Real Estate Weekly News Letter 27 October 2014- 2 November 2014

March 28, 2018 | Author: Aayushi Arora | Category: Real Estate Investment Trust, Toll Road, Business, Investing, Economies


Comments



Description

For private circulation onlyReal Estate News Letter 27h October– 2nd November, 2014 CONTENTS 1. Snapshot 2. Interest Rates 3. Infrastructure 4. Industry News 5. Private Equity News 6. Regulatory Buzz 7. Public Markets 8. Land 9. Residential 10. Commercial/ Retail 11. Township 12. SEZ 13. Hospitality 14. Input Cost 3 -2.4 -0.0% 6.2 1.0% 3.5 -1.0 29/Oct 30/Oct 1.5 0.5 0.7% 7.1 3.5 3.2% 3.9% 2.5 Trends in Nifty and CNX realty index per cent 3.5 -3.9 -4.0% 1.8 1.6% 9.8% 6.0% 7.0% Feb/14 Mar/14 Apr/14 May/14 Jun/14 Jul/14 Aug/14 Sep/14 Note : Data indicates inflation over previous year’s month Source : Ministry of Commerce and Industry Trends of FII in equity markets Rs billion 67 70 60 52 50 40 44 39 39 36 37 38 38 37 30 20 27/Oct 28/Oct 29/Oct Buy 30/Oct 31/Oct sell Source : NSE 4.Snapshot WPI-inflation data (primary articles) Per cent 8.3% 6.5 27/Oct 28/Oct Nifty Source : NSE CNX REALTY 31/Oct .0% 7.4 0.9 2.8% 5.3 0.5 1.5 -0.5 -3. Interest Rates No news in this section for the week . etc.New Delhi RFQ deadline for Navi Mumbai airport extended Bidders for the construction of the Navi Mumbai International Airport (NMIA) have been given an extension period of six weeks to submit their Requests for Qualification (RFQ) application after they sought more time from the City and Industrial Development Corporation (Cidco). Every year. toll fees and toll notifications on the basis of which fees are charged.Mumbai E-tolling on Delhi-Mumbai highway starts on Friday From this Friday. Now. which often leads to traffic congestion. as well as complaints against under-reporting/non-reporting of toll collection. When vehicles pass through any of the 18 toll plazas on the Delhi-Mumbai highway. an antenna on the plazas will detect the RFID (radio frequency identification) tags installed on the vehicles.” a senior Cidco official said. say officials in the Ministry of Road Transport & Highways.car. Also. The Economic Times.nhtis. The concerned parties will now have to submit the RFQ by December 10 from the earlier planned date of October 30.org.574-crore airport project. Besides. it is expected issues of overcharging and undercharging. www. van. subsequently. and PWD.Infrastructure Government sets up council for Infrastructure Projects on Public Private Partnership mode The Government of Rajasthan today set up a council for preparing a policy on Infrastructure Projects to be taken up on Public Private Partnership (PPP). the government has set up Indian Highways Management Company Ltd . Water Resources. Currently. The Financial Express. vehicles passing through toll plazas have to stop and pay a fee. land acquisition. “This is the final time that the RFQ submission time has been extended on the request of bidders who have asked for more time to form joint ventures to bid for the airport project. One will be able to calculate the toll she/he has to pay while travelling on national highways by various modes . A new website. one can travel on the Delhi-Mumbai highway without stopping at any toll plaza. taxi. address malpractices in the process and avoid traffic jams resulting from toll collection. under the brand name FASTag. The government plans to make the service available at all 350 toll plazas across national highways by the end of this year. to form joint ventures to bid for the R14. and airspace management. an estimated Rs 6. the toll will be automatically deducted from the vehicle/tag owner's bank account. The aim is to streamline toll collection on national highways. with the government launching electronic toll collection (ETC). the statement added. these can only be bought at toll plazas. a dedicated lane. Energy Minister. Chief Minister Vasundhara Raje would be chairperson of the council. according to an official statement here. the nodal implementing agency for the project. truck. The dedicated ETC lanes will also have distinct colour coding. will also be addressed.30 October ‘2014. Cidco had earlier extended the deadline to July 31 from June 28 and then to September 2 after the bidders sought clarifications on issues like pre development works. This is the third time Cidco has extended the RFQ submission date after the civil aviation ministry approved the revised tender document for the proposed Navi Mumbai airport in July. including the number of toll plazas between specific routes. will be available at every toll plaza. will offer all toll-related information. Though some operators offer the facility of tag lanes. The data will then be sent to a server and.29 October ‘2014. bus. such tags can only be used at designated points.000 crore is collected from toll plazas on national highways. To manage the process of ETC. Principal Secretary Finance and Advisor (Infrastructure and PPP) would be its member. Any project costing more than Rs 500 cr would require the permission of the council. the ruling Samajwadi Party wants the metro project operational by then. The committee had examined the technologies available for ETC and recommended the most suitable one. Madhya Pradesh. he made way to a technocrat for faster completion of the project. The project had been stalled for the last several years.Lucknow . passive RFID (based on EPC. has started to gather steam with actual ground work starting this week. LMRC is targeting to complete this railroad section covering about 8 km between Transport Nagar and Charbagh railway station by December 2016. the project could not move beyond the route alignment stage. A pilot project for an interoperable ETC system on 10 toll plazas between Mumbai (Charoti) and Ahmedabad has also been tested and seamless ETC on this section is underway. Business Standard. Lucknow Metro is proposed in two corridors — North-South (NS) and East-West corridors. the state government had given its formal nod to the proposed LMRC project. On March 3. ETC technology has been installed at 55 toll plazas. Since. which would connect Lucknow airport to the city.31 October ‘2014. 1989. thanks to the differences over funding model. Metro Man E Sreedharan is the principal advisor to the Lucknow Metro project.Infrastructure (IHMCL). The ministry has also made necessary amendments in the Central Motor Vehicle Rules. Business Standard. In the starting.5 million. However. said ministry officials. with equity participation from the National Highways Authority of India (25 per cent). is being undertaken in the first phase and is estimated to cost over Rs 7. And. the rate of acceptance and ease of implementation. The proposed 23-km NS corridor. Keeping in mind user convenience. There has been tremendous horizontal growth in the state capital with rapid development of suburban areas. So far. Gen2. ISO 18000-6C Standards for ETC technology) was adopted. The project was conceptualised by the United Progressive Alliance government. so that it can be showcased as a success story and epitomise its development agenda. Unique Identification Authority of India. their integration with Central Clearing House operators on the Delhi-Mumbai route via Haryana. which had constituted a committee on using ETC technology on national highways under the chairmanship of Nandan Nilekani. IHMCL has tied up with Axis Bank and ICICI Bank for clearing house services and offering RFID tags to users through franchises/agents and at points of sales near toll plazas.New Delhi Lucknow Metro Rail project gathers steam Lucknow Metro Rail. According to officials. about 40 pillars would be raised at a distance of 200 metres. Gujarat and Maharashtra. concessionaires (50 per cent) and financial institutions (25 per cent). Assembly polls are due before May 2017. former chairman. During the Mayawati regime. one of the flagship projects of Uttar Pradesh Chief Minister Akhilesh Yadav.30 October ‘2014. for installation RFID tags on vehicles. Yadav had laid the foundation of Lucknow Metro depot near the airport. The project has been designed to cater to the projected population in Lucknow in the next 25 years. Lucknow City has a population of about 4. a senior bureaucrat was appointed as the MD of the project. Earlier on June 27.000 crore. The work on boring earth for raising pillars on the NS corridor started on October 27 in the presence of Lucknow Metro Rail Corporation (LMRC) Managing Director Kumar Keshav. 