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Real estate sector sentiments revive to optimistic zone in Q3: Report

1/17/2020 5:21:00 PM

Real estate sentiments in the country revived in December quarter and turned optimistic after two quarters on the back of several measures taken by the government and the RBI to boost demand, according to a joint report by Knight Frank-FICCI-NAREDCO. After staying in pessimistic zone (below 50 mark) for two consecutive quarters, Knight FrankFICCINAREDCO Real Estate Sentiment Index Q4 2019 survey showed that sentiments of real estate stakeholders in India was in optimistic zone at 53 in October-December quarter of 2019, up from 42 in the previous quarter. The future sentiment score, that had gone in the red for the first time in the preceding July-September 2019 quarter at 49, also bounced back to 59 in Q4 2019. A score over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 shows 'pessimism'. Though the sentiment is in optimistic zone now, the qualitative outlook of stakeholders remains cautious, with a majority of them opining that the sector will remain at the same levels as previously even while it will not go down further in the next six months, it added. "The real estate sector sentiments have shown improvement in its current as well as expected outlook for the market in Q4 2019. This optimism is significant in the wake of the continued downslide in India's overall economic performance," Knight Frank India Chairman and Managing Director Shishir Baijal said. "Even while the sