Daily News Update - Credai Bengal

10-Oct-2019 30-Oct-2019

CREDAI Bengal Daily News Update | 30.10.19

Finance Ministry seeks details of land parcel from CPSEs for asset

monetisation

The Department of Investment and Public Asset Management (DIPAM) has already

empanelled 11 consultancy firms for monetisating land and properties of CPSEs, PSUs

and other government organisations.

The finance ministry has written to all ministries asking them to seek details of land parcel

from CPSEs under their administrative control for monetisation, according to sources. The

exercise is part of the government's efforts to meet disinvestment target of Rs 1.05 lakh crore

for the current financial year.

The Department of Investment and Public Asset Management (DIPAM) has already empanelled

11 consultancy firms for monetisating land and properties of central public sector

enterprises (CPSEs), public sector undertakings (PSUs) and other government organisations.

The list of empanelled firms includes RITES Ltd, Bostan Consulting Group, Anarock Property

Consultants Pvt Ltd, Cushman & Wakefield and Feedback Infra Pvt Ltd.

DIPAM has asked all ministries and departments to get details from CPSEs under their

administrative control of those land parcel for monetisation which are free from any

encumbrances, litigation and encroachment, the sources said.

It also asked the ministries to seek board-approved monetisation plan of CPSEs for smooth sale.

According to the sources, the land parcel including that of enemy property and residential

quarters could be sold by bunching up together or separately on a case-to-case basis.

Over 6.50 crore shares in 996 companies of 20,323 shareholders are under the custody of

Custodian of Enemy Property for India (CEPI), under the home ministry. Of these 996

companies, 588 are functional or active companies -- 139 of these are listed, while 449

companies are unlisted.

The government has set a target of mobilising Rs 1.05 lakh crore from disinvestment proceeds

and achieving this has become more critical after it doled out Rs 1.45 lakh crore stimulus by

way of a cut in corporate tax.

Newspaper/Online ET Realty(online)

Date October 29, 2019

Link https://realty.economictimes.indiatimes.com/news/industry/finance-ministry-

seeks-details-of-land-parcel-from-cpses-for-asset-monetisation/71807093

The proceeds from disinvestment will be critical for the government to stick to its target of

keeping fiscal deficit at 3.3 per cent of the gross domestic product in the current financial year.

Earlier this month, the Cabinet approved a new process of strategic disinvestment with a view

to expediting privatisation of select PSUs.

The Cabinet headed by Prime Minister Narendra Modi gave nod for sale of 53.29 per cent

government stake in Bharat Petroleum Corp Ltd and its 63.75 per cent stake in Shipping

Corporation of India, 30 per cent in Container Corporation of India, 100 per cent NEEPCO and

75 per cent in THDC.

Officials said strategic sale may involve two-stage bidding beginning with an expression of

interest or a preliminary intent showing bid, and a final financial bid. Pre-bid meetings with

likely bidders and roadshows to attract potential investors will form part of the process to

provide clarity on every aspect of the stake sale.

________________________________________________________________

Commercial real estate continues to attract private equity

investments

According to a research by ANAROCK Property Consultants, 'private equity (PE)

funds have pumped in nearly $3.8 billion between January to September period in

2019'

The demand in the office market is expected to grow strongly in the next few years

While real estate developers in the residential segment are finding it difficult to raise funds for

their projects from most banks and financial institutions given the low demand and associated

risk, the commercial segment is seeing an uptick. The real estate commercial segment that

includes offices space, warehousing and so on are finding plenty of investors and financers,

both in domestic as well as foreign market, who are looking for good opportunities for

investment in this segment.

According to a research by ANAROCK Property Consultants, “private equity (PE) funds have

pumped in nearly $3.8 billion between January to September period in 2019. Recording nearly

19% yearly gain, total inflows equalled over $3.2 billion in the corresponding period a year

ago."