2013. In such a dynamic scenario. a modern urban rapid rail transit system is imperative for a growing city like Lucknow to facilitate faster commuting and decongesting ever increasing road traffic. has almost been completed. Rajasthan. these investor-buyers flipped properties at ease within six months of buying them. managing director of IndiaHomes." says Samarjit Singh. So. While project delays are a big issue. well over 50% of those who buy property think of it as a short-term investment. thus making a killing and . according to property research firm Liases Foras. BUILDING NOWHERE But it's not just the size of the unsold 'inventory' that makes Delhi the worst off among the real estate markets of larger cities. Brokers say they are getting a lot of enquiries from buyers but not too many conversions. why is it so gloomy in NCR? Why does Bangalore and even Mumbai look better? THE PROBLEM The NCR has a total of 303. 56% of the unsold real estate in NCR is in areas which are currently uninhabitable. Over the last few years. a real estate brokerage firm. MD of Liases Foras. In comparison. builders were able to garner almost 30-40% of their sales for the entire year during this threemonth period. the real reason is more to do with high prices. undercutting developers on price as they do not have the holding capacity." When the economy was riding high. while the apartments have come up. for the Mumbai region. At the current pace of sales. national director residential at Knight Frank India. Its location in Gurgaon is closest to Delhi and several projects were launched here a few years back but work on the expressway has not been completed yet though some builders are close to giving possession to buyers. a number of scams and project related issues that have cropped up across NCR have also scared buyers. the other essential infrastructure — roads. but sales are still not happening at the pace that is usually associated with the festive period. In good years. Take for instance the Dwarka-Manesar Expressway. In NCR.48 million sq ft (about 303.000 apartments) of unsold space of which just 2% of the inventory is in undeveloped areas in each city. have added to the gloom." says Mudassir Zaidi. Riding on improved sentiments. "As the level of sales dropped. or water connections — have not.investors who don't really want to live in the flats they buy and essentially see them as an investment they can flip quickly to other buyers — the NCR has far more than its fair share.000 apartments) of unsold real estate. pushing builders to launch hundreds of projects over the last few years without so much as a thought to the main premise of real estate — location. the interest of developers in creating social infrastructure also reduced. In other words.000 apartments) and Bangalore has 113 m sq ft (113.Industry News Urban areas in and around Delhi constitute 40% of unsold real estate in top eight cities Urban areas in and around Delhi account for a stunning 40% of unsold real estate in India's top eight cities. cases against developers such as the one where the Competition Commission of India slapped a fine of Rs 630 crore on DLF for unfair trade practices in a few of its Gurgaon projects. the figure is about 48 months while it is the lowest for Bangalore at 19 months. SPECULATORS And while the real estate market in every city has its share of speculators . For the top eight cities combined. In comparison. "Prevalence of investors is compounding the problem as they are also selling their inventory. "The problem in the NCR is peculiar. The festive season this year has failed to bring cheer to builders despite many of them doling out offers which include ones where buyers have to pay 10% of the apartment cost upfront and the rest at the time of possession. sewage systems. this stock requires another 53 months to be completely sold off. the 765 m sq ft of unsold space will require at least 35 months to be sold. or environmental concerns such as those around development near the Okhla Bird Sanctuary." says Pankaj Kapoor. "NCR is a very inefficient market where a lot of projects were launched in undeveloped areas. While sales have slowed down in Mumbai as well. home sales in the NCR are up about 10% over the previous quarter. the Mumbai Metropolitan Region (MMR) has 168 m sq ft (168. there is no improvement in sales during the festive season. "While demand exists. and Gurgaon. This is witnessed from the number of enquiries we are receiving. The announcement of each new corridor brings with it a push in property prices. He said. including the natural lag between the announcement and implementation of the government policy catalysts. Kapoor of Liases Foras says in locations where social infrastructure is in place and the price too is compelling." IndiaProperty.will need more time to bring their benefits to bear on the market. Puri said. this festive season has failed to bring in cheers to the real estate industry as home buyers continue to remain cautious. the events that have catalysed it .com Chief Executive Ganesh Vasudevan told PTI here today. But this is not translating into actual transactions as buyers have adopted a wait and watch approach.. we will see a surge in sales from the second or third quarter of 2015. If the interest rates come down. "During the festive season.27 October ‘2014.Industry News raising prices. according to industry experts. Buyers. there has been a slowdown in new launches as the inventory levels itself are very high. The Economic Times. However." Samruddhi Realty Chief Executive Madhusudan K said." Vasudevan noted. The Economic Times. Likewise.New Delhi Delhi Metro: Growth engine of NCR market In the run up to expanding its footprint in various areas of the Delhi NCR. "There is also an expectation that home loan rates may come down in the next 2-3 quarters as the government is taking initiatives to tame inflation. despite recovery. over the last few quarters. However. pointing out that the list of developers still maintaining their reputation is now very small in the NCR. He further said developers are currently concentrating on clearing the inventory and are offering discounts and other incentives to attract buyers. "It will take several more months for the market to get into convincing forward momentum again. Developers. the success of which has varied across cities and locations. though there is a recovery in sentiment. But the same market is now gasping for breath as actual buyers started to pull back in an uncertain market. developers generally launch new projects as well as offer various incentives to attract buyers. Festive season is generally considered as the most important time for the realty sector as it records the highest number of sales. Noida. he says. on the other hand. have been addressing the situation by offering selective discounts and incentives. Del hi Metro has hugely boosted the prop erty markets in Delhi. now prefer buying apartments in completed projects or in ones that are at a very late stage of construction. "There is a logjam in NCR because the trust deficit about the builder community here is the worst compared to other cities.27 October ‘2014." According to Jones Lang LaSalle India Chairman and Country Head Anuj Puri. it is still held in abeyance by various economic factors.namely the new government at the Centre and "its probusiness policies favouring realty". "the demand from property buyers has increased compared to the last few quarters. which is nearly 20-25 per cent more than nonfestive period. Ghaziabad. on . home sales are still robust." Puri added." he said. the festive season did not bring the kind of momentum that was hoped for. the Reserve Bank has held on to current interest rates in favour of safeguarding against further inflationary trends." says Singh.New Delhi Festive season fails to bring cheers for real estate Despite recovery in market conditions and sentiment. "The real estate industry has always witnessed a rise in sales during the festive season especially on the back of freebies and incentives offered by the developers. Those with greater holding power continue to wait for the market to pick up so that sales velocity will accelerate. For the last 12 years.7kmlong line from NoidaGreater Noida through Noida Expressway and 6. this Metro line in Phase III will benefit Sectors 5. and Ghaziabad and stops right at the border of Faridabad-193km of Metro track in all. 16A. cheaper and faster. it has been proven that transport infrastructure has had a positive impact on the real estate sector. says: “The proposed Metro track along Gurgaon Expressway will help clear any uncertainty in the minds of homebuyers and investors who were counting upon this decision. In line with the “complete connectivi ty“ plan. and Ashoka Enclave in Faridabad. 27D. Mohan Nagar. The 11km-long Mundka-Bahadurgarh line is pushing prices along this stretch. 46. mak ing commuting convenient.5kmlong Metro link from Dwarka Sector 21 to IFFCO Chowk will drive the property prices on this route. We are very happy with the development authorities of Noida and Greater Noida for coming together with the DMRC for the two Metro extensions. 15. As per the plan.New Delhi . Raj Bagh. director (Strategy & Systems) of BPTP . Pari Chowk. but it provides strategic linkage connecting South Delhi to Noida. 11. Connecting Badarpur with Faridabad. 43. Gurgaon. Delhi Metro will also reach Faridabad and Bahadurgarh districts in Haryana. Rajendra Nagar.27 October ‘2014. Like the Mumbai locals that have been instrumental in pushing life there.7km-long line from City Centre to Noida's Sector 62. 18. which is set to connect various parts of Gurgaon with Delhi Metro. 17. 24. Corridor-wise. shaping the market in a big way . MD of Satya Group says: “Delhi Metro is not only the lifeline of the entire Delhi-NCR region but also has been a source of property boom in the areas it has passed. MD of Antriksh Group. while the property market on the proposed Metro link between Dilshad Garden and New Bus Depot (Ghaziabad) has seen a lot of activity in the area after the announcement. 21A.“ Sandeep Bedi.Industry News average. says: “Metro connectivity is a game changer for the real estate industry as a whole. 27A. Phase III (covering 140km) and IV are going to be crucial. 39. The proposed 11. the property prices here have seen steep rise.“ Manish Agarwal. Similarly . Noida development authority recently signed a MoU with DMRC to construct two new Metro links--29. too. Delhi Metro connects various parts of Delhi to three districts of the NCR -Noida. 44. The construction will start soon and is likely to be completed by 2017. Delhi Metro has become the fulcrum for realty development. Developers and builders cash in on Metro connectivity to their projects. as historically . Arthala. 9.“ The Times of India. 47. Noida City CenterGreater Noida West link has been benefiting the property prices on its route covering Sectors 50. says: “The realty market of Noida has gained quite a lot from Metro connectivity. and New Bus Depot in Ghaziabad. It got further boost from Rapid Metro. This stretch is going to benefit areas in the vicinity of Shahid Nagar. 27B. respectively . which to them means secure investment. as this district bordering Delhi was in dire need of smooth connectivity with the national capital. With this. especially during office hours. 30. 28. The Botanical Garden-Kalindi Kunj Metro link. 13. 32. The construction of Metro along Dwarka-Gurgaon Expressway has been approved by the government and it has been taken up as an early-bird project by Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC). For the next phase of development. Dwarka-Huda City Centre corridor has significantly impacted the property prices on this stretch and has particularly benefited Gurgaon. etc. Delhi has undergone a phenomenal transformation with the construction of the Metro. New Delhi--a government of India organization. 143. by 20-25% in the nearby areas. 21B. putting it at the top of their USP list. 144. while end users and investors.“ Ajay Kumar. Rakesh Yadav. The average daily ridership figure of 23 lakh is enough to gauge its impact on people's lives. 12. Shyam Park. under construction. today it is hard to imagine life in the Delhi NCR without Delhi Metro. CMD of Ace Group. may be short. prefer to buy into such projects for great connectivity to offices and higher returns. Bodaki. Hindon. Dayal Basti. 2014 has taken into account the price trends for residential properties in different locations and zones in each city and is based upon the transaction data received from Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). Mumbai (1. 2014 has shown marginal increasing trend in 18 cities ranging from 0.4 per cent). The Residex for the quarter April-June. 2014. Chennai (1. The Economic Times.6 per cent).New Delhi . according to National Housing Bank (NHB).9 per cent." NHB said in a statement.96 per cent).9 per cent) followed by Coimbatore (3.5 per cent). The data based on actual transactions are put through a model that depicts the trend in the market.91 per cent.88 per cent).4 per cent) followed by Meerut (-3.2 per cent). while Chandigarh saw highest fall of 4.7 per cent) and Kolkata (2. Patna (2.9 per cent in April-June over the preceding quarter while property rates fell in six cities including Delhi.5 per cent in Lucknow to -4.4 per cent. Jaipur (0. Delhi (-3 per cent).4 per cent in Chandigarh in comparison to the previous quarter January-March. according to NHB's 'RESIDEX'.2 per cent)." NHB said.5 per cent). "The movement in prices of residential properties for the quarter April-June.9 per cent in Pune.5 per cent in Bhubaneswar to 3.remained stagnant. and fall in 6 cities ranging from -0.99 per cent).Industry News Housing prices rise in 18 cities by up to 3.75 per cent). The appreciation in property prices in majority of cities tracked by NHB comes at a time when the domestic real estate sector is reeling under a lingering slowdown for last 2-3 years. Bhopal (1.93 