Residential sales in top 8 cities grew 13% in 2017-18: Report

Affordable housing continued to be the mainstay of the demand as the contribution of this segment to the overall sales in tier I cities

MUMBAI: Residential sales across top 8 tier I cities of India has grown 13% during the financial year 2017-18 (April-March) with Mumbai Metropolitan Region witnessing maximum growth of 25%, showed data from Liases Foras Ratings & Research.

Affordable housing continued to be the mainstay of the demand as the contribution of this segment to the overall sales in tier I cities including Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai, Kolkata and Ahmedabad stood at 18% during the fourth quarter.

The government has been pushing affordable housing through various schemes and incentives. Lower home loan interest rates and necessary impetus by the government to affordable housing has played a key role pushing sales in this segment.

The government has supported the housing sector through affordable housing fund, lower Goods & Services Tax (GST) rates, increased tenure of loans under Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of carpet area of 645 sq ft.

Mumbai was followed by Delhi-National Capital Region with 19% increase in sales for the year. In south zone, Chennai and Bangalore have shown a slow down with sales numbers showing a drop of 15% and 5%, respectively while Hyderabad witnessed a growth of 17%.

On year-on-year basis, new launches across these top 8 markets have declined in most cities except in Mumbai, Hyderabad and Kolkata where launches grew 42%, 53% and 29%, respectively.

With a growth in sales and drop in new launches the unsold inventory in the tier 1 cities have dropped by 3% from a year ago to 9.29 lakh units as on March end.

During the fourth quarter ended March, residential sales across these tier I cities increased by 14% with Hyderabad emerging as the leader with a 33% increase followed by Bangalore with 30% rise, MMR with 19% growth and 14% increase in Pune. Kolkata is the only city that witnessed a marginal decline of 1%.

During the fourth quarter, sales in affordable segment with price tag of less than Rs 25 lakh increased 24% from a year ago. Sales in the cost bracket of Rs 25 lakh to Rs 50 lakh increased by 4% on an annual basis. Sales in the cost bracket of Rs 50 lakh to Rs 1 crore increased by 17%, while sales in luxury segment with Rs 1 crore to Rs 2 crore rose 13%. Sales in ultra-luxury segment above Rs 2 crore rose 13%.

Weighted average price across tier I cities witnessed a muted increase of 1%. Marginal decline of 1% was observed in Pune and NCR while prices dropped by 4% in Chennai. Prices in Ahmedabad witnessed no change while a slight increase of 1% was observed in Hyderabad , Kolkata , MMR and Pune each, the data showed.

NCR led with the highest contribution to sales in the affordable segment with 26% followed by MMR with 23%, Ahmedabad with 20% and Pune with 15% of total sales in this segment. All 8 cities cumulatively sold highest in cost range of Rs 25 lakh – Rs 50 lakh, with sales of 35% of total sales, followed by cost range of Rs 50 lakh to Rs 1 crore at 30% of total sales.

Among regions, MMR contributed the highest to overall sales at 17,143 units or 25% of total sales followed by NCR at 15,326 units or 22% of total sales, the data showed.

During the quarter, MMR added the highest new launches, with a contribution of 25% followed by Bangalore 17% and NCR 11%. Among various cost segments, the cost bracket of Rs 50 lakh to Rs 1 crore witnessed maximum new launches amounting to 39% of total new supply followed by the cost brackets of Rs 25 lakhs to Rs 50 lakhs with 36% contribution.

The Rs 50 lakh to Rs 1 crore segment of MMR witnessed maximum launches of 5,545 units contributing 11% of the total new launches across eight tier 1 cities. Kolkata contributed 29% of the new launches in the affordable segment with less than Rs 25 lakh followed by MMR 25% and Pune 24%.

Source : https://realty.economictimes.indiatimes.com/news/residential/residential-sales-in-top-8-cities-grew-13-in-2017-18-report/64256679?photo_id=59863844

Gurgaon: NHAI invites tenders for elevated road on Dwarka Expressway, construction may start in April

Invites tender for 10km elevated road between Delhi-Gurgaon border, Basai railway overbridge

The construction of the Northern Peripheral Road (NPR), popularly known as the Dwarka Expressway, is likely to start next month as the highways authority has initiated the process of inviting tenders for an elevated road.

Simultaneously, efforts are being made to settle litigations to clear land for the project that was initiated in 2007.

The biggest road block in completion of the Dwarka Expressway has been transfer of litigation-free land from the Haryana government to the NHAI.

“A week ago, the National Highways Authority of India (NHAI) opened tender for the construction of the proposed elevated road on the Dwarka Expressway. Hopefully, construction (of the elevated road) would commence anytime in April. By that time, Huda is making efforts to vacate the stay on land falling in alignment of the expressway in New Palam Vihar,” said Rao Inderjit Singh, Union minister of state and Member of Parliament from Gurgaon.

Besides opening of tender, the Haryana urban development authority (Huda) has also started the process of demolishing structures affecting the road’s alignment.

While the Huda has demolished one house that was affecting the road’s alignment, it has given compensation to all 70 house owners and served notices cautioning them to vacate by Monday, March 20, or face action.

The Huda has also decided to file a petition in the Supreme Court to vacate the stay granted by Punjab and Haryana high court on acquiring land from plot owners with general and special power of attorneys (GPA-SPA) for the NPR project.

“We will move a petition in the Supreme Court to vacate high court stay soon to acquire land,” said Chander Shekhar Khare, administrator Huda, Gurgaon.

Meanwhile, the NHAI-appointed consultants have started site inspection of the expressway.

“The government at the centre and the states (Delhi and Haryana) are trying their best to resolve litigation affecting land acquisition. However, NHAI has opened its tender as sign of positive development in this regard,” said a senior NHAI official, requesting anonymity.

With this, investors who bought plots and flats along the Dwarka Expressway are hopeful that the NHAI would commence construction of the proposed elevated road between Delhi-Gurgaon border and Basai railway overbridge (ROB) in April.

The developers of housing complexes along the proposed road have not completed projects, which are delayed by three to five years, due to inordinate delay in completion of the Dwarka Expressway.

This delay has also affected the spread of basic civic amenities to such as sewer, water, roads and electricity connections, in the area.

“Huda has not been able to acquire a small portion of land in New Palam Vihar since a few houses of oustees, who have purchased land on GPA/SPA are yet to be vacated. Huda went out of its way and allotted alternate plots to these oustees, but the allotment has been stayed by Punjab and Haryana high court. Fate of over one lakh legitimate homebuyers and a ₹7,500 crore project of national importance lies in the hands of the court today,” said Manish Grover, member of the Dxp Welfare Association.
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India’s largest toll plaza with 40 lanes proposed at Sehrawan

GURUGRAM: India’s largest toll plaza will come up at Sehrawan, about 11km from Kherki Daula, if NHAI gets land for it from the district administration. The toll plaza will have 40 lanes, NHAI officials said on Saturday.

Each lane will be made at a cost of Rs 9 lakh, TOI has learnt. The Gurugram-Delhi Expressway (Sirhaul) toll plaza with 32 lanes was the biggest in India before it was scrapped in 2014.

According to NHAI officials, the 40-lane toll plaza that has been proposed at Sehrawan will ensure less traffic congestion than the Kherki Daula toll plaza which has 23 lanes.
However, the proposal to shift the Kherki Daula toll plaza to Sehrawan has been facing flak from environmentalists who claim the land is a forest area and wildlife corridor.

The district administration is yet to get the forest clearance for the land but has allotted 65 acres, including 59 acres under Manesar village, 5 acres under Sehrawan and one acre under Kakrola, for the new toll plaza.

The shifting of the Kherki Daula toll plaza was officially announced in 2017 by Union minister for road transport and highways Nitin Gadkari after talks on the matter for over two years. The district administration allotted land for it in Sehrawan in December 2017.

Ashok Sharma, NHAI project director, Gurugram, said, “We have not received land for the Sehrawan toll plaza yet.”

MD Malla, managing partner of Malla Consulting, consultant for the project, said, “NHAI will need 65 acres for the toll plaza, including portions of Kakrola, Sehrawan and Manesar. The toll plaza will run for 1.3 km on the NH8, starting from the point which is at a distance of 51.9 km from ISBT and ending at the 53.2-km point. The highway will be widened for the toll plaza, starting from the Government Polytechnic College in Manesar.”

In 2014, the 32-lane Sirhaul toll plaza was removed after all parties concerned, including NHAI, expressway operator Delhi-Gurugram Super Connectivity Ltd (DGSCL) and lead banker for the project, Infrastructure Development Finance Company, reached a mutual settlement at the end of a prolonged legal battle in which charges of financial irregularities were levelled against DGSCL.

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DLF gets 11.76-acre Gurgaon Plot with Record Rs 1,496 Crore Bid

In a closely contested auction, DLFBSE 1.19 % has emerged as the highest bidder for a land parcel put by Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) spread over 11.76 acres in Gurgaon for a record Rs 1496 crore, said three persons familiar with the development. 

The company is expected to pay an additional Rs 143 crore for Transit-Oriented-Development rights. DLF will also have to pay Rs 120 crore for registration of the land parcel, taking the total deal value to Rs 1,759 crore, against the reserve price for the land parcel that was set at around Rs 686 crore. 

This is an unprecedented price for a land parcel in the National Capital Region. The deal concluded through an e-auction on Monday night, at a base price of over Rs 127 crore per acre, has surpassed all earlier benchmarks.

DLF and Bharti Realty had emerged as the contenders in the final round out of more than half a dozen developers, including Indiabulls Real Estate, Experion Developers, Emaar Group, Embassy Group and RMZ showing interest in this land parcel.

The second highest bid made by Bharti Realty stood at Rs 1,446 crore. 

 An HSIIDC official, who requested anonymity, confirmed that a subsidiary company of DLF has emerged as the highest bidder with Rs 1,496 crore. An email sent to DLF remained unanswered till the time of going to press on Tuesday.

As per the bid terms, the allotment letter for the said land parcel will be issued to Aadarshini Real Estate Developers, subsidiary of DLF Home Developers upon payment of 10% of the quoted amount. The balance amount can be paid in installments as per the terms of bid document, DLF said in a regulatory filing. In November, global home furnishing company Ikea had bought a 10-acre land parcel in Gurgaon for Rs 842 crore through an e-auction conducted by HUDA, the Haryana government’s development agency. 

The land parcel is located on NH8 behind Oberoi Hotel in Guragaon, and has the potential to develop both commercial and retail spaces. “This is an extension of the established DLF Cyber City micro market and the deal reconfirms DLF’s long–term commitment to retain control over this NH8 cyber city micro market in terms of pricing, supply and occupier profile,” said Ankur Srivastava, chairman, GenReal Property Advisors. “It allows DLF to revalue its undeveloped FSI in this micro market while using this auction as a benchmark.”

“This is an extension of the established DLF Cyber City micro market and the deal reconfirms DLF’s long–term commitment to retain control over this NH8 cyber city micro market in terms of pricing, supply and occupier profile,” said Ankur Srivastava, chairman, GenReal Property Advisors. 

“It allows DLF to revalue its undeveloped FSI in this micro market while using this auction as a benchmark.” The said 11.76 acre land parcel has a leasable potential of around 2.3 million sq ft. The plot has base floor space index of 1.75 times, which would get double to 3.5 times after factoring the benefit of Transit Oriented Development (TOD) rights. 

DLF is expected to push this development into DLF Cyber City Developers Ltd (DCCDL), its joint venture with Singapore sovereign fund GIC. Promoters of DLF have sold their 33.34% stake in its rental arm DLF Cyber City Developers Ltd (DCCDL) to GIC for Rs 8,956 crore. The transaction was concluded on December 26, and the company now holds the balance 66.66% in DCCDL.

