-Sonipat Orbital Rail Corridor, linked to KMP [Kundli-Manesar-Palwal] and new elevated road to Gurugram will boost housing in the city,” Pradeep Agarwal, managing director of Signature Developers, which has a major presence in the town, said. According to Behl, what makes Sohna attractive for both end-users and investors is the lower entry point, with good scope for price appreciation that has seen risen significantly over the past seven years. Improved connectivity Developers and experts were particularly enthused after Union transport minister Nitin Gadkari visited Sohna on September 5 and announced that work on the Haryana portion of the Delhi-Mumbai Expressway and Sohna elevated road will be completed by mid-2022, even as officials of the National Highways Authority of India (NHAI) clarified that the Sohna elevated road would be completed by June 2022. The stakeholders admitted that while the past three to four years witnessed a slowdown across the country, the Sohna micro market and projects on Sohna Road remained attractive due to affordability and good prospects. “Last year, it was Sohna and New Gurugram micro markets which had emerged on the top as far as supply and price of properties is concerned. Once the elevated road is completed, home buyers in Gurugram will have great options to buy affordable houses, plots and also premium housing in this area,” Sanjiv Thakur, a real estate consultant, said. Although developers admitted that the launch of new projects has been slow over the past two years due to a weak market caused by the Covid-19 pandemic and lockdowns, they are optimistic that the two new road projects will lead to a turnaround and greatly contribute to Sohna’s growth. “Owing to its proximity to different business centres and industrial clusters, it promises good connectivity and planned infrastructure upgrades. The proposed link between the new Jewar airport and the Delhi-Mumbai Expressway is the newest and most crucial connectivity factor, boosting real estate on Sohna Road,” Amarjit Bakshi, the chairman and managing director (CMD) of Central Park, said. Market trend According to studies by real estate consultancies, homebuyers’ preferences are changing, as many as preferring to reside in gated communities on the outskirts of the cities. A report released by Anarock last year stated that almost 57% of home launches in NCR in 2020 took place in areas on the outskirts of Gurugram, such as Sohna and Sohna Road, besides areas under the Yamuna Expressway in Uttar Pradesh’s Gautam Budh Nagar. “Sohna, Sohna Road and Dwarka Expressway are some of the most preferred areas among the buyers. Previously, most of the sales in the periphery were made by investors or buyers planning to relocate in future. However, they are now willing to accept the distance between their homes and their workplaces due to boost in infrastructure and connectivity,” an excerpt from Anarock’s report stated. Echoing this viewpoint, Ashish Tandon, president, sales and marketing, SS Group, said that these two expressways will enhance connectivity and boost demand for real estate. “The improved connectivity and decongestion will push up the prices of residential properties, generate employment opportunities and usher in a socio-economic transformation of the region,” he said. Basic infrastructure While most of the stakeholders are bullish about Sohna’s emergence as a housing hub, there are others also who suggest caution as the area is still lacking in physical, social and recreational infrastructure. “Roads are good but we need much more to survive and thrive in a city. There is need for schools, colleges, malls, hospitals, and similar recreational spaces. It will take a long time for this area to emerge as a subcity of Gurugram,” Ramesh Menon, the chief executive officer of Certes Realty, said. He said that the supply of housing in Delhi is likely to increase by next year, and this will also impact the growth of peripheral areas. “The private players and Haryana government will have to do lot of work to boost infra in Sohna to ensure its transformation into a city,” Menon said. Officials of DTCP, however, said that work on setting up the infrastructure is being taken up on priority. “The focus is to build required infrastructure in proportion to population growth. We had envisaged that Sohna will develop as a key micro market and this is happening. We will work with all stakeholders to ensure that this town grows into a city,” RS Bhath, district town planner (enforcement), said. Bhath said that large-scale exercises are also being taken to prevent the illegal development of colonies and farmhouses in and around Sohna. “We are going to ensure that sanctity of Sohna master plan is maintained,” he said. Source: Hindustan Times INDIA

Indian real estate sees $1.8 billion PE funding in last 6 months

10/12/2021 12:01:00 PM

Private equity firms pumped about $1.8 billion into the real estate sector in the first half of the FY2022. The office segment had a 33 per cent share of the PE funding at $591 million, according to a report by Anarock titled Capital’s Flux Market Monitor for Capital Flows in Indian Real Estate. Private equity investment in Indian realty climbed 27 percent to $1.79 billion in the first six months of the current fiscal mainly driven by domestic funds, it said. The share of foreign funds, however, reduced 19 percent during the six months compared to the previous corresponding period. Investments by domestic funds jumped from less than $10 million to $650 million during the corresponding first halves, reflecting their confidence The industrial and logistics segment saw significant investments of approximately $537 million in first half of FY22, comprising a 30 percent overall share of the PE funding, the report said. The residential sector saw investments to the tune of $394 million or, approximately 22 percent, of the total PE funds. Data centres, land and mixed-use developments attracted the remaining 15 percent of the overall PE inflows, comprising 5 percent each, the report said. “The average ticket size for the PE deals in the current period declined by 32 percent – from $114 million in H1 FY21 to $78 million in H1 FY22,” said Shobhit Agarwal, MD and CEO – ANAROCK Capital. Investors this time preferred single-city deals in contrast to multi-city deals earlier. The top 10 deals in the first half contributed nearly 81 percent of the total PE investments in the country, the report said. The share of multi-city deals reduced from 77 percent to 42 percent in H1 FY 2022. In comparison with the first half of 2020-21, structured debt and equity recorded considerable growth in the first half of this year at 25 percent and 28 percent . Structured debt went primarily towards project-level assets, the report said. Going forward, demand for flexi offices is gaining momentum. They are expected to attract more PE investments over the next 1-2 years. Operators are aggressively looking at expansion of data centres across major locations in the country, the report said. Source: Money Control INDIA

RBI’s interest rate-setting panel starts deliberating next monetary policy

10/10/2021 1:02:00 PM

Experts are of the view that the central bank will maintain the status quo on policy rates for the eighth time in a row. Reserve Bank’s rate-setting panel started its three-day deliberations on the next bi-monthly monetary policy on Wednesday amid rising global commodity prices and the need to contain inflation at home. The decision of the six- member Monetary Policy Committee (MPC) would be announced on Friday by RBI Governor Shaktikanta Das on Friday. Experts are of the view that the central bank will maintain the status quo on policy rates for the eighth time in a row. The policy repo rate or the short-term lending rate is currently at 4 per cent, and the reverse repo rate is 3.35 per cent. Ranen Banerjee, leader (Public Finance and Economics) at PwC India opined that the latest statements by the US Fed Chair on possible actions if inflation does not wear off by H1 of 2022 is a clear commencement of chatter around rate action after the clarity on taper timing. This will have a bearing on the stance of the MPC as it will also be worried on the inflation front given the oil, natural gas and coal prices showing no signs of abetting and rather continuing to have an upward bias,” he said. However, it is very unlikely that there will be any rate action given the inflation is within the tolerance band and the 10-year yields keep hovering slightly above 6 per cent, Banerjee said. M Govinda Rao, Chief Economic Advisor of Brickwork Ratings, said with the consumer price inflation easing from 5.59 per cent in July to 5.3 per cent in August, improved supply situation on the back of the pandemic-led restrictions being relaxed, and capacity utilisation still in the recovery mode, there is no immediate pressure on the MPC to either alter interest rates or change the accommodative stance. When asked for his opinion, Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com, said even though most growth indicators currently show positive signals, the RBI is expected to maintain a status quo on key policy rates to maintain financial stability and boost demand during the ongoing festive season. He also said that home loans are currently available at interest as low as 6.50 per cent annual interest. “The continuation of this historically low interest rate regime for the entire festive season is a must for India’s real estate sector, the second biggest employment generating sector in India, to regain its strength,” Agarwal added. The RBI has projected the CPI inflation at 5.7 per cent during 2021-22 — 5.9 per cent in the second quarter, 5.3 per cent in third, and 5.8 per cent in the fourth quarter of the fiscal, with risks broadly balanced. CPI inflation for the first quarter of 2022-23 is projected at 5.1 per cent. The CPI inflation was at 5.3 per cent in August. The inflation data for September is scheduled to be released on October 12. Suman Chowdhury, Chief Analytical Officer, Acuit Ratings and Research said: In line with market expectations, RBI will continue with its accommodative monetary policy in October 2021 although it is likely that it may take some further steps to recalibrate the excess liquidity in the monetary system over the next 1-2 quarter. He further said while the high frequency indicators for August and September reveal that economic activity is reaching its pre-pandemic levels and the risks of another wave of the COVID are gradually on a decline, the recovery momentum is still uneven and not well anchored across all sectors of the economy. Sharing his pre-monetary policy view, Sandeep Bagla, CEO, TRUST Mutual Fund said the next two CPI inflation readings are likely to be below 5 per cent. “Credit offtake is yet to pick up in a meaningful way. While there is a lot of speculation that time is ripe for RBI to signal withdrawal of accommodation and change in stance, it is quite likely that the MPC chooses for status quo policy with no change in repo rates or stance,” he said. If the RBI maintains status quo in policy rates on Friday, it would be the eight consecutive time since the rate remains unchanged. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. The RBI has been asked by the central government to ensure that the retail inflation based on the Consumer Price Index remains at 4 per cent with a margin of 2 per cent on either side. The Reserve Bank had kept the key interest rate unchanged in its after monetary policy review in August citing inflationary concerns. Source: Financial Express INDIA

Private equity inflow in real estate up 27% in April-September at $1.79 billion

10/8/2021 1:55:00 PM

Inflows were at USD 1.41 billion in the year-ago period. Private equity (PE) investment in Indian real estate rose 27 per cent to USD 1.79 billion in the first six months of the current fiscal mainly driven by domestic funds, according to property consultant Anarock. PE inflows stood at USD 1.41 billion in the year-ago period. According to the data, the office segment attracted nearly 33 per cent of total PE inflows at USD 591 million. The industrial and logistics sector saw significant investments of about USD 537 million in the first half of FY'22, comprising a 30 per cent overall share. The residential sector saw investments to the tune of USD 394 million, 22 per cent of the total PE funds. Data centres, land and mixed-use developments attracted the remaining 15 per cent of the overall PE inflows, comprising 5 per cent each. "Displaying continued confidence in the Indian real estate sector, private equity funds pumped about USD 1,790 million into the sector in the first half of the FY 2022," Anarock Capital said in its 'Flux Market Monitor for Capital Flows in Indian Real Estate'. This is a 27 per cent growth over the corresponding FY 2021, when inflows were approximately USD 1,410 million, it added. "The average ticket size for the PE deals in the current period declined by 32 per cent – from USD 114 million in H1 of FY21 to USD 78 million in H1 of FY '22," said Shobhit Agarwal, MD & CEO – Anarock Capital. "Notably, investors this time preferred single city deals in contrast to multi-city deals. As seen, the share of multi-city deals reduced from 77 per cent to 42 per cent in H1 of FY'22. Further, the top 10 deals in H1 FY22 contributed an approx 81 per cent of the total PE investments in the country," Agarwal said. In comparison with H1 FY21, structured debt and equity witnessed considerable growth in H1 FY22, at 25 per cent and 28 per cent, respectively. Structured debt went primarily towards project-level assets. While overall PE inflows in Indian real estate increased in H1 FY2022, the share of foreign funds reduced. "Investments by domestic funds jumped from less than USD 10 million in H1,FY21 to USD 650 million in H1, FY22, a reflection of the improving situation in the country resulting in higher confidence by domestic funds," Anarock said. Foreign investors continued to remain major contributors with about 63 per cent share of the total inflows of USD 1,790 million. However, in the same period of FY2021, they contributed a 99 per cent share. Source: Business Line INDIA

51% of urban Indians say festival season is a good time to invest in property

10/7/2021 12:28:00 PM

Around 51 percent of urban Indians think that the festival season, which typically runs from October to November, is a good time to invest in real estate, a survey has found, as developers ready offers to lure consumers. About 35 percent of urban Indians aged between 25 and 44 plan to invest in real estate over the next six months. YouGov’s Diwali Spending Index, an indicator of spending propensity, also reveals a recovering appetite to spend during the festival season marked by Diwali. These findings should offer some comfort, as Indians, hit hard by coronavirus and job losses as well as salary cuts that followed, have been watchful. As the virus fears ebb, vaccination picks up and the economy opens, businesses are hoping that the festival season will boost demand. For many, Diwali is a time for big-ticket purchases like homes, vehicles and jewellery. Data shows that almost 51 percent of urban Indians agree that this is a good time to invest in real estate. Only 12 percent disagree, while 27 percent are undecided. Men are most likely than women to say they will invest in property, the survey found. Residents of Tier I (39 percent) and II (38 percent) are more enthusiastic about buying property than those in Tier-3 cities (30 percent). The online survey, which had 2005 respondents from across the country, was conducted between August 3 and 6 by YouGov, a global market research company that began operations in 2017. While most people—72 percent—looking to invest in real estate are planning to buy a residential property, 25 percent prefer commercial properties. As many as 38 percent of Indians will finance property through home loans. Using savings is the next best option at 30 percent, while 21 percent will finance their dream by selling another property. Availability of loans at a record low-interest rate is encouraging people to explore real estate this season. As many as 16 percent of the respondents said they would avail a home loan this season as rates are low. Nearly 19 percent wish to buy a property this year as they could not do so earlier due to the pandemic. Other reasons include better prices (17 percent), intention to save and buy a property in 2021 (17 percent) and availability of funds due to recent financial gains (15 percent). Affordable properties under ₹50 lakh are the most preferred, with 44 percent of people eyeing this segment. As many as 41 percent respondents were willing to go higher to Rs 50 lakh-Rs 1 crore segment. People living in North India (44 percent) and Tier-I cities (48 percent) are most likely to invest within this range. Only 9 percent of property-seekers are willing to go above ₹ 1 crore. Family and friends continue to play a big role, as 48 percent of people relied on information provided by them to buy a property but technology is catching up as well. While 45 percent of the respondents got their information from the websites of real estate companies, 42 percent talked to local brokers or property agents. Source: Money Control INDIA

Developers intensify project launches as demand for housing grows in festive season

10/6/2021 11:00:00 AM

Driven by growing homeownership sentiment, record-low home loan rates, lower Covid-19 cases in Q3, stable employment scenario, and robust hiring in the IT/ITeS and financial sectors, both housing sales and new launches have increased significantly in recent months. According to a recent report by ANAROCK, for instance, while the housing sales across the top 7 cities surged by 113% YoY in the third quarter of this year – from close to 29,520 units in Q3 2020 to 62,800 units in Q3 2021, new launches in the top 7 cities increased by 98% – from 32,530 units in Q3 2020 to 64,560 units in Q3 2021. As per JLL’s Residential Market Update – Q3 2021, released today (October 4), residential sales across the top 7 cities rose by 47% during January-September 2021 as against the same period last year. On a sequential basis, sales improved by 65% during Q3 2021, to 32,358 units from 19,635 units in Q2 2021, and 14,415 units in Q3 2020. Similar was the case with new launches as the top 7 cities recorded new launches of 32,863 units in Q3 2021, a rise of 21% QoQ. According to JLL, as the economy began to improve and with the festive season around the corner, developers continued to launch residential projects across the country. The markets of Kolkata, Delhi NCR and Pune witnessed a substantial increase in launch activities during Q3 2021, when compared to the same period last year as well as from the previous quarter. Most of the new launches in the markets of Bengaluru, Mumbai and Pune were in the affordable and mid segments. Hyderabad continued to dominate new launches and accounted for about 29% of launches during Q3 2021. Pune and Mumbai, which contributed 23% and 19%, respectively, to the overall new launches. Although developers still remain cautious while launching new projects and are aligning their launch strategies in sync with the actual market demand, new launches are likely to intensify in view of the growing housing demand and the upcoming festive season. For instance, CASAGRAND, one of the leading developers of South India, has just announced the launch of its new project — CASAGRAND Orlena — at Hennur Junction in Bangalore. Nestled amidst 4 acres of serenity, the Casagrand Orlena community consists of 296 apartments boasting a unique footprint by offering 80+ luxurious amenities. Offering a balanced mix of 2 & 3 BHK premium apartments ranging from 1110 sq ft to 1575 sq ft, CASAGRAND Orlena aims to provide home buyers an unparalleled lifestyle at an affordable price point. Speaking at the launch, Sathish CG, Director, CASAGRAND, Bangalore Zone, said, “I strongly believe this project will materialize many homebuyers’ dream of having a home in the city at an affordable price. This project caters to the need of everyone; it has dedicated facilities for children, senior citizen, young professionals etc. Keeping the lifestyle of current homebuyers in mind, we have designed many unique amenities and ample of open green space. Despite being situated at a prime location, the project has been priced very attractively.” MRG World, an affordable housing major in Delhi NCR, has recently launched its fourth project ‘The Skyline’ at Dwarka Expressway, Sector 106, entailing an investment of Rs 350 crore. Spread over 10 acres, the project will be developed in single phase over a period of four years. Signature Global has also launched two projects in Gurugram. Signature Global City 81 and Signature Global City 92 are the 6th and the 7th residential projects under DDJAY by the company in Sector 81 and Sector 92 of Gurugram, respectively. Spread over an area of 11.97 acres, Signature Global City 81 will offer a Green Luxury Life within a plotted residential complex with Premium Independent Floors. Similarly, Signature Global City 92 is a 19.48-acre project, out of which 10.3 acres will be developed in the first phase of development. Both the projects offer 4 premium independent floors with parking in stilt and a dedicated lift on each plot, and will be embraced with dedicated retail hubs for the residents. Rajasthan-based Trehan Group has recently entered the market of Gurugram with the launch of 320 high-end luxury independent floors priced in the range of Rs 1.27 crore to Rs 4 crore. The group will invest about Rs 250 crore to develop these 320 independent floors at multiple locations in the heart of millennium city Gurugram. The independent floors will be built on plot sizes of 217 sq yards to 676 sq yards, and are expected to be delivered in 15 months. “During the Covid-19 pandemic, we have witnessed a decent surge in demand for plotted development and independent floors. To cater to this rise in demand, we are launching these independent floors across various sectors in Gurugram. All the luxury units will be semi-furnished,” said Harsh Trehan, Chairman, Trehan Group. Gurugram-based Antriksh India Group has also recently launched ‘Central Avenue’ – a luxurious premium development nestled in a lush green environment – in Sector-33 Gurugram. The project offers 3+Servent / 3+Study / 4+Study apartments and deluxe penthouses. The basic sell price of this project is Rs 9,575 per sq ft. “The Central Avenue project has been detailed out in order to illustrate a vibrant picture of a truly evolved life. The very idea of the project is about creating space for moments and making them wonderful. Living spaces at Central Avenue transcend beyond the ordinary to create an aura of the fine balance between finesse and practicality,” said Deepanshu Rao, Managing Director, Antriksh India Group, adding, “Antriksh India Group has successfully delivered more than 50 projects in Delhi-NCR. In addition to this, we assure timely delivery and post-sales maintenance.” Source: Financial Express INDIA

Real estate trends show strong resilience in the new normal

10/5/2021 12:16:00 PM

India’s real estate sector has registered a strong resilience against the pandemic which hit the economy last year. Despite setbacks, the sector realigned very quickly to the new normal with digital interventions and was back in recovery mode soon. The pandemic’s second wave has altered the atmosphere for real estate buyers and investors in the country, and there is now a greater demand for own homes keeping in mind the factors of health, hygiene and safety. The macroeconomic recovery has also shown a significant pick-up inducing a positive trend in the last few months in the real estate sector. The appetite for residential property in the mid-income segment is growing, with people looking to buy homes sooner than they had anticipated given the current scenario with the pandemic. Developers have analysed the trend of a healthy lifestyle and have shifted their interests towards developing projects that fulfil the changing needs of new-age buyers in a post-Covid world. In the context of this change in mood, it is important to grasp the new trends in the real estate sector. Real estate now a buyer’s market As the pandemic continues to abate, noticeable changes in consumer behaviour and market sentiments are shaping up new trends in the segment. The realty sector has now transformed into a buyer’s market, and today, with an evolved sense of buying preferences, consumers are focusing on bespoke offerings to make the best investment decisions. Buyers also have the options to see and research projects digitally before purchase. Customer-centricity is defining the Indian real estate sector and it is important to recognize the shift in their outlook towards property purchase. Preference for larger, healthy homes The pandemic has given homeowners the time to reflect on the value of the space that they call their home. Having spent a good amount of time indoors over the past one and a half years, homebuyers now realise the value of having multifunctional homes. Demand for slightly larger homes with added spaces like a work station, reading nook or activity space has certainly increased. With increased time being spent at home, homebuyers are identifying projects with well-designed apartments that give them that extra breathing room. Access to wide infrastructure Locations that comprise a strong mix of physical and social infrastructure and are relatively better priced in comparison to expensive locations, have witnessed a higher demand recently. Home buyers are preferring properties with good connectivity in terms of access to transport hubs like bus and metro stations and cab services to prominent localities and the central business district, along with access to hospitals, educational institutions, supermarkets, parks, entertainment spots, and recreational centres. Today most homebuyers are looking to upgrade their lifestyle and are willing to stretch their budget a little more to ensure that they find homes that provide comfort, space and convenience too. Ready to move in homes gain further traction Ready-to-move-in spaces will remain the top priority of today’s discerning customers who do not want to wait endlessly for their properties and expect quick possessions. There’s more demand for ready-to-move-in projects or the ones which are closer to completion over under- construction properties. Given the pandemic and the need to be safe, buyers are eager to buy a home in quick time. There is also increasing interest in villas, as this serves the purpose of a standalone home but at the same time is within a community with a host of amenities. Lower interest rates boost demand As the vaccination campaign continues to strengthen and the central bank maintains its supportive position pegging interest rates at historic lows, residential demand is set to revive strongly in the coming quarters with buyers going in for loans at lower interest rates. The RBI’s firm assurance in maintaining the status quo has boosted demand in the market. The segment has remained the safest investment option and conducive government policies with guaranteed higher and secured returns are attracting investors to keep market sentiment buoyed. Home ownership sentiment is also induced by decision drivers such as flexible payment plans offered by developers. Branded developers gaining strength The sector is most likely to see more people preferring properties developed by prominent brands than unorganized and smaller players. Buyers are reviewing the history of the brands, their performance, the standards that they maintain, quality they offer and schedule of delivery. The preference is towards financially stable developers with a good track record, execution capabilities and high-quality projects that are gaining substantial market share. The pandemic has transformed the market and 2021 is a turning point for the Indian real estate sector. The segment now understands the ‘new normal’ and is better prepared than last year. Imagination, innovation and digital transformation will drive the sector, and with new trends shaping up, the realty sector will enter a new growth phase soon. The real estate sector continues to prove, time and again, that the investment made on this asset will yield robust returns. As the pandemic subsides, the segment will be the key pillar to strengthen India’s economic growth. Source: Times of India INDIA

Over 80% of prospective homebuyers likely to buy property in 3 months, says survey

9/24/2021 11:35:00 AM

Majority of prospective homebuyers are looking to purchase a property in the next three months with self-use as a primary reason while investor interest has started to increase in certain markets, shows a JLL-Roofand Floor survey. Around 80% of over 2,500 surveyed prospective homebuyers across the top six cities of Mumbai MMR, Delhi NCR, Bengaluru, Hyderabad, Chennai, and Pune have indicated their interest in buying a house in the next one quarter. According to the survey, nearly 80% of the prospective homebuyers indicated a preference for properties in the sub-Rs 75 lakh category. This hasn’t changed much over the course of the pandemic, while the size of the apartment has assumed greater significance and there is a clear preference for larger, more spacious homes. The buyers are today showing a greater willingness to relocate to suburban or peripheral markets to get larger homes while keeping the budget intact. “With more than 80% of the prospective homebuyers expected to make a purchase in the next three months, the residential market is expected to ge back on the recovery path and 2021 is likely to end on an optimistic note. Developers are launching optimal sized houses to capture the changing preferences of consumers in the post-COVID era. While some of these changes will be fleeting in nature, others will be permanent. In the residential real estate sector, there is still a great deal of uncertainty around ‘what permanent changes we are likely to witness,” said Siva Krishnan, Managing Director, Residential Services, India, JLL. Cities like Bengaluru, Chennai, Hyderabad as well as the Delhi NCR market are the prominent cities where the demand for 3BHK apartments has increased. Layouts of apartments, presence of balconies and an additional small room for work and online classes are in focus. This trend is more prominent in the cities of Mumbai and Pune where 1BHK and 2BHK are usually the most sought-after configurations. by pent-up demand and the presence of ‘affordable synergy’ in the market. However, sustained recovery in the next few quarters and the resilience shown during the second Covid19 wave are indicative of a fundamental shift in the sentiment towards home ownership. Residential real estate is an enabler of our existence and contrary to popular belief, recovery in the residential sector was quick and more resilient,” said Sriram Krishnaswamy, COO, RoofandFloor. The recovery process, which started in the third quarter of 2020, was derailed in the second quarter of 2021 because of the second Covid19 wave. With most of the prospective homebuyers expected to make a purchase in the next 3 months, the residential market is expected to get back on the recovery path and 2021 is likely to end on an optimistic note. New launches are expected to go up in the second half of 2021 as developers launch new projects to monetize their land banks. Source: The Economic Times INDIA

Real Estate developers expect home loan rate cuts to push housing sales in festive season

9/23/2021 11:19:00 AM

Real Estate developers expect several leading banks and mortgage lenders’ move to reduce interest rates on home loans to help convert demand for housing into sales this festive season. Both public as well as private sector banks including the State (SBI), NSE -0.40 % Bank, Bank of Baroda (BoB) and Punjab National Bank (PNB) are offering home loans at a record low-interest rates to cash in the spending rush ahead of the festive season. State Bank of India (SBI) has announced that it will charge home loan borrowers an interest of 6.7% based on their credit score, irrespective of the loan amount. The offers are available to all segments of borrowers irrespective of the profession of the borrower. The 6.70% home loan offer is also applicable to balance transfer cases. “There is already a growing desire to own a home as consumers look at it as a necessity in this unprecedented time of the COVID-19 pandemic. With the onset of the festive season, there is a stiff competition amongst the financial institutions to provide the consumers with the best home loan interest rates…These factors are also proving to help spur the real estate demand that was temporarily hit last year as a result of the pandemic,” said Ashok Mohanani, President, NAREDCO Maharashtra. HDFC too, announced a festive offer with home loans starting from 6.70%. This offer will be applicable to all new loan applications irrespective of the loan amount or employment category. The special festive offer is for all loan slabs and for all customers with credit score of 800 and above. Many homebuyers may abstain from making purchases during the ongoing Pitrupaksha period that will come to an end in the first week of October. However, the festive quarter of October-December usually witnesses a surge in housing sales across cities as homebuyers prefer this auspicious period including Navratri, Durga Puja, Dussehra and Diwali to book and buy properties. “Considering the auspicious festive season ahead, the timing of the reduction in interest rates by leading banks couldn't have been better. The real estate market has seen decent sales this year and this reduction in interest rates would further help to keep up the sales momentum,” said Cherag Ramakrishnan, MD, CR Realty. Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) to 6.50%. This special rate is a limited period festive season offer beginning 10th September and ending 8th November 2021. “Lower interest rates will help push the conversion of demand from end users as affordability will improve. A lot of prospective first-time homebuyers will be able to take the decision as it becomes viable for them to buy an apartment. It will also allow homebuyers to upgrade to a relatively bigger home, the importance of which has come to the fore following the pandemic,” said Aditya Kedia, Managing Director- Transcon Developers. Bank of Baroda (BoB) is also offering a waiver of 0.25% in the existing applicable rates for home and car loans. In addition to a processing fees waiver for home loans. Now, its home loan rates will start at 6.75% and car loan rates start at 7%. Punjab National Bank (PNB) too has slashed the repo-based lending rate by 25 basis points (bps) to 6.55% Source: The Economic Times INDIA

Tier-2 cities in India are the next big market for co-housing, says Housr CEO Deepak Anand

9/22/2021 11:24:00 AM

Founded in 2018 by real estate veterans Deepak Anand and Kalpesh Mehta, co-living startup Housr offers easy and hassle-free living for millennials. The two-year-old brand has Serum Institute CEO Adar Poonawalla as its key investor and Pirojsha Godrej (Chairman, Godrej Properties), Abhishek Lodha (Lodha Group) and Harsh Patodia (Group Chairman, Unimark) as angel investors. Co-founder and CEO of the startup Deepak Anand speaks to The Indian Express about co-living spaces and the company’s trajectory. Your note talks about the company taking different models in different cities in terms of operations. Has the company invested in its own property in any city or is the model running mostly on leased properties? Housr works on asset-light models, leasing properties on a long-term basis across cities. We take the entire building and undertake a full-stack service model where we become the sole operator for the property and put up services like F&B, laundry, Wi-Fi, housekeeping, security, providing fully furnished rooms and common areas for residents. In addition, through our tech stack we control the entire operations on a day-to-day basis and for residents, everything happens on a seamless app on their mobiles ranging from rent payment, visitor management, ticket resolutions to opting for value-added services like F&B, gym etc. Co-housing has huge potential but it is limited to certain cities only. For example, Sangli, Kolhapur or Latur in Maharashtra has a large student population but co-housing is almost absent as a segment or is very fragmented. What have been your observations in tier 2-3 cities and do you see any potential for growth there? For us, the focus would be to enter tier-2 cities where both the student population and working professionals are widely present. Such micro-markets for Housr exist as part of large markets like specific sectors in Gurgaon, Noida, Pune. We are essentially a working professional brand and also cater to post-graduate students as the overlap between the two segments is quite high. However, at the moment we do not do dedicated college student housing. We are looking to add over ten tier 1 and 2 cities in India serving over 30,000 beds across over 50-75 Grade-A stand-alone properties in the next 18-24 months. After starting operations in NCR, Housr has also forayed into Pune and is now expanding their operations in Hyderabad, Chennai and Bengaluru with 35 locked-in properties at the moment. Towards the end of 2021, the aim is to enter Ahmedabad and Indore that have a large population of single working professionals and there is a definite product gap in the market How has Covid impacted your business? With most educational institutions closed and work-from-home being the norm, you would have seen many vacancies. What is the present percentage of occupancy in your properties and what was it prior to the pandemic? What was the student versus working professional occupancy prior to Covid and now? Housr did not stop during the lockdown and worked in full capacity to translate Housr’s strategies into desired outcomes. We focused on the supply side and during the first Covid wave, locked in eight properties in a span of 3-4 months. Also, as I said, Housr is primarily a working professionals brand and even though we had setbacks during the lockdown, we still had above-average occupancy numbers and the speed at which the occupancy came back post both waves has been really encouraging. How long will it take for the sector to go back to pre-Covid occupancy rate? For Housr, the recovery has been very sharp. In fact, we have grown across metrics when compared to pre-Covid in terms of number of properties, residents living with us or our overall revenue and growth numbers. We expect this trend to continue as more and more offices are now opening up post the successful vaccination drive in India. For the industry, we expect close to full recovery by Q1 2022, if the current positive trends are to continue. Source: Indian Express INDIA

Low-interest rates to boost housing sales, benefit affordable & mid-segment homebuyers: Experts

9/21/2021 9:40:00 AM

Several banks such as State Bank of India (SBI), Kotak Mahindra, Bank of Baroda (BoB), and Punjab National Bank (PNB) have announced low-interest rates for housing loans, and real estate experts say that this is expected to push sales during the festive season and benefit affordable and mid-segment homebuyers. State Bank of India (SBI) will charge home loan borrowers an interest of 6.7% based on their credit score, irrespective of the loan amount. The offers are available to all segments of borrowers. The 6.7% home loan offer is also applicable to balance transfer cases. Kotak Mahindra Bank has reduced its home loan interest rates by 15 basis points (bps) from 6.65% to 6.50% p.a. This special rate of 6.50% p.a. is a limited period festive season offer beginning September 10 and ending on November 8, 2021. Bank of Baroda (BoB) is offering a waiver of 0.25% in the existing applicable rates for home and car loans. In addition, the bank is also offering a waiver of processing fees in home loans. Now, home loan rates will start at 6.75% and car loan rates start at 7.00%. Punjab National Bank (PNB), too, has slashed the repo-based lending rate by 25 basis points (bps) to 6.55%. “The banks are competing to grab the home loan customers before the fiscal year ends. Currently, the home loan rates are at a historic 15-year-low, as banks compete in a market with low credit demand. The benign interest rates environment will continue for some time and it is unlikely that interest rates will fall further from the current levels,” said Pritam Chivukula, co-founder and director, Tridhaatu Realty and secretary, CREDAI-MCHI. "The move to reduce interest rates by few banks is encouraging and will create competitive housing finance options for the home buyers and eventually will pave the way for robust housing demand. It will also augur well for ready-to-move-in homes and the affordable housing segment,” said Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory. Last week, SBI announced festive offers for prospective home loan customers, including a credit score-linked home loan starting at 6.70 percent, irrespective of the loan amount. Earlier, a borrower availing a home loan above Rs 75 lakh had to pay an interest rate of 7.15 percent. “This move is aptly timed, coinciding with the beginning of the festive season. This year, we are likely to see significantly improved traction in the housing segment during this period. Waiving of processing fees and occupation-linked interest premium are added levels of savings. Cumulatively, this package is the most compellingly attractive offering ever extended by a housing loan lender and it is reasonable to expect that other lenders will follow SBI's footsteps in order to remain competitive,” said Anuj Puri, Chairman – ANAROCK Group. Source: Money Control INDIA

Why demand for holiday homes is gaining traction in India

9/19/2021 12:01:00 PM

The Indian real estate market has gone through various ups and downs in the past decade. A spate of regulatory movements such as demonetization, RERA and GST around 2016-2017 helped to give a facelift to this sector. While some of these steps were much needed, it impacted the sales. The year 2017 was an extremely challenging as the sales dropped a new low of 100,000 units but thanks to the positive sentiment, the sector posted good recovery in the subsequent years. It was rather unfortunate that just as things started to look for the real estate sector, this pandemic struck and jolted the growth. The coronavirus pandemic, lockdowns and the travel curbs have all impacted the sector in a big way. However, the residential real estate market has shown great resilience in the year 2021. The sectors that have performed well in the first half of the year are the affordable residential sector and the luxury segment. One of the major reasons for the increased demand in the luxury and affordable segments can be attributed to the changing need and mindset of the people. The pandemic and the uncertainty that it caused has resulted in an increasing desire among people to own a house of their own. This coupled with low interest rates offered by the banks and stamp duty cuts in some key markets have helped to keep the demand in the real estate segment steady during this testing time. In the month of August too, RBI’s Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 4 per cent while the reverse repo rate has been maintained at 3.35 per cent. This accommodative stand will help in fuelling further growth in the segment keeping in mind the upcoming festive season. The affordable dream In this post COVID-19 time, it is the affordable housing segment that has been registering the maximum growth. According to industry reports, almost half of the total housing demand in the primary residential market across eight major cities is for two-bedroom apartments. These apartments fall under the price bracket of Rs 45 lakh and are the top performers of the segment. There are various incentives that are being provided by the government to help the growth of the affordable housing segment. In order to make it easier to achieve this goal, the government is offering a number of subsidies. One of these subsidies is a reduction of GST rates for the affordable housing segment. For homes below the price of Rs 45 lakh, the applicable GST rates have been reduced from 8 per cent to 1 per cent. The other end of the spectrum There is another interesting convergence that this pandemic has brought about, which is between the ‘luxury real estate’ and ‘quality of life’. A lot of people have started equating the quality of life to luxury living. They want nothing but the best for themselves and are willing to spend to get the finest that life has to offer. It is thus not surprising to see that in this post pandemic phase there has been a significant increase in the buyers seeking luxury properties. It has been noted that there is a growing demand amongst homebuyers for bungalows, villas, farmhouses and spacious apartments. As a result, new launches in the luxury segment have multiplied in the first half of the year. According to industry reports, out of the total houses launched in this year, 17 per cent belonged to the luxury segment. In comparison, luxury houses comprised 9 per cent of the overall houses constructed in 2020. Focus on overall well-being Surveys show that homebuyers are now making a distinct shift towards investing in homes as long-term assets. With the house doubling up as their office, gym and even recreational space, homebuyers are eyeing spaces that are more spacious. Furthermore, the COVID-19’s virus impact has also made the way clear for larger, well-ventilated homes and second homes. Instead of focusing on buying homes near their workplace for an easy commute, homebuyers are showing interest in safe indoor environments, services emphasising health and wellness, and self-sufficient homes with open areas. With the work from home culture being the norm, homebuyers are scouting for places that are picturesque. They are looking for self-sufficient properties in holiday destinations such as Goa, Alibaug, Kerala, Darjeeling or Shimla. The rationale behind choosing a holiday destination is that these places enable people to leave the hustle, bustle of the city life behind and enjoy time by the nature. Favourable weather conditions all year round, easy connectivity, better air quality and better quality of life are some of the qualities that make these destinations a hot favourite among the new age buyers. Moreover, these places are not as densely populated as the metros and that is another big positive for people looking for homes in the post-COVID-19 scenario. Another factor that is pushing homebuyers to contemplate holiday homes is that it offers a great return on investments. In this post-pandemic world, people want prudent investment choices and holiday homes yield better returns over time than any other commercial or residential property. Given the benefits that they offer, holiday homes have started to become a hot favourite amongst the travel-savvy upper-middle-class, who earlier enjoyed annual holidays. The return of NRI investors Another interesting trend that is being observed in this post pandemic phase is that the non-resident Indians (NRIs) have started investing in luxury homes back home. It is being noticed that a large chunk of the Gulf-based expat Indians have invested in the residential properties in India during the last one year. Depreciating value of the Indian rupee and great offers being offered by developers in the country are some of the reasons why NRIs have now started to look at real estate as a great investment option. Most of them are eyeing spacious and modern luxury homes, which are either 3BHK and 4BHK apartments or villas or holiday homes. This segment prefers larger and more luxurious homes because of the lifestyle they enjoy in the country they are staying in. These buyers are also extremely conscious about the health aspects and thus projects that addressed these issues gained the most last year. Currently, the Indian restate market has been pegged as a $200-billion industry by the Ministry of Housing and Urban Affairs (MoHUA). The ministry further expects the sector to grow at an exponential pace in the coming years and become a $1-trillion industry by the year 2030. For the same to happen, the luxury segment will have to continue to be a great driver. Source: Financial express INDIA

Chandigarh admn exploring land pooling options to develop villages

9/16/2021 11:25:00 AM

The UT administration is considering a number of land pooling models for the development of villages and periphery land pockets. One of the models being considered is giving land development rights instead of land rights. Under it, villagers opting for land pooling will form a consortium and then be allowed to develop the land as per the laid down building bylaws and other rules and regulations. Common facilities like roads and water supply will be provided. Such models were taken up in a meeting that was convened at the level of the UT adviser here on Wednesday. Different aspects of the Land Aggregation Policy for Chandigarh and proposed development of villages and peripheral areas as notified in the Chandigarh Master Plan 2031 were also discussed. “Mohali has a Greater Mohali Area Development Authority (GMADA) and Panchkula has Haryana Shehri Vikas Pradhikarn (HSVP), but Chandigarh doesn’t have any such authority. The administration will be exploring the option of giving this role to Chandigarh Housing Board,” said a senior UT official who attended the meeting. On the controversial issue of the Lal Dora extension, the administration has decided that it will be marked on villages using LIDIR technology. The deputy commissioner’s office will provide the same to the urban planning department, said the official. “The urban planning department has been directed to prepare a comprehensive strategy for village development plan,” the official added. Earlier, the consultant of Indian Institute for Human Settlement (IIHS), Bangaluru, presented a draft policy for aggregation of land for villages and peri urban areas in Chandigarh, after studying best practices of this area in Punjab, Haryana, Gujarat and Maharashtra. The UT adviser said that provisions of RERA and other Acts/guidelines prevalent for such development may also be incorporated. Other officials present in the meeting also made suggestions on the issue. The consultant has been given a month’s time to rework the initial draft and submit a report within a month. Kapil Setia, chief architect, thereafter made a presentation on study undertaken for development plan of villages in Chandigarh, highlighting existing physical situation and proposals and possible options for both sectoral and non-sectoral villages in conformity with the notified CMP 2031. Based on recommendations of the Chandigarh Master Plan 2031, focused development of villages shall be undertaken by the municipal corporation/CHB as per the above policy to be notified by the Chandigarh administration in consultation with the competent authority. These development plans shall be undertaken through a special village planning cell in close coordination between MC, CHB and the department of urban planning in a time-bound manner. Source: Hindustan Times CHANDIGARH

India ranks 54th globally in home price appreciation: Knight Frank

9/15/2021 11:30:00 AM

The pandemic-induced housing boom continues with prices rising by 9.2% on average across 55 countries and territories in the year to June 2021. Ten of the world’s developed economies averaged price growth of 12% in the 12 months to June, double that seen in key developing markets (4.7%), as per the latest global home price index by Knight Frank. Turkey (29.2%) leads the annual rankings, but its rate of growth is slowing. Several key economies including New Zealand (25.9%), US (18.6%), Australia (16.4%), Canada (16%) and Russia (14.4%) also make it into the top ten. In total, 18 markets registered double digit price growth, up from 13 last quarter and seven a year ago. Only two markets saw prices decline in the year to June 2021 – India and Spain. This is the lowest proportion of markets registering a decline in prices since the Global House Price Index commenced in 2008. India moved one spot up in the global home price index to the 54th rank during the quarter ended June 2021 as against Q2 2020 due to continued resilience shown by the residential segment amidst the global outbreak of the COVID-19 pandemic, On a QoQ basis, India climbed up one spot in Q2 2021 as compared to Q1 2021. The Global House Price Index report tracks the movement of mainstream residential prices across 55 countries and territories worldwide. The index tracks nominal prices in local currency. The report further mentioned that a breakdown by developed and developing economies shows a more nuanced picture with developed markets outperforming by some margin. Overall, 18 countries in Q2 2021 have reported double-digit growth, while India and Spain were the only countries to register an annual decline in home prices. Concerning 6-month (Q4 2020 – Q2 2021) and 3-month changes (Q1 2021 – Q2 2021), mainstream residential prices in India witnessed a growth of 0.9% and -0.5%, respectively. “India’s mainstream residential prices have largely remained stable with negative bias despite recovery being impacted due to the second wave. Moving forward with the downward trajectory in COVID-19 cases and mass inoculation drive, the sector is expected to make a healthy recovery with demand for homes only expected to increase in the coming quarter,” said Shishir Baijal, Chairman and Managing Director at Knight Frank India. Source: Financial Express INDIA

As many as 70% respondents want to buy a second home within two years: Survey

9/14/2021 5:16:00 PM

With the COVID-19 pandemic appearing to have created several resets in real estate and the wider acceptance of work from anywhere, the demand for second homes has gone up. As many as 70 percent respondents want to invest in a second home priced at Rs 2 crore or less within two years, a survey by Savills India, a global property consultancy firm amongst prospective homebuyers, has said. Approximately three-fourths of the potential buyers would like a second home in locations like Dehradun, Nainital, Shimla, Goa, Alibaug, Lonavala, Mahabaleshwar, Coorg, Ooty and Wayanad. The survey respondents were willing to invest in second homes across the length and breadth of the country, starting from Kovalam in the south to Manali in the north and Gujarat in the west to Meghalaya in the east, the top 10 destinations emerging from the survey collectively have a share of 87 percent within the domestic locations. Goa (20 percent) leads the domestic demand for second homes with one-fifth of respondents interested in buying a second home here. Almost 70 percent of demand is within the Rs 2 crore price range. As many as 29 percent of the survey respondents would like to invest in the popular second home destinations in Maharashtra and 65 percent of the demand is within Rs 2 crore. Net yields of Maharashtra properties have been in the range of 4-6 percent, the survey said. Only 3 percent of respondents want to purchase plots in Uttarakhand reflective of the stringent local ownership laws. Net yields of Uttarakhand properties have been in the range of 3- 6 percent. Himachal Pradesh witnessed limited demand for second homes priced at more than Rs 5 crore (0nly 3 percent respondents are in search of such properties). Preference for plots in the hill state is also low. (less than 5 percent). Net yields of Himachal Pradesh properties have been in the range of 3-6 percent, the survey said. Of the one-fourth of respondents who prefer purchasing their second home in international locations, the top five destinations--London, Dubai, Portugal, Scotland and Canada-- account for more than 75 percent of the share. Other notable investment destinations are Australia, Barcelona, Bali, the Netherlands, Switzerland, the USA, Oman, Qatar and South East Asia. This short-term commitment of less than two years is evident not only in the domestic market, but also in the preferred offshore destinations. When compared maximum preference of investments is within India in a horizon of less than 6 months. Almost 80 percent of potential second homebuyers intend to hold the properties for more than five years. As the ticket size of the property increases, so does the intended investment period reflecting an intent to attain capital appreciation and rental return before eventual exit from the cherished property, the survey said. Savills India’s research analysed responses on critical parameters that buyers consider while purchasing a second home and these include - owning a second home at a holiday destination, spacious and larger floor space, health and wellness factor, connectivity from home city, internet infrastructure and an eventual return on investment. The survey highlights that almost 60 percent of the respondents would like to invest in a second home within the security of a gated community that offers a sense of security and allows homeowners to enjoy facilities such as a swimming pool, gymnasium, health centre and sporting amenities, without having to worry about the maintenance of such provisions on a regular basis. The survey was carried out during June-July 2021. Several aspirational buyers appear to be evaluating alternate and additional homes, as the market seems to be providing value-based investment opportunities. The driving factors for such purchases are many, ranging from the need to create an asset pool, diversification of investment, future residence planning, lifestyle choices, or holiday and staycation homes. Affordability Driving Residential Housing Market in India Improved affordability is one of the major key demand drivers of second homes. Though the property costs have been rising over a period, so is the affordability due to rising income and lower interest rates. The recent surge in demand for second homes can also be attributed to rebound in domestic tourism after tapering of the second wave of the ongoing pandemic. Domestic air traffic witnessed a growth of 41 percent month on month in June 2021. As international travel norms for Indians are getting progressively relaxed, the surge in demand for second homes has extended to international hotspots as well. As many as 46 percent prefer a second home in the ticket size of Rs 50 lakh to Rs 1 crore and 24 percent prefer second homes in the range of Rs 1 crore to Rs 2 crore, the survey said. A vast majority want to hold on to their second homes for a longer time horizon. The long-term investment option does not change, even when the end use of the property is renting out. Across majority of the price points, the preference for a holding period greater than 10 years is higher than a 5-10 year horizon. In fact, as the ticket size of the property increases, so does the intended investment period reflecting an intent to attain capital appreciation and rental return before eventual exit, the survey said. Source: Money Control .Com INDIA