per cent). Housing prices appreciated in Ahmedabad by 1. housing prices dropped by 3 per cent during the first quarter of this fiscal compared with the January-March 2014.3 per cent).4 per cent). NHB had launched housing index 'RESIDEX' in July 2007 to track the movement of housing prices on a quarterly basis.3 per cent). Maximum increase was observed in Pune (3.1 per cent) and Lucknow (-0. Prices in two cities -. Surat (-2.6 per cent) and Bhubaneswar (0. Nagpur (0.4 per cent).9 per cent: National Housing Bank Housing prices appreciated in 18 major cities by up to 3. Indore (3.01 November ‘2014.5 per cent). Ludhiana (1.Hyderabad and Raipur -. NHB said. Vijayawada (1. Maximum price increase was witnessed in Pune by 3. In the national capital. Dehradun (-2. Guwahati (3. Faridabad (0. Bengaluru (0. "Six cities have shown decline in prices over the previous quarter with maximum fall observed in Chandigarh (-4. It currently covers 26 cities. Kochi (1.72 per cent). GIC Singapore and Standard Chartered. The remaining land is being developed as Villa Grande. Within our coverage universe. which provides ample room for growth and ability to optimise returns going ahead. developers with large land banks — Sobha Developers. which will alleviate these concerns. Godrej Properties (hold rating) and Brigade Enterprises (buy rating) are likely to be key beneficiaries. developers like Godrej Properties. SGCPL is developing a residential project with 147 units of 3-BHK and 4-BHK configurations. The transaction involved a corporate due diligence on SGCPL. Bangalore by Sterling Gated Community Private Limited (SGCPL).Private Equity News HDFC arm. Sterling Urban Development Pvt Ltd (SUDPL). Also. Brigade Enterprises and Mahindra Lifespaces.000 square metres (sq m) for attracting FDI.31 October ‘2014. drafting. an analyst tracking the sector with Edelweiss. Legal firm J Sagar Associates (JSA) advised and assisted Superior Investments and HDFC Investment Trust II. Brigade. comprising 243 villas. in connection with the investment of the residential project in Whitefield.The move. Analysts say this move will be a positive for developers with existing joint development/ investment arrangements with foreign investors — they will gain as their addressable market will expand. whichever is earlier. will facilitate larger FDI inflows in the construction sector that accounted for . ICICI Securities believes new planned residential launches in the next six months in Mulund. about the execution of a joint development agreement in favour of SGCPL. Sterling Gated Community is a special purpose vehicle formed by Ramani Sastri and Shankar Sastri.5 per cent. who have more than 30 years of experience in developing real estate projects in Bangalore and are the founders of the Sterling group. Worli and Borivali land parcels provide nearly ‘4x’ FY10-FY14 sales booking potential over the next five years. developers with large land banks will benefit with potential increase in demand for land.Mumbai Godrej Properties. in the new norms. Singapore firm invest in Bangalore residential project HDFC Investment Trust II. Goregaon. will be allowed to exit on completion of the project or after three years from the date of final investment. SUDPL. Andheri.” says Aashiesh Agarwaal. respectively.” he adds. The Hindu Business Line. with Phase-I complete and Phase-II ongoing. investors. planned over a part of larger land parcel owned by SGPCL’s associate company. an investment company under mortgage lender HDFC Ltd. Oberoi Realty. and Singaporebased Superior Investments have together invested ₹60 crore in a residential project in Bangalore. according to an ICICI Securities report. who have existing joint development/investment arrangements with foreign investors (APG Group. Unitech. Minimum capital requirement has also been halved to $5 million and the government is now permitting 100 per cent foreign ownership of projects in the construction sector through an automatic route. negotiating and finalising the agreement as well as other documents. The S&P BSE Realty Index was the top sectoral gainer that moved up nearly 3.5 per cent.9 per cent. respectively). Besides reducing the built-up area requirement to 20. HDIL and DLF were among the top gainers that rallied 8. DLF and Jaypee Infratech — will also gain with potential increase in demand for land. a day after the government relaxed norms for foreign direct investment (FDI) in the construction sector. As part of the transaction. “Further. while lowering the threshold for new investment. Mahindra Lifespace to gain from FDI in construction Realty stocks rallied on Thursday. six per cent and 4. “At the company-specific level. continues to stand out among publicly-listed Indian realty developers with the strongest balance sheet and a quality asset portfolio. Sobha Developers (buy rating). While cashflows have been muted in the past two years. JSA advised the landowner. will benefit as their addressable market will expand. chairman and managing director. Business Standard. Though the government has relaxed rules for FDI. analysts do not expect money to start flowing immediately. though they agree this is a step in the right direction and reflects the government’s intention towards reviving the sector. “The reform would now allow foreign investor to invest in smaller projects spread over land parcel of about three – four acres. real estate and construction sector. we foresee another 8-12 months for the decision to bear fruit.31 October ‘2014. analysts say. “Relaxing FDI norms will open up the capital markets thereby attracting investments into the sector. yet requires heavy investment due to expensive land parcels and high construction cost.Private Equity News about 10 per cent of total FDI inflows in India over the last decade. we expect the policy to support housing and commercial office projects in metro cities such as Delhi and Mumbai.” says Neeraj Bansal. partner and head. In the near-term. where project size is generally small.” said Shishir Baijal. Knight Frank India. KPMG in India.New Delhi . However. capitalisation and lock-in period." said a government official. will also help infuse more funds into the debt burdened sector and facilitate faster completion of projects. the minimum initial offer size should be Rs 250 crore with a public float of at least 25 per cent.The sector attracted $1. For both trusts. "FDI in construction note is with the cabinet for approval and will likely be considered on Wednesday. In case of publi-private-partnership projects. If it is given. The department of industrial policy and promotion (DIPP) has proposed substantial easing of norms for affordable housing and the 100 smart cities envisaged by the new government that took charge in May. has proposed relaxation in norms related to built-up area. To ensure transparency. InvITs will need tax sop thrust Tax incentives are key to the success of Real Estate Investment Trusts (Reits) and Infrastructure Investment Trusts (InvITs). DIPP. 100% FDI is allowed through the automatic route in development of townships.2 billion in FDI in 2013-14. that would help attract more funds in a transparent manner into realty and infrastructure sectors. Developers will be exempt from restrictions in size. These are heavy stages so tax issues have to be addressed. would get tax incentives. Both the structures. Comments from various ministries and departments have been incorporated. It has proposed that the minimum built-up area be cut to 20. a