Currently, the rental arm's portfolio includes leased space of 27 million sq ft and nearly 4 million sq ft under construction. The joint entity also has access to land bank that has additional development potential of 19 million sq ft.

According to industry experts, the successful bidder will have to lease spaces in proposed development on this plot in the range of Rs 150 to Rs 160 per sq ft a month to achieve a breakeven, given the high amount of bid. Currently, office space lease rentals in this vicinity are around Rs 110 per sq ft and a right mix of retail and commercial development may help the company fetch the expected average lease rentals.

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Japan’s Sumitomo Enters Indian Realty Sector with $2 billion Gurgaon Projects

Japanese conglomerate Sumitomo Corp today announced USD 2 billion township project in Gurgaon as it forayed into Indian real estate sector in collaboration with local partner Krishna Group.

The 50:50 joint venture, Krisumi Corporation Pvt Ltd will build 5,000 flats, shopping mall, office space and educational institution at 65-acre land in Sector 36-A, Gurgaon abutting the Delhi-Mumbai industrial corridor's Global City.

The project, which will have a total built-up area of 18-18.5 million square feet, will be developed in phases, the two partners announced at a media round table today.

"I want to create a Japanese city here...The first phase will comprise 1.2 million square feet of

 built-up, consisting of 430-450 apartments and will be completed in 4-5 years," said Ashok                 Kapur,      Chairman, Krisumi Corp.

Krishna Group, a diversified business house with interests in auto components, media, travel, and entertainment seating, owns the 65-acre land parcel where the mini-township will be built, said Kapur, who is also the head of the Group.

"Idea is to create a niche which Indian market had not seen," Kapur said adding the apartment that may cost Rs 1-2.5 crore will have quality and facilities equivalent to those costing Rs 15-20 crore at present. Sumitomo Corp, which has done 300 real estate projects globally, will bring in the expertise and technology for Krisumi City. 

"India's real estate sector is going through an interesting phase. While consumer's expectations have evolved manifold, most of the traditional developers are finding it difficult to effectively cater to all their requirements," said Masahiro Narikiyo, Chairman and MD,

Sumitomo Corp India. Narikiyo said the Tokyo-based group has done projects in Japan, the US, China, Singapore, Indonesia and Vietnam. The company was attracted to India because it "is politically very stable among emerging markets," he said. "It is governed by democracy, the value we can share." Sumitomo Corp has sold over 50,000 (rpt) 50,000 condominiums in Kansai and in the Tokyo metropolitan area over the past 50 (rpt) 50 years. In the office building business, it operates about 3,30,000 square metres of office space in Tokyo and Osaka.

Kapur said the biggest challenge facing the Indian real estate industry today is quality, efficiency, and commitment to timelines, all of which is exactly what Japan is known for.

"Japan is already beyond RERA," he said .. adding that Sumitomo may enter into more such alliances in India later on. The project spread over 65 acres will be developed in 7-8 phases over 10 years. While the first phase with 1.2 million sq ft development will have over 450 apartments, the entire project will offer around 5,000 apartments.

“The biggest challenge facing the Indian real estate industry today is with regard to quality, efficiency and commitment to timelines, all of which are exactly what Japan is known for. We are certain that our partner, Sumitomo Corporation, part of the 400-year-old Sumitomo Group, with their extensive global experience in real estate development shall contribute tremendously in creating projects with endearing value for our clients as well as the local communities around it,” said Ashok Kapur, chairman, Krishna Group.

The joint venture company has got most of the approvals for the first phase, which will be launched later this year. The construction of the first phase of the project is also expected to commence this year.

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Investing in Real Estate? These Micro Markets can Give Good Returns

There is an uncanny similarity between the stock market and the real estate market today. Though the overall equity market is looking weak, there are several stocks worth investing right now. Similarly, though the broader real estate market is flat, action is happening at the micro level. There are several pockets across metros and large cities where property prices are reasonable and investors can
expect Good Returns.

 

However, don’t expect prices to shoot up like they were between 2005 and 2008. “Rental yield can be a good yardstick for residential real estate. Investors should get in only when the rental yield is more than 3%,” says Pankaj Kapoor, MD, Liases Foras.

The introduction of the Real Estate Regulation Act helps buyers but has removed the information asymmetry that helped generate High Returns from property. “Real estate, especially New Launches, used to double in value in 3-4 years; that phase is n .. Second, the focus has shifted from premium properties to the affordable and mid-priced segments.

Due diligence by home buyers has also improved. “Home buyers are taking time and doing indepth research like visiting property sites several times before buying,” says Jayashree Kurup, Head – Content & Research, MagicBricks. “Three main factors to check is the credible developer, right-sized house and good price. Unlike earlier, home buyers now insist that all three are in place,” says Sharad Mit .. This week’s cover story looks at micro markets that are doing well and could offer value to buyers. We examine the factors that have worked for these pockets and tell you why you should consider buying property in these hotspots. Improving connectivity and quality of space are plus points.

Gurugram Strong Showing

Improving connectivity and quality of space are plus points.



Availability of high quality office space at reasonable rates has helped Gurugram score over more expensive Delhi. “Gurugram remained the preferred office destination in NCR with about 57% share in overall leasing in 2017,” says Sachdev of Colliers International India. In addition to the cost advantage, proximity to the airport is another attraction.

The price performance in Gurugram has been unlike other cities. A similar trend is expected in the coming year as well. “Premium office occupiers will continue to prefer Cyber City, Golf Course Road and NH 8 owing to their enhanced connectivity,” says Sachdev. Similarly, the state government’s efforts to decongest the Gurugram-Alwar highway should make commuting easier from Sector 48.

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Commercial realty business in India rebounds

The year 2015 marked a turnaround for India's commercial real estate as steady economic growth and renewed corporate confidence, especially among ecommerce and IT companies, propelled transactions to the second-highest level in terms of area.