Good time to buy your dream home now

9/14/2021 11:41:00 AM

The real estate market in India is one of the pillars of the economy and is the second-highest employment generator in the country after agriculture. The sector is deeply interlinked to as many as 250 allied industries and accounts for nearly 6 - 7 per cent of the economy, which is set to rise to nearly 13 per cent by 2025. The sector has also been one of the biggest wealth creators in the past few decades. In the context of the pandemic now, and with the rollout of the vaccine, real estate is expected to grow further with renewed vigor. The current focus on ‘Stay home, stay safe’ has reinforced the importance of home ownership as living in an owned home is much safer and secure than the uncertainty faced in a rented home. Recently, the government has also introduced a lot of reforms and incentives for home buyers to promote housing. There are many factors that make investment in residential real estate lucrative in this scenario. Low home loan interest rates: The current home loan interest rates offered by banks are the lowest in the last decade and are a big boost to homebuyers. The overall cost of buying a home goes down drastically with lower loan rates, which makes it the ideal time to buy your dream home. The RBI has maintained repo rates at a lower level to ensure that home loans are less expensive for homebuyers. Also, demand in real estate is highly dependent on intensity of interest rates as they impact monthly budget of buyers. A secure and tangible asset class: Real estate has always proven to be a secure asset class and a tangible investment in times of crisis like the pandemic, a global calamity that has brought back attention to secure investments. Post Covid-19, everyone wants to buy a home that they can call their own given considerations of health, hygiene and social distancing. Fence-sitters too were prompted to buy homes, which has given a boost to residential real estate. This year will see a surge in demand for homes owing to not only reasons of safety, but also because of the volatility across stock markets. This has made real estate a safe investment class. Availability of exciting offers and attractive pricing: There are many other factors that explain why it is the right time to purchase a property now. Property valuations are at realistic, bottomed-out levels, stamp duty is lower in some states and developers are offering flexible payment schemes, cost-saving incentives and other offers as well. All this implies that you don’t buy a property at an inflated price and developers are willing to make it attractive for buyers. There are very real savings to be secured. Preference for ready to move in properties: There are also several options available in the market with ready-to-move (RTM) properties. The prices of RTM properties are almost at par with under-construction homes in many areas and this has not happened before - and since developers have restricted new supply, it is unlikely to happen again. The sentiment is positive for home buyers who are showing greater interest and are opting for branded developers to ensure that they get a premium product. There has also been a keen interest in villas, as this serves the purpose of a standalone home but at the same time is within a community with a host of amenities. Upgrading homes post pandemic: The fear of the pandemic and the uncertainty has resulted in people, now more than ever, wanting to upgrade their living environment. Home buyers are also looking to upgrade to bigger spaces for reason of safety and this is fuelling demand in the real estate sector making it the best time to buy property. Customers’ aspirations and their desire to upgrade their lifestyle has certainly fuelled the increased interest in luxury homes too. Those who had planned to buy a home within a certain price band are willing to stretch that to ensure they are purchasing multifunctional homes. Those who had saved up money have come forward and shown keen interest in investing right now. Demand for planned developments: Apart from owning a home, there is rise in demand for developments that are integrated and well-planned and offer host of modern amenities. These self-sustaining, compact urban ecosystems are now more than just lifestyle upgrades - they provide the kind of environment that makes a big difference during such an outbreak. The emphasis on this requirement will be high in the new normal. Locations that comprise a strong mix of physical and social infrastructure and are relatively better priced in comparison to expensive locations, have witnessed a higher demand recently. High demand due to capital appreciation: Triggers like attractive rental returns and capital appreciation have also enhanced the trust factor in real estate among buyers. Real estate value constantly increases over time and surpasses other investments. Investing in real estate allows you to safeguard yourself and your wealth. The value of the home will always be an excellent stand-by in case of a crisis. The growth forecast for the Indian economy too has been assessed by the International Monetary Fund (IMF) as positive, which will maintain the momentum of demand in the residential real estate sector. With lockdowns, last year and this year bringing to fore the volatile nature of high-risk investment instruments, real estate has proven to be a safer and more stable investment. Real estate players with a strong track record in the industry would definitely benefit in the current scenario. The post- COVID scenario will not just alter the homebuyers’ preferences and developers’ strategies, but also usher in a new dawn in Indian real estate. Thus, home buyers should make the most of this positive climate and make an investment in residential property. Source: Construction Week Online INDIA

Five reasons why real-estate recovery is inevitable this festival season

9/11/2021 2:10:00 PM

Indians are obsessed with the real-estate from centuries whether land or house. The love for owning a house has turned into an obsession due to Covid for some, which is being showcased in the sudden surge in the demand from end consumers. There is a clear euphoria for not only affordable housing but also for luxury housing. Covid has played a huge role for the fence sitter to buy a house at the first opportunity in the affordable housing sector. However, demand never slowed down in the luxury housing as this category involved lots of planning from the buyers end. If stock market is considered one of the indicators, real-estate stocks are upbeat and has seen a return of almost anywhere between 50-75% in last few months. India real-estate sector has never ever seen so active in the last so many years. There are multiple reasons for the sectors which is driving this demand. Let us try to understand the reason behind a sudden surge in the demand post second lockdown. Government push Government’s policy for housing for all by March 2022 is one of the major push behind all the hype in the sector. No doubt it is an ambitious dream by the Government of India. But the real-estate housing sector doesn’t need any assurance, it runs on the sentiment. If the sentiment is positive in the economy the real-estate sector is going to boom. The RBI no rate change policy and low rate is also rubbing the sector in a perfect way towards higher growth. The worst is NOT over There is notion among masses that there will be third wave and a fourth wave of Covid which is adding fuel to the buying sentiment in real-estate. This was another reason people just went out of the houses to breathe to various hill stations after the second lockdown was over. Millennials who believed in living today; suddenly house became a priority for them. They just do not shy away from taking loans either for buying a house or a car. It clearly indicating a hot property buying season. Festival season The festival season is round the corner, with Rakhi, builders have already started doling offers. Such are the lucrative offers that on buying a flat worth Rs50 lakhs, one can have a chance of winning a car worth same amount and only 20 people competing for the car. Means after every 20 bookings a draw will be held. Who will not try their luck with such offers? Covid impact The migrant population in Delhi NCR, even in white collar jobs have faced the music from owners. This league of people is ready to stretch their resources to own a house in NCR at whatever cost. Lower loan rates and good credit score are aiding them further. This conscious buyer is up for good deals coming their way during this festival season. We have to wait and watch all the action happening in this space by the end of this financial year. Source: IIFL Securities INDIA

Haryana CM Khattar writes to Amit Shah, seeks 10-acre land in Chandigarh for constructing new Assembly building

9/9/2021 5:59:00 PM

Citing a lack of adequate space and disputes with Punjab, Haryana Chief Minister Manohar Lal Khattar has written to Union Home Minister Amit Shah seeking 10 acres of land in Chandigarh for constructing a new and separate Vidhan Sabha complex for the state. Currently, Punjab and Haryana share the Assembly building in Chandigarh. Khattar, in the letter, mentioned that as per the proposed delimitation for 2026, the number of members of the House can increase to 126, but the current Assembly building can accommodate only 90 members. “Even 55 years after Haryana was created, the state is not getting its partitioned share in the Vidhan Sabha complex. Punjab has illegally occupied a large portion of Haryana’s share in the Vidhan Sabha complex. Haryana had been consistently making efforts to claim its right. A resolution was also passed in this regard in the Haryana Vidhan Sabha and an all-party delegation had also submitted a memorandum to the Punjab Governor. But, despite all these efforts, the Punjab governor-cum-UT administrator did not take any conclusive decision in this regard. It is a complicated issue and the functioning of Haryana Vidhan Sabha is getting affected due to lack of adequate space”, Khattar said in his letter to Amit Shah. In the letter, Khattar also mentioned that there was enough land available near the current building of the Vidhan Sabha for a new one for Haryana alone. Khattar also brought up examples of other states like Rajasthan and Gujarat and Himachal Pradesh which have constructed new Assembly buildings. In June, Assembly speaker Gian Chand Gupta also raised this demand and wrote to the Union government and the Lok Sabha speaker. Source: Indian Express CHANDIGARH

Chandigarh airport to launch cargo facility on November 1

9/9/2021 11:29:00 AM

Being constructed at a cost of ₹11.5 crore, the air cargo complex will handle both domestic and international cargo, including perishable goods Six years after getting the international tag, the Chandigarh airport will finally offer the cargo facility from November 1. Air cargo or air freight allows speedy transportation of commercial goods through an air carrier. At present, the Chandigarh International Airport Limited (CHAIL) only provides a common screening facility for domestic cargo, while the airlines — Air India, Indigo, Vistara and GoAir — are handling the goods on their own. Being constructed at a cost of ₹11.5 crore, the air cargo complex is spread over 14,127 square metres. With five cargo sheds being built, it will handle both domestic and international cargo, including perishable goods. It was on September 11, 2015, when Prime Minister Narendra Modi had inaugurated the international airport. In February this year, the Punjab government finally announced the air cargo facility. Presenting the budget, finance minister Manpreet Singh Badal had said that the facility will give boost to the industry and provide better access to international and domestic markets. Ajay Bhardwaj, chief executive officer, CHAIL, said: “Around 85% of the construction is done, and we are hopeful of completing the work by mid-October, and begin the facility from November 1. Some clearances are also awaited, and we are hopeful of get them from the authorities concerned in a couple of weeks.” The complex has four cargo sheds constructed through Galvalume pre-painted self-supported roofing and one pre-fabricated shed for perishable cargo. It is equipped with the latest equipment — cold room, reefer van, fork lifts, scissors lift, pallets, user-friendly weighing scale and trolleys — and high-security apparatus — closed-circuit television camera, X-ray machines, door frame metal detectors and explosive trace detection system. Yogesh Sagar, president, Mohali Industries Association, said: “It was the need of the hour. At present, we have to send our consignments by road to the Delhi airport, where they are lined up for 24 to 48 hours before being loaded on to the aircraft, which takes a week’s time. Now, the cargo facility here will save our time. It will also promote ease of business.” Source: Hindustan Times CHANDIGARH

Chandigarh gets country’s tallest air purifier

9/8/2021 4:08:00 PM

The Chandigarh Pollution Control Committee (CPCC) had taken an initiative to install the tower at Transport Chowk, Sector 26. This is the highest air purifier of India, which will cover around a 500-metre radius around Transport Chowk. Polluted air enters the inner casing of the mist chamber, wherein a number of mist nozzles spray water in the form of mist on the polluted air. Heavy polluted air particles are drained into a drain tube, which collect in a water tank. Fitted with a system to suck polluted air through inlets, particulate matter (PM) 2.5 and PM 10, along with various oxides of sulphur and nitrogen, are filtered by the purifier and the purified air exhausted in the environment. This purifier has been installed by Pious Air Pvt Limited without any cost to the UT Administration. It will also operate and maintain it for five years without any cost. According to the company, with the commissioning of the tower, the air quality around Transport Chowk will improve substantially. It is estimated that about 1.5 lakh vehicles ply on this chowk every day. The trial found that air pollution in and around Transport Chowk has come down by 70 to 80 per cent. The temperature around the chowk is also expected to drop by 10-12 degrees below the rest of the city. According to the manufacturer, the air purifier is a 24-metre-high tower-like structure, which will clean 3.88 crore cubic ft of air from the surrounding environment. The tower will pull in polluted air from the surrounding environment and release clean air into the atmosphere. A board installed at the tower will display how much polluted air is being sucked by the tower and also how much clean air has been released into the atmosphere. Among those present on the occasion were Debendra Dalai, Secretary, Environment, Anindita Mitra, Commissioner, Municipal Corporation, Mandip Singh Brar, Deputy Commissioner, and other senior officers of the Administration. Followed by the inauguration, a water sprinkler machine was also flagged off by UT Adviser Dharam Pal. The sprinkler will be used to wash roadside plants and also to suppress dust along the roads. A bicycle rally of around 100 students from prominent schools of the city was also flagged off by the Adviser to raise awareness among the public to curb air pollution and sensitise them to use bicycle as their local mode of conveyance. A prize distribution ceremony was held at Paryavaran Bhawan, Sector 19-B, Chandigarh, to distribute prizes among the winners of a poster-making competition on the theme of the International Day of Clean Air for Blue Skies this year i.e. healthy air, healthy planet. How it works Polluted air enters the inner casing of the mist chamber, wherein a number of mist nozzles spray water in the form of mist on the polluted air. Heavy polluted air particles are drained into a drain tube, which collect in a water tank. Fitted with a system to suck polluted air through inlets, particulate matter (PM) 2.5 and PM 10, along with various oxides of sulphur and nitrogen, are filtered by the purifier and the purified air exhausted in the environment. Source: The Tribune CHANDIGARH

Trends that are Transforming Real Estate in India This Year

9/8/2021 11:28:00 AM

The Indian real estate sector made an impressive rebound despite disruptions and market upheavals during the pandemic. Remarkable sales were registered in Q3 and Q4 2020 which continued till March 2021. As the pandemic continues to stay, noticeable changes in consumer behaviour and market sentiments are shaping up new trends in the segment. The realty sector has now transformed into a buyer’s market, and today, with an evolved sense of buying preferences, consumers are focusing their searchlight on bespoke offerings to make the best investment decisions. The sector has registered indomitable spirit and has remained resilient to become an investor’s favourite. The ‘work from home’ model is likely to remain this year and it is increasingly becoming an integral part of the long-term strategy. Businesses across the country are also finding this model viable to run operations in the pandemic. Demand for workspaces in homes, functional areas, dedicated space for study, gymnasiums and entertainment zones will continue to dominate the market. Ultra-modern high-rise apartments, gated townships and luxury towers with well-managed infrastructure will remain the most preferred choice in the ultra-luxe segment, which is driven by NRIs, UHNIs, expats, and business leaders amongst others. Interest rates are historically low and the RBI’s firm assurance in maintaining the status quo has boosted demand in the market. This has pushed investors to proceed with their purchase decisions. The segment has remained the safest investment option and conducive government policies, lucrative offers with guaranteed higher and secured returns will attract investors to keep market sentiment buoyed throughout 2021. The trend of consolidation in real estate was in place and it will be considered by more players in the days to come. Ready-to-move-in spaces will remain the topmost priority of today's discerning customers who do not want to wait endlessly for their properties and expect quick possessions. As these spaces are devoid of such risks, they have become a safer investment option in today’s world where preferences are changing rapidly. A digital future awaits the realty segment as tech-enabled solutions will play a pivotal role in its growth. Trusted developers with strong financial backing and proven track record will gain a higher market share. Customer- centricity will define the Indian real estate sector and the buyers will search for offerings which can sate their demands by coupling emerging trends with their preferences. Change in consumer demands will enable the Indian housing sector to set global benchmarks for better customer satisfaction. The increase in demand is organic as it is driven by the realisation among buyers about the value of having a home in the midst of the pandemic. The second wave of coronavirus has resulted in a temporary decrease in velocity but with mass rollout of vaccines and lowering of infections, the industry is confident that the demand will bounce back quickly. The market gained some traction late last year, cushioned by massive fiscal stimulus, accommodative monetary policy and signs of a better-than-expected economic rebound. With lowering of Covid cases and economic recovery, a fair price rise in property rates also looks inevitable. The sentiments are high as the government has set a target of vaccinating the entire population by the end of 2021. The pandemic has transformed the market and 2021 will be a turning point for the Indian real estate sector. The segment now understands the ‘new normal’ and is better prepared than last year. Imagination, innovation and digital transformation will drive the sector, and with new trends shaping up, the realty sector will enter a new growth phase soon. Source: Outlook India India

Drop In People Seeking Affordable Housing; Rise In Desire To Own Second Homes In Green Environment: Survey

9/5/2021 12:29:00 PM

Attractiveness of affordable housing seems to be declining even as more home seekers are opting for properties priced between Rs 90 lakh to Rs 2.5 Cr, according to the latest CII-Anarock Consumer Sentiment Survey released on Friday. The survey results are surprising given the government push and incentive for the affordable housing segment over the last few years. More than 34 percent respondent among home seekers expressed desire to buy properties priced between Rs 90 lakh to Rs 2.5 Cr, while 35 percent favoured properties priced between Rs 45-90 lakh, while 27 percent respondents voted in favour of affordable housing (priced below 45 lakh). In the previous H2 2020 survey, approx. 36 percent respondent property seekers has expressed preference for budget housing. The survey - conducted between January and June 2021 on various digital platforms with responses from 4,965 participants, underscores how radically Covid-19 has altered homebuyers preferences. The second wave has proved to be a significant change catalyst. “The budget range, which this survey identifies as the hottest seller is a surprise, but it makes sense if we consider that it is precisely this segment of buyers who are least financially impacted by the COVID-19 pandemic,” says Anuj Puri, Chairman – CII Real Estate Knowledge Session and Chairman of Anarock Group. While attractive pricing continues to rule the roost of must-haves, established developer credibility is the second-highest priority for 77 percent of the surveyed buyers. Project design and location are also key game changers. Online home sales are gaining traction, with close to 60 percent of the entire property buying process now being conducted online as against 39 percent in the pre-pandemic period. "From property search to documentation and legal advice to down payments, homebuyers are leveraging the new tidal wave of digital technology driving the Indian housing sector," says Puri. "Only developers with sufficient online presence will remain relevant going forward. Also, social media are among the most effective property marketing platforms at this stage.” The survey revealed that approximately 41 percent participating property seekers are considering second homes for self-use, with 53 percent of them keen to own homes in mountainous regions. Around. 71 percent respondent property seekers in the second wave are end-users, and only 29 percent are investors. In the first wave period survey, investors accounted for 41 percent. Amid the sustained work-from-home and e-schooling realities, over 65 percent respondents currently working remotely now prefer larger homes. The new work scenario has boosted the appeal of living far from busy and often polluted areas as around 68 percent respondent expressed desire to own property in peripheral or suburban areas. Where NRI are concerned, the survey revealed their continuing preference to own luxury properties priced between Rs. 1.5-2.5 Crore. Among the metros, Bengaluru, Pune, and Chennai are the hottest NRI picks, while Chandigarh, Kochi, and Surat top their Tier 2 & 3 cities list. The survey also highlights a stark contrast between consumer preferences during the first and second waves of the pandemic. Investor confidence in real estate has risen to 54 percent during the second COVID-19 wave, against 48 percent in the first wave. Ready-to-move homes are still the most preferred category at 32 percent, though this is a slide of 14 percent from first wave levels. However, the available inventory of RTMI homes is limited. Also branded developers dominate the new housing supply as buyers consider them safe bets. . The desire to acquire second homes in greener, healthier environs post the pandemic-infused lockdowns has given rise to aspirations like 72 percent of respondents designated walking trails a must-haves, while 68 percent have expressed keenness to have adequate open green spaces amid massively increased health awareness. Source: Out Look India INDIA

Gurugram property prices set to rise

9/4/2021 11:26:00 AM

Buyers of residential and commercial property in the millennium city will have to shell out more, with the Gurugram Bench of the Haryana Real Estate Regulatory Authority (HRERA) imposing registration and processing fee on promoters for the registration of new real estate projects. Now, a registration fee of Rs 10 per square metre will be levied in hyper/high potential areas, while it would be Rs 5 per sqm in the medium/low potential area. Highlights Registration, processing fee on new projects to push up prices Registration fee for residential, industrial and commercial projects ranged from Rs5 to Rs20 per sqm Processing fee of Rs10 per sqm will be charged for all projects Scrutiny fee of Rs5K mandatory registration of real estate agents Under the HRERA Gurugram (fixing of standard fees to be levied on promoter) Regulations, 2021, which were approved by the authority recently, fee @ Rs 10 per sqm will be charged for hyper/high potential area for residential/industrial projects. It will be Rs 5 per sqm for the medium/low category. The rates for the commercial projects will be Rs 20 per sqm for hyper/high potential area, while the rate for plotted colonies will be Rs 10 for per sqm for all categories. Similarly, the authority will charge a processing fee of Rs 10 per sqm for the floor area in residential/commercial/industrial projects and Rs 10 per sqm of the total plotted area in case of a plotted colony. Suresh Aggarwal, president of the Haryana Property Dealers Welfare Association, said the levy of the fee would have a ‘cascading effect’ on the prices of the residential and commercial properties in Gurugram.“The real estate promoters will pass on the increased cost of the projects to the customers,” he added. Moreover, for the extension of the registration of the real estate project, the promoter will to have shell out Rs 10 per sqm of the floor area. For plotted colony also, an amount of Rs 10 per sqm of the total area of the plotted colony will be charged. The promoters will have to pay 50 per cent of the registration for “delayed registration” for the delay of six months. An amount of 50 per cent of the registration fee for every subsequent six months will have be deposited with HRERA for “delayed registration”. For the extension of the project, promoters will pay half of the registration fee for residential, industrial, commercial and plotted colonies. Real estate agents will pay Rs 5,000 as mandatory registration. Source: Tribune INDIA

