10-Oct-2019

06-Dec-2019

14-Feb-2020

CREDAI Bengal Daily News Update | 14.02.20

Indian realty attracts $6.2 billion private equity inflow in 2019:

Report

The office segment attracted $3.1 bilion from institutional investors in 2019, accounting for

a 50.1% share of total investments during the year.

Indian real estate attracted $6.2 billion or Rs 43,704 crore private equity investments in the year

2019 driven mainly by institutional investors’ interest in office assets. Total investment into the

country’s realty assets rose 3% from a year ago, showed data from Cushman & Wakefield India.

The office segment attracted $3.1 bilion from institutional investors in 2019, accounting for a

50.1% share of total investments during the year. Foreign investors made up a significant share

of 72.9% of overall investment inflows. Equity capital infusion formed 80.5% of the total

investment inflows during 2019, up from a 64% share in 2018.

“The PE activity observed in 2019, with volumes touching Rs 43,704 crore, confirms the

confidence of institutional investors in the Indian real estate market. With strong demand in the

commercial segment, investor interest has remained robust in this asset class, for core and build-

to-core opportunities, despite the tepidness in the residential sector,” said Anshul Jain, Country

Head & Managing Director, Cushman & Wakefield India.

He expects investment volumes to remain healthy on account of anticipated deployment of fund

commitments that have been made across the office and warehousing and logistics platforms. In

addition, strategic investments in alternative segments like co-living, student housing, co-

working, and data centers are likely to garner active interest from institutional investors.

Interestingly, the absolute numbers of investment deals were lower by 17% from a year ago,

pointing towards an increase in ticket size per deal and a spike in large sized transactions valued

at over Rs 1,000 crore during the year.

Platforms joint ventures between foreign investors and domestic entities remain a bright spot

indicating long term and patient capital being invested into the sector. These long-term

partnerships aimed at greenfield, brownfield developments especially in the commercial segment

including office and retail properties and industrial segments is a sign of increasing

institutionalization in the real estate sector.

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Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/indian-realty-attracts-6-2-billion-private-equity-inflow-in-2019-report/74115737

Residential realty sees early signs of green shoots

The highest supply in the affordable housing segment during the quarter was in Pune,

followed by MMR and NCR, where the segment accounted for 75%, 49% and 82% of the

total new supply, respectively.

The country’s residential real estate market is beginning to look up. India's top 35 property

markets, including tier I and II, recorded 3% year-on-year and 5% sequential growth in sales

during the quarter ended December, data from Liases Foras Real Estate Ratings & Research

shows.

Of these, 27 cities saw an upward momentum in sales in the quarter ended December, while new

launches--an indicator of confidence among builders to start marketing their projects—climbed

38% from a year ago.

The dominance of affordable housing continued on both the counts, driven by government

incentives which have not only made housing projects attractive but also bolstered the confidence

of end users. Apartments priced below Rs 50 lakh accounted for over 58% of the sales in the

December quarter. This cost segment saw 66% new launches, according to Liases Foras Real

Estate Ratings & Research.

“The year 2018-19 had seen marginal decline in both sales and launches. The downward slide

has now been arrested and the trend is reflecting an upward movement,” said Pankaj Kapoor,

managing director, Liases Foras Real Estate Ratings & Research. “Time correction has improved

home buyers’ affordability, and with inquiry levels going up, builders have garnered confidence

to launch more projects.”

Apart from government incentives, home loan rates have also been on a decline. Over the last one

year, the Reserve Bank of India has reduced the repo rate by 135 basis points.

In December, State Bank of India (SBI), the country’s largest lender, reduced its external

benchmark rate by 25 basis points. The revised effective benchmark lending rate of 7.8% came

into effect from January 1, 2020 and new home buyers have been getting loans at an interest rate

starting from 7.9%.

"Gradually, the sentiment among the industry stakeholders--be it developers with new launches,

fence sitters turning into the actual home buyers, or investors returning back to the sector--shows

signs of resuming confidence with cascading effect of a slew of positive economic measures by

the government," said Niranjan Hiranandani, national president of National Real Estate

Development Council (NAREDCO).

Project launches are increasing as response from homebuyers has been improving. For instance,

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/residential-realty-sees-early-signs-of-green-shoots/74115811

property developer Sunteck Realty sold 125 apartments worth over Rs 200 crore at its project in

Mumbai’s Goregaon suburb in December. The company recently launched another project in

Naigaon near Mumbai. On Monday, Piramal Realty also announced it is selling over 300

apartments, with sales value of Rs 200 crore, at its Thane project that offers apartments starting

at Rs 57 lakh.

The highest supply in the affordable housing segment during the quarter was in Pune, followed

by MMR and NCR, where the segment accounted for 75%, 49% and 82% of the total new supply,

respectively.

During the quarter, unsold stock in 35 cities increased by 4% from a year ago to 1,315,000 units.

This increase can be attributed to the high number of new launches this year. Weighted average

price across these markets showed a marginal drop of 1%, both on sequential and annual basis.

Prices declined marginally in 16 cities and increased in seven cities, data shows.

The government recently extended by a year the tax holiday for new affordable housing projects,

a move which is expected to increase supply in this segment.

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Allahabad Bank cuts MCLR by 5 bps across tenors

Likewise, the overnight, three and six-month tenor MCLRs have been cut by 5 bps each in

the range of 7.75-8.10 per cent. There has been no change in one-month MCLR of 7.85 per

cent.

Allahabad Bank has cut the marginal cost of funds based lending rate (MCLR) by 0.05

percentage points across tenors, effective February 14. The Asset Liability Management

Committee of the bank has reviewed the existing MCLR and decided for a downward revision by

5 basis points (bps) across different MCLR tenors, the bank said in a regulatory filing.

The benchmark one-year tenor MCLR will now be 8.25 per cent as compared to the existing 8.30

per cent.

Most of the consumer loans, such as retail, automobile and personal, are based on one-year

MCLR.

Likewise, the overnight, three and six-month tenor MCLRs have been cut by 5 bps each in the

range of 7.75-8.10 per cent. There has been no change in one-month MCLR of 7.85 per cent.

The revised rates will be effective from February 14, 2020, Allahabad Bank said.

Several other banks, including State Bank of India, have revised their MCLR following RBI's

policy rate announcement on February 6.

Even though the regulator kept the repo rate unchange at 5.15 per cent, banks were given other

relief in the form of cash reserve ratio (CRR) relaxation for loans to MSMEs.

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Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/allahabad-bank-cuts-mclr-by-5-bps-across-tenors/74116770

Co-working space providers take cover

Indian providers of co-working spaces that usually attract travellers and freelancers as their

key clienteles have started implementing preventive measures.

MUMBAI | BENGALURU | NEW DELHI: Following the outbreak of Corona virus in China,

Indian providers of co-working spaces that usually attract travellers and freelancers as their key

clienteles have started implementing preventive measures at their centres across the country.

Indian arm of WeWork, which has closed around 100 of its co-working buildings in China over

the Corona virus concerns, has issued advisory to its members urging them to ensure those

returning from affected areas overseas undergo medical screening. The company is also

encouraging such members to work from home for 14 days.

Several flexible workspace providers in India including Awfis, SmartWorks and Hong Kong-

headquartered Garage Societies have also started taking initiatives like these and have advised

their members accordingly.

"At WeWork, our members' and employees' health, safety and experience is our top priority. We

are monitoring the Coronavirus outbreak closely and have implemented precautionary measures

across all our Asia locations," said a WeWork India spokesperson.

Since its outbreak, Corona virus has claimed 1,367 lives and confirmed 59,805 cases in China so

far. Rest of world has so far recorded 524 confirmed cases and 2 deaths.

"The impact of Coronavirus in India is likely to be short-lived providing the virus remains

relatively contained...In the long-term, the outbreak could encourage more occupiers and

landlords to place greater emphasis on employee well-being and sustainability," said Anshuman

Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE.

All the flexible workspace providers, ET spoke to, maintained that they are and will adhere to

guidance from the government and local health authorities regarding the proper prevention and

management of this issue on an ongoing basis.

Apart from issuing advisory to their members, these companies are also monitoring the situation

closely to maintain an infection-free environment at their centres by deploying preventive

measures.

"All our workspaces have been disinfected thoroughly and this process will continue every week

to maintain utmost hygiene standards. Full-size sanitizer bottles have been placed almost at every

corner...Our Community Desk is always open in case anyone wants any support or help from our

end," said Prashant Garg, Country Manager, Garage Society.

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Newspaper/Online ET Realty (online)

Date February 14, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/co-working-space-providers-take-cover/74127321

Maharashtra CREDAI urges government to keep RR rates

unchanged

The appeal comes even as district meetings of local representatives are on in the state for

suggestions on RR rates. The state kept the rates unchanged in the last two years.

The Confederation of Real Estate Development Association of India (Credai) has urged the state

government to keep ready reckoner (RR) rates unchanged for the next financial year and reduce

the prevailing high rates in some areas.

The appeal comes even as district meetings of local representatives are on in the state for

suggestions on RR rates. The state kept the rates unchanged in the last two years.

Ready Reckoner (RR) rates are assessments of property value by the state government, on the

basis of which stamp duty and registration charges are paid. The government usually revises these

rates every year at the start of the financial year on April 1.

State Credai president Rajiv Parikh told TOI, “We have demanded that there should be reduction

of rates in most parts of the states as lowering the rates will automatically attract buyers for

registration of units. This will help government in getting substantial revenue.”

Credai also requested the government to change RR rates once in every three years. The body has

sought drastic and factual changes in the footnotes (guidelines) in RR books, which are useful in

calculating stamp duty.

Meanwhile, town planning department officials said they were hearing the suggestions made by

local representatives, which will be sent to the registration department.

Property analyst Niranjan Kelshikar, who has been studying the realty sector in the state, said the

rise in RR rates will adversely affect the registration and revenue collection in the state. “If

government is for revenue rise, small rise in stamp duty of about 1% can bring about 10-15% rise

in revenue. However, it should be done only after detailed assessment,’’ he said.

________________________________________________________________________________________________

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/maharashtra-credai-urges-government-to-keep-rr-rates-unchanged/74109769

Jaipur development body issues lease deeds to residents of PRN

scheme

According to JDA officials, records of above 315 housing schemes are deposited at JDA and

these colonies will be regularised.

Amid protest, the Jaipur Development Authority (JDA) on Wednesday organised camps to issue

lease deeds to residents of Prithvi Raj Nagar (PRN) scheme.

According to JDA officials, records of above 315 housing schemes are deposited at JDA and

these colonies will be regularised. The move has been criticised by the many residents and BJP

workers who protested at the zone office in large number. BJP councillor Man Pandit said, “The

JDA has not developed facilities in PRN area with Rs 1,250 crore collected after regularisation

of plots earlier. The JDA should first give an account of development work done in the area before

collecting development fee and other money from PRN residents,” he said.

After applicants applied online, the JDA issued lease deeds to the plot owners. An official

informed, applications for regularisation are accepted online at the zonal offices and extensive

preparations have been made for the convenience of the residents. “Advisor for assistance of

residents has been appointed at the civic service centre at the camp site to help the applicants

apply online,” said a JDA official.

The civic body has set a target to issue lease deeds to all the PRN plot holders till November

2020. Residents, who will fail to procure lease deeds on time, will have to pay double

development and regularisation rates to regularise their plots.

For a 100 square-yard plot, JDA will charge Rs 300 regularisation charge (per square yard), which

will include allotment rates. Similarly, for plot size between 101 and 300 square-yard, JDA will

charge Rs 480. The agency will charge regularisation rates of Rs 720 (per square yard) for plots

bigger than 301 square yards and up to 1,000 square yards. Owners having a plot of more than

1,000 square yards will have to give 1.5 times regularisation charges.

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Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/jaipur-development-body-issues-lease-deeds-to-residents-of-prn-scheme/74118742

Pune civic body to withdraw 40% tax discount on properties built

before 2018

PMC has decided to withdraw the 40 per cent discount it was offering on realty built before

2018; part of measures to increase revenue for the civic body

In a bid to raise its revenue, Pune Municipal Corporation (PMC) has decided to do away with

a property tax discount it offered to buildings that came up before 2018, which it defined as “old

properties”, if they’ve been rented out. Interestingly, many property owners were unaware of such

a discount.

While others said they will have to brace against this escalation in the incidence of tax by hiking

rents. Realty observers also fear this will impact resale of properties and many may remain vacant

as property owners will try to avoid higher tax payouts.

Desperate to improve the civic body’s income its standing committee’s chairman, Hemant

Rasane, had formed a special panel to find ways to ramp up revenue by Rs 1,000 crore. The

decision to withdraw the property tax discount of 40 per cent offered to older properties that have

been rented out, was taken at the first meeting of this committee. “Having cracked this avenue of

improving our revenue, we’ve sought the data on rented properties from the cops (with whom

tenant verifications are done). Once we access the data we will implement the new tax regime,”

informed Vilas Kanade, who helms the taxation and tax collection department of PMC.

Caught completely off-guard several owners pointed out they were not even privy to being

beneficiaries of such a tax rebate. But they warned that if they are now forced to cough up more

tax, they will have to raise the rent. “PMC must have done this to increase its revenue, but the

impact of this move will be felt by our tenants as we will be forced to push up the rent,” warned

Smita Ingale, who has rented out a flat in the city.

Seconding her, another property owner, Kiran Abhiyankar echoed, “Hike in rent is inevitable if

property owners find themselves paying additional tax and the rent escalation will not necessarily

be proportionate to the higher levy by PMC.”

“There is no mention of any tax waiver/discount on the tax bills. PMC needs to furnish data on

the waiver they are giving before charging the additional amount,” contested Shashank Kulkarni,

yet another flat owner.

Tax professionals and realty observers fear more dire consequences to this decision. “This is

bound to impact resale of properties. A prime attraction for old properties being purchased or

even rented is the lower incidence of property tax. There is a huge gap between the property tax

on new buildings and the older ones in the same area. This has propelled property resale and

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/pune-civic-body-to-withdraw-40-tax-discount-on-properties-built-before-2018/74109791

renting, even in accommodations lacking certain amenities. Once the tax discount is withdrawn,

these properties will lose their lure. Soon many of these properties will fall vacant, in the absence

of takers. Similarly rents will go up as owners will not be willing to take the brunt of higher tax,”

pointed out Pavan Kasat, a chartered accountant.

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Madras HC summons administration officials over suspension of

revised property tax

"The revision, made after 20 years at the instance of this court, is also suspended. The

sufferer is the common man,” a division bench of Justice N Kirubakaran and Justice P

Velmurugan said.

Taking exception to the suspension of implementation of revised property tax in the city, the

Madras high court on Wednesday summoned the Greater Chennai Corporation commissioner and

the secretary of municipal administration to appear before it to explain why the process had been

suspended.

“The local body as well as the government should have enough funds for providing all amenities

to citizens. In the absence of sufficient funds, the corporation has been unable to pay the

compensation for loss of properties caused by the 2015 deluge.

There is a shortage of staff also, since the corporation is not in a position to pay salary and

therefore, recruitment could not be made. The revision, made after 20 years at the instance of this

court, is also suspended. The sufferer is the common man,” a division bench of Justice N

Kirubakaran and Justice P Velmurugan said.

Directing the officials to file a report on a series of queries including on the number of malls, IT

corridors and commercial complexes in the city and the percentage of tax levied on them, the

bench said, “The above queries are to be answered by the two officials. Both are directed to appear

and answer before this court on February 13.”

It passed the interim order on a PIL moved by advocate V B R Menon, seeking a direction to the

authorities to formulate and notify transparent and uniform rules, procedures and applicable rates

for determining property tax for all categories of buildings in the areas under corporation limits.

When the plea came up for hearing, the bench said the petitioner was trying to stall the collection

of property tax through the PIL.

Denying this, the petitioner made it clear he only wanted a fair collection of property tax as there

are many malpractices committed by the officials.

Recording the submissions, the bench said, “It is known that the last revision of property tax in

Chennai was only in 1998. Though, every five years, the tax has to be revised, successive

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/madras-hc-summons-administration-officials-over-suspension-of-revised-property-tax/74109893

governments deliberately omitted to revise it for their political interest.

“They are afraid that due to revision of property tax, their electoral fortunes will be affected. The

past and present governments are not exceptions. As per the statute, if the property tax was last

revised in 1998, subsequent revisions should have been during 2003, 2008, 2013 & 2018. The

five revisions could have augmented the income of Chennai Corporation,” it added.

________________________________________________________________________________________________

Mohali: To curb misconduct by tenants, flat owners to submit rent

deed

Mahesh Bansal, estate officer (housing), said, “We have issued a notice due to public interest

and welfare. One has to submit a copy of the agreement to us within 30 days else strict action

will be taken against them.”

After rising complaints of misconduct from tenants, officials of the Greater Mohali Area

Development Authority (Gmada) have issued a public notice to residents of Purab Premium

Apartments, Sector 88, stating that if they further lease out flats to tenants, they need to submit

an agreement copy to Gmada as well.

Mahesh Bansal, estate officer (housing), said, “We have issued a notice due to public interest and

welfare. One has to submit a copy of the agreement to us within 30 days else strict action will be

taken against them.”

The officials claimed that there was no problem with the allottees present in the society, but as

per information they receive from allottees, tenants have been creating nuisance in the society

which further disturbed the environment and was a major issue for residents of the society.

“The Purab Premium Apartments were constructed for residential purposes. However, the

allottees are renting out their flats after agreement and are using it for commercial purposes,” read

the notice.

“It is important that an agreement copy should be with us as we can check how many people are

living there and how many are on papers,” said an official.

Recently, officials of Gmada, to make sure that no frivolous element enters the society, had also

decided to issue two separate identity cards to tenants as well as owners of the apartments for

security purposes.

Some residents of the society said even though Gmada officials were on their toes to curb the

menace, still, loud music and nuisance was a common site in the society which caused them

trouble.

________________________________________________________________________________________________

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/mohali-to-curb-misconduct-by-tenants-flat-owners-to-submit-rent-deed/74118703

Max Estates forms JV with New York Life for Noida realty project

The Rs 400 crore project, with a built-up area of 700,000 square feet, will be the second

investment of New York Life Insurance in Max Ventures and Industries in the past two

years.

Max Estates, the wholly owned subsidiary of Max Ventures and Industries, has formed a 51:49

joint venture with New York Life Insurance, the largest mutual life Insurance company in the

United States, to develop a commercial real estate project in Noida.

The Rs 400 crore project, with a built-up area of 700,000 square feet, will be the second

investment of New York Life Insurance in Max Ventures and Industries in the past two years. In

2017, it had invested nearly Rs 250 crore in a combination of preference and right issues of Max

Ventures and picked up nearly 23% stake.

“This would be the third commercial project of Max Estates. We aim to scale up to among the

top three commercial real estate developers in the region within the next three years,” said Sahil

Vachani, managing director, Max Ventures and Industries.

“Our business model going further is to develop the commercial projects in the partnership with

such large foreign funds. Companies are preferring developer owned office to lease vs strata sold

ones so we will own the assets and give them on long term leases,” he said.

Strata sold buildings are the ones which are pre-sold to investors in parts who then further lease

them out to companies.

“Max Ventures will have continued stream of income from these projects. It will have project

management fee during the construction phase of these projects and asset management fee after

the completion of the projects,” said Vachani.

The company is also looking at acquiring some distressed assets that are coming up for resolution

under the Insolvency and Bankruptcy Code.

Max Estates has already developed the 600,000 sq ft Max Tower in Noida and is set to complete

a second project of 300,000 sq ft, Max House, in the next quarter.

New York Life had partnered with Max Group to form Max New York Life Insurance

Company Limited with 26% ownership. The American insurance behemoth sold its stake

to Mitsui Sumitomo Insurance Company Limited of Japan in 2012.

According to Colliers International, a Canada-based global commercial real estate services

Newspaper/Online ET Realty (online)

Date February 13, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/max-estates-forms-jv-with-new-york-life-for-noida-realty-project/74116427

organisation, leasing activity continued its strong momentum in 2019 across seven major cities

in India with gross absorption at a new high of 58.6 million sq ft, 17% higher than in 2018.

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