senior Sebi official has said. “Countries like Singapore and Hong Kong had launched Reits but did not give any tax incentives because of which these did not kick off well.The minimum asset base for these trusts to get listed is Rs 500 crore. “Taxation is involved at four stages — first while structuring and transferring assets to Reits or InvITs.Regulatory Buzz Reits. if they commit 30% of project cost to affordable housing. minimum capitalisation and exit. the nodal agency for FDI. In September. housing and built-up infrastructure. Reits and InvITs are required to make investments either directly or through special purpose vehicles (SPV). norms of which were approved by the regulator in August. The proposal. The whole Reits structure is motivated by tax benefit. Under current rules. The government hopes the easier rules will also help faster completion of projects delayed by a squeeze on funds due to elevated debt . The Tribune. these trusts would be subject to stringent norms on disclosure as well as related party transactions. subject to stringent conditions and a three-year lock-in. down 8% from the previous fiscal. Reits and InvITs. Sebi has said. Barua said there were four levels of taxation involved in both Reits and InvITs. then it will work or else it will not. Minimum built-up area in case of serviced housing plots is proposed to be cut to 5 hectares from 10 hectares and the minimum lock-in period of three years after the completion of the project is proposed to be dropped.”" Sebi executive director Ananta Barua said according to a PTI report.5 million for joint ventures with Indian partners.000 sq metres while the minimum capitalisation be halved to $5 million from $10 million and from $5 million to $2.27 October ‘2014.” he stated. Realty players and investors have been seeking more clarity on the taxation structure for newly-created Reits and InvITs.New Delhi Cabinet may take up plan to liberalise FDI in construction sector The union cabinet is likely to consider on Wednesday a proposal to liberalise foreign direct investment in construction sector. second when they distribute income to its investors.000 sq metres from 50. if approved. which need to be addressed. and fourth time when there is an exit. The norms mandate minimum capitalisation of $10 million for wholly-owned subsidiaries and $5 million for joint ventures with Indian partners. money can be put in only through SPV. market watchdog Sebi had notified the norms for listing of business trust structures. third when they are traded. New Delhi 17 villages identified for land pooling Uncovering its capital city plans. The long-awaited decision taken by the cabinet chaired by prime minister Narendra Modi has more than halved minimum built-up area requirement for FDI in construction to 20.100-1.000 sq meters from the present 50.29 October ‘2014. Uddandarayunipalem. Sources said the government has earmarked Tullur. where a final call on the compensation package is expected to be cleared. Rayapudi. Neerukonda. As reported by TOI earlier. Of the nearly 30. If the proposal is accepted. Lingayapalem and Abbarajupalem villages for the initial land pooling exercise. the AP government has decided to pool land in 17 villages of Guntur district in the ? rst phase. Although. A crucial meeting of the cabinet sub-committee on land pooling will be held on October 30.000 to Rs 40.000 acres in the first phase.29 October ‘2014.000-18. "We want to complete the firrst phase within three to six months. suggest all of them to make use of the best packages to be announced by the government. which will boost affordable housing and bring in copious FDI flows. the present prices in the earmarked villages are between Rs 1 crore and Rs 3 crore per acre.000 sq yards of developed land once the capital is ready.000 sq metres." said a senior revenue official. In a major relief to the ailing housing sector. however. Mandadam. The government also believes that the farmers might not oppose giving away their lands as they can get not less than Rs 2 crore for 1. Dondapadu. Borupalem. investors are likely to be able to exit projects on receipt of occupancy and/or completion certificates issued by the competent local authority or after Foreign Investment Promotion Board's nod. the government does not consider them to be realistic. FDI norms eased Finally. Kuragallu. Finance minister Arun Jaitley had promised this relaxation in the budget. Mangalagiri and Ta tikonda and hence has decided to take up land pooling there in the second phase.200 sq yard of developed land to farmers in return for every acre acquired. Velagapudi. the government on Wednesday eased foreign direct investment (FDI) norms in construction sector. we will go for forcible acquisition.Regulatory Buzz levels. It is also contemplating offering an annual compensation ranging from Rs 25. They added that the government has zeroed in on these villages in view of the absence of high priced paddy fields there. "The government felt that there could be some protests from farmers of Amaravati. The government wants to begin the negotiation process immediately after that.000 per acre till the portion of the developed land is returned to the owner.000 acres to be pooled for the capital. "We want to begin the process of land pooling from November 1." said a minister. According to the draft plans. The Times of India. Prathipati Pullarao. Nelapadu. Sources said chief minister N Chandrababu Naidu is of the view that farmers who are resisting land pooling will fall in line once the process is successfully completed in the upland areas of 17 villages in Tullur mandal. it has exempted Amaravati from the first phase. Tadepalli. Sakhamuru. We." said a minister." confirmed agriculture minister and member of the land pooling committee. Malkapuram. "In fact. Nidamarru. The Economic Times. . there is some good news for the real estate sector. If farmers do not agree even then. the government will acquire 15.New Delhi Affordable housing gets leg up. Mudha Lingayapalem. they might get more than what they are anticipating now as land in the vicinity of the capital will have high premium. the government is contemplating giving at least 1. Nekkallu. A senior offcial of the rank of principal secretary is expected to closely monitor the process. including roads. “This would usher in huge investment into the country’s realty sector.Regulatory Buzz The cabinet also halved minimum capital requirement for such projects to $5 million from $10 million. Although 100 per cent FDI is allowed in townships. Real estate developers saw the move as a major help to the cash-starved realty sector to raise funds. The move was aimed at attracting more foreign investment in construction and real estate sector. the statement said. The relaxation proposal was moved by the department of industrial policy & promotion (DIPP) to attract more foreign investment in construction and real estate sector that is facing a severe liquidity crunch in the last few years. Rajiv Talwar. came with certain riders. street lighting. managing director. Investment in the construction development sector has a multiplier effect on the economy by way of infrastructure creation. have been made available. will monitor compliance of the above conditions by the developer. Though the sector has huge potential for foreign investment. The state government/ municipal/ local body concerned. drainage and sewerage. DLF managing director. adding the sector witnessed steadily rising FDI from 