As much as $3.6 billion was equity funding, comprising nearly 95% overall share, while the

remaining 5% came via structured debt. Out of the overall PE investment in the sector, foreign

PE funds continued to dominate the real estate investment scene. Top investors included

Blackstone, Hines, Ascendas, Brookefield and so on, stated the report.

Though PE investment increased in residential segment by about 40% from $210 million to

$295 million during the same period, it is still too little compared to the overall PE investment

of $3.8 billion in real estate sector.

“Improved transparency over the last few years, coupled with high rentals and Real Estate

Investment Trusts (REITs) coming in Indian market is what is attracting global PE firms to

invest in real estate sector in India," said Samantak Das, chief economist and head of research

and REIS, JLL India, a real estate consultancy firm.

The demand in the office market is expected to grow strongly in the next few years. With time,

this growth in commercial demand is likely to transfer into higher residential demand which

augurs well for the future of the real estate market in India, added Das.

Newspaper/Online Live Mint (online)


Link https://www.livemint.com/industry/infrastructure/commercial-real-estate-

continues-to-attract-private-equity-investments-11572079594320.html

Bengaluru: No pre-plan approval for houses constructed in less

than 2,400 sq ft land

Sources said that the BBMP will issue a notification on this soon. However, current

commissioner BH Anil Kumar has said that they will have one more round of discussions

before taking a final call.

If the house of your dreams is spread across lesser than 2,400 square feet, then you can expect

an exemption from seeking pre-approval for your building plan. The State Government has

approved a proposal from the Bruhat Bangalore Mahanagara Palike (BBMP) to exempt pre-

approval for building plan (only for G+2 houses constructed in a land measuring less than 2,400

square feet).

Sources said that the BBMP will issue a notification on this soon. However, current

commissioner BH Anil Kumar has said that they will have one more round of discussions

before taking a final call.

As of now, those planning to build houses have to get a pre-plan approval from the BBMP. The

plan that must be prepared by an architect has to be submitted to the BBMP’s zonal offices.

Upon submission, officials from BBMP take up a site inspection and then provide the approval

and the construction can begin only after that.

However, the current system has a lot of loopholes and there are allegations of huge bribery

involved in the building plan approval process. Rajesh S, a techie, said, “I wanted to construct a

house in a land measuring 1,200 square feet. However, it is not easy to get the plan sanctioned

even if everything is legally okay. It is known that bribe plays a big role in building plan

approval. The BBMP must fix that.”

As per the proposal, a plan created and approved by an architect should be uploaded on the

BBMP website. The BBMP officials would review the plan online and give it a go-ahead. The

house owner need not wait for the inspection and can begin construction. But, if any violation

or deviation is found at a later stage, the BBMP will penalise the house owner. Recently, Mayor

Goutham Kumar had said that the new move would help people for quick approval and also

avoid having to run to BBMP offices.

Welcoming the move, M Jagadish, an architect said, “It’s a good decision. The new rule will

benefit the common man. As of now, one must visit BBMP office several times to get their plan

approved and meet a number of officials. It takes at least a fortnight to get the plan approved.

The online system will be helpful to both the people and BBMP, as it will control misuse of the

law by both parties.”



Link https://realty.economictimes.indiatimes.com/news/industry/bengaluru-no-pre-

plan-approval-for-houses-constructed-in-less-than-2400-sq-ft-land/71812815

Commissioner Kumar, however, has said there will be a review before the plan gets a go-ahead.

“We fear it could lead to more violations. So before we adopt it, we need to take a proper view

at it and be cautious. We are already facing several violations,” he told Bangalore Mirror.

______________________________________________________________

PNB unlikely to subscribe to fresh equity expansion of its housing

subsidiary

It is learnt that the mortgage lender will opt for 'limited preference' route whereby a

maximum of five investors can participate. The company has hired Kotak Mahindra

Capital Co and JM Financial to manage the issue.