Changing landscape of real estate in India — millennials are driving the demand

9/3/2021 1:27:00 PM

The sale of residential real estate in Mumbai is not only higher than pre-covid levels but stands at its highest in the last 10-years in July 2021. Going by the recent trends, a substantial push came from the millennials. It demonstrates yet another behavioural change induced by the COVID-19 pandemic as these millennial cohorts were once perceived to be more inclined to rent a home as opposed to buying one. According to reports, there are over 400 million millennials in India, which is higher than the entire population of the US. Now aged between 25-40 years, millennials in India comprise one-third of its total population and 46 % of the country’s total workforce, with a spending capacity of $3.6 billion. The millennial generation is generally defined as people born between the mid-1990s to early 2000s, more specifically within the 1981 to 1996 period. In India, the millennials are considered profligate spenders and a generation that seeks instant gratification, not worrying or planning much about the future. As proponents of the sharing economy, they would rather use ride-share apps like Ola and Uber than buy a car, look after its repair, fuel, and pay EMIs. The same logic applied to owning a house too. They would prefer to rent a house than buy one, pay maintenance and EMIs. This behaviour by the millennials held true till early-2020 before the arrival of the COVID-19 pandemic. The same millennials have shown a marked change in their habits. Reports indicate that this largest spending cohort of people is now turning serious in their spending. Two factors could be playing a part in this behavioural pattern change, one is the coming of age of the millennials and in many cases, they are the sole providers of their families. Experts believe that the second reason for the change in spending priorities is the pandemic induced lockdown that revealed the handwriting on the wall - the non-sustainability of the ‘reckless’ spending and the advent of WFH with its wide acceptance. A recent news report highlights this shift in the spending pattern of millennials from borrowing for lifestyle and recreational purposes to serious priorities like home repairs and medical emergencies in the family. Another study by Standard Chartered Bank discloses that as a cohort the millennials are the most inclined to conscientiously strive for their far-sighted monetary objectives. The study specifically shows that 48% of the Indian millennials who are saving for a substantial buy like a car or a house whereas only 28% of the 45+ generation. This matured approach to financial matters also reflects in a recent study by 360 Realtors, a renowned name in real estate advisory services, wherein 3/4th of millennials expressed their desire to purchase a residential property in the next three years. A similar report by Anarock Property Consultants echoes the same intent mentioning that 55% of total buyers looking to buy their own homes are from the millennial age group. This number stood at 42% last year. 68% of the millennials polled by Anarock indicated that these home purchases were for their own end-use. Nobroker.com, a leading real-estate platform, says that millennials as a group constituted 63% of all its buyers amongst its entire user base, up from 49% from the pre-covid period. For the city of Mumbai, the millennials buyers were 74% of all the buyers across all the age groups. The COVID-19 impact & rising need to own a home among millennials While the pandemic has largely been instrumental in the shift in millennials’ mindsets towards buying homes, other significant factors are influencing this decision. The success of the WFH model means both employers and the millennial employees view a hybrid model of work wherein one does not have to go to an office every day as a sustainable framework of the future of work culture. This also means that the idea of career mobility and city-hopping for jobs is not at the forefront and a hybrid model of work. The major constituent, which is fulfilling the millennial aspiration of buying a house of their own in Mumbai into a real possibility is the lowest ever interest regime prevailing in the current times. The easy availability of credit and having experienced the flexibility and commute-less remote work means that the millennial buyer can now fulfil his bigger home dreams away from the island city to accommodate his/her remote WFH and their children’s online schooling in extended suburbs of MMR. The combination of record-low interest rates that have limited scope to reduce further and incentives by government augur well for both the millennial buyers of first-time home as an end-user and ones looking at a second home for investment. Source: Business Insider INDIA

Rising foreign investment in the Indian real estate market

9/2/2021 12:31:00 PM

Real estate sector in India is at its zenith. It has always been one of the most evolving sectors is one of the primary contributors to employment with seven percent of the country’s GDP. Furthermore, it is expected that by 2025 its contribution will increase to a whopping 13 percent. The investment trends for the last three months highlight one key trend – Strong investor confidence in the Indian real estate sector, which has resulted due to the following factors: 1) Direct investment in Indian real estate and ownership The decision to liberalise FDI norms in the construction sector is perhaps the most significant economic policy decision taken by the government of India. Real estate investment tops $1.35 bn in Q2 2021, thereby reflecting a nine-fold increase. Despite the second wave of the coronavirus pandemic that hit India in April this year, the first six months of 2021 saw investments worth $2.7 billion, which is 53% of the total investments seen in 2020. 2) Investment by way of REITs or equity investment in listed companies Real estate and infrastructure have become key factors of growth in a fast-growing economy like India where cities are expanding at a rapid pace. The sector is estimated to touch $650 billion by 2025, thereby contributing 13 percent of India’s GDP and by 2040, the realty sector is estimated to grow to $9.3 billion, which was at a mere $1.72 billion in 2019. Gazing at these numbers, it is evident that the Realty and Infrastructure sector is a viable avenue for investors. As of present day, there are about 11REITs and InvITs in operation across India out of which 10 have AAA level security. India began 2021 with the successful launch of the country’s third REIT – Brookfield REIT (issue size of around $512 million). Despite the pandemic, the net absorption of real estate was high, indicating that REITs are streaming up as a destination for investment. This will only further fuel the realty sector that adds to the domestic and global community’s confidence in REITs. Therefore, India’s REIT market is all set to enter a new growth phase with more REITs to be listed in 2021. 3) By way of huge influxes into the property technology (prop-tech) space Technology has permeated into almost all industries, and the real estate sector is no exception. On one hand the realty industry has been quick to identify opportunities in the adoption of technology, the government has been simultaneously coming up with various initiatives to drive in the same among the industry players. Few of the marquee campaigns of the government are ‘Digital India’, “Global Housing Technology Challenge’, “IndiaChain’, and so on, that are making the access of technology easier and more holistic. As more and more homebuyers in India plan and execute their property purchases through virtual platforms in the aftermath of the coronavirus pandemic, the real estate industry has assimilated technology in a way that has made it more resilient, invincible and given it a new and vibrant dynamism. The PropTech industry in India attracted over $551 million in 2020, surpassing the aggregate of 2019; $549 million. Blox as a startup with no team or build-out but only a concept and investor deck managed to raise 2.1 mn at a post money valuation of 12.1 mn. Global investors are excited for the long term prospects of the Indian real estate industry and more specifically, the digitization of the industry that is now certain to happen in light of the pandemic. Source: Construction Week Online INDIA

Changing landscape of real estate in India — millennials are driving the demand

9/1/2021 12:14:00 PM

The sale of residential real estate in Mumbai is not only higher than pre-covid levels but stands at its highest in the last 10-years in July 2021. Going by the recent trends, a substantial push came from the millennials. It demonstrates yet another behavioural change induced by the COVID-19 pandemic as these millennial cohorts were once perceived to be more inclined to rent a home as opposed to buying one. According to reports, there are over 400 million millennials in India, which is higher than the entire population of the US. Now aged between 25-40 years, millennials in India comprise one-third of its total population and 46 % of the country’s total workforce, with a spending capacity of $3.6 billion. The millennial generation is generally defined as people born between the mid-1990s to early 2000s, more specifically within the 1981 to 1996 period. In India, the millennials are considered profligate spenders and a generation that seeks instant gratification, not worrying or planning much about the future. As proponents of the sharing economy, they would rather use ride-share apps like Ola and Uber than buy a car, look after its repair, fuel, and pay EMIs. The same logic applied to owning a house too. They would prefer to rent a house than buy one, pay maintenance and EMIs. This behaviour by the millennials held true till early-2020 before the arrival of the COVID-19 pandemic. The same millennials have shown a marked change in their habits. Reports indicate that this largest spending cohort of people is now turning serious in their spending. Two factors could be playing a part in this behavioural pattern change, one is the coming of age of the millennials and in many cases, they are the sole providers of their families. Experts believe that the second reason for the change in spending priorities is the pandemic induced lockdown that revealed the handwriting on the wall - the non-sustainability of the ‘reckless’ spending and the advent of WFH with its wide acceptance. A recent news report highlights this shift in the spending pattern of millennials from borrowing for lifestyle and recreational purposes to serious priorities like home repairs and medical emergencies in the family. Another study by Standard Chartered Bank discloses that as a cohort the millennials are the most inclined to conscientiously strive for their far-sighted monetary objectives. The study specifically shows that 48% of the Indian millennials who are saving for a substantial buy like a car or a house whereas only 28% of the 45+ generation. This matured approach to financial matters also reflects in a recent study by 360 Realtors, a renowned name in real estate advisory services, wherein 3/4th of millennials expressed their desire to purchase a residential property in the next three years. A similar report by Anarock Property Consultants echoes the same intent mentioning that 55% of total buyers looking to buy their own homes are from the millennial age group. This number stood at 42% last year. 68% of the millennials polled by Anarock indicated that these home purchases were for their own end-use. Nobroker.com, a leading real-estate platform, says that millennials as a group constituted 63% of all its buyers amongst its entire user base, up from 49% from the pre-covid period. For the city of Mumbai, the millennials buyers were 74% of all the buyers across all the age groups. The COVID-19 impact & rising need to own a home among millennials. While the pandemic has largely been instrumental in the shift in millennials’ mindsets towards buying homes, other significant factors are influencing this decision. The success of the WFH model means both employers and the millennial employees view a hybrid model of work wherein one does not have to go to an office every day as a sustainable framework of the future of work culture. This also means that the idea of career mobility and city-hopping for jobs is not at the forefront and a hybrid model of work. The major constituent, which is fulfilling the millennial aspiration of buying a house of their own in Mumbai into a real possibility is the lowest ever interest regime prevailing in the current times. The easy availability of credit and having experienced the flexibility and commute-less remote work means that the millennial buyer can now fulfil his bigger home dreams away from the island city to accommodate his/her remote WFH and their children’s online schooling in extended suburbs of MMR. The combination of record-low interest rates that have limited scope to reduce further and incentives by government augur well for both the millennial buyers of first-time home as an end-user and ones looking at a second home for investment. Source: Business Insider INDIA

Listed real estate firms continue to do well, post 25% YoY sales growth in Q1FY22: Kotak Institutional analysis

8/31/2021 12:14:00 PM

All-India residential real estate sales across major cities in India increased 56% year-on-year to 75 mn sq. ft in Q1FY22 on the back of a lower base of 48 mn sq. ft due to the first wave of Covid-19. The impact of the second wave of Covid-19 was visible with sales declining sequentially from 179 mn sq. ft witnessed in Q4FY21, an analysis by Kotak Institutional Equities Research. Listed real estate companies posted a 25% YoY growth in sales in Q1FY22. Unlike the overall industry, listed players had a respectful sales performance in Q1FY21, the analysis said. Sales in 4QFY21 stood at their highest ever levels in the past five years at 179 mn sq. ft for sales value of Rs 1.07 tn (+31% YoY), it said. Geographically, sales momentum remained encouraging in Mumbai, Bengaluru, Hyderabad, Pune and Chennai while the NCR market saw slower growth in Q1FY22. Sales activity failed to pick up in NCR in Q1FY22, reaching 4.4 mn sq. ft (+10% YoY, -63% qoq) after having reached 12 mn sq. ft in 4QFY21. The sales mix was dominated by Gurugram and Greater Noida contributing 37% and 25% of sales, respectively, of total sales of 4.4 mn sq. ft clocked in NCR while Noida contributed only 22% in Q1FY22. Launches in NCR remained weak with only 4.5 mn sq. ft of new projects launched in Q1FY22. Greater Noida’s unsold inventory stood at 67.6 mn sq. ft in NCR followed by Gurugram (25%) and Noida (18%) at 47.7 mn sq. ft and 34.4 mn sq. ft, respectively. Net unsold residential inventory in NCR stood at 189.3 mn sq. ft as of June 2021, declining by 7.2 percent YoY and equivalent to 5.4 years of sales (based on trailing 12 months). Blended realizations in NCR increased 24% YoY to Rs6,730 per sq. ft in Q1FY22, led by 17% YoY increase in Gurugram, 12% YoY increase in Noida and 10% YoY increase in Greater Noida. In Mumbai Metropolitan Region (MMR), strong sales recovery was witnessed in 2HFY21, MMR saw a decline in Q1FY22 with sales of 13.3 mn sq. ft. Sales suffered due to the dual impact of a second wave of Covid-19 and removal of temporary reduction in stamp duty. Thane continued to maintain a higher share in overall sales in MMR at 50% while Mumbai and Navi Mumbai contributed 34% and 16% sales, respectively, in Q1FY22. Launches in MMR remained at 9.2 mn sq. ft in Q1FY22 with Mumbai contributing 39% of the launches in Q1FY22. Realizations in MMR increased by 6% YoY in Q1FY22 to Rs 10,370 per sq. ft due to lower sales contribution from Mumbai in the base quarter even as Thane saw a decline of 4% YoY. MMR is seeing a sharper decline in inventory among all regions, although outstanding inventory still remains the highest at 242 mn sq. ft as of June 2021 (down from 288 mn sq. ft in June 2020), the analysis said. Bengaluru saw sales of 7.7 mn sq. ft (+40% YoY, -55% qoq) against launches of only 4.2 mn sq. ft (-15% YoY, -64% qoq ) in Q1FY22. Launch activity in Bengaluru has remained weak over the past year and declined by 38% YoY to 33 mn sq. ft. Weakening launches on the back of strong sales momentum led to a decline in outstanding inventory to 139 mn sq. ft (-12% YoY) by June 2021 and is equivalent to 2.7 years of sales (based on trailing 12 months). Realizations increased by 4.4% YoY to Rs 6,000 per sq. ft in Q1FY22, it said. Overall, launch activity across India showed improvement at 52.5 mn sq. ft Q1FY22 against 40 mn sq. ft witnessed in 1QFY21, however, it remained weak compared to average quarterly launches of 88 mn sq. ft in FY2021. Launches in FY2021 stood at 352 mn sq. ft as against 519 mn sq. ft in FY2020. Outstanding inventory across the country stood reduced to 1.2 bn sq. ft (-12% YoY) as of June 2021, equivalent to 2.3 years of sales (based on trailing 12 months sales). Average prices across India increased 3% YoY to Rs5,860 per sq. ft in Q1FY22 (from Rs5,700 per sq. ft in 1QFY21). Property registration data for Mumbai and Maharashtra in August 2021 (till August 27, 2021) stood at 6.3K and 96K, slightly weaker than levels seen in 4QFY21 though still strong, suggesting continued sales momentum, the analysis said. Larger real estate players are likely to expand their footprint as the ongoing consolidation continues to weed out smaller players from the industry. A low interest rate regime leading to improved affordability will continue to fuel sales momentum. The industry’s demand-supply dynamics are well placed against a backdrop of weakening launch activity, it noted. Recovery in development plays, relative to pure annuity investments, will likely lead to stocks trading at a premium to NAVs due to strong business prospects. Bengaluru-based players are better positioned to capitalize on the growth story in the sector, the analysis said. Money Control INDIA

People in remote area of Jammu & Kashmir's Rajouri get houses under PMAY

8/30/2021 2:35:00 PM

The people of the far-flung hilly area of Draman Panchayat have also been provided jobs under the MNREGA scheme. Abdul Rehman, Sarpanch said that under the PMAY 200 pucca houses are being constructed here. The Department of Rural Development of Jammu and Kashmir is constructing pucca houses in the Draman Panchayat of Rajouri district for people living below the poverty line under the Pradhan Mantri Awas Yojana (PMAY). The people of the far-flung hilly area of Draman Panchayat have also been provided jobs under the MNREGA scheme. The beneficiaries of the PMAY scheme, who were earlier living in kacha houses, faced many problems during the winter season. Mushtaq Ahmed, a resident of the area told ANI, "We are really happy and want to thank the government for giving us what we needed." "I was living in kaccha houses and we were facing a lot of problems. Now, we are very happy and thankful to the government for providing pucca houses to us," said Ahmed. Ahmed further said that they are also being provided work in their own village and now they don't have to go to Delhi, Punjab, or other states in search of work. "In the winter season, our village gets 5 feet of snow because of which around 200 kaccha houses are damaged. The Modi government has come up with a very good scheme and it is very good for us," he added. Abdul Rehman, Sarpanch said that under the PMAY 200 pucca houses are being constructed here. "This far-flung, hilly area is 7 kilometres away from Rajouri. People over here have to face a lot of problems during winter because it is a snow-prone area. During winters due to snow, houses are damaged and the people have no place to stay. We are very thankful to the government. Rs 1.5 lakh is provided by the government under the PMAY," said Rehman. "Under the PMAY these pucca houses are being constructed. This is a very good initiative from the government. Earlier in our village, there was no electricity but for the last two years it has been there," said a local. Source: ET Realty INDIA

61% of mid income homebuyers feel prices to rise in next 1yr: Survey

8/29/2021 11:07:00 AM

Over 60 per cent of middle-income homebuyers in India expect prices of their primary residences to rise in the next 12 months, according to a survey by Knight Frank. Around 30 per cent of respondents in the survey expect rates to rise up to 9 per cent, while 25 per cent hope prices to rise by 10- 19 per cent and 6 per cent feel rates to appreciate by more than 20 per cent. The consultant on Wednesday released the Global Buyer Survey that analysed the impact of the COVID-19 pandemic on residential buyers' attitudes to purchasing homes around the world. Knight Frank also conducted a two-part primary survey for India, having a total sample size of more than 550 people. The first part of the survey comprised respondents in the high-end income segment, referred to as the 'Global Indian Segment' while the second part gauged buyer sentiment in the mid-end income segment referred to as the 'Mainstream Indian Segment'. In the Indian edition of the survey, 26 per cent of mainstream Indians had moved their residences within the pandemic period. "These relocations were motivated by factors like wanting more open space and proximity to friends and family," it said. For Indian mainstream non-movers, 32 per cent were more inclined to move residences in the next 12 months. An overwhelming 87 per cent of the respondents who desire to move homes in the next year, favoured the suburban neighbourhood of their current city of residence, while 13 per cent of respondents who want to relocate, may consider an alternate city. On price outlook, the report said that 64 per cent of the respondents expect the value of their primary residence to increase in the next 12 months. In the case of the Global Indian segment, which represents the higher-income segment, 32 per cent expect prices to rise. "Reflecting a more optimistic outlook, 61 per cent of respondents in the mainstream Indian segment expect prices of their primary residences to rise in the next 12 months," Knight Frank said. Among other findings, 32 per cent of the respondents from the mainstream Indian segment expressed willingness to move into a new home in the next 12 months as a result of the pandemic, whereas 14 per cent from the Global Indian segment indicated a desire for relocation. The report emphasised that the future of work would play a significant part not only for the commercial sector but also for the residential. More than half of the respondents in the Mainstream Indian segment expect to be back in the office for the entire workweek once all restrictions are lifted. As much as 47 per cent of the Global Indian segment respondents expect to continue working for 2-4 days in a week from the office once all restrictions are lifted. In the mainstream Indian segment, the highest inclination towards five days of work from the office was shown by professionals such as lawyers, architects, doctors, chartered accountants etc. In the case of the salaried class segment, the preference for work from the office ranged from 3 to 5 days. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, The pandemic has changed the outlook towards ownership of homes." "Our survey confirms that across the spectrum of Indian homebuyers, 32 per cent showed interest in relocating from their pre-pandemic homes." Apart from the spending propensity and house type that typically govern an Indian home buyer's purchase decision, Baijal said that factors such as access to open green spaces, healthcare and proximity to the workplace have also started playing an important role. "Energy-efficient homes are also gaining traction as the concept is finding preference amongst home buyers in India," he added. Source: Business Standard INDIA

COVID-19 impact: More Indians keen to shift homes to suburban neighbourhood

8/27/2021 11:54:00 AM

More Indians are looking to shift their homes to suburban neighbourhoods owing to their learnings from the Covid19 pandemic. Around 87% of total 558 respondents who desire to move homes in the next 12 months, favoured the suburban neighbourhood of their current city of residence, while 13% of respondents who want to relocate, may consider an alternate city, showed a Knight Frank India survey. According to this survey, 26% of mainstream (mid-income) Indians had moved their residences within the pandemic period. These relocations were motivated by factors like wanting more open space and proximity to friends and family. For Indian Mainstream non-movers, 32% were more inclined to move residences in the next 12 months. Globally, 64% of the respondents expect the value of their primary residence to increase in the next 12 months. In the case of the Global Indian segment, which represents the higher income segment, 32% expect prices to rise. Reflecting a more optimistic outlook, 61% respondents in the Mainstream Indian segment expect prices of their primary residences to rise in the next 12 months. “The pandemic has changed the outlook towards ownership of homes. Globally, two trends have stood out in the last few months. Firstly, a growing ambivalence of some buyers when it comes to location, provided they can secure a co-primary home that delivers the lifestyle and enjoyment they feel they’ve missed out on. And, secondly given low savings rates and frothy stock markets, buyers are taking a more defensive stance by rebalancing their portfolios with a greater focus on tangible assets such as property,” Shishir Baijal, CMD, Knight Frank India. Around 32% of the respondents from the mainstream Indian segment expressed willingness to move into a new home in the next 12 months as a result of the pandemic, whereas 14% from the Global Indian segment indicated a desire for relocation. In a price sensitive environment, more than 50% across all income segments in India cited lack of willingness to pay a premium for branded residences. Marking a significant citation, 32% of the Global Indian segment expressed willingness to pay a premium for a greener home. Globally, over two-thirds of total 900 respondents expect the value of their current home to increase in the next year with most expecting a rise between 1% and 9% over the 12-month period. “Besides economic fundamentals, the home buyer psychology is also seen as an influential element in formulating the home price dynamics. There is an optimistic expression from global home buyers in terms of expecting an incremental value in the prime residential asset class in the next one year. We believe residential demand will strengthen and we expect market fundamentals to gain prominence in bringing an equilibrium in real estate economics which got impacted by the fury of the pandemic last year,” said Kate Everett-Allen, Head of International Residential Research at Knight Frank. Around 61% homebuyers in India’s mid-income segment expect residential prices to increase in the next 12 months.Nearly 58% respondents in Mumbai and Kolkata expected up to 10% increase in residential prices, while 53% in Pune also had a similar expectation. More than 60% respondents in Southern cities expect up to 20% price increase in the next 12 months. Around 19% respondents in Bengaluru and 18% in Chennai expected prices to increase 20% or more in the next 12 months. The survey findings emphasize that the future of work will play a significant part not only for the commercial sector but also for the residential. More than half of the respondents in the mainstream Indian segment expect to be back in office for the entire work week once all restrictions are lifted. Around 47% of the Global Indian segment respondents expect to continue working for 2-4 days in a week from office once all restrictions are lifted. In the Mainstream Indian Segment, the highest inclination towards 5 days of work from office was shown by professionals i.e. lawyers, architects, doctors, chartered accountants etc. In case of the salaried class segment, the preference for work from the office ranged from 3 to 5 days. This is largely due to the impact of tech-firm employees working from home. Globally, 59% of respondents envisage working 3-5 days in a week from office once all restrictions are lifted. In the Middle East and Asia, the figure is 41% and 36% respectively. Source: The Economic Times INDIA