After over three years of weakness, total purchases and leases of office space in the top eight property markets rose to 35 million square feet during 2015. Net commercial real estate transactions by companies rose 17.1% from a year ago.

In 2011, a record 37 million sq. ft.of office space was taken up as rents eased after the global financial crisis. This time, however, it was the result of companies implementing growth plans, according to a report by property consultant Jones Lang LaSalle (JLL) India.

"During the year, office space demand was mainly driven by information technology IT enabled services, ecommerce, startups and large consulting firms," said Anuj Puri, chairman at JLL India. "Players in many other sectors like fast moving consumer goods, banking, financial services and insurance, manufacturing, telecom and pharma did not come into the market - however, this should happen in 2016 and 2017. Next year will also see demand for built to-suit properties, especially from the larger IT occupiers."

Commercial space transactions were distributed across new and old buildings in 2015, compared with largely newly completed buildings in 2011. There was a pick-up in large transactions this year, led by Flipkart, which leased 2 million sq. ft. of a custom-built office campus in Bengaluru, and Tata Consultancy Services, which rented over 2 million sq. ft. of built-to-suit space at Hiranandani Estate in Thane for 15 years.

Among purchases, pharma major Abbott IndiaBSE 1.38 % bought 5 lakh sq. ft. of space at Godrej Properties' commercial project in Mumbai's Bandra-Kurla Complex for about Rs 1,479 crore. A revival of momentum in commercial realty is an indicator of the economy's health and augurs well for job creation. Deals by both investors and occupiers suggest that sentiment is improving for the office property market.

The pan-India vacancy level still stands at 16%, although the `realistic' availability is actually 8-9% because total supply is not always relevant for corporate entities, he said. Many occupiers do not consider Grade-A buildings with multiple owners or those located in areas with inherent disadvantages and connectivity issues. Cities such as Pune, Bengaluru, Hyderabad and Chennai have a vacancy rate of 5-10% and would need fresh supply to meet growing demand, the report said.

Rental growth across Indian cities was steady, with Pune leading the pack with an 8.4% rise. This was followed by a 5.3% increase in average rentals in Bengaluru, 3% in the National Capital Region (NCR) and 1% in the Mumbai Metropolitan Region.

Source: PropertyatNeoDevelopers.Wordpress.Com

Commercial space worth $15-20 billion eligible for REITs in 2-3 yrs

Nearly 80-100 million sqft of commercial space worth USD 15-20 billion are eligible for Real Estate Investment Trusts (REITs) in the next 2-3 years, a recent survey said. According to the survey by KPMG, India potentially has about 375 million sqft of Grade-A office space which is valued at USD 65-70 billion.

Out of this, 80-100 million sqft is estimated to be eligible for REITs in the coming 2-3 years and would be valued at USD 15-20 billion. "REITs pose a large opportunity in the Indian real estate market which is backed by growing economy and more importantly by a large existing Grade-A commercial portfolio," KPMG said.

The report said in 2015 and 2016 nearly 52.6 million sqft and 57.1 million sqft, respectively, of commercial space is expected to be added. "Most of the Grade-A properties, which will be added in the two years, will be concentrated in seven major cities like including Delhi NCR, Mumbai, Bengaluru, Chennai, Pune, Kolkata and Hyderabad," it said.

Apart from the Grade-A office spaces, there are other commercial assets such as shopping centers, hospitality and industrial warehouses which might come under the purview of 'REIT-able' space, thereby presenting a potential for increasing the overall stock, it said.

KPMG noted that REITs would not address the liquidity challenges faced by developers but are expected to help streamline the sector by creating a transparent mechanism for raising finance in the market as it would be governed by SEBI guidelines which would help in maintaining transparency and their accountability.

The agency, however, noted that certain amendments in the taxation and regulatory aspects of REITs are required, which would further enhance the attractiveness of Indian REITs for global investors.

Source: PropertyatNeoDevelopers.Wordpress.Com

Land records to soon be put online

The additional chief secretary and financial commissioner of revenue department, Dalip Singh, on September 11 said that land records will soon be made available on www.jamabandi.nic.in.

Singh was speaking at a function organized to lay the foundation stone for a new office building for the revenue department at Jharsa Road.rnrn"Since land has become costly in Haryana, it has gained importance and is considered wealth, so its proper maintenance is necessary. The land records are in the process of being made available online. Anybody can see the record on www.jamabandi.nic.in," he said.

He added that a system was being devised under which the data will be uploaded on the website as soon as the sale deed is registered. Under this system, fraud in land deals could be checked to a large extent, said Singh.

Singh further said that he had directed revenue officials to clear pending mutations in a time-bound manner and said the deputy commissioner has prepared a schedule for it. He said that Tehsil areas in Gurgaon and Faridabad could be further divided as uploading of data in the two districts has been slow due to the large number of transactions.

He also said that in order to solve the problem of lack of government accommodation for employees of the revenue department, forming a housing corporation within the department was being considered.

Source: PropertyatNeoDevelopers.Wordpress.Com

Government will invite private players to plan, build ITO infrastructure

A shortage of funds with the government for infrastructure development may usher in the private sector in works like maintenance of roads, and construction of flyovers and foot overbridges. The ITO decongestion plan is set to become the first project in which the government will outsource planning and construction. The trend may pick up pace if this project is perceived as successful.

The work at ITO involves construction of a foot overbridge and a skywalk. "ITO is a prominent locationand we also wanted to involve the public in the work of constructing the FOB and skywalk. For that, we have started a competition for innovation designs that are not only aesthetic but also fit in with the surroundings.

It is open to everyone. Five designs will be shortlisted for which winners will be paid Rs 50,000 each. Thereafter, each will have to make a detailed presentation. The winner will be awarded Rs 2.5 lakh after which the design copyright will be transferred to PWD. This is the same amount that is paid to a consultant," said a senior PWD official.