Punjab National Bank is unlikely to subscribe to the fresh equity expansion of its housing

subsidiary PNB Housing while Carlyle Group is keen to expand its investment, sources familiar

with the development told ET. The housing finance company is raising Rs 2000 crore equity

first time in four years.

State-run PNB holds 32.66% in the company while Carlyle holds 32.25% through a group

company, called Quality Investment Holdings.

General Atlantic with 9.87% interest in the housing finance lender may also subscribe to the

issue, sources said. A couple of new investors may usher in.

When contacted, PNB Housing managing director Sanjaya Gupta merely said that two of the

three large investors would invest. He did not share further details. PNB did not respond to

queries.

It is learnt that the mortgage lender will opt for 'limited preference' route whereby a maximum

of five investors can participate. The company has hired Kotak Mahindra Capital Co and JM

Financial to manage the issue which is expected by the end of this fiscal.

Responding to queries from ET, PNB Housing said that its board had discussed the equity

raising issue threadbare on October 24. “We discussed the options and further plan of action.

We will have a firm capital raise plan in the next two to three weeks and post that we plan to

start doing our roadshows,” the company said.

The lender’s capital to risk adjusted ratio (CRAR) improved to 15.67% at the end of September

from 13.98% six months back with tier I capital being at 12.69%. Although loan disbursement

slowed this year, the fresh equity will boost the company’s future growth plans.

Total loan disbursements for the quarter shrunk almost by a third to Rs 12,604 crore between

April and September compared with Rs 18,172.2 crore in the same period last year. The

company has cut down its corporate lending to 83% amid lesser opportunity while retail loan

disbursement remained more or less same.



Link https://realty.economictimes.indiatimes.com/news/allied-industries/pnb-unlikely-

to-subscribe-to-fresh-equity-expansion-of-its-housing-subsidiary/71812670

Last week, the company board has also approved an enabling resolution to raise Rs 10000 crore

in bonds which would be done in the next six months.

It had raised $100 million (Rs 690 crore) from the International Finance Corporation in July

through external commercial borrowing route for providing small and medium ticket housing

loans.

_______________________________________________________________

Government likely to order SFIO probe into DHFL financial

irregularities

The central government may order an SFIO probe on financial irregularities at DHFL.

The RoC has said after submitting its report on DHFL to MCA that There is good enough

reason to refer the matter of DHFL to SFIO.

The government is likely to order an SFIO probe on the financial irregularities at

troubled mortgage firm DHFL soon, an official said.

The Registrar of Companies, Mumbai office, has submitted its report on Dewan Housing

Finance Corporation (DHFL) to the Ministry of Corporate Affairs a couple of days ago, an

official said.

There is good enough reason to refer the matter of DHFL to Serious Fraud Investigation

Office (SFIO), the official said adding, the report indicates fund diversion and siphoning.

The matter will be referred to the agency in the next few days, the official added.

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/allied-industries/government-

likely-to-order-sfio-probe-into-dhfl-financial-irregularities/71803522

Can’t trace DHFL’s loans: Banks

Meanwhile, the government will soon order a probe by the Serious Fraud Investigation

Office (SFIO) after a report by the Registrar of Companies to the corporate affairs

ministry alleged diversion of funds by DHFL.

State-owned lenders to DHFL are understood to have informed the government that they cannot

ascertain recoverability or end-use of wholesale loans extended by the troubled housing

finance company. Given the lack of visibility on recoveries, they have indicated their inability

to move ahead with any resolution plan.

Meanwhile, the government will soon order a probe by the Serious Fraud Investigation Office

(SFIO) after a report by the Registrar of Companies to the corporate affairs ministry alleged

diversion of funds by DHFL. Agencies reported a government source stating that the company

will be referred to the SFIO in the next few days.

On September 27, DHFL had submitted a draft resolution plan wherein it sought conversion of

some of the debt to equity and elongating the repayment period for other debts. However, the

auditors had raised red flags over several loans and cast doubts over the ability of the firm to

sustain operations.

There have been other firms that have looked into the loans of DHFL at the behest of lenders.

These included KPMG, which conducted a forensic audit, and a couple of real estate firms that

sought to value the company’s securities. According to lenders, none of the reports have been

conclusive on the recoverability of loans. Lenders said that a resolution plan can be drawn only

when there is some visibility on future cash flows from these loans. They said that they have not

been successful in establishing a money trail of the loans.

The draft forensic audit report by KPMG had said that there were 28 entities with total loan

outstanding of Rs 12,451 crore, the repayments of which are not traceable. These include loans

advanced as bridge finance, loans against property, slum rehabilitation finance, and financing

through inter-corporate deposits.

The KPMG audit had indicated that DHFL had lent close to Rs 20,000 crore to companies that

had links to the promoters. Typically, in case of irregularities, lenders seek to bring about a

change in the management of the borrowing firm. If there is a clear sign of fraud, the loans are

reported to investigative agencies and banks must make full provisions for the loan in line

with RBI guidelines.

Some banks have made only partial provisions on their loans to DHFL. A fraud probe will force

them to set aside a larger amount from their third quarter earnings.



Link https://realty.economictimes.indiatimes.com/news/allied-industries/cant-trace-

dhfls-loans-banks/71812656

The impending SFIO probe is the latest in the series of problems facing the housing finance

company. Earlier this month, the Enforcement Director started investigations into loans by the

company over its exposure to firms linked to Dawood Ibrahim aide Iqbal Mirchi.

_______________________________________________________________

Prestige Estates Projects to focus on affordable housing

Realty firm Prestige Estates Projects plans to focus on mid-income and affordable housing

projects, the segment that has been driving demand for residential units in India.

Realty firm Prestige Estates Projects plans to focus on mid-income and affordable housing

projects, the segment that has been driving demand for residential units in India. The

Bengaluru-based company, which has ready stock worth over Rs 2,000 crore in the luxury

housing segment, will take up more luxury housing projects only selectively, said Irfan Razack,

managing director of Prestige Group, the parent company. Prestige had earlier tied up with

Vijay Mallya and Leela Hotels for one of the most expensive luxury homes projects in

Bengaluru.

Prestige is also looking to expand its presence in Hyderabad, NCR, Pune and Mumbai with

residential projects. It recently partnered with New Consolidated Construction Company

(NCCCL) and Ace Group to develop residential projects in Mumbai and Noida. “We have

utilised HDFC money to invest in three recent housing projects. Entry into new geographies

should add lots to our scale,” said Razack.

In 2018, the builder entered into a strategic partnership with HDFC Capital Advisors to set up a

dedicated residential platform to invest in the mid-income and affordable housing segment.

This platform has capital to the tune of Rs 2,500 crore, which is a combination of equity and

debt.

“The platform has been very beneficial for us,” said Razack.

The company is also looking to increase its hotel portfolio. It recently entered into a joint

venture with DB Realty to build the country’s largest hotel in Delhi.

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/industry/prestige-estates-

projects-to-focus-on-affordable-housing/71801165

MahaRERA attaches unsold Nirmal Nagari flats to recover Rs 6

crore fine

The project was implemented by Nirmal Ujjwal Credit Cooperative Society, headed by

businessman Pramod Manmode.

In maybe the first such ruling at least in Vidarbha, Maha-RERA has issued orders for

attachment of unsold units of Nirmal Nagari Complex, off Umred Road, which has 540 odd

residential flats apart from commercial space. The attached property will be sold to realize the

fine levied on the society for various lapses.

The project was implemented by Nirmal Ujjwal Credit Cooperative Society, headed by

businessman Pramod Manmode.

The order comes after the society failed to pay6 crore fine levied on it for not registering the

project under Maharashtra Real Estate Regulatory Authority (Maha-RERA). Selling units

without registering the project is a violation of RERA laws.