REITs, InvITs to be included in Nifty indices from September 30

8/26/2021 12:58:00 PM

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts will be included in the Nifty indices from September 30, according to new eligibility criteria announced by the NSE. Vinod Rohira, CEO, Mindspace Business Parks REIT called it a very encouraging step from NSE. "This would enable wider investor participation in REITs and consequently increased volumes, liquidity and better price discovery. REITs merit to be on the Nifty indices, and this move will assist in widening investor participation for REITs at par with other equity options in India," he added. In a statement on Monday, the exchange said all equity shares, REITs and InvITs that are traded (listed and traded and not listed but permitted to trade) at the NSE are eligible for inclusion in the Nifty indices. Under the current rules, only shares traded on NSE are eligible for inclusion in the Nifty indices. REITs and Infrastructure Investment Trusts (InvITs) are relatively new investment instruments in the Indian context but extremely popular in global markets. While an REIT comprises a portfolio of commercial real assets, a major portion of which are already leased out, InvITs comprise a portfolio of infrastructure assets such as highways, power transmission assets. As at March-end, total 15 InvITs and four REITs were registered. Of these, six InvITs and three REITs were listed on the stock exchanges. These investment vehicles collectively raised close to Rs 55,000 crore in 2020-21, taking their net assets to Rs 1.64 lakh crore. The funds were raised through initial offer, preferential issue, institutional placement and rights issue. In addition, the eligibility criteria for Nifty pharma index has been revised. In the semi-annual review of indices, Bank of Baroda, Cholamandalam Investment Fin Co, Jindal Steel & Power, PI Industries and Steel Authority of India Ltd (SAIL) will be included in the Nifty Next 50 index. Abott India, Alkem Labs, MRF, Petronet LNG and United Breweries will be dropped from the Nifty Next 50 index. Apart from Nifty Next 50, changes have also been made in several indicies including Nifty 500, Nifty 100, Nifty Midcap 150 and Nifty Smallcap 250. The index maintenance sub-committee of NSE Indices has decided to make the changes in eligibility criteria of Nifty indices and replacement of stocks in various indices. These changes will become effective from September 30, 2021. Source: Money Control INDIA

NRIs form nearly 30% of investors keen in fractional ownership of commercial property: Report

8/25/2021 5:03:00 PM

The report says CA and finance executives have shown maximum interest (30% of total respondents) in investments towards fractional ownership of the commercial real estate, followed by lawyers (21%), doctors (15%), and Tech-IT executives (13%) Nearly 30% of total investors interested in fractional ownership of commercial real estate are NRIs as they seek to create an alternative income source for their family in India, according to a survey. Mumbai-based MYRE Capital, which facilitates investors in fractional ownership of the commercial real estate, conducted a survey collecting responses from over 1,500 high-ticket registered users and investors. According to the findings of the survey, chartered accountants and finance executives have shown maximum interest (30% of total respondents) in investments towards fractional ownership of the commercial real estate, followed by lawyers (21%), doctors (15%), and Tech-IT executives (13%). "These investors prefer fixed income options that are collateralised with a hard asset and have started appreciating the favourable risk-return profile of fractional CRE and the end-to- end management provided by fractional ownership platforms," MYRE Capital said in a statement. The survey found out that 72% of investors are from India while 28% are NRIs from countries like the US, the UAE, the UK, Denmark, Nigeria, and Australia. MYRE Capital's Founder and CEO Aryaman Vir said, "Fractional investment has long existed in India but in an unorganised manner. Even now, investors limit themselves to residential real estate as their only choice of investment and we want them to be aware of CRE as an effective avenue." MYRE Capital, a venture by Morphogenesis, is a tech-enabled fractional ownership platform that provides easy access, transparency, and liquidity to a curated selection of rent- yielding commercial real estate assets. Source: MInt INDIA

Himachal Pradesh Real Estate Regulatory Authority ranked second best in country

8/24/2021 1:20:00 PM

Himachal Pradesh Real Estate Regulatory Authority (RERA), constituted with the objective of regulating and promoting the real estate sector, has been ranked second best amongst all the RERA authorities across the country. The ranking is based on Himachal RERA’s effectiveness in executing its orders by instituting execution proceedings within one and a half year of its inception. The main objective of the HP RERA is to regulate and promote the real estate sector and ensure that sale of plots, apartments or buildings is done in an efficient and transparent manner. The primary objective is to protect the interest of home buyers in the state. About 38 new real estate projects and 52 agents were registered with the authority within a short period. The authority has decided a large number of cases by hearing the parties online without calling them to visit its office in view of Covid restrictions. All the hearings of complaints are being conducted virtually and the parties are not required to physically visit the RERA office which makes it more convenient for the stakeholders to pursue their cases. More than 260 virtual hearings have been conducted. In these cases, an amount of Rs 6. 55 crores was ordered to be refunded to the house allottees. Out of this sum, about Rs 76 lakhs has already been recovered from the promoters. The HP RERA has also taken initiative to settle matters amicably between parties as a result of which Rs 52 lakhs has been refunded. Apart from refund, a penalty of more than Rs 2.27 crores was also imposed on the builders and promoters for contravention of provisions of Real Estate (Regulation and Development) Act, 2016. Till today 14 execution petitions have been filed by allottees and nine execution petitions have been registered suo moto against promoters and builders. A total of Rs 35 lakhs has also been realised as penalty from the builders and promoters. The authority has formulated regulations no. 2, 4 and 5 to facilitate and regulate the filing of quarterly progress reports (QPRs) and annual progress reports (APRs) online. The allottees and home buyers are at liberty to see the progress of homes and apartments through these QPRs. The new website of RERA is under process of development through the NIC. Source: The Tribune HIMACHAL PRADESH

Realty prospers in Tier-II cities as interest surges post the pandemic

8/20/2021 12:19:00 PM

The Tier-II cities tale resurged after a long period when interest in real estate investment was concentrated mainly in the larger cities. The rejuvenation is taking place as many of these cities are witnessing increased economic activity and infrastructure development, reducing outward migration to metros; this is a positive trend that will result in a more equally distributed real estate market, easing pressure on larger cities. The development in these places is taking place in urban-centric ways to attract young buyers and renters yearning for a better lifestyle – a metro lifestyle. These resource-rich cities have remained virtually untouched for a long time as the country’s big developers flocked only to the metro cities. But, the pandemic has prompted real estate titans to rethink their plans and shift their focus away from metros. By 2030, India would have 104 Tier II cities and 155 Tier I cities. The figure alone foreshadows future Tier-II city development. Finally, improved economic growth, infrastructural development, and the benefits of lower real estate prices and a reduced cost of living are all driving up residential demand in these places. People would want to have all of the modern conveniences in one location, particularly in the aftermath of COVID-19, such as upscale markets, colleges, hospitals, and entertainment venues. Major developers are already coming to these ‘prime’ cities from all across the country. The present housing market favours features that meet health and safety issues, and this is addressed by reputable developers, which provide inhabitants with a controlled living environment. Cost-effective housing, a dearth of well-organized living options, and the migration of working professionals, among other things, are reigniting demand in places such as Chandigarh and Zirakpur. With interest rates on home loans at historic lows and government incentives for home purchasers, a surge in demand seems inevitable. Furthermore, under the present administration, many of these cities are undergoing significant infrastructure deployment. Indeed, supply and demand are frequently inversely proportional; not all tier 2 and tier 3 cities are performing equally well. To put it another way, cities that are doing well economically would also attract more migrants who will require rental homes. Both investors and end-users will have a wide range of options from which to choose, allowing them to fine-tune their final choice based on the location, amenities, and ticket sizes. End-users can purchase properties in their home cities – or, in the case of NRIs, in their cities of origin. Premium home projects in Tier-II cities provide nicely spaced and efficient larger apartments. Beautifully constructed independent floors in Zirakpur’s PR 7 Airport Road provide near proximity to all major necessities and projected accessibility through 200 feet wide road. People are investing in properties along PR7 Airport Road near Zirakpur because of the possibility of large profits and that these properties provide easy commuting to the surrounding locations. NRIs and Punjab, Haryana, Jammu, and Himachal residents are investing in the newly constructed route that connects Chandigarh, Zirakpur, Mohali, and, in time, Panchkula. The availability of properties in Zirakpur near Airport Road has offered NRIs the opportunity to expect significant returns on their investment now that Chandigarh is on the map for them. It also provides good access to important locations, proximity to tourist sites, and high quality of life, making it a popular spot to buy/invest. Furthermore, property investment is secure since consumers will earn returns on their capital, whether through rental or capital appreciation; short-term capital appreciation is expected to range between 10% and 12%. In fact, because of the expected strong footfall from the mid-segment to the high-end, numerous foreign brands in commercial enterprises are making their presence felt in the area. As a result, real estate value in such neighbourhoods in Tier-II cities will skyrocket as more developers and investors are flocking to these burgeoning metropolises. Source: Financial Express INDIA

Allow freehold conversion of industrial plots: Chandigarh administration to centre

8/19/2021 11:31:00 AM

CHANDIGARH: The UT administration has written to the ministry of home affairs (MHA) for giving in-principle nod for conversion of leasehold properties into freehold in commercial and Industrial Area, phases I and II, a long-pending demand of industrialists. UT adviser Dharam Pal has recently met MHA officials and made the demand. In the coming days there will be a detailed meeting between the ministry and UT officials. Last year before the coronavirus lockdown was enforced, the matter was discussed in a meeting between UT officials and members of Industrial Advisory Committee of Chandigarh. The UT had last converted leasehold plots into freehold in 1983 in commercial category. The matter was also taken up by MP Kirron Kher with the MHA and ministry of urban development. Recently, the administration had even conducted a survey in Industrial Area for checking leasehold plots. The administration had also sought a report on violations in industrial plots in Industrial Area. Industrial Area was set up in the 1970s The administration had set up phases I and II of Industrial Area during the 1970s on an area measuring 147 acres. The plots are governed by zoning and architectural control, which were prepared as per the conditions prevailing at that time. There are1,884 plots in both phases, of which 700 are 1 kanal and above, while there are 443 and180 plots measuring10 and15 marla, respectively. There are as many as 381 plots of 5 marla. Certain need-based changes in architectural controls in line with modern day industrial requirements was allowed. The UT had even allowed cycle stands for purposes such as storage of raw material and industrial functions. UT had stated that in the wake of thefts in industrial areas, partial covering of central courtyard with poly carbonate sheets was allowed. Source: ET Realty CHANDIGARH

Construction of 16,488 houses approved under Pradhan Mantri Awas Yojana-Urban

8/18/2021 1:12:00 PM

Construction of 16,488 houses have been approved under Pradhan Mantri Awas Yojana-Urban (PMAY-U) at the 55th meeting of Central Sanctioning and Monitoring Committee (CSMC). The houses are proposed to be constructed under Beneficiary-Led Construction (BLC) and Affordable Housing in Partnership (AHP) verticals of PMAY-U. “The demand for sanction has saturated in all States/UTs and work should be done expeditiously towards completing all the projects within stipulated time,” said Durga Shanker Mishra, Secretary, MoHUA while chairing the meeting. Construction of PMAY-U houses is in various stages. With this, the total number of sanctioned houses under PMAY-U is now 113.06 Lakh; of which 85.65 Lakh have been grounded for construction and more than 51 Lakh have been completed and delivered to the beneficiaries. The total investment under the mission is Rs 7.39 lakh crore with a central assistance of Rs 1.82 lakh crore. So far, Rs 1,06,390 crore of funds have already been released under the mission. The approval for proposals under Model-2 of Affordable Rental Housing Complexes (ARHCs) was also reviewed by Secretary, MoHUA, with 5 states - Tamil Nadu, Chhattisgarh, Assam, Uttar Pradesh and Gujarat. A total of 59,350 units, including single bedroom/double bedroom units and dormitory beds, have been approved for urban migrants/ poor, involving a Technology Innovation Grant (TIG) of over Rs 135 crore. ARHCs, a sub-scheme under PMAY-U, provides ease of living to urban migrants/poor in industrial sector as well as in non-formal urban economy to get access to dignified affordable rental housing close to their workplace. With respect to Light House Projects (LHPs), Secretary, MoHUA, said that the States/ UTs should encourage registration of stakeholders as Technograhis in large numbers so that they get to learn about globally innovative technologies and adapt their use in Indian context across the nation. Source: The Economic Times India

Pandemic accelerates home buying in India

8/17/2021 12:15:00 PM

The value of owning a home is underpinned during the Covid-19 crisis and it gained momentum on grounds of safety and stability it offered. The Indian real estate has undergone a system reboot with structural policy reforms like The Real Estate (Regulation and Development) Act (RERA), GST, insolvency, and bankruptcy simultaneous to demonetisation and Infrastructure Leasing & Financial Services (IL & FS) fiasco. As a result, the market was sluggish with a liquidity crisis, subdued demand, muted investment, rising unsold inventory, and prices that stood stagnant for a long time. Dr Niranjan Hiranandani, MD, Hiranandani Group and National President, Naredco, said: “The Covid-19 crisis acted as a demand catalyst for home buying from domestic as well as global Indians. NRI investors reassessed residential realty as a safe bet asset to invest on back of currency swap benefit, low home loan interest rate, deal sweetener by the developers, stamp duty waiver, flexi payment schemes, and digitisation of home buying experience which made it more rewarding.” For the expatriate Indian, the market scenario skewed favourably with RERA that ensured transparency, accountability, and financial discipline. Thus, now seems to be the right time to invest in residential real estate with attractive pricing and less volatility compared to other asset classes. “The rising geo-political uncertainties, job insecurity also fuelled the demand to invest in Indian real estate- an asset close to home which also offers assured rentals from the branded developers making it a win-win scenario,” added Dr Hiranandani. This demand increase generated post-Covid-19, aided by rock bottom housing prices and historically low-interest rates on home loans, has helped residential real estate developers to successfully navigate through the tough economic situation caused by this pandemic. — Dhruv Agarwala Real estate continues to be the preferred asset class for investment in the wake of the Covid-19 pandemic, but the majority of homebuyers want discounts along with flexible payment options as an incentive, according to the Housing.com and Naredco survey. The real estate portal conducted the survey between January to June this year of more than three thousand consumers. According to the survey findings, real estate is the preferred mode of investment for 43 per cent (35 per cent last year) of respondents, followed by stocks 20 per cent (15 per cent last year), fixed deposit 19 percent (22 per cent last year) and gold 18 per cent (28 per cent last year). “The health crisis has reinforced the importance of homeownership across the world. As a result, the residential real estate market is not only witnessing fresh demand from first-time homebuyers but also from a lot of consumers who are upgrading to bigger apartments,” said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com, and PropTiger.com. “This demand increase generated post-Covid, aided by rock bottom housing prices and historically low-interest rates on home loans, has helped residential real estate developers to successfully navigate through the tough economic situation caused by this pandemic,” Agarwala added. Among other key findings, the majority of the respondents (71 per cent) feel that flexible payment plans and discounts will provide much-needed financial aid during current times and drive them to make purchase decisions. Strong housing sales in Maharashtra’s two key markets — Mumbai and Pune — suggest that stamp duty reduction by the state government did play an important role in stimulating demand during September 2020 to March 2021 period. “Builders’ margins for under-construction properties have reduced due to increase in construction costs and land prices in some cities. Therefore, there is little scope for a reduction in basic selling price (BSP). However, builders have been offering flexible payment plans and discounts in some cases to attract customers,” said Mani Rangarajan, Group COO, Housing.com, Makaan.com, and PropTiger.com. “The housing market has shown great resilience during the second wave of Covid infections with demand and supply both growing during April-June 2021 compared to the same period last year. The survey shows that buyers’ sentiments have improved since June and people have started searching properties with renewed vigour. We expect demand to remain strong during the festive season,” Rangarajan added. “The state governments should reduce stamp duty on registration of properties to encourage homebuyers.” The survey found that economic and income outlook for the coming six months is more optimistic as compared to H1 2020. The sentiments have been less impacted this year given that uncertainty is lower as compared to last year. Also, lockdowns have been more selective along with vaccine availability. “While the second wave did see homebuyers shying away from making a purchase, subsiding coronavirus cases has seen buyers resume their home searches a lot quicker than after the previous lockdown period,” the report said. Anupam Rastogi, Co-founder and Head of NRI Business at Square Yards, said: “The Indian real estate industry had an optimistic run in H1 2021, with the sector braving the second covid wave with aplomb backed by digital home buying, recalibrated business plans by developers, and bullish investor sentiments, making handsome amends for the disappointment that was 2020. New launches in the first half of 2021 in top six cities trumped previous year’s H1 launches recording a rise of anywhere between 50 per cent to 125 per cent.” Sales also spiked across all top real estate markets driven by a heightened need for homeownership and robust buyer confidence in the sector. A raft of reforms including realistic repo rates, stamp duty waiver, and circle-rate cuts kept the housing sales momentum brewing throughout the Jan-Mar quarter with lucrative offers from developers sweetening deals further. Even though the momentum was hit by the second wave during the April-June 2021 quarter, the cumulative impact of the numbers achieved in Q1 meant that sales figures for H1 2021 significantly exceeded that of H1 2020. The spike in sales was more prominent in the state of Maharashtra, thanks to the stamp duty waiver. Top realty markets in the state such as MMR and Pune registered a yearly growth of 80 per cent to 155 per cent in residential transactions. With an accelerated Covid-19 inoculation drive, measured reopening of the economy, and recall of stamp duty cuts in Karnataka and Maharashtra, the home buying demand and sales trajectory has moved north post-June, signaling a positive home buying sentiment. “NRIs can leverage this opportunity to buy a property back home as a financial investment and sentimental attachment with a vision of settling in the future. Increased transparency, stable property rates, depreciation in the Indian rupee, reduced home loan rates, security of real estate investment in India, strong growth prospects and the option of digital home buying, have made property investment highly conducive and a good bet for NRI homebuyers.” While India’s real estate market makes a certain move for investment due to low prices, increased transparency, and digital progression, the fact that the world is coping with the pandemic is an opportunity in itself. Investment in real estate has been often regarded as a risk-free option given the tangible nature of the asset and over time the property ensures a genuine appreciation value along with assured ROI. Today, in the post-pandemic world processes have rapidly moved to online modes offering investors much transactional ease, even if they are across borders. Shraddha Kedia-Agarwal, Director, Transcon Developers, also pointed out: “The recent volatile stock market and the currency benefit of the rupee-dollar exchange have made it favourable for the NRIs to invest in Real Estate in India. A large section of non-residential Indians, previously aligned to the stock market as primary investment policy have shifted more to real estate as a form of long-term investment. Also, the rupee’s decline in value against the dirham, heavy returns, good rental, improving infrastructure are the additional key drivers. The Indian government has recalibrated its approach towards remobilizing the economy and introduced various reforms to ensure adequate liquidity in the system such as keeping the interest rates low, additional liquidity support to NBFC and HFCs. The residential real estate market in India has become more lucrative for ultra-high net-worth individuals (UHNIs) and NRIs as a result of the increased transparency and ease in investment norms. The new class of ultra-rich people is on a buying spree of luxury homes in global cities like Mumbai, Bengaluru, etc. With vaccination drives in advanced stages in most countries, and a huge part of the vulnerable population vaccinated, the situation is likely to return to normal by the end of the year. With RERA ensuring transparency and laws allowing 100 per cent FDI in construction, Indian real estate is witnessing sharp investment infusions from NRIs. The Indian markets are proving their grit and potential, it is now time for NRIs to decide if they want to benefit from India’s future potential.” The rising geo-political uncertainties, job insecurity also fuelled the demand to invest in Indian real estate — an asset close to home, which also offers assured rentals from the branded developers making it a win-win scenario. — Dr Niranjan Hiranandani Echoing the similar positive sentiment, Ram Naik, Executive Director, The Guardians Real Estate Advisory, said: “The current market scenario augurs well for the NRI and HNI communities that are looking for investments at attractive valuations. The depreciating rupee has also created lucrative long-term investment opportunities for NRIs, especially in the real estate sector. We have also seen eagerness amongst NRIs to make the most of the lucrative offers from developers in line with the factors prevalent in the market today. These factors also suit the end-users and it is they who are making the most of the low home loan rates along with attractive payment plans by the developers. The turn of events due to the pandemic and the subsequent lockdowns have also prompted developers to begin easing the purchase process for customers. The current scenario, therefore, augurs well for NRI investors who typically have larger funds to invest upfront and are attracted by today’s affordable pricing, handsome rental yields, and a favourable investment climate in India. And this interest will only continue to rise as homes have now become a priority for NRIs towards their aged parents or for their own retirement in the future". Source: Khaleej Times India

Housing in city got cheaper, smaller over past five years, states Anarock realty report