The project will then be tendered out for construction and maintenance. Two to three models of earning from the project are being considered. These include setting up of kiosks, advertisements on the FOB and skywalk and even installation of small cellphone towers on the structure. "There will be a concession period and a penalty clause as part of the contract wherein the company will be penalized for not maintaining the structure. The city is growing at breakneck speed and, if infrastructure has to keep pace, we will need to involve private players. The government will closely monitor such projects," said a source.

ITO, where the first such project will come up, witnesses a huge volume of both vehicular and pedestrian traffic due to a heavy concentration of offices, a Metro station, the Tilak Bridge railway station and seven major arterial roads. A new complex for the Supreme Court and another court on Deen Dayal Upadhyay Marg will lead to increase in volume of traffic. At present, there is only one footbridge in the area which is on Vikas Marg. Delhi Metro has built a pedestrian subway.

PWD has, therefore, planned a skywalk connecting Sikandara Road to the parking lot near Pragati Maidan Metro station across Mathura Road. The deck of this skywalk could be linked to the proposed footbridge being constructed by DMRC near the Metro station.

The footbridge will connect the footpath of Deen Dayal Upadhyaya Marg to the lane near the drain close to the Institution of Engineers building for access towards the Hans Bhawan side from the Tilak Bridge railway station.

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Bill for converting 101 rivers into waterways in next session: Nitin Gadkari

Keen on promoting water transport, the government will introduce a bill in the upcoming monsoon session of Parliament that seeks to convert 101 rivers across the country into waterways.

Converting existing rivers into waterways will propel economic growth as it is a cheaper mode to transport cargo and with this objective in mind, government has set the target to convert 101 rivers into waterways, Road Transport, Highways and Shipping Minister Nitin Gadkari told PTI.

"In the next Parliament session, the Bill will be introduced," Gadkari said.

Promoting waterways is the top-most priority of the Ministry as it will ease the burden from road and rail network besides being cost-effective and eco-friendly, he said.

"Unfortunately, this mode of transport is yet to be tapped in the country whereas this mode accounts for 47 per cent of China's transportation and 40 per cent of Europe's transport.

"The total transportation cost through waterways comes to barely 30 paise/km in comparison to Re 1/km through railways and Rs 1.5/km through road. Unfortunately, this mode of transport is yet to be tapped in our country," Gadkari said.

Even Japan and Korea depend on waterways, he said, adding that in India it is a minimal 3.3 per cent, of which 3 per cent is coastal transport and remaining 0.3 per cent is inland transport.

The government has so far declared only five river stretches as waterways. For 55 rivers, consultants have been appointed and detailed project reports (DPR) will be formulated once necessary approvals were sought, he added.

The projects will be done on public-private-partnership basis, he said.

Inland waterways comprising rivers, lakes, canals, creeks, and backwaters extend to about 14,500 kms in the country.

However, potential of this mode of transport has not been fully exploited so far.

The government has already decided to launch projects for setting up dry and satellite ports, besides converting rivers into waterways.

Five National Waterways are Ganga-Bhagirathi-Hooghly river system (Allahabad-Haldia-1620 kms); river Brahmaputra (Dhubri-Sadiya-891 kms); West Coast Canal (Kottapuram-Kollam) along with Udyog Mandal and Champakara Canals-(205 kms); Kakinada-Puducherry canals along with Godavari and Krishna rivers (1,078 kms) and East Coast Canal integrated with Brahmani river and Mahanadi delta rivers (588 kms).

Source: PropertyatNeoDevelopers.Wordpress.Com

E-commerce, start-up scene driving up office space demand

Thanks to frenzied activity by e-commerce and tech start-ups, as well as the IT and ITeS companies’ capacity expansion plans, the country’s office space market seems to be regaining lost steam. With a major chunk of  total absorption of Grade A office space being notched up by the technology sector, in the January-March quarter, commercial realty market is getting ready to make the most of it.

Most real estate advisory firms have reported that India’s office sector has registered a notable rise in net absorption in the office leasing market.  Globally, a number of blue-chip tenants are moving to prime grade development in India as part of organic growth.

According to Cushman & Wakefield, there was a 20% year-on-year rise in the March quarter’s net absorption of Grade A office space with Bengaluru, Chennai, Kolkata, Mumbai and  Pune showing the most notable increases. The office market saw the strongest growth in Bengaluru with a whopping 500% increase in absorption rate.

Ravi Ahuja, executive, director, Cushman & Wakefield India, said Blackstone and other PE funds have been queuing up to buy assets. “This may bring about  a sea change. The trend serves as  a great level-playing up for both foreign and domestic investors,” he said. He added the country may surpass the 2006-2007 level of office space absorption, where 42-45 million sq-ft was consumed, in another few years.

“Last year we had 30-35 million sq-ft intake and I foresee this level going up to 35-36 million sq-ft this year. New age demand driver will be from e-commerce and start-ups which are scaling up big time, in Bengaluru and elsewhere in the country,” he said.

Cushman & Wakefield  has said in its latest research that total absorption of Grade A properties in office spaces was recorded at 8.5 million square feet in Q1. Among the total share in absorption, IT/ITes continued to remain the main driver with a share of 69% of total lease space. Bengaluru garnered 44% of the total share of absorption.

Real estate tracker Colliers International reported that office space absorption in the January-March quarter had risen by 2.8% from the last quarter. IT/ITeS drove most of this demand and e-commerce companies took up 52% of the total space absorbed.

According to Colliers, among major markets, Bengaluru market remains in the sweet spot in terms of supply-and-demand fundamentals. About 2 million sq ft of office space is set to witness completion next quarter.

Source: PropertyatNeoDevelopers.Wordpress.Com

Proposed real estate law may force developers to speed up stuck projects

With the government bringing in ongoing projects under the ambit of proposed real estate law, developers are looking to speed-up construction of existing housing units to escape any regulatory action, but funds may be a constraint.

Real estate market, particularly Delhi-NCR, has been facing a huge delay of 6-7 years in project completions, which in turn has affected the buyers' interest also.