Since the builder failed to pay the fine, orders have been issued to the district collector to attach

the property. Attempts to get response from Pramod Manmode failed. The property to be

attached includes the units in Nirmal Nagari that have not been booked or mortgaged to any

financial institution. If the property from the project falls short in recovering the fine amount,

the personal assets of the defaulters too can be seized.

The responsible persons include Manmode and five other officials of the society. The defaulters

will also have to disclose their property details and produce the property card. On failing to do

so, the person can be sent to three months of imprisonment, says the attachment order issued by

RERA.

The order also clarified that units or land that has been booked by a buyer or mortgaged to a

financial institution should not be touched, so the project can be completed.

The builders had flouted the very basic requirement of RERA, which calls for registering every

project before advertising or starting sales. The orders says that Nirmal Nagari project did not

fall in the exempted category, yet the builder did not get it registered under RERA.

Also, despite getting an opportunity, the builder did not disclose the cost of the project, which

was independently estimated by RERA to be at 300 crore.



Link https://realty.economictimes.indiatimes.com/news/regulatory/maharera-

attaches-unsold-nirmal-nagari-flats-to-recover-rs-6-crore-fine/71812793

Later, the builders’ counsel produced a document which showed that society’s claim for non-

eligibility for registration was rejected by the high court. Based on it the society had assured to

get the project registered within 60 days, however, it failed to do so.

It all began with a dispute between the residents and the builder over lack of basic facilities like

water supply, security and other amenities. Even as residents had moved in and a corpus of Rs8

crore was created by taking one time maintenance deposit, the amount was not transferred to the

house owners’ cooperative society.

Rather, the society itself was not formed by the builder. This led to a complaint by one of the

residents that the project itself was not registered under RERA.

________________________________________________________________


Hub and Oak to invest Rs 4 crore to setup two co-working centres

in Delhi

Hub and Oak currently has four coworking centres comprising 300 seats in the national

capital.

Co-working start up Hub and Oak will soon open two new centres in the national capital

comprising 750 seats with an investment of about Rs 4 crore, a top company official said.

Founded by Srishti Dhir in 2017, Hub and Oak currently has four coworking centres comprising

300 seats in the national capital. These centres are at Defence Colony, Bhikaji Cama

Place, Nehru Place and Jasola.

"We are coming up with two new centres in Delhi by the end of this year. The locations have

already been finalised. These new centres will take our capacity to over 1,000 seats," Dhir said.

The company focuses on providing workspace solution to professionals such as lawyers and

chartered accountants, she added.

Hub and Oak provides seats in a price range of Rs 10,000 to Rs 12,000 per month.

Dhir said the company has invested about Rs 1.2 crore to set up these four operational centres

and will put in Rs 4 crore more on these two new co-working facilities.

Asked about revenue, she said the company's revenue is Rs 20 lakh per month currently and this

will reach Rs 60 lakh with opening of these new centres.

"We operated one centre in defence colony for over two years at 100 per cent occupancy before

we decided to expand and grow this business. Now, we want to expand and open centres across

India through blitz-scaling strategy," said Dhir, who is an alumni of London Business School.

Coworking segment has been performing well in India because of demand for quality flexible

office space from corporates and startups.

According to property consultant JLL India, office space taken up by co-working operators was

13 per cent of the overall net leasing of 32.7 million sq ft during the first nine months of 2019.


Link https://realty.economictimes.indiatimes.com/news/commercial/hub-and-oak-to-

invest-rs-4-crore-to-setup-two-co-working-centres-in-delhi/71805489

Newspaper/Online Financial Express (online)


Link https://www.financialexpress.com/industry/adani-group-partners-with-us-based-

digital-realty-for-data-centre-infra-in-india/1749162/

Adani Group partners with US-based Digital Realty for data centre

infra in India

A data centre is an infrastructure facility with networked computers and storage that

other businesses use to catalogue, process and distribute large amounts of data.