8/13/2021 10:59:00 AM

The report, released by Anarock Property Consultants, states that the average size of houses has reduced from 1,550 square feet (sqft) to 1,250sqft in the second half of the last decade. Also, speculated buying and role of local developers reduced in this period while branded and listed developers, with corporate backgrounds, have taken centre stage, it stated. The housing sector in Gurugram moved towards affordability, with houses getting smaller and cheaper in the 2016-2021 period and an emphasis on timely deliveries — a move away from the premium and luxury segments that dominated the sector from 2011 to 2015 — according to a report released by a private real estate service company on Tuesday. The report, NCR Real Estate Market – A 2015-2021 Timeline, released by Anarock Property Consultants, states that the average size of houses has reduced from 1,550 square feet (sqft) to 1,250sqft in the second half of the last decade. In the past five years, the ticket size (investment per unit) of flats also reduced from ₹68 lakh to ₹56 lakh, according to the report. Also, speculated buying and role of local developers reduced in this period while branded and listed developers, with corporate backgrounds, have taken centre stage, it stated. The report also stated that almost 52% of stalled or delayed housing projects in the country are in the National Capital Region (NCR), with Greater Noida accounting for the maximum, at 26% (162,720 units), while Gurugram accounts for 6.24% (40,380 units) of it. Arun Puri, chairman of Anarock Property Consultants, said that by far, the most glaring aspect of NCR’s darker years is now beginning to see some light at the end of the tunnel. “The aftermath of this (2010 to 2015) period is still glaringly evident. More than 328,600 homes are either terminally stalled or heavily delayed in NCR alone, accounting for 52% of all such units across India’s seven major cities,” he said. Another noticeable change that has happened over the years, the report stated, is that developers are also launching smaller projects. The average size of projects has reduced from 950 units to 650 units to allow faster completion and delivery. City-based developers and experts concurred with the findings of the report, attributing the change to the introduction of a real estate regulatory act in 2016, demonetisation, affordable housing, market slowdown and predominance of end-users among buyers. The industry is also moving towards consolidation, professionalism and corporatisation, with established brands entering the sector and improvement in the quality of investors. Prashant Solomon, the managing director of Chintels and spokesperson, Confederation of Real Estate Developer’s Associations of India (CREDAI) NCR, said that in the past five years, housing has become more end-user driven. “RERA [Real Estate Regulatory Authority] has changed the perspective of developers and there is more accountability and transparency in project funding, development and delivery timelines. Home loan culture has reduced the involvement of speculation,” he said, adding that ticket sizes of flats and projects have been reduced for easy affordability and faster completion. Gurugram-based experts said that the residential market has seen a major change over the past five to seven years, from an unorganised, highly speculative and overpriced market to an organised, consumer-driven affordable housing market. They said that the changes have been so much so that at present, Gurugram has emerged as a hub of affordable housing. “The central government’s reforms, such as RERA, fully regulated the property market and effectively put an end to speculative selling by banning pre-launch sales. Further, PMAY [Pradhan Mantri Awas Yojana] incentives were restricted to only first-time buyers of homes up to ₹45 lakh to check speculation and promote affordable housing. The introduction of GST by the Centre and later its rationalisation to 1% for affordable/mid-segment housing further fuelled affordable housing,” said Vinod Behl, a city-based real estate expert. Source: Hindustan times INDIA

RLDA to redevelop 49 more railway stations as part of Smart Cities project

8/12/2021 12:52:00 PM

Rail Land Development Authority (RLDA) has been entrusted with additional 49 railway stations across India, for redevelopment. It is already developing 60 railway stations as part of the Smart Cities project of the government. Some of these stations are Amravati, Rajkot, Mathura, Agra Fort, Bikaner, Kurushetra, and Bhopal, among others. "We look forward to the mandate. The station redevelopment is intrinsically linked to urban rejuvenation. The redevelopment of these stations will offer world-class amenities to passengers and enhance their travel experience. It will also lead to a multiplier effect on the local economy to boost retail, real estate and tourism and generate employment opportunities. As a responsible organisation, RLDA is steadfastly committed to delivering these stations as per schedule to fulfill the aspirations of New India,” said Ved Parkash Dudeja, vice chairman, RLDA. The stations to be redeveloped by RLDA in the next phase include Meerut City, Moradabad, Deen Dayal Upadhyay (Mughal Sarai), Gorakhpur, Aligarh, Gonda, Mathura, Agra Fort, Bareilly in Uttar Pradesh; Jamnagar, Bhavnagar, Gandhidham, Junagarh, Rajkot in Gujarat; Bhopal, Bina, Jhansi, Ujjain in Madhya Pradesh; Beas, Jalandhar City, Bhatinda Junction, New Pathankot (Chakki Bank) in Punjab, among others. The stations to be redeveloped in Maharashtra include Sainagar Shirdi, Nanded, Amravati, Akola. In Bihar, the stations include those located in Chapra, Sitamarhi, Barauni, Darbhanga; Dhanbad, Tatanagar, Jasidih in Jharkhand; Tirunelvelli, Chennai Central in Tamil Nadu; Begumpet, Kachegoda in Telangana; Gudur and Rajamundry in Andhra Pradesh. Other stations include Bandel and New Cooch Behar in West Bengal; Bikaner and Jodhpur in Rajasthan; Palampur in Himachal Pradesh; Silchar in Assam; Kurukshetra in Haryana; Vasco-da-Gama in Goa; Mysore in Karnataka and Haridwar in Uttarakhand, a statement by RLDA said. RLDA has recently successfully concluded a Request for Qualification (RFQ) for the Puri and Lucknow Railway Stations inviting bids from eligible developers to participate in the redevelopment process. In addition, for redevelopment of the Dehradun, Nellore, Tirupati, Puducherry, Ernakulum and New Delhi Railway Station, RFQ have been finalised and RFPs will be issued shortly. These station projects will be redeveloped under PPP model. Rail Land Development Authority (RLDA) is a statutory authority under the Ministry of Railways for the development of Railway land. It has four key mandates as a part of its development plan, namely leasing commercial sites, colony redevelopment, station redevelopment and multi-functional complexes. Indian Railways has approximately 43,000 hectares of vacant land across India. RLDA is currently handling 84 railway colony redevelopment projects and has recently leased out three railway colonies in Guwahati and Secunderabad for redevelopment. RLDA has over 100 commercial (greenfield) sites across India for leasing, and the eligible developers for each will be selected through an open and transparent bidding process. RLDA is now working on 109 Railway stations in a phased manner. In the first phase, RLDA has prioritised prominent stations like New Delhi, Tirupati, Dehradun, Nellore, Cuttack, Lucknow and Puducherry for redevelopment. The railway stations across India will be redeveloped on a PPP/EPC Model as a part of Smart City Projects launched by the government. Source: Mney Control News INDIA

Residential sales recorded 75% YoY growth in H12021, says CBRE report

8/11/2021 12:20:00 PM

The first half of 2021 recorded a growth of 75% in sales on a year-on-year (YoY) basis as green shoots of recovery were visible and the momentum is expected to continue over the next couple of quarters. Pune led housing sales in H1 2021 and accounted for an almost 26% share in residential sales across the top seven cities, a report by CBRE has said. Pune was closely followed by Mumbai (19%). Hyderabad (18%) and Delhi-NCR (17%) were next on the list. On the back of measured policies announced by the Central, state governments, and the RBI. That apart, owing to the incentives provided by the developers, the residential segment has been showing green shoots of recovery as housing sales grew by 73% on a quarter-on-quarter (QoQ) basis across India’s top seven cities in Q42020, said the report titled Residential Real Estate in India - Challenges And Future-Proofing Strategies For Developers. Affordability at its highest in over a decade While property prices have grown at a CAGR of 1-6% across high-end segment and around 2–7% across mid-segment since 2010, the per capita GDP grew at a CAGR of 4.0% between 2010 and 2020, the report said. The growth in GDP per capita for the top seven cities was above the national average, with Bengaluru reporting the highest CAGR (6.6%). Hence, the income growth overtook the average rise in the price of properties, further contributing to housing affordability, it said. “With incentives such as the all-time low-interest rates on home loans, extension of moratorium period on loans, coupled with reduction in either circle rate or stamp duty across a number of states, residential has not only shown recovery but has become a great addition to asset portfolios,” said Anshuman Magazine, chairman, India & South-East Asia, Middle East & Africa, CBRE. Source: Money Control.com INDIA

Demand for premium second homes makes big comeback

8/10/2021 10:44:00 PM

Realtors are seeing demand for larger individual homes—with office space—at higher budgets. Second homes priced from ₹50 lakh to ₹50 crore are seeing a pick-up in demand from wealthy individuals—including tech entrepreneurs, corporate professionals and non-resident Indians (NRIs) —as they look to get away from cities amid the pandemic. Tata Realty and Infrastructure Ltd (TRIL), DLF Ltd, Isprava, and others are seeing a demand for larger individual homes—with office space—at higher budgets, both for individual use and investment, in Goa, Kasauli, Coonoor, Alibaug and other ‘away from the city’ locations. TRIL has sold off the stock in Phase 1 of its luxury villa project ‘Myst’ in Kasauli and launched the second phase in April. In its project ‘Prive’ in Lonavla, it has sold homes priced at ₹4-6 crore over the last year. In Goa, where apartments are priced at sub- ₹1 crore, only a few units are left. “Second homes are witnessing an all-time high demand. People are looking at buying not just in India, but also in Dubai and London. NRI demand for such homes in India has picked up primarily for investment purposes. Most of the second home inventory we sold was ready to move in," said Sanjay Dutt, managing director (MD), TRIL. Luxury lifestyle developer Isprava, which sells fully furnished ready-to-move homes between ₹5 crore and ₹50 crore, has seen a 30-50% increase in ticket size as people seek larger living spaces with an office. “Before covid, the ultra-rich travelled extensively, but now everyone has realized the importance of having a secondary or semi-primary home within the country where you can reach easily. There was always strong demand, but the pandemic acted as a catalyst. People realized work-from-home is doable and one can actually work out of Goa or Alibaug or Coonoor for extended periods of time," said Dhimaan Shah, founder and chief operating officer, Isprava. Shah said buyers who would have spent ₹6-7 crore on a home are now buying properties worth ₹10-11 crore. “There are also several clients who are purchasing big-ticket homes ( ₹20 crore and upwards) with us in Goa and Alibaug while renting in their primary cities of residence because rental yields are so low in the metros. We are seeing a clear trend towards a younger demographic (30-45 years of age) purchasing homes with us," he added. Isprava is also entering Kasauli as a new location for secondary homes. In August, property advisory Savills is hosting an online Goa festival, a curated show of hand-picked villa developments, resale inventory, and apartments for interested buyers from across the country. Shveta Jain, MD, residential services at Savills India said there is definitely rising interest in owning or leasing a second home following the covid outbreak. “Places like Goa, which have seen active real estate development, are no more just a second home destination. Homebuyers are looking for housing options across the country. Potential homebuyers from Mumbai or NRIs are seeking to buy in Kasauli or Uttarakhand and the same is true for people in other parts of the country," she said. “Depending on the affordability, such properties also provide homeowners another source of income. In terms of demand, gated developments, and independent homes of around 3,000-4,000 square feet on large land parcels are top choices. The preferences are for villas in the price range of ₹1-3 crore or for premium residences of ₹5-11 crore," Jain added. The pandemic has altered both homebuyers’ preferences and developers’ strategies. People are seeking stable assets and those who can afford it prefer to have bigger spaces. “We witnessed strong demand for properties that can serve as catch-all compounds and live-work spaces. Suburbs of metros and Tier II and III cities have emerged as the new locus for real estate. We have seen a phenomenal increase in inquiries and sales from micro markets like Indore, Panchkula, Kasauli, Lucknow, and Kochi in Q3 and Q4 of FY21. We are also getting inquiries from customers in metros who are looking to relocate, and from NRIs who want to buy a home for their families," said a DLF spokesperson. Samavana I, a premium residential and plotted project by DLF in Kasauli, has seen a rise in interest from homebuyers since the onset of the pandemic, especially buyers from the National Capital Region. Source: Mint INDIA

Rising foreign investment in the Indian real estate market

8/8/2021 11:47:00 AM

Real estate sector in India is at its zenith. It has always been one of the most evolving sectors is one of the primary contributors to employment with seven percent of the country’s GDP. Furthermore, it is expected that by 2025 its contribution will increase to a whopping 13 percent. The investment trends for the last three months highlight one key trend – Strong investor confidence in the Indian real estate sector, which has resulted due to the following factors: 1) Direct investment in Indian real estate and ownership The decision to liberalise FDI norms in the construction sector is perhaps the most significant economic policy decision taken by the government of India. Real estate investment tops $1.35 bn in Q2 2021, thereby reflecting a nine- fold increase. Despite the second wave of the coronavirus pandemic that hit India in April this year, the first six months of 2021 saw investments worth $2.7 billion, which is 53% of the total investments seen in 2020. 2) Investment by way of REITs or equity investment in listed companies Real estate and infrastructure have become key factors of growth in a fast-growing economy like India where cities are expanding at a rapid pace. The sector is estimated to touch $650 billion by 2025, thereby contributing 13 percent of India’s GDP and by 2040, the realty sector is estimated to grow to $9.3 billion, which was at a mere $1.72 billion in 2019. Gazing at these numbers, it is evident that the Realty and Infrastructure sector is a viable avenue for investors. As of present day, there are about 11REITs and InvITs in operation across India out of which 10 have AAA level security. India began 2021 with the successful launch of the country’s third REIT – Brookfield REIT (issue size of around $512 million). Despite the pandemic, the net absorption of real estate was high, indicating that REITs are streaming up as a destination for investment. This will only further fuel the realty sector that adds to the domestic and global community’s confidence in REITs. Therefore, India’s REIT market is all set to enter a new growth phase with more REITs to be listed in 2021. 3) By way of huge influxes into the property technology (prop-tech) space Technology has permeated into almost all industries, and the real estate sector is no exception. On one hand the realty industry has been quick to identify opportunities in the adoption of technology, the government has been simultaneously coming up with various initiatives to drive in the same among the industry players. Few of the marquee campaigns of the government are ‘Digital India’, “Global Housing Technology Challenge’, “IndiaChain’, and so on, that are making the access of technology easier and more holistic. As more and more homebuyers in India plan and execute their property purchases through virtual platforms in the aftermath of the coronavirus pandemic, the real estate industry has assimilated technology in a way that has made it more resilient, invincible and given it a new and vibrant dynamism. The PropTech industry in India attracted over $551 million in 2020, surpassing the aggregate of 2019; $549 million. Blox as a startup with no team or build-out but only a concept and investor deck managed to raise 2.1 mn at a post money valuation of 12.1 mn. Global investors are excited for the long term prospects of the Indian real estate industry and more specifically, the digitization of the industry that is now certain to happen in light of the pandemic. Source: Construction Week online INDIA

Tech-enabled rental accommodation provider Colive to upgrade co-living properties into hybridliving accommodations

8/7/2021 12:40:00 PM

Tech-enabled rental accommodation provider Colive is upgrading its coliving properties into hybrid-living accommodations. Through this transformation, Colive aims to enhance its customers’ living experience with plug-and-play homes that provide a hybrid working environment. In a post-pandemic world where work from home is a prominent mode of work and numerous companies, as well as start-ups, are adopting the homeoffice model, spaces that strike the balance between personal and professional life have become essential. “Remote working is made even harder for the young professionals who are struggling to get high speed secured wifi and 24x7 power back up at their home town. Hence, to help people cope with the redefined work culture in a post-pandemic world, Hybrid Living equips you with facilities that are both cost-effective and increase work efficiency,” said Suresh Rangarajan, Founder and CEO of Colive. The facilities include a proper formal working atmosphere, round-the clockpower backup, strong Wi-Fi network and dedicated conference rooms to conduct meetings. The company has also come up with ‘Bid4Bed,’ wherein prospective tenants will select a property based on their location and sharing preference and place a bid. This allows tenants to quote a fair estimate of what they’re willing to pay for a listed hybrid living accommodation. If the bid is approved, the customer is required to pay the remainder and move in. If the bid is rejected, they receive a counteroffer. “Priceline is considered to be one of the most remarkable success stories in recent years, Priceline is best known for its name-your-own-price that led to its height of success, in which consumers bid for services but not for service providers. Because Priceline serves as an opaque selling mechanism, it attracts price-conscious consumers,” said Suresh Rangarajan. Colive has received more than 2,000 bids until now under Bid4bed for hybrid living properties and have observed an uptick of 60 per cent in reservations at Colive since bidding has been implemented . Source: The Economic Times INDIA

Kasauli, Goa and Demand for premium second homes makes comeback

8/6/2021 2:23:00 PM

Second homes priced from ₹50 lakh to ₹50 crore are seeing a pick-up in demand from wealthy individuals—including tech entrepreneurs, corporate professionals and non-resident Indians (NRIs) —as they look to get away from cities amid the pandemic. Tata Realty and Infrastructure Ltd (TRIL), DLF Ltd, Isprava, and others are seeing a demand for larger individual homes—with office space—at higher budgets, both for individual use and investment, in Goa, Kasauli, Coonoor, Alibaug and other ‘away from the city’ locations. TRIL has sold off the stock in Phase 1 of its luxury villa project ‘Myst’ in Kasauli and launched the second phase in April. In its project ‘Prive’ in Lonavla, it has sold homes priced at ₹4-6 crore over the last year. In Goa, where apartments are priced at sub- ₹1 crore, only a few units are left. “Second homes are witnessing an all-time high demand. People are looking at buying not just in India, but also in Dubai and London. NRI demand for such homes in India has picked up primarily for investment purposes. Most of the second home inventory we sold was ready to move in," said Sanjay Dutt, managing director (MD), TRIL. Luxury lifestyle developer Isprava, which sells fully furnished ready-to-move homes between ₹5 crore and ₹50 crore, has seen a 30-50% increase in ticket size as people seek larger living spaces with an office. “Before covid, the ultra-rich travelled extensively, but now everyone has realized the importance of having a secondary or semi-primary home within the country where you can reach easily. There was always strong demand, but the pandemic acted as a catalyst. People realized work-from-home is doable and one can actually work out of Goa or Alibaug or Coonoor for extended periods of time," said Dhimaan Shah, founder and chief operating officer, Isprava. Shah said buyers who would have spent ₹6-7 crore on a home are now buying properties worth ₹10-11 crore. “There are also several clients who are purchasing big-ticket homes ( ₹20 crore and upwards) with us in Goa and Alibaug while renting in their primary cities of residence because rental yields are so low in the metros. We are seeing a clear trend towards a younger demographic (30-45 years of age) purchasing homes with us," he added. Isprava is also entering Kasauli as a new location for secondary homes. In August, property advisory Savills is hosting an online Goa festival, a curated show of hand-picked villa developments, resale inventory, and apartments for interested buyers from across the country. Shveta Jain, MD, residential services at Savills India said there is definitely rising interest in owning or leasing a second home following the covid outbreak. “Places like Goa, which have seen active real estate development, are no more just a second home destination. Homebuyers are looking for housing options across the country. Potential homebuyers from Mumbai or NRIs are seeking to buy in Kasauli or Uttarakhand and the same is true for people in other parts of the country," she said. “Depending on the affordability, such properties also provide homeowners another source of income. In terms of demand, gated developments, and independent homes of around 3,000-4,000 square feet on large land parcels are top choices. The preferences are for villas in the price range of ₹1-3 crore or for premium residences of ₹5-11 crore," Jain added. The pandemic has altered both homebuyers’ preferences and developers’ strategies. People are seeking stable assets and those who can afford it prefer to have bigger spaces. “We witnessed strong demand for properties that can serve as catch-all compounds and live-work spaces. Suburbs of metros and Tier II and III cities have emerged as the new locus for real estate. We have seen a phenomenal increase in inquiries and sales from micro markets like Indore, Panchkula, Kasauli, Lucknow, and Kochi in Q3 and Q4 of FY21. We are also getting inquiries from customers in metros who are looking to relocate, and from NRIs who want to buy a home for their families," said a DLF spokesperson. Samavana I, a premium residential and plotted project by DLF in Kasauli, has seen a rise in interest from homebuyers since the onset of the pandemic, especially buyers from the National Capital Region. Source; Live Mint INDIA

Mumbai records sharpest data centre capacity growth in Asia Pacific in June quarter, report

8/5/2021 10:59:00 AM

The data centre market has experienced strong momentum in 2021 with Mumbai clocking the sharpest increase in supply as the pandemic has influenced push for digital services that accelerated new supply. Mumbai added 56MW capacity in June quarter, taking the total supply to 753MW. In 2020, the city added 252MW or 50% added to its development pipeline taking its supply to 697MW at the end of 2020, said a joint report by Knight Frank India and data centre research and analytics platform, DC Byte. Between 2016 and 2019, Mumbai’s IT power capacity increased from 148MW to 456MW. The report provides comprehensive coverage of 28 key markets and has closely tracked the significant pandemic-driven data usage shift in 2020, which in turn magnified the traditional “buy” cycle and led to record developments in the global data centres market. This year the data shows it is apparent that whilst some markets have kept up with this pace others, mostly Tier II cities, have reported little supply growth in early 2021. “Mumbai is amongst the better-established data centre hubs in the APAC region. The city’s location has a strategic importance as a landing destination for undersea data-cables connecting the east and west. The presence of an established telecom industry in India and the push for digital services during the pandemic has further fuelled the growth of data centres in Mumbai,” said Shishir Baijal, CMD, Knight Frank India. He believes the rise of emerging markets in the Asia Pacific region has brought Mumbai under the focus of multiple international operators, who wish to establish themselves in this region. With respect to market composition, Colocation wholesales comprised the largest chunk with 126.68MW, accounting for 73% of the overall market. Colocation retailers commanded the supply of 31.42MW registering 18% of the overall supply. Telecom enterprises commanded 8% and 1% by Financial Institutions of the total supply, with 14MW and 2.5MW respectively. Source: Economic Times MUMBAI

Affordable housing prices set to rise in 6 months; work-from-home boosting demand: Niranjan Hiranandani

8/4/2021 11:51:00 AM

India's economic indicators are pointing towards recovery with many states starting to ease restrictions. The manufacturing PMI has come in at 55.3 in July, witnessing a sharp jump after contracting to 48.1 in June. GST collections also rebounded to Rs 1.16 lakh crore in July, after a brief downturn due to the COVID second wave. Real estate sales too are looking up with property registrations in Mumbai at a 10-year high for July. In an interview with CNBC-TV18, Niranjan Hiranandani, MD & Co-Founder of Hiranandani Group said that he expects to see consolidation and a price hike in real estate in six months from now. "Steel, cement and metal prices have gone up, all the segments of inputs have gone up, labour costs have gone up, so you are definitely going to see a price rise soon or later. When you see a 2-2.5x price rise taking place in cement and steel, you are bound to see a price rise in the affordable housing segment as well as in the other segments in the next 6 months," he reasoned. The work from home phenomenon due to the COVID-19 pandemic has had a significant impact on the sector too with a large number of people who work from home wanting larger and better quality apartments. "The branded apartments are definitely getting higher sales today. So many of the listed companies will see much better sales in the near future than they have done in the past because there is a consolidation taking place in the marketplace. So you will see slowly but surely consolidation in the next 6 months beyond what we have seen in the past," Hiranandani said. Hiranandani said property sales in Mumbai are increasing at an astounding pace. He added that property registration in Mumbai jumped to a 10-year high of over 9,000 plus deals. "The sales are increasing, property registration in Mumbai jumped to a 10-year high of over 9000 plus deals where stamp duty spillover has taken place. However, some of it could be because of the lower stamp duty paid in March 2021. But the overall position in terms of sales which have taken place in Mumbai Metropolitan Region is astounding," he said. The Mumbai-based real estate player also highlighted that they have seen a lot of upturn for luxury segment apartments in the last 18 months. Further, luxury housing has seen an upturn. Hiranandani says it was not the case in the last couple of years. "We were seeing a pickup in affordable housing especially because of the Pradhan Mantri Awas Yojana (PMAY) scheme but now we are seeing a lot of upturn over the last 18 months in larger segment apartments - 2, 3, 4 bedrooms and even surprisingly in some 5 bedroom apartments being sold and this was never there before. So a lot of changes are taking place and the GST collection report itself is an indication of things that are very positive. So I am looking at a positive recovery," he said. On a nationwide basis too, housing has definitely taken an upward trend. "I do see things likely to improve but there is a lot of fear because of third-wave expectations and what is going to be the result, will the workers continue to stay with us or not etc.," said Hiranandani. Shares of Oberoi Realty, Prestige Estate Projects, Sobha, Sunteck Realty, Indiabulls Real Estate and Godrej Properties jumped 4-10 percent lifting the Nifty Realty index over 5 percent during the day. Source: CNBC 18 INDIA