2006-07 to 2009-10 after which the levels of inflows have been much lower. will be considered as affordable housing projects. Hiranandani Group.75 billion had flowed into sector.30 October ‘2014. hit hard by the economic slowdown. substantial employment generation over the entire spectrum from unskilled workers to engineers. The cabinet decision. it is believed that some liberalisation and rationalisation of the FDI policy on construction development could be the necessary catalyst to give a boost to the sector. greater investment in the sector would help to augment the available housing stock including affordable housing and built up infrastructure for different purposes. “The government's focus on affordable housing would require 25 million houses and with the relaxation in the norms to allow foreign direct investment in construction these funds could be raised easily.” Talwar said. however. the official statement said. the flow was just ten per cent of the total FDI inflows into the country. it creates the demand for products of a number of related industries including those in the manufacturing sector. it said. said. architects. water supply.” “It would now be much easier for the sector to raise the required capital for construction. “developed plots” will mean pieces of land where trunk infrastructure. like cement. For the purposes of this policy. In order to step up investment in construction development with its backward and forward linkages for many other sectors of the economy. fittings and fixtures and others.” Hiranandani added. Niranjan Hiranandani. Besides its employment and income generation potential. The Indian investee company will be permitted to sell only developed plots. which was a relatively small amount compared to some of the other sectors. housing and built-up infrastructure and construction developments since 2005. only $23.New Delhi . Projects using at least 60 per cent of the FAR/FSI for dwelling units of carpet area not more than 60 sq mt. steel. an official statement giving details of the cabinet decision said. The projects that commit at least 30 per cent of the total cost for low cost affordable housing would be exempted from minimum built up area and capitalisation requirements with a minimum three-year lock-in period. which approves the building / development plans. Financial Chronicle. designers as well as financial and other supporting services. The government is taking the right steps to revive the sector. The affordable segment will benefit hugely by these relaxations. Further. Support also came from other leading realty companies. said it was a welcome decision and a prompt response to address the woes of the sector. Enhancement of the affordable housing stock is an urgent need in order to stem the proliferation of slums in and around the cities. 2 crore from Rs 1.235.New Delhi . The company had posted a sales bookings of Rs 632. The real demand in the northern and western markets as a whole continues to be weak and the company remains cautious about these micro-markets in the medium term. The company SAID there has been an uptick in the general business sentiments post formation of the new government at the Centre. “With the approaching festive season and an expected improvement of overall performance in the second half of the fiscal.32 per cent to Rs 6. “Whilst the steps being taken by the new government enthuse optimism.27 October ‘2014. The company during the quarter achieved new sales of 833. Sobha’s sales bookings stood at Rs 2.3 crore in the year-ago period.” Sobha said.” Sobha said.Public Markets Sobha Q2 sales bookings drop 12% to Rs 559 crore Real estate firm Sobha Ltd’s sales bookings fell 12 per cent to Rs 559 crore during the second quarter of this fiscal due to poor demand.991 sq ft valued at Rs 559 cr with an average realisation of Rs 6.000 sq ft during the second quarter of the present fiscal from 1 million sq ft in the year-ago period. Sales volume dropped to 833.703 per sq ft.” Bangalore-based Sobha said in its operational update for the July-September quarter.1 crore in the corresponding period of previous year. Business Standard.703 per sq ft. the same is yet to translate into a significant revival of demand in the real estate sector. However. sales realisation improved 6. Sobha’s sales bookings fell to Rs 1. During the first six months of this fiscal.” it added. especially in the NCR-Gurgaon region. the company has delivered a stable and consistent performance in all its southern markets.600 crore due to the slowdown in demand. “During the quarter.343 crore during the full 2013-14 financial year but missed the target of Rs 2. the company remains positive about achieving the guidance set for the year (2014-15 fiscal).041. Land No news in this section for the week . “It is for the first time in the country that a builder is offering such an insurance package. explosion. SmartCity has entered into agreements for joint development of infrastructure with leading IT.8 million sq ft built-up area will be developed. Now. the need of the hour is to extend insurance coverage to buildings. says Sunil Kumar. a landmark entry arch and gate. all villas and apartments to be purchased henceforth from Asset Homes will be covered against damages caused by fire.27 October ‘2014. Gigo Joseph.” he added. hospitality. CJ Philip. has launched Purva Evoq.27 October ‘2014.New Delhi Purva Evoq in Chennai Puravankara Projects Limited. Each apartment will have a royal white. When fully occupied. lightening. and cloaking it with modern day luxuries.Kochi Asset Homes to sell insured apartments The Kerala-based Asset Homes has introduced a new concept of bundled insurance coverage in all its newly constructed dwellings. Purva Evoq will have 181 premium homes in 3. Asset Homes. The insurance company has agreed to extend a similar package for existing apartments of the company. he added.” he said. CEO. damaging buildings fully or partially. Considering all eventualities. the collective financial wealth of the residents is estimated to be in upwards of US$ half a billion (Rs 3000 crore). which has now been cleared. Deputy General Manager. for which discussions are in progress with resident associations. with substantial area left for greenery and open spaces. even as the construction of the first IT building is fast nearing completion. This has necessitated us to think in favour of providing an insurance coverage benefiting apartment owners.5 lakh sq ft first IT building (SCK01). a first-of-its kind contemporary residential project at Chennai’s prime location Guindy. Managing Director. The palatial looking building will have world class features. Joseph said the environmental clearance was given at the meeting of State Environment Impact Assessment Authority Kerala (SEIAA-K) followed by the State Expert Appraisal Committee’s (SEAC) recommendations. the company will speed up the construction of infrastructure. Asset Homes has entered into an agreement with New India Assurance Company to offer the coverage called Insured Asset Scheme. The façade of this project has been designed by a renowned international architectural firm from Germany taking inspiration from the Chettinad architecture of south India. said the environmental clearance was received in July last year for the 6. The financial loss caused by recent cyclone Hudhud and devastating Kashimir floods to building structures has prompted the company to go in for an insurance coverage. According to him. Overlooking the