The Union Cabinet last week approved amendments to the long-pending real estate bill to bring under its ambit all ongoing projects, which would need to be registered with a proposed regulator after the new law comes into force.

CREDAI, the apex body for real estate developers, has opposed the decision to bring the ongoing projects under the proposed law, saying that provisions should be prospective and not retrospective.

"If given a choice developers would like to push ongoing projects so that the they do not get stuck in the registration process of the regulatory department. One must understand that to compress the delivery time, adequate fund would be required, besides robust technology," CREDAI (National) President Getamber Anand told PTI.

"The bottom line is that retrospective effect of the bill would definitely cause delay in ongoing projects if they get entangled in the regulatory process," he added.

Property consultant JLL India Chairman and Country Head Anuj Puri said that it would be difficult to bring ongoing projects under the purview of the new law.

"If it does, there will be a rush to secure completion certificates, wherever developers are in a position to do so, before the implementation of the Act," he added.

Puri, however, said consumers would be benefited if the construction activities of those projects, which are nearing completion, speed up because of this provision.

"Overall, the real estate regulation is a good move to bring in more transparency and corporate governance in the real estate sector. This will no doubt protect consumers and also weed away with unscrupulous developers," he said.

The amended bill, which is likely to be introduced soon in Parliament, also seeks to make it mandatory for all developers to keep minimum 50 per cent of funds collected from buyers in a escrow account to meet construction cost.

The Real Estate (Regulation and Development) Bill aims to protect the interest of consumers, promote fair play in real estate transactions and ensure timely execution of projects.

The Bill contains provisions of registration of realty projects and real estate agents with the proposed Real Estate Regulatory Authority.

Source: PropertyatNeoDevelopers.Wordpress.Com

FM Arun Jaitley promises to step up public funding to boost infrastructure

Concerned over slow growth of manufacturing sector, Finance Minister Arun Jaitley today promised to step up public spending on infrastructure, ease entry barriers for overseas investors and push Goods and Services Tax (GST) to boost economic expansion.

He also pitched for a low interest rate regime and defended the land acquisition bill saying it would benefit the rural India by promoting industrial activity in non-urban centres.

"Historic opportunity has revisited (us) and we have to use it to the maximum," Jaitley said while addressing investors at 'The Growth Net' conference.

The Minister expressed the hope that the constitutional amendment bill to roll out the GST, new indirect tax regime, would be passed in the next leg of the budget session beginning on April 20.

Once approved by Parliament, GST will subsume various indirect tax levies like excise, service tax and octroi.

Answering questions on the land acquisition bill, which is stuck in the Rajya Sabha, Jaitley said that the Union Cabinet would take a call on the issue as the Ordinance promulgated by the President on the subject is set to automatically lapse on April 5.

The Minister said that while the agriculture and services sectors have been doing well, "manufacturing is a challenge" and the government is trying to resolve the "legacy" issues hampering development of infrastructure sector

"Our manufacturing sector is challenging and it is here that we have to actually invent the key engine of growth. This is an area where countries which overtook us. China is an obvious example...

"Our concentration therefore is on 'Make in India', ability to try and device various methods of financing infrastructure...this is one are where we need to seriously concentrate on," he said.

The Finance Minister said he reviewed the progress of highway projects this morning.

"These are huge legacy issues. In the highways sector alone as many as 77 projects were stuck for want of one thing or the other," he said, adding that "now by resolving the issues 24 of them have taken off".

Referring to the defence sector, Jaitley said he was becoming a little optimistic because "a flurry of activities" is taking place in the sector.

"You see foreign investors partnering with domestic manufacturers, takeovers have started, large groups are now taking overs have started, large groups are now taking interests in entering that particular field," he said.

Earlier, he said only public sector units and some private companies were in the defence manufacturing. The new government has hiked the FDI limit in the sector to 49 per cent from 26 per cent.

"Therefore lot of liquidity getting into railways, highways, may be ports...," Jaitley said, adding that "I don't expect them (the private sector) to suddenly raise a fund and say I don't expect them (the private sector) to suddenly raise a fund and say I will build infrastructure.

"This is the first responsibility of the government particularly when you are trying to get out of the slowdown phase, we are quite conscious of that".

Jaitley said the government was committed to giving a push to infrastructure development.

"In my Finance Bill, there is a proposal to pass on a substantial part in terms of cess for highway authorities ... Rs 8 on that cess means Rs 80,000 crore for the National Highway Authority and part of goes into the railways also," he added.

Therefore, Jaitley said, with liquidity in the hands of highway authority, "incomplete projects can also be assisted by them through some fund mechanism".

The Finance Minister stressed that the government focus was to improve ease doing business in India.

"I mentioned about allocation of resources, resolution of disputes in government contract, bankruptcy law so that the exit itself becomes easier.

"In the ease of doing business there are some initiatives that are in pipeline from entry point to time gap between the entry point and actual start of business, to the enabling environment, the exit and to a non adversarial taxation regime," the Finance Minister said.

Source: PropertyatNeoDevelopers.Wordpress.Com

PE deals in real estate hit multi-year high despite sluggish market

The property market in many cities is in doldrums with sluggish demand and languishing prices. But real estate private equity funds are making a beeline for real estate. PE deals in the realty sector – both INVESTMENTS as well as exits – are increasing.

PE funds INVESTED ₹5,930 crore and ₹5,480 crore in the third and fourth quarter of 2014 respectively – the highest since 2008. For the full year in 2014, INVESTMENTS were ₹15,410 crore – more than double the amount invested in 2013. INVESTMENTS were in both residential and commercial segment.

Many private equity funds were also able to make exits in the recent past. For instance, Milestone Capital, a real estate private equity fund, profitably exited four commercial and one residential project in 2014. The investments were made five-six years ago. The commercial investments returned around 1.5 times (including rents and capital appreciation) while the residential project return was 2.3 times. Likewise ASK Property INVESTMENT Advisors, which focuses on equity funding to residential projects, exited from its ₹37 crore Pune property investments (made in late 2010) with a return of 2.3 times.

Unique Opportunity:

Money flow continues to be robust in 2015 with 10 deals worth $500 million concluded so far, as per data from Venture Intelligence, a research service focussed on Private Equity and M&A. This is a fourth of the investments during the entire year in 2014. The surge in investments is largely due to insatiable demand for cash from real estate companies that are in dire straits due to declining sales and debt service obligations. Some PE debt funds, known as mezzanine funds, lend to these companies at 20 per cent rate of interest. “The funds are betting that as the economy picks up and home loan rates fall, buyers will return to the market and builders will repay their loans”, says Amit Bhagat, MD & CEO, ASK Property Investment Advisors.

Investors are also seeing the slowdown as a cyclical event rather than a structural issue observes Gaurav Kumar, Co-Head Capital Markets, CBRE South Asia, a real estate research firm. “The long term outlook for the housing market is positive, given the country’s demographics”, he says. So investors are taking the opportunity but budgeting for a slow revival by accepting a flexible principle and interest repayment schedules. PE funds that put money in rent giving commercial properties such as IT parks and malls are pinning their hopes on Real estate investment trusts (REITs) to help them get an exit by buying these properties. “In a falling interest rate cycle, rent giving properties offer good scope for capital appreciation”, says Rubi Arya, Vice Chairman and Director, Milestone Capital Advisors.

Shift to Equity:

With more confidence on the ability of developers to complete residential projects, funds are more open to deploy their capital in the form of equity rather than debt. And this shift may be good for developers given they are highly leveraged notes Bhagat.

It may also be good for home buyers. “Unlike PE INVESTMENTS in other sectors, real estate funds do not play an active role, especially when giving debt funding to big brand developers”, says Thillai Rajan Annamalai, Associate Professor, Department of Management Studies IIT Madras.

Source: PropertyatNeoDevelopers.Wordpress.Com

RBI UNVEILS POSTBUDGET RATE CUT

Less than a week after the Union Budget, RBI governor Raghuram Rajan reduced the repo rate - the rate at which RBI lends to banks - by 25 basis points, to 7.5%, citing improved government finances. However, the burden of home and auto loans on borrowers is expected to ease only in April, the beginning of the new financial year. This is RBI's second rate cut in the last two months but only three of 45 banks - Union Bank, United Bank, and Karur Vysya - have so far lowered the benchmark rates.

Banks are yet to pass on the benefits of the earlier midterm cut in rates on January 15. “Since there is a lag effect for the monetary transmission to take place, effect of previous 25 basis points cut together with the present rate cut would encourage banks to review their base rates,“ T M Bhasin, chairman of Indian Bank, said.

Although banks have seen a marginal dip in cost of funds, they are reluctant to lower rates now due to earning pressure on account of rising bad loans. Also, the financial year end is the time banks try to beef up their balance sheet by aggressively mobilizing deposits and often offer better deals.

An immediate rate cut would reduce interest income for banks. Although some economists did forecast a rate cut given the improvement in the quality of fiscal deficit in the Budget, the timing of the rate cut took markets by surprise. Apart from announcing the cut midweek, this was also the first time that RBI announced its decision before markets opened for TRADING.

Source: PropertyatNeoDevelopers.Wordpress.Com

India among top 20 realty investment destinations in world: C&W

Investments in real estate last year jumped more than twofold to about $5 billion, helping the country figure in the list of world’s top 20 property destinations, according to global property consultant Cushman & Wakefield.

India at the 20th rank recorded the third highest growth in investments, with an increase of 140 per cent in the total INVESTMENT volumes in 2014 at $5,050 million, compared with $2,100 million in the previous year.

Of the total investment volume, the domestic investments were $3,120 million (62 per cent) and foreign $1,930 million (38 per cent).

“The Indian real estate investment scenario saw a high point in 2014, reaching highest investment levels in the past five years,” C&W said in its report ‘International Investment Atlas 2015’.

However, the consultant, said the global real estate investments fell in 2014 for the first time in five years, dropping 6.3 per cent to $1.21 trillion.

“By activity, the US has moved back to the top for the first time since 2009, with volumes rising 16.2 per cent to $390.6 billion, 16 per cent ahead of China. These two of course dominate global activity with a combined 60 per cent market share,” the report said.

Out of the total investment volumes in Indian real estate, corporate investments increased sharply at $2,550 million in 2014, against $900 million in 2013.

Private equity investments, too, increased to $2,500 million from $1,200 million during the period under review.

Corporate investments transactions include real estate purchases by companies, including office or development site ASSETS for end-use, development or investment, C&W said.

“Residential emerged as the sector to receive the highest amount of investment totaling up to $2,600 million, while office sector followed closely at approximately $2,000 million,” C&W said.

Commenting on the report, C&W Executive Managing Director, South Asia Sanjay Dutt said: “The huge growth in investment volumes in real estate markets in India are proof that investors are already acting out on their expectations of improvements in the ease of doing business in India”.

He expects investment volumes to increase even more to match the levels of top 10 global investment destinations.

"Indeed, there is huge longer-term potential if the government addresses supply-side bottlenecks such as poor infrastructure to enhance India's position as a global information technology and outsourcing hub, as these could boost private investments (including foreign funds) and ensure all-inclusive growth for the entire population," Dutt said.

Source: PropertyatNeoDevelopers.Wordpress.Com

Buying a property? Check the legal status

With many projects facing delays and many getting stuck in court for various reasons, investing in a property with clear legal status is a matter of prime importance on a consumer’s mind. However, most of us are unaware of what kind of legalities should be checked before buying a property. To help and consult such consumers, a live chat session was organized with Sadhawa N. Mishra, partner- real estate, SNG Partners. The topic of the discussion was - “How to check the legal status of your property?".