Housing property registrations in Mumbai jump to 9,037 units in July: Knight Frank India

8/3/2021 11:36:00 AM

Registration of housing properties in the Mumbai municipal region has jumped over threefold so far this month at 9,037 units as against the year-ago period with fresh sales contributing more than half, according to Knight Frank India. Mumbai BMC region (i.e. Churchgate to Dahisar and Colaba to Mulund) recorded property registrations of 9,037 units till 12 noon on Friday. As many as 7,857 units were registered in June 2021, while 2,662 units were registered in the entire July month of 2020. Knight Frank said that 53 percent of registrations in July 2021 were from new residential sales concluded in the month, recording a sharp improvement compared to 42 percent in June 2021, 29 percent during May 2021 and 7 percent during April 2021. The Maharashtra state government, in December 2020, had given a leeway of four months to homebuyers to register a property after the payment of stamp duty in order to prevent crowding of registration offices. This ensured that homebuyers who had purchased residences and paid stamp duty on or before 31st March 2021 have a maximum window of four months till 31 July 2021 from the respective date of payment of stamp duty for registering their apartment. Knight Frank India CMD (Chairman & Managing Director) Shishir Baijal said, "It is encouraging to see a strong pick up in property registrations in the recent months, despite the impact of the second wave. Property registrations have continued to grow on a monthly basis since May 2021 and have crossed the 9,000 units mark in July 2021." The registrations for July 2021, so far, have recorded the highest ever numbers for the month of July in the last decade, he added. "As the economy revives and the lockdown restrictions ease further, with the increase in the pace of vaccinations, we expect this momentum to sustain provided we avoid the third wave," Baijal said. Even though the duration of lockdown in Mumbai was similar to last year, the pick-up post gradual easing of restrictions in June was sharper this time around compared to last year, the consultant said. Source: CNBC TV 18 INDIA

67% of $100 bn lent to Indian real estate is stress-free

8/1/2021 11:17:00 AM

At least 67% (or approx. $67 bn) of the total loan advances ($100 bn) to Indian real estate by banks, NBFCs and HFCs is currently completely stress-free, reveals the latest study by Anarock Capital. Another 15% (approx. $15 bn) is under some pressure but has scope for resolution with certainty on at least the principal amount. $18 bn (or 18%) of the overall lending to Indian real estate is under ‘severe’ stress, implying that there has been high leveraging by the concerned developers who have either limited or extremely poor visibility of debt servicing due to multiple factors. Shobhit Agarwal, MD & CEO, Anarock Capital says, “Covid-19 has had a cascading impact across sectors, and ‘severely stressed’ loans levels in Indian real estate were expected to go up substantially. However, real estate – particularly the residential segment - has fared better than anticipated. Towards 2019-end, of the total real estate loan of $93 bn, at least 16% was severely stressed. Despite the devastation of the pandemic over the last one year, only 18% of the total $100 bn loan value falls under this category. This is definitely far better than other major sectors such as telecom and steel.” “Moreover, the entire ‘severely stressed’ loan value in real estate is spread across more than 50 developers," says Agarwal. "In telecom and steel, default by a single company equals a sizable portion of the overall stress in the real estate sector. Also, every real estate loan is backed by hard security, which is anywhere between 1.5 to 2 times. Even if the loan is NPA, there is enough security for the lenders to recover a significant portion of their money.” The overall contribution of NBFCs and HFCs (including trusteeships) towards the total lending to Indian real estate is at 63%. Individually, banks accounted for the largest share of total realty loans with 37%, followed by HFCs with approx. 34%, and NBFCs have 16% and 13% loans given under trusteeships. Interestingly, since 2013, the share of NBFCs and HFCs has grown considerably - at the expense of banks. However, in the past 4-8 quarters, banks have been more active than NBFCs. Of these, banks and HFCs are much better placed with 75% and 66% of their lending book in a comfortable position. Not surprisingly, nearly 46% of the total NBFC lending is on the watchlist. About 75% of the total lending to Grade A developers is safe. This presents a comfortable outlook because out of the total loans given to real estate, more than USD 73bn is given to Grade A builders. Of this, USD 55bn is safe and under no stress. On the other hand, a high amount of realty loans given to Grade B and C developers needs strict monitoring. Close to 55% of the loans given to Grade B developers is under ‘severe’ stress; for Grade C developers, it is over 73%. In terms of cities, Pune and NCR are both high on stress with 40% and 39% respectively of the total loan given to them, followed by Mumbai with 37%. Hyderabad, Kolkata and Chennai are well placed with just 3-4% stress (however, their overall share of the pie is limited). Bangalore with a 15% share of overall lending has 76% book with no stress at all. Source: Construction Week Online INDIA

Growth prospects of commercial realty look promising in second half of 2021

7/31/2021 1:23:00 PM

The second wave of pandemic — like the first wave — hit both the housing and the commercial realty market in recent months. However, its impact was limited as developers were better prepared this time. Thankfully, with the decline in Covid cases, residential sales have started rising again, and along with that commercial real estate has also started showing sings of revival. Commercial realty, in fact, is seen picking up momentum in the top cities of the country, driven by the IT/ITeS sectors. According to a recent JLL report, India’s net office absorption stood at 4.39 million sq. ft in the Q2, showing 32% YoY growth in major cities. “Given the strict nationwide lockdowns across the country in the second quarter, net absorption dipped by 16% versus the previous quarter. However, the quarter-on-quarter drop was lower than the 61% during the same period last year when the first wave of the pandemic hit, showing the market’s improved resilience,” the report noted. An Anarock report says that 7,400 office leases of 90 million sq ft is up for renewal in the top 6 cities in 2021. That is because many IT firms are on a hiring spree amid acceleration in their overall business post the pandemic. “This eventually bodes well for overall office space demand in 2022 and 2023, when we may see gradual return of normalcy coupled with the newly added workforce. The IT/ITeS sectors are among the prime drivers of overall leasing activity in the top cities. Bulk hiring by these firms will influence demand for large quality office spaces,” the report states. Moreover, like the future sentiments of real estate sector stakeholders, the outlook for commercial office market has also been progressive in Q2 2021, for both leasing and rentals, according to the 29th Edition of Knight Frank- FICCI-NAREDCO Real Estate Sentiment Index Q2 2021. After weathering the lockdown-induced lull in the second quarter, offices have started to re-open across cities. Buoyed by the lifting of lockdowns and relaxing of mobility restrictions since June, stakeholders expect a pick-up in office market activity in the coming six months. “The demand for office or dispersed commercial portfolios will expand on the back of a consolidation trend and expansion of satellite offices following the hub and spoke model,” says Dr Niranjan Hiranandani, National President, NAREDCO and MD, Hiranandani Group. A majority of developers are currently bullish on the growth prospects of the commercial market. “In 2021, Delhi-NCR’s leasing market is predicted to grow by 20-25 per cent, with the majority of activity occurring in the second half of the year. Demand is projected to be driven by technology, BFSI, consulting, and manufacturing occupiers. The Delhi-NCR region has an 8.5 million sq ft supply pipeline, with Gurugram likely to finish over half of it and Noida the rest,” says Sachin Gawri, Founder and CEO, Rise Infraventures Ltd. Increased mall opening hours in several locations, a resurrection of food and beverage demand and increased spending all contributed to the swift recovery that began after the third quarter of 2020. Due to its growth possibilities and guaranteed economic returns, commercial real estate may continue to be the preferred choice of investors. “From the last one year, especially post Covid 2020 we have witnessed a huge leap in commercial project demand in Noida. And yet again in 2021. Following the initial shocks in April and May, economic activity across sectors began to build up in June 2021, owing to declining infections and modest relaxations in lockdowns, both of which are critical for boosting employment and income stability. The fact that people have begun to look at real estate to stabilise their financial condition is a source of optimism,” says Ajendra Vikram Singh, VP-Sales, Spectrum Metro. Commercial real estate is proving to be a far more tempting investment option for both individual and institutional investors. Private equity inflows into the commercial market have been increasing. According to a Savills analysis, the first half of 2021 saw roughly 41% of the investment inflows seen in the full year of 2020, indicating that investor confidence is still high. “The first half of 2021 saw office leasing drag to a six-year low. However, with increase in vaccination coverage and economic activity slowly returning to normalcy, the second half looks promising for both office and retail segment. PEs have shown an avid interest in the office and retail segment, thereby signalling a stability in this asset class going forward. While an immediate reversal in demand going forward is unlikely, the vacancy levels are expected to fall in the coming quarters as physical offices resume and visitors flock to malls. Recent reports have suggested consumers’ intent to increase discretionary spending,” says Siddharth Katyal, Director (Planning & Strategy), Omaxe Ltd. Even though 2021 may not be immune to pandemic effects, the foundation for a sector-wide recovery has already been laid. “The recent listings of Indian REITs are projected to boost developers’ ability and desire to create more commercial properties, resulting in increased liquidity inflows into the commercial real estate asset class. Existing lease collections remained largely intact, with no significant difficulty in collecting the billed rentals. The situation after this Unlock is different since offices will continue to operate following immunisation, and they will be more likely to follow COVID protocol to avoid further business interruptions. As a result, we anticipate strong leasing activity in the final six months of the year,” says Uddhav Poddar, MD, Bhumika Group. Source: Financial Express INDIA

Work from home leads to rise in demand for luxury houses across NCR

7/30/2021 12:10:00 PM

Despite the economy being hit due to the Covid-19 pandemic and subsequent lockdowns, demand for luxury and ultra-luxury properties is on the upswing. Realtors said the trend in investment in the luxury segment across the national capital region was on the rise due to work from home (WFH) culture. According to a report by Anarock property consultants, 10,570 units were launched across Delhi-NCR in the first six months of 2021, with 17 per cent of the residences falling in the premium category. “Even though the pandemic slowed down many industries, real estate, particularly luxury properties, saw a boom in demand. As the pandemic fades, luxury house sales would climb even more due to pent-up demand,” said Amarjit Bakshi, CMD, Central Park, a luxury realtor from Gurugram. During the lockdown, 1,800 luxury to ultra-luxury properties were sold in six months, which is an astronomically high number, according to realtors. Out of these, 73 per cent are in Noida, 22 per cent in Gurugram and five per cent in Greater Noida. “Noida is the market leader across the board, especially in the luxury class. The sale of premium flats in the satellite city has reached an all-time high,” said Dhiraj Jain, director of the Mahagun Group. “With the rise of the work-from-home (WFH) culture, people are now yearning for nicer and larger residences outside the city borders in a better location. The luxury housings have facilities for a home-office, WFH, and recreational activities such as yoga,” Bakshi said. With the advent of WFH, corporate executives, technologists, and others with similar job profiles are choosing for such homes even outside city limits. “Despite the pandemic and lockdowns, the luxury housing segment surprised everyone with record sales in the fourth quarter, till April 2021. The luxury segment sales across the entire NCR have increased by a stunning 54 per cent. Modern, affluent, and technologically advanced buyers demand modern home technology and a location that fits their lifestyle,” said Pankaj Bansal, director of M3M. Source: INDIA TODAY DELHI

Future of real estate will be pinned on 3Rs – Relief, Restructure and Resilience

7/29/2021 12:40:00 PM

Broadly based on themes of the 3Rs, it is high time that the industry and the governing agencies work together for the betterment of real estate as well as the economy. The Indian real estate constitutes around ~ 8% of the national GDP. In 2017, the housing market alone was estimated at $180 billion and is expected to reach $650 billion by 2025. In another 5 years, the industry will reach $1 trillion. The importance of the industry is further outlined by the fact that a large workforce (roughly sized ~ 40 million) is directly or indirectly dependent on the sector and around 250 ancillary industries are linked to it. Amid an enormous and wide-reaching role that the industry plays, it is natural that strains in Indian real estate will have a cascading effect on the economy, which is already floundering in the face of the 2nd lockdown. The Indian real estate is both stressed and strained at the moment. While piles of unsold inventories over the years have affected the morale of many developers, the whiplash from the lockdown has created a momentary halt in sales. Although the silver lining in the current circumstances lies in the fact that cases have plunged in most of India and economic revival should follow soon. Rating agencies are bullish on the prospect of India in FY 22, despite a softening stand on the economic growth. Meanwhile, the government and industry bodies must work in tandem and chalk out a sustainable plan. Broadly based on themes of the 3Rs – Relief, Restructure, and Resilience — a term originally coined by the World Bank, it is high time that the industry and the governing agencies work together for the betterment of real estate as well as the economy. Relief to the Industry A relief plan should be formulated for the industry, which should not just have policy impetus but also windows for loan restructuring in stressed and stuck projects. By lowering bad debts, not only breathing space will be given to developers but also financial institutions will be unburdened. GOI should also look for direct policy support such as stamp duty reduction and levy in income tax returns to accelerate sales. The industry has seen how stamp duty cuts in certain states such as Maharashtra and Karnataka have resulted in a jump in sales last year. Similar direct incentives can be a real game-changer. Meanwhile, the industry should take care of their employees, vendors and offer them financial safety. Another important step would be to take initiative and offer vaccine packages to employees. At 360 Realtors, we have taken such steps in a few of our offices. Nothing can be prudent than to be careful of employees’ health, amid a medical crisis of this magnitude. Restructure the Value Chain In the middle to long run, it is essential to restructure the industry value chain with the help of technologies. After remaining demure for the past few years, the Indian real estate started embracing the online medium last year, as the pandemic in its first instalment has driven wider behavioral changes. Now the time has come to move to the next level. The government and industry body should work jointly to not just develop technological innovation but also to scale them fast. Through subsidies, discounts, and other policy incentives, the latest technologies should be developed and deployed – both in construction management as well as transaction cycles. This will help in cohesive backward and forward integration, strengthen unit economics, shorter construction cycles, and optimize the overall operational flow. Likewise, academic institutions should also be roped into Research & Development (R&D). Besides, the industry needs to relook at its product strategy and understand transformations in consumer preferences. Demands are expected to pick up in product categories such as rental homes, plotted developments, affordable units, co-living spaces, and second homes. Industry players should fine-tune their strategy based on emerging product categories. The government should also support these efforts through policies. Finally, Resilience will be the Winning Mantra While relief measures will give breathing space and restructuring will help in adjusting to the new normal, the victory saga will be pinned mainly on one thing – how much resilience do we show in the face of the current crisis. Despite the pandemic-induced fatigue, we have to stay ahead in our game and work with a mindset of continuous evolution. There is no dearth of housing demand in the country. Favorable socio-economic conditions, a young demographic, an unprecedented rate of urbanization & infrastructure enhancement, and the overall rise in household income will help the industry to move on an upward trajectory. However, to tap into the market, we would require extra efforts at all levels – government, organization, and individual. Aggressive sales & marketing planning without incurring incremental costs is the need of the hour. New business strategies have to be deployed that can push the run rate but simultaneously contain CAPEX & OPEX. In this regard, franchises are a good option as they offer a profitable platform for the optimal sharing of resources. Both the parent and franchises can enter new market segments and earn more profits without overheads. Source: Financial Express INDIA

REITs and InvITs raise $9.7 billion in India: EY

7/28/2021 10:47:00 PM

InvITs are expected to play a key role in the monetisation of existing projects in some sectors namely roads and highways, conventional power, renewable energy, airports, railways, and digital infrastructure. Real estate investment trusts (REITs) and Infrastructure investment trusts (InvITs) have raised a capital of over $9.7 billion in India, a report by EY titled REITs and InvITs – financing urbanisation and infrastructure in India has said. With favourable government policies and a long-term investment outlook, many marquee investors including sovereign and pension funds are continuing to invest in such vehicles. Investors are benefiting from receiving regular cash distributions, stable yield and provides the opportunity for sponsor(s) to expand their asset base, it said. The National Infrastructure Pipeline announced by the government has estimated a funding requirement of over $1.4 trillion by 2025. The early trends of performance of REITs/InvITs in India are encouraging with the combined market cap of the three listed REITs in India currently at over $7 billion and over $10 billion for InvITs. REITs and InvITs can be used to attract private investments in the infrastructure and real estate sectors by mitigating challenges such as funding requirement, more long term capital, optimal leverage, limited exit options and corporate governance issues. According to the report, InvITs are expected to play a key role in the monetisation of existing projects in some sectors namely roads and highways, conventional power, renewable energy, airports, railways, and digital infrastructure. This is against the backdrop of conducive regulatory frameworks and cash flow profiles with taxation advantages for such vehicles. For REITs, despite the near to medium term headwinds from COVID-19, the long-term drivers for real estate demand are strong and likely to withstand adversities in the sector. “InvITS and REITs will play a significant role in funding the government’s infrastructure plans as well as assist in meeting its asset monetization plans and at the same time enable deleveraging existing balance sheets which would in turn help meet the capitalization requirements of banks,” said Gaurav Karnik, partner and National Leader – Real Estate, EY India. REITs/InvITs are primarily governed by the SEBI Infrastructure Investment Trusts Regulations, 2014 and SEBI Real Estate Investment Trusts Regulations, 2014 and various circulars issued under these regulations. While InvITs can be public listed, private listed or private unlisted, REITs are required to be publicly listed. Under SEBI regulations, three years of audited combined financial information under IndAS need to be presented. Some of the practical challenges that arise include availability of financial information, different auditors of the investment trust and those of SPVs before acquisition, GAAP conversion from Indian GAAP to Ind AS and the need to have uniform accounting policies. In addition, there are other complex areas related to asset acquisition or business combination, classification of unit capital and appropriate accounting for distributions. “Accounting for REIT/InvITs can be complex with multiple legal entities being involved and the interplay of various regulations. Having the relevant structure in place early and evaluating the relevant tax, accounting and other implications would allow sponsor(s) to make the most of this increasingly popular route to funding,” said Sandip Khetan, Partner and National Leader, Financial Accounting Advisory Services (FAAS), EY India. REITs and InvITs are pass-through vehicles under Income tax and hence distributions made by the investment trusts are taxed directly in the hands of investors depending on the nature of such distributions i.e. dividend, interest or capital repayment. There is a beneficial tax regime for dividends received from REITs/ InvITs subject to certain conditions. Source: Money Control.com INDIA

Indian real estate sector to add $800 billion by 2030

7/27/2021 12:05:00 PM

Emphasising the importance of real estate in India’s economy, he pointed out that the sector creates demand for around 270 industries, including cement and steel. India’s real estate sector, which is a $200-billion market, is gradually coming out of the disruptions caused by the Covid-19 pandemic and is on the path to become a $1 trillion industry by 2030, said ministry of housing and urban affairs (MoHUA) secretary, DS Mishra. “The sector is around $200 billion at present, and projections are that it will hit $1 trillion by 2030. In fact, the sector provided employment to 5.5 crore people in 2019, and is expected to provide jobs to 7 crore people in the coming years,” he said at an event organised by industry association, CII. The growth story of real estate is intact, despite the country facing the onslaught of the pandemic, Mishra said, adding that an estimated 88 crore people will be living in urban areas by 2051 as against the current 46 crore, thereby creating huge demand for houses, road, electricity and other infrastructure services. Emphasising the importance of real estate in India’s economy, he pointed out that the sector creates demand for around 270 industries, including cement and steel. The recently introduced Model Tenancy Act would make rent laws more equitable and help unlocking a large number of housing units which could be leased out. Mishra clarified that the law is prospective and would not affect existing rental agreements. K Raheja Group president, Neel Raheja said that despite challenges the sector is on the growth trajectory and new opportunities are emerging from sub-sectors like warehousing, data centres and logistics. He expressed confidence that the industry will reach a size $500 billion within next 3-4 years. Seeking support for the industry, Raheja highlighted the issue of high risk weightage given by RBI to real estate industry which becomes a deterrent in raising affordable finance. There are restrictions on InvITs and REITs financing, land financing, foreign portfolio and ECBs which needs to be looked into to enable the real estate industry to tap-in low cost finance for housing sector. Source: Financial Express India

Aditya Birla Group invests around Rs 1,500 crore in Punjab

7/24/2021 4:23:00 PM

CHANDIGARH: Punjab Chief Minister Amarinder Singh on Friday welcomed the Aditya Birla Group for making an investment of around Rs 1,000 crore in its recent foray into the paints segment and another Rs 500 crore in setting up a cement unit at Rajpura. Speaking on the occasion after handing over a land allotment letter for 61 acres land at a cost of Rs 147 crore in the recently developed Hi-Tech Valley Ludhiana, the chief minister said this investment would further act as a catalyst to boost industrial activity in the region. He also mentioned Punjab offers a congenial climate to the prospective entrepreneurs and industrialists due to peaceful labour coupled with robust infrastructure in terms of excellent road, rail and air connectivity. He said Punjab due to its pro-investor industrial policy and lucrative incentives has now emerged as the most-preferred investment destination in the country. 'Invest Punjab' being one-stop shop has seamlessly facilitated in garnering massive investments worth Rs 91,000 crore in over 2,900 project proposals received during the past four years, as per an official statement here. Out of these investments, nearly 50 per cent have already started commercial production and the state has been able to attract such meaningful investments even during the peak of the COVID-19 pandemic. Expressing gratitude to the chief minister, Aditya Birla Group Chairman Kumar Mangalam Birla, who joined the meeting virtually from Mumbai, affirmed faith in Punjab's industrial ecosystem, forward looking industrial policies and a non-intrusive government interface. He lauded the speed at which the Punjab government moved to attract this investment to the state and also appreciated the facilitation provided by the state at every step. Source: ET Realty Birla further apprised the chief minister that the upcoming paint manufacturing unit is likely to generate a direct employment of over 600 persons and around 1,500 indirect job potential through its operations. He said this upcoming plant would have best-in-class safety and environment protection systems having zero liquid discharge. Looking forward for continued support to set up more such ventures in near future, he said Punjab is now on their priority list. Source: ET Realty PUNJAB