Chennai Race course.Residential Green signal for entire SmartCity project SmartCity Kochi has received environmental clearance for the entire project covering 246 acres. as the decks have been cleared for the entire project. attracting companies from within India and abroad. and later the company applied for the rest of the project. This new initiative was taken to counter eventualities arising out of all natural and manmade calamities. not less than 8. New India Assurance Company said. bomb explosions are on the rise. As per the MoU. realty and education companies to make the hub an integrated township. . earthquake. aircraft damage etc for a period of 25 years. The Hindu Business Line. 4 and 5 BHK formats that will have contemporary design ideas to blend with the grandeur of the architecture in the project. He said SEAC appreciated SmartCity’s effort in presenting a clear-cut master plan of the project. making it possibly one of the wealthiest residential enclaves in Chennai. large chandeliers and marble clad lobby. “Incidents of natural calamities and manmade disasters such as terrorism. The Hindu Business Line. Whitefield. wooden floor in master bedroom.800 sq ft respectively with price starting from Rs 1 crore. The building sanction has been received and construction is likely to commence shortly. which was completed in 2012. or around Rs 1. making it one of the most expensive such purchases in the country. high-value deals have continued to defy the trend in the last few quarters. said two persons familiar with the development. with proximity to major IT parks.Mumbai Vaswani pre-launches luxury project in B’lore Vaswani Group has pre-launched a luxury residential project. this project promises its residents an uber luxurious living experience. among others. The Tribune. this is the highest reported transaction for a flat so far in terms of absolute numbers. Last year. The deal is in the list of costliest transactions on a per sq ft basis on both these measures. HSBC India declined to comment as did the transaction advisor CBRE. hi-tech main door along with a panic button in the master bed room and dining area as well as marble clad living room. another sea-facing duplex apartment in a building on Mount Pleasant Road in south Mumbai's Malabar Hill locality was sold for Rs 57 crore.35 lakh a sq ft. making it the most expensive residential property transaction on a per sq ft basis. The residents will have access to a 5-star concierge service as well as several amenities on rooftop that include a stately sky/ cigar lounge. The project also comprises well designed penthouses. The strategic location of Vaswani Exquisite cuts down on travel time for its future residents working in Whitefield area. ITPL Main Road.Several high-profile figures from the corporate world are among those who have homes in Raheja Viverea. The apartment is located on the 40th and 41st floors—the top two—of one of the three wings of the complex. . evergreen gazebos.Residential large. the company said in a statement. "The deal is concluded and the registration was done recently. They include HDFC vice-chairman and CEO Keki Mistry and private equity firm KKR's CEO Sanjay Nayar. in Bangalore. Total consideration for the apartment also includes stamp duty and registration charges. With slim towers rising in an arc overlooking the Hoodi lake.27 October ‘2014. sky gazing observatory.750 sq ft to 2. jogging track. On the basis of built-up area. It is adjacent to Zuri Hotel. Johnson & Johnson and Mondelez India Foods Ltd (formerly Cadbury India) have also bought apartments there for their respective CEOs. gas leak detectors in kitchen and luxury fixtures.The project is a high rise with G+24 floors and offers three and four bedroom apartments ranging between 1. HSBC bought the apartment directly from developer K Raheja Corp.28 October ‘2014." said one of the persons mentioned above.000 sq ft— it's almost Rs 1. hard scape paved area with seating. While the hottest property market in the country does have apartments valued at Rs 100 crore under construction. In one such trans action. A limited number of units have been released for booking up to the 16th floor. The missions of Germany. at special pre-launch prices. Going by carpet area—5. Although the realty market has been sluggish for nearly two years.Chennai HSBC buys duplex for Rs 60 crore in South Mumbai locality HSBC has bought a luxury duplex apartment overlooking the Arabian Sea in south Mumbai's Mahalaxmi locality for around Rs 60 crore. The 8. infinity pool and private offices. private equity firm Xander's founder and chairman Siddharth Yog bought a sea-facing apartment at the famous Samudra Mahal building in Worli for Rs 40.000 per sq ft.000 sq ft apartment located in the Raheja Viverea development overlooks the Mahalaxmi racecourse and golf course has been bought by the bank to house its India chief executive officer. the deal is valued at Rs 75. Vaswani Exquisite. currently Stuart Milne. welllit terrace garden.5 crore.10 lakh per sq ft. Australia and Canada also own apartments in the complex. The Economic Times. which is spread across eight acres. Financial Chronicle. said. “With the presence of the Export Promotion Industrial Park and ITPL. well known educational institutions. Kailash Advani. (southern operations) Vaswani Group. Apart from corporate houses. educational and entertainment hubs. the statement claimed. Whitefield has become a hot-spot for most people in IT and ITeS sectors. business parks and commercial complexes have also come up in and around the area. we saw an opportune time to prelaunch this project.30 October ‘2014.Residential healthcare centres. With increasing demand in the micromarket.Bangalore . chief executive officer. 29 October ‘2014. Titled as 'Esplanade by Forum'. the project will have parking facility for over 1000 cars. Speaking about the project. deputy managing director of Forum Group said "the entire 500-crore project will be executed by Leighton Group from Australia. one of the world's biggest contractors. One of its group companies UAL is amongst the state's largest fibre cement sheet producers. Another company SAPL is in the process of setting up a Rs 2000 crore Titanium venture near Chhatrapur in Ganjam district. Vidyut Saraf. the project will consist of a 4 lakh square feet shopping mall including an eight-screen multiplex and 2. Additionally." Forum Group has been investing in Odisha for over 35 years now. Business Standard.Commercial/ Retail Forum Group starts building Rs 500 crore mall in city Kolkata-based real estate developer Forum group has commenced construction of Rs 500 crore shopping mall and office space complex at Rasulgarh square in Bhubaneswar. The facade of the project is inspired by Odisha's famous weave pattern and will use materials never before used in India.Kolkata .5 lakh square feet luxury office spaces. many countries have shown interest in supporting the initiative in specific states. India is projected to add about 400 million people in urban areas. information and communications technology (ICT) can play an important role in the rationalisation process. through demand-supply matching and providing better service to the commuters. Japan’s FeliCa or London’s Oyster card are great examples of hassle-free ticketing service. rates Tokyo. The idea of smart cities is timely considering that urbanisation is inevitable. The government must embark on an initiative making innovation as an enabler for Indian smart