While explaining, the legal checks that should be made while buying an apartment, Mishra, says, “You need to verify the original title deeds along with building approvals/occupancy certificate. Further, you also need to ensure that all the documents for sale are adequately stamped and registered.”

In case of a resale property, Mishra advised, “Apart from the above mentioned documents, please check the transfer deeds, share certificate”.

Do the legalities differ for plots? To this question Mishra answered, “In case of plots, you need to additionally check the Property card/7/12 extract apart from the above mentioned documents.”

Questions around bank approved projects were asked in abundance by the participants. Does bank approval mean that the property has all the legal approvals? Mishra opined, “It is not necessary. However, presumption can be made that once the project is approved, it has got all the legal approvals.”

Mishra advised participants to avoid paying cash to the builders even if they ask for it. He said, “You should not give in cash. However, if the builder is not ready to listen and you want to go ahead with the deal, then you can do so at the time of registration of your agreement. However, cash transaction is not advisable and you should avoid as much as you can.”

To people who buy or has bought properties through brokers, Mishra counselled them to check the legality of property. He asked them to get a sub-registrar search done to ensure that the property is not encumbered and the relevant agreement for sale is registered with the sub-registrar of assurances.

Considering there are many buyers who avoid vetting documents through lawyer and prefer brokers do the job for them, Mishra strongly recommended them to visiting lawyers to get the documents verified.

In case, the final product differs from the product showed in brochures, Mishra says that one can claim the compensation if the same is a part of the MOFA agreement.

Understanding the Legal Jargons:

What are stamp duty charges and why are we supposed to pay it? Mishra defined, “Stamp duty payment is mandatory by law. All the documents related to property or otherwise need to be stamped as per the relevant stamp act.”

Readers also asked about the importance of getting an Encumbrance certificate? Encumbrance certificate is issued by the concerned Sub-Registrar which mentions details of all transactions related to a property. This is important because if there is any sale/mortgage over the property, then the same can be identified.

Mishra also answered questions on the importance of obtaining NOC from society before selling the property. “Yes, it is important to obtain NOC from the society, though it’s not a mandatory requirement. Societies cannot deny issuing NOC unless there is a dispute over the property with respect to payment to be made to society or Municipal Corporation”.

Source: PropertyatNeoDevelopers.Wordpress.Com

Real estate sector focuses on silver lining

The real estate sector had pinned high hopes on the Union Budget 2015 for introducing various reforms that would not only push the government’s intention of ‘Housing for All by 2022’ but also provide the common man some sops for housing loan and taxations. However, the ‘common man’ seems to be quite dissatisfied. As per a recent reports, more than 51 per cent of the respondents were not happy with the Budget presented. However, 30 per cent of the respondents were satisfied with the measures announced by the finance minister.

Looking for housing options? Here is your chance!

Apparently, those who were not happy were concerned about the expected rate cut in home loans and tax rebates on housing loan repayment that were completely ignored in the speech. In a pre-budget report, majority of the respondents had said that they were expecting measures for reduction in home loan rates and increased limits for tax deduction in home loan repayments.

Voicing the sentiments of the common man, Lalit Kumar Jain, CREDAI chairman says, “A big opportunity to address core issues has been lost. It is fine to talk about policies and a vision like ‘Housing for All by 2022’, but sadly the budget does not give any direction towards executing this. Much like the infra bonds, the government could have launched Tax-free Housing Bonds as well, to allow home loans at 7 per cent to home seekers and provide the much needed funds for the sector.”

However, with several indirect measures such as the ‘benami bill’ and rationalisation of REITs, the sector is expected to benefit in the long run.

Kalyan Chakrabarti, MD, Red Fort Capital mentioned, “I like the budget. Decentralised structure is the focus of the budget. REIT and AIF have attained a leg up. Corporation tax rate decrease road map is cool.”

Sharing the same sentiment, V Suresh, former CMD, HUDCO said “The REIT benefits will be good for more investments for rental, commercial and other properties. Similarly, 2 crore urban and 4 crore rural houses for each family by 2022; allocation of Rs 20,000 crore and tax free bonds for infrastructure is a positive move. All these aspects will definitely impact the realty sector in the long run.”

Therefore, only time would tell as to what extent this would impact a common man. As of now, the real estate sector is concentrating on the benefits these indirect measures would bring to the industry.

Source: PropertyatNeoDevelopers.Wordpress.Com

Country’s ultra rich invest 50% of wealth in realty

Nearly half of the Indian ultra high net worth individuals ( UHNWI ) investment portfolios are allocated in property - the highest across the globe. This is followed by the Australians at 42%, said the Knight Frank Wealth Report 2015.

Samantak Das, chief economist and director, research, Knight Frank India, said, "Indian UHNWIs have given a positive outlook towards wealth creation and their decisions relating to the purchase of real estate property. Although not purely for investment purpose, a quarter of Indian UHNWIs are contemplating purchase of another home in 2015. From an investment perspective, as many as 87% of Indian UHNWIs wish to increase allocations towards prime residential property, which bodes well for the real estate sector."

Nicholas Holt, head of research for Asia Pacific, added, "The rise of Asia and its subsequent impact on prime property within the region and beyond has been one of the key narratives. This growth in wealth is impacting prime residential markets across Asia and Australasia, with the region's key cities and second home destinations seeing a strong price growth over the past five years. This is despite interventions by policy makers in a number of markets, designed to slow price growth and curb foreign ownership."

Watches, art and jewellery are the other top draws for wealthy Indians, said the report. Globally, the Knight Frank Luxury Investment Index found classic cars were again the top annual performer in the index; it tracks price growth of ten luxury investment sectors.

Coins were the only asset class to record a double-digit growth in 2014, although Chinese ceramics and wine performed more strongly than in recent years, rising 9% and 7%, respectively. The report said use of private jets is growing steadily around the world with demand rising most quickly in Asia - 38% respondents said their clients increasingly use them for business and leisure.

Source: PropertyatNeoDevelopers.Wordpress.Com