Future real estate outlook remains optimistic, office market sentiment improves: Survey

7/24/2021 10:36:00 AM

The sentiments among various real estate stakeholders have remained optimistic as realtors managed to cope better with the second wave of the Covid19 pandemic. With relatively less stringent lockdown restrictions and learnings from the last year helped developers and other stakeholders weather the situation. The availability of vaccines and aggressive vaccination has further helped the optimistic outlook for the sector. The Current Sentiment score, as per a survey conducted jointly by property consultancy Knight Frank and industry bodies NAREDCO and FICCI, has dropped from 57 in Q1 2021 to 35 in Q2 2021, but the drop is less intense than it was during the first Covid wave (Q2 2020) when the score had hit an alltime low of 22. The Future Sentiment score has inched down marginally from 57 in Q1 2021 to 56 in Q2 2021 continuing to remain in the optimistic zone. Here as well, the outlook of stakeholders reflects more resilience in Q2 2021 than in Q2 2020. Stakeholder outlook on the office market saw an improvement in Q2 2021 especially with respect to leasing activity. In Q2 2021, 40% of survey respondents were of the opinion that office leasing activity would increase over the next six months, up from 34% last quarter. Around 21% of the Q2 2021 survey respondents, up from 15% in Q1 2021, expects office rents to increase in the next six months while 40% expect rents to remain stable. A score of 50 represents a 'neutral' view or 'status quo'. Above 50 demonstrates 'positive' sentiment while below that indicates a ‘negative' outlook. The optimism in the residential market outlook has continued in Q2 2021. More than 50% of the Q2 2021 survey respondents continue to expect an increase in residential launches and sales in the coming six months. “The tragedy of the second wave of pandemic has pushed the overall industry sentiments down in the second quarter of 2021. However, our learning from the first wave, as well as a less stringent lockdown in the second wave, have equipped us well to mitigate the severity of the economic ramification, showing some level of positive outlook among the stakeholders when compared to the dead low sentiment score of 22 during the same period last year. The availability of vaccines, a robust vaccination programme, along with continued economic activities have been the primary reason for the optimistic future sentiment score, as compared to last year,” said Shishir Baijal, CMD, Knight Frank India. According to him, the real estate sector is treading cautiously and acknowledges that there is latent demand for both office and residential sectors, albeit hindered by the prolonged pandemic. Buoyed by the post-second wave resumption of economic activity, Future Sentiments of stakeholders for the next six months have remained in the optimistic zone across most regions. In terms of geography, the West zone saw the sharpest recovery in the Future Sentiment Score. This zone’s Future Sentiment score jumped from 53 in Q1 2021 to 60 in Q2 2021. With the resumption of economic activity, future sentiments (for the next six months) of stakeholders have remained in the optimistic zone, across most regions. North zone’s Future Sentiment score has inched down marginally from 56 in Q1 2021 to 55 in Q2 2021, while for the South zone, the score has fallen from 63 in Q1 2021 to 57 in Q2 2021. The Future Sentiment score of the East region has entered the pessimistic zone with a fall from 53 in Q1 2021 to 48 in Q2 2021. “Despite the debilitating impact of a pandemic, the outlook of the sector is really positive. There are several factors behind the growing positive sentiment. The nationwide vaccination drive has been a tremendous sentiment booster for the sector. The industry is also doing its bit by strengthening health infrastructure to support COVID patients and by initiating vaccination drives to inoculate over 2 crore construction workers. Furthermore, the sector is aggressively adopting digital technologies to streamline the supply chain, attract home buyers, and most importantly, ensure business continuity,” said Getamber Anand, Co-Chair, FICCI Real Estate Committee & CMD, ATS Infrastructure. According to him, in the initial phase of 2021, the sector was gearing for a spirited turn-around, which was disrupted by the second wave. The industry has been capitalising upon certain positive trends and emerging opportunities. Despite lockdowns, developers have completed some major commercial projects and have put them for possession and lease. This shows the stronger confidence of developers in business opportunities in the new normal.” On the macroeconomic front, more than 80% of the Q2 2021 survey respondents continue to have an optimistic outlook for the economy in the coming six months. While on the credit availability front, stakeholder outlook has improved in Q2 2021 with 46% respondents – up from 41% in Q1 2021 – expecting an increase in the coming six months. The future outlook of both developers and non-developers including banks, financial institutions and private equity funds remains in the optimistic zone in Q2 2021, although there has been a significant fall in the sentiment score for non-developers. Source: The Economic Times India

Housing sector drives cement demand for April-May 2021

7/23/2021 11:31:00 AM

Cement production demand and growth was primarily driven by the housing sector during the first two months of the financial year 2021-22. Cement production demand and growth was primarily driven by the housing sector during the first two months of the financial year 2021-22. During the months of April and May, the cement production was recorded at 54 million tonnes, which is almost a 100 per cent increase in the production of cement during April-May 2020. Last year, 27 million tonnes of cement was produced during the months under review, according to a report by Care Ratings. This year, the production started picking up because of demand coming from the housing and real estate sector, accounting for 68 per cent of the overall demand. Many low cost affordable housing were introduced this year which made up for 13 per cent of the cement demand. Apart from this, industrial and Infrastructure sectors contributed to the 10 per cent and 22 per cent of the demand, respectively. “The thrust provided by the government in the form of spending on infrastructure such as construction of roads, railways, highways, rural and low-cost affordable infrastructure augurs well for the industry,” the report noted. However, when compared to the first three months of 2021, the domestic production of cement registered a decline of 12 per cent on a monthly basis in April and this was followed by a de-growth of 17 per cent in May 2021. The decline in production, according to the report, was due to the spike in Covid-19 cases along with the subsequent state-wise restrictions imposed from April 2021 onwards “which affected the demand-supply dynamics for the commodity.” Meanwhile, the prices for cement have increased this year by 5 per cent as the all-India average wholesale and retail prices now stand at Rs 370 and Rs 380 per 50 kg bag, respectively “This growth in prices can be ascribed to the increase in the cost of inputs: power, fuel and freight expenses account for nearly 50-55 per cent of the total expenditure incurred by the cement players,” read the research note. Further, analysts at Care Ratings said that right now, the cement industry players seem to be cautiously optimistic on the impact of the second wave of Covid-19 on the cement industry. Source: Financial Express INDIA

Fractional ownership of real estate mega-projects on the rise post Covid lockdowns

7/22/2021 1:58:00 PM

As a result of consecutive Covid-induced lockdowns, the Indian economy took a nosedive. With it, it took the real estate sector down too. However, a ray of hope has emerged in the realty sector with the rise of fractional ownership of mega-projects. According to data compiled by hBits, a fractional ownership realty firm, fractional ownership has been rising over the last five years with an estimated total transaction of Rs 750 crores. Of this, Rs 350 crores worth of transactions took place in the last one year, i.e., after the first Covid lockdown was imposed. “The idea of fractional ownership provides a fair chance of investment in mega-projects. Common people who are willing to spend on commercial properties like shops and offices but have limited finances and options and are apprehensive about the returns are now opting for fractional ownership. In fractional ownership cases, the realtors provide guaranteed returns. Additionally, every bit of information about the property is available at your fingertips - literally. Investors can track real-time developments in the project on their mobile phones,” said Shiv Parekh, the founder of hBits. ALSO READ: Real estate developers in UP demand 12 more months to complete projects “It is estimated that over the next three years, the fractional ownership market's worth will reach five billion dollars. This is a shot in the arm for the real estate industry,” he continued. According to experts, apartment-dwellers across the national capital region, who are looking to invest in commercial properties like shops and offices to gain a secondary income, are now opting for fractional investment due to its relatively safe procedure in attaining ownership of multi-crore mega-projects. “A common apartment-dweller who is interested in investing in commercial spaces is usually hesitant due to the slump in the market. But since fractional ownership gives an opportunity to invest in more promising mega-projects, it is drawing the attention of such investors. We have received many queries about fractional ownership in recent times. Due to the consecutive lockdowns, investors are looking for safe investment options and fixed assured returns,” said Ujjwal Mishra, a property expert and the owner of Blue House Consultancy. Source: India Today INDIA

Over 7,300 families conferred ownership rights under PM-UDAY: Housing minister

7/21/2021 11:26:00 AM

A total of 4,19,485 people have registered under the PM-UDAY and 7,329 families in unauthorised colonies in Delhi have been conferred ownership rights till date, Puri, the Minister for Housing and Urban Affairs, tweeted in Hindi. More than 7,300 families have been conferred ownership rights while over 4.1 lakh people have registered till date for the PM-Unauthorised Colony in Delhi Awas Adhikar Yojna (PM-UDAY), Union minister Hardeep Puri said on Saturday. PM-UDAY was launched on October 29, 2019, to confer ownership rights to residents of 1,731 unauthorised colonies (UCs) in Delhi. A total of 4,19,485 people have registered under the PM-UDAY and 7,329 families in unauthorised colonies in Delhi have been conferred ownership rights till date, Puri, the Minister for Housing and Urban Affairs, tweeted in Hindi. He also shared a Delhi Development Authority (DDA) video in two parts that offers a step-by-step explanation for people to do the registration online. The registration process for this scheme is totally online. In the video, it is mentioned that if a person is unable to do it at home, then he or she could go to the nearest Common Service Centre (CSC) or contact a registered agency empanelled to assist people in doing the registration, on payment of a nominal fee. The DDA has been made the nodal agency for the scheme, which delineates the boundaries of these UCs with the help of the Survey of India and the Revenue Department of the Delhi government using satellite imageries of 2015. Puri said, "We had made a promise, we kept the promise." "Now, people living in unauthorised colonies, who will get ownership rights, won't have to fear either the bulldozers or have any worry. The registration process is very simple," he said. Under the scheme, the DDA will scrutinise documents and will issue conveyance deed for government lands and authorisation slip for private lands, only for residential purpose. The beneficiaries can get these documents registered with the sub-registrar's office. Source: ET Realty INDIA

Multi-level parking facilities now emerging as real estate asset class

7/20/2021 12:48:00 PM

These vertical developments utilize basements as car parks and the higher storeys for retail development which in turn help generate revenue and realise project costs. Growing urbanisation and the raging pandemic have created opportunities to augment the infrastructure in our cities. Parking is one such asset class that can be leveraged by urban planners and realty players alike. This might come as a surprise to many that car parks annually generate a revenue of more than $20 billion, according to the International Parking Institute. However, in India, little attention has so far been paid towards the growing need for car parks even though millions of cars get sold each month. According to a study by the Centre for Science and Environment (CSE), in India, a car is parked for more than 95% of the time and is driven for less than 5%. If one were to consider the economics, car parks use, at least in the metros, valuable land, which can be monetized through urban planning and architecture. The demand is constantly rising and to accommodate rapid urbanisation, construction of multi-level parking facilities can make development more sustainable and can also have a multiplier impact on the economy. Real estate developers can leverage this opportunity to offer urban India mixed-use complexes to create facilities with multiple benefits for all users. By allocating space for offices or retail, the commercial value of these assets can be multiplied many times. This is creating multiple opportunities for revenue generation from parking facilities. Also, the metro cities of India, sooner or later, will exhaust opportunities for horizontal development, and a multi-level car parking system that can vertically accommodate car parks, while allowing land to be used for other use (commercial, residential, or retail) might become a necessity. Indian metros including Mumbai, Delhi and Bengaluru have been consistently featured in the world’s top 10 most congested cities in the world for traffic. In Indian metros, the land is increasingly becoming a scarce resource. Therefore, through proper urban planning and architecture, car parks can be monetized. The financing of these facilities is not a constraint anymore and funds can be drawn from the private sector to build these structures in a public-private partnership mode. Furthermore, vehicle-free zones are also fast gaining traction with cities across the world successfully implementing them. It also creates a ripple effect on the region’s tourism and boosts commercial activities. Places like Mall Road in Shimla, MG Road in Gangtok, Chandni Chowk or nearby areas of Golden Temple in Amritsar have successfully tried the vehicle-free zone model. That being said, proactive measures taken by the government with respect to the decongestion of cities and monetizing the prime real estate through a public-private partnership model is finding favour with shoppers, businesses and tourists. It validates the business case of a land parcel that can be utilised as a car park vertically (basements), and prime real estate such as retail be developed in the higher storeys to support project costs and generate revenue so as to ensure that the government gets the targeted land value and private participants get their return on investment through project development. A car-centric development with poor parking has only left our cities cluttered and polluted. The Delhi Master Plan 2041 also stresses the need to re-organise parking facilities for maximum utilisation. The multi-level parking facilities demand lesser operational, maintenance, and construction costs and are environment-friendly with open spaces for landscaping. Source: Money Control INDIA

Demand for residential realty bounces back in June 2021: Report

7/12/2021 4:49:00 PM

Notwithstanding the deadly second wave of COVID-19 that led to severe economic repercussions in the months of April and May, signs of recovery for demand in residential real estate were visible in June with a pan-India price growth of 1.7% during the quarter, the latest Magicbricks PropIndex Q2 (April-May-June) 2021 has revealed. Despite the slump during April and May, the demand for housing in June’21 rebounded to the March’21 levels. The intermittent lockdown due to the second wave and the continuance of Work-From-Home (WFH) policies ensured a rise in demand for 3BHKs and above as home buyers are looking to upgrade for the need of an extra room to suit the requirement of home-office. This shift has led to the rise in demand share of 3BHKs and higher configurations in Delhi-NCR, Hyderabad, and Kolkata, reaching an all-time high of more than 65% of the overall demand share in all these markets. Commenting on the PropIndex report, Sudhir Pai, CEO, Magicbricks, said, “Unlike the first wave, the recovery in demand for residential real estate has been faster in the second wave. The residential markets of Bengaluru, Chennai, Thane, Noida-Greater Noida, Kolkata, and Delhi witnessed price corrections ranging from 1%-2.3% during the quarter that also saw rising medical expenses and debt. This rise in price reflects the inherent strength of the housing sector even during these troubled times. The quarter also witnessed a rise in supply across pan-India by almost 8% due to new launches, with Hyderabad seeing a maximum jump of 20%.” “This recovery can be attributed to factors such as a consistent demand in the large sizes properties and a higher flow of global PE funds ensured by good risk-adjusted returns by the sector. This swift recovery signals a revival in stability in the industry,” he said. The maximum impact of the crisis was seen for the middle and low-income buyers who usually look for smaller houses with lower configurations. However, most premium and high-income buyers were relatively less impacted by the crisis in terms of the money flow. This trend has led to the fall in demand for lower configuration, while the demand for bigger houses persisted during Q2 2021. Key takeaways from the Magicbricks’ Propindex Report: Delhi: The residential real estate market in Delhi witnessed a 2% QoQ price growth during Q2 2021. The price growth was primarily on the back of rise in price of under-construction projects, which rose by 10.8% YoY. However, the prices of the ready-to-move property remained stagnant during the same time-period. Change in supply patterns and buyers’ preferences for premium and larger units were a major factor contributing to this trend. Bengaluru: A dip of more than 25% in demand during the second quarter of 2021 was observed. However, the prices of properties continued to show a resilient outlook as they grew slightly over 1% during the same period. The state government has started assisting property taxpayers during the lockdown by extending a 5% property tax rebate till June 30 in the city. Chennai: The demand for residential houses declined by 17.9% in the quarter ended June 2021, compared to-3.7% in the first quarter. The housing prices in the city and its suburbs, however, increased by 1.5% despite the lockdown and business closures. Hyderabad: The city’s residential market witnessed an increase in the launch of new projects, resulting in an upward revision of property prices in both under-construction and ready-to-move segments. The increase in property price resulted from a shift in demand towards bigger homes with better social infrastructure and recreational facilities along with rising construction costs. Mumbai: Mumbai’s real estate market too faced some headwinds, registering some contraction in the residential demand. However, with various supporting steps taken by the developers including easy and affordable payment plans, extension of the 2% stamp duty benefit, and various freebies and offers, among others, helped limit this decline in demand to just 16% QoQ as compared to national demand decline of over 23% QoQ. Pune: Despite the ongoing crises and slowdown in the real estate and infrastructure sector, the residential property prices in Pune registered a marginal QoQ growth of 0.7% during the quarter ended June 2021. The PropIndex also suggests that the momentum gained in the last six months will continue across both supply and demand, especially due to the emerging needs of consumers for large size houses and all-time low interest rates. However, caution is required given the resurgence of COVID cases in the country and threats of another streak of lockdowns. The future of the sector is tied to speedy vaccine drives and completion of infrastructure projects like the metro and major highway projects. Source: Financial Express INDIA

Mumbai real estate showing signs of resurgence

7/11/2021 3:10:00 PM

Being the financial capital of India, professionals, job seekers migrants from all over the country flock to Mumbai to make their careers and realise their dreams giving rise to the sobriquet of ‘City of dreams’. While buying a house in the island of Mumbai was and remains a proposition not for all, however people working in the city always had an option to buy their houses in suburbs and satellite towns of Mumbai where residences were affordable. These peripheries are now fuelling resurgence of the real estate sector in Mumbai. Peripheral areas of Mumbai gaining increased preference A recent ANAROCK study shows that there is a marked preference by new home buyers towards buying housing properties in peripheral areas of major cities in the country. This study which covers seven major cities in the country shows that around 58% of all new projects launched in these cities in FY20 are in their peripheral areas. This trend is on the rise as in FY19, this proportion was 50%. Similarly in Mumbai MMR too, of a total of 34,620 housing units launched, a significant chunk amounting to 67% was in peripheral areas of the city. This is up from 60% in FY19. Key and fast-growing areas with increasing demand which constitute as peripheral areas of Mumbai in today’s time are Dombivali, Panvel, Palghar, Vasai, Virar, Kalyan, Badlapur and Bhiwandi. With work from home being a reality, home buyers are preferring satellite towns of Mumbai for their fulfilling their demand of buying affordable and larger homes. Both the companies and their employees were pleasantly surprised by the success of Work-from-Home experiment and it has paved way for a hybrid model of work, wherein one does not have to go to office every day. Thus consumers are looking to buy bigger houses in the suburbs. Another evolving trend is that of satellite offices, wherein increasingly corporations are setting up offices in the suburbs that are residential hubs. Typically, located in an integrated township project, these offer employees the convenience of walk to work. The supply too has followed the demand with Grade A developers like Lodha, Godrej and Hiranandani among others have come up with self-sustained and integrated townships in the peripheral areas of Mumbai. Consumers are opting to buy their property in self-contained townships as they are self-sustainable and developed to meet the primary requirements of their residents, provide amenities for leisure and have ample open spaces. In addition, the buyers have shown a marked preference for properties developed by grade-A developers and in the process willing to pay a premium over the market price as they are assured of quality and delivery. The looming spectre of real estate price rise While demand supply economics will dictate pricing dynamics, there are clear signs of real estate prices rising soon. The major factor influencing this upward trend in real estate is inflation which has a twin effect on the housing sector affecting both the demand and supply side. First effect is that rising inflation is going to play spoil sport with the prevailing interest rates. While the Government is trying hard to not raise the interest rates given the pandemic conditions, soon the time will come when economic compulsions will force it to take unpopular decisions to boost the country’s economy in the long term. So, home buyers will have to pay higher EMIs as they delay their buying decisions. On the supply front, inflation has taken its toll on the input costs as prices of commodities like iron, cement and steel have gone up by 10-15% in the past year. The developers are already under stress having cut their costs last year during first wave of Covid-19 to hold prices to attract home buyers. So, there is limited scope for developers to absorb the increase in prices for their raw materials. Soon they will have no option but to pass on the increased costs either in part or in full to the home buyer. With prices set to rise, the sooner the home buyer finalises his purchase decision the cheaper it is going to be eventually. Source: Business Standard INDIA

Realty institutional investment tops $1.35 billion in April-June, most active quarter in 5 years

7/10/2021 3:12:00 PM

Strong appetite among Institutional investors for Indian real estate has sustained even during the ongoing pandemic as they continue to invest and look for opportunities to participate in the growth driven by reforms.Institutional investors have deployed over $1.35 billion into the Indian real estate market led by the commercial property segment during the quarter ended June, representing a 9-fold on-year increase, showed data from JLL India. Capital deployments in the April-June period represented the most active second quarter in five years.“Despite the second wave of Covid hitting India in April this year, the first six months of 2021 saw investments of $2.7 billion, which is 53% of the total investments seen in 2020. Investors are showing resilience and are adapting to the uncertain environment. Relaxing lockdowns during the first three months of 2021 also gave investors a first-hand experience of the postpandemic world. This led to risk re-rating and asset allocations witnessed a subsequent change in Q2 2021.” said Radha Dhir, CEO and Country Head, India, JLL. Of the total investments during the quarter, warehousing attracted the most at 55%. Office properties received 17% investments despite the noise around work-from-home model, and 20% funds were infused into retail assets indicating the bright prospects of consumption once the pandemic comes to an end. “The warehousing and logistics sector has been the biggest beneficiary during the pandemic and attracted total investments of over $1 billion during Q2 2021…In addition, the data center industry has been drawing strong operator and investor interest with various funds exploring entry strategies.” said Samantak Das, Chief Economist and Head of Research & REIS, India, JLL. Investments in the warehousing and logistics sectors were attractive due to the increasing shift to online shopping from discretionary to essentials. Major global funds have invested with warehousing developers and operators as scale and regional footprint are the key differentiators in the sector. Some funds are following opportunistic strategies by investing in marquee retail assets and have been selectively investing in well-established malls. The shift in investment strategy from specific assets to platform type investments with marquee developers has led to a shift from asset and region to the portfolio approach. Since most warehousing, as well as retail assets, are also located in tier 2 and 3 cities apart from major metros, the share of panIndia investments are gaining prominence. According to Dhir, the first half of 2021 saw broader investor participation andalthough the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to maintain momentum. “From where we stand, institutional investors have passed the litmus test of resilience during pandemic resurgence and are expected to commit more capital in 2021,” she said. The series of policy initiatives aimed at reforming the property sector including the introduction of Real Estate Investment Trusts (REITs) in 2014, the Real estate Regulation and Development Act in 2016 (RERA), Benami Transactions (Prohibition) Act and progressive relaxation in foreign direct investment norms have been attributed for the volume of investments over the last few years. Though the economic dent created by the second wave will lead to slower growth in 2021, investments in real estate are expected to stay strong through the year. Defensive sectors like warehousing and data centers are likely to gain center stage, while office assets will gain interest with more visibility on work from office trends. The Real Estate Investment Trusts (REITs) market is expected to get a further boost as the reduction in lot size of REIT units is expected to drive more retail participation. The growth prospects of the data centers are expected to attract capital at the development stage with ambitious expansion plans by the data center players. Source: The Economic Times INDIA