The Adani Group on Tuesday said it would partner with San Francisco-based Digital Realty to

foray into the data centre domain. Adani Enterprises and Digital Realty have signed a

memorandum of understanding (MoU), wherein the two companies will evaluate developing

and operating data centres, data centre parks and cultivating undersea cable provider

communities of interest across India.

A data centre is an infrastructure facility with networked computers and storage that other

businesses use to catalogue, process and distribute large amounts of data.

“Data centre infrastructure is critical to enable a Digital India and this partnership leverages

several of the capabilities developed by the Adani Group in power generation, transmission,

retail electricity distribution, access to waterfronts through the ports business, and real estate

management. Also, as one of the top five renewable energy companies in the world, our ability

to power our data centres with solar and wind energy is unique and addresses some of the

challenges of building and operating data centers,” said Gautam Adani, chairman, Adani Group.

The Adani Group is a $13-billion business conglomerate in India focused on coal mining, solar

modules manufacturing, real estate and edible oil production. Digital Realty provides data

centre services to companies across North America, Europe, Latin America, Asia and Australia.

The Adani Group has recently taken steps to grow its presence in the infrastructure sector, and

set up multiple companies to begin metro rail and airport construction and operation services. ___________________________________________________________________________________



House prices in UK edge up slightly in October: Survey

House prices rose by 0.4% on the year, Nationwide said on Tuesday, the 11th month in a

row that annual price growth remained below 1%.

British house prices, which have almost flat-lined ahead of Brexit, grew a bit more quickly in

October, a survey from mortgage lender Nationwide showed.

House prices rose by 0.4% on the year, Nationwide said on Tuesday, the 11th month in a row

that annual price growth remained below 1%.

A Reuters poll of economists had pointed to another rise of 0.2%, which would have matched

September's eight-month low.

Nationwide's chief economist Robert Gardner said average prices rose by 800 pounds ($1,029)

over the last 12 months, a sharp slowing compared with the 12 months to October 2016, just

after the Brexit referendum, when prices jumped by 9,100 pounds.

Some measures of the housing market have shown prices falling recently in London and

neighbouring areas.

Nationwide said in October alone, British house prices rose by 0.2%, also slightly stronger than

forecasts of no change in the Reuters poll.

Gardner said Britain's strong labour market - the silver lining of the economy before Brexit -

and low borrowing costs were offsetting the drag from the uncertain economic outlook.

"The question is whether this pattern will continue," he said.

The European Union agreed on Monday to delay the Oct. 31 Brexit deadline by up to three

months and Prime Minister Boris Johnson said he would push on with his attempt to end

Britain's political paralysis with an election on Dec. 12.

________________________________________________________________

Link https://realty.economictimes.indiatimes.com/news/residential/house-prices-in-

uk-edge-up-slightly-in-october-survey/71807383


Brazil's Cyrela Commercial Properties raises $190 million

Cyrela priced its offering of 40 million new shares at 19 reais per share, above its 18 reais

closing price on Monday in Sao Paulo stock exchange.

Brazilian commercial real estate company Cyrela Commercial Properties raised 760 million

reais ($190.4 million) in a share offering on Monday, the company said in a securities filing.

Cyrela priced its offering of 40 million new shares at 19 reais per share, above its 18 reais

closing price on Monday in Sao Paulo stock exchange.

The company will raise its capital to 1.6 billion reais with the proceeds of the offering. CCP, as

the company is known, is the fourth homebuilder to raise capital this year. During Brazil's

harshest recession in decades, homebuilders faced losses and did not access capital markets.

The offering signals renewed interest by investors in Brazilian real estate, as the country's

interest rates fall to their lowest level ever.

Tecnisa raised $118 million in a share offering last July. Helbor Empreendimentos SA and

Eztec Empreendimentos also sold shares this year.

________________________________________________________________


Link https://realty.economictimes.indiatimes.com/news/commercial/brazils-cyrela-

commercial-properties-raises-190-million/71805426

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