cities. as multiple aspects including governance. public transport and traffic. The survey considers parameters including governance. London and New York as the top smart cities in the world. Further. can we get such simple things aligned amongst urban local bodies and fix ownership? The government should expand on the PPP-based initiatives and replicate success stories in passport service and airports. Creating the right ecosystem India needs a strategy to enable and sustain a strong smart city ecosystem. Sample this: as much as 75% of population in advanced countries live in cities. . e-governance must be given the right thrust as it can bring in better transparency and can reduce corruption. we should let the traffic police focus on educating and improving responsible driving among the public. France offered to invest in creating smart cities in Himachal Pradesh. entertainment and safety. During this period.Township A smart way to create 100 smart cities Prime Minister Narendra Modi’s vision to create 100 smart cities has resonated well both in India and across the world. Rationalising/integrating urban bodies Should India create 100 new smart cities or improve the existing ones? India has 53 cities with over 10 lakh population and there are hundreds of smaller cities. urban planning and environment. The sole aim should be realising affordable India-specific solutions. The concept of smart cities should be incorporated in the urban planning bodies and a holistic approach is required. waste management. Further. A recent survey by the IESE Business School. For example. How about integrating transportation and traffic planning with urban planning? This will make the urban planning department completely responsible and accountable for a city’s traffic and public transportation. It makes sense to improve existing cities and aim at making them ‘smart’ rather than creating new ones which are bound to take significantly longer time. Rightly so. and 70% of world’s population will live in cities mainly in developing countries over the next 30 years. Nobel laureate Jean Tirole’s suggestion to improve the PPP model through periodic independent evaluation is worth considering in India as well. among others. called ‘Cities in Motion’. We need to rationalise the existing infrastructure and then look for improvement. Why should the traffic police be responsible for traffic planning? Instead. Recently. We can also learn from other countries in improving public transport ticketing using ICT. Here. How many times do we get frustrated at the utter lack of coordination between government organisations resulting in wastage of effort/money and causing public nuisance? Roads are nicely tarred and within a few days the sanitation/water supply department begins work on the same stretch of road! As a first step. The survey indicates that these three cities have a clear vision and consistent implementation of their strategic urban plans. It is a given that each Indian city has different priorities. While smart city as a concept has gained popularity over the past few years. Mexico city’s chaotic bus service got transformed into the most dependable public transport using ICT. need to be considered. there is vagueness in the definition. While each state is pitching 4-5 cities to figure in the final list. Reports suggest that few cities such as Surat and Pune have performed well. Students should be encouraged to pursue specialised courses by creating the right demand environment. Can we utilise this talent more effectively? Also. but we need government bodies to show much more willingness to embrace public participation.28 October ‘2014. can these institutions be held accountable in certain areas from conceptualisation to implementation? The ministry of human resource development (MHRD) should consider adding specific aspects around smart cities such as introducing urban planning as a specialised course. can have a great opportunity to make significant contribution in enabling e-governance or providing high-end analytics that can help the common man. The Financial Express. That’s fine and perhaps Janaagraha’s annual survey of Indian cities could be a starting point for assessing Indian cities on smart city parameters. A holistic approach is needed in rationalising the existing systems. ICT will play a major role in enabling smart cities and India is quite uniquely positioned in terms of the IT ecosystem. It will take a while for Indian cities to figure among the world’s best smart cities. and not an end-goal in India’s quest to create top-class cities. IT industry. but most large cities have miserably failed. There can be many ‘valid’ reasons. IITs and IIMs produce some of the best talent in the country.New Delhi .Township Institutions of national importance such as the IISc. Making our cities ‘smart’ is a milestone. Subjects such as traffic and transportation engineering should also be popularised. We have the technology know-how. skilled and mature manpower. often seen as export-oriented. The success of participative governance (where the government departments and the general public work closely in prioritising improvement actions for the city) has been patchy in India. SEZ No news in this section for the week . Hospitality No news in this section for the week . Input Cost No news in this section for the week . Nothing in this document is intended to constitute legal. This document is being communicated to you solely for the purposes of providing our views on current market trends. or opinion regarding the appropriateness of any investment. By accepting delivery of this document each recipient undertakes not to reproduce or distribute this presentation in whole or in part. Past performance cannot be a guide to future performance. or a solicitation for any product or service. The information in this document reflects prevailing conditions and our views as of this date. ASK Property Investment Advisors does not vouch for the accuracy of the information and is not responsible for decisions that may be taken on the basis of the information. without independent verification. The recipient and its professional advisers will keep permanently confidential information contained herein and not already in the public domain. This document is being communicated to you on a confidential basis and does not carry any right of publication or disclosure to any third party. No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. completion. ASK Property Investment Advisors does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. tax. ASK Property Investment Advisors has reproduced the articles and reports verbatim. In preparing this document we have relied upon and assumed.Disclaimer The information carried by the articles in this newsletter has been gathered from various reports published in newspapers and magazines. . verification and amendment and such information may change materially. all of which are subject to change. This document is not an offer. nor to disclose any of its contents (except to its professional advisers) without the prior written consent of ASK Property Investment Advisors. revision. securities or investment advice. The information set out herein may be subject to updating. who the recipient agrees has the benefit of this undertaking. invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. The use of any information set out in this document is entirely at the recipient's own risk.
Copyright © 2020 DOKUMEN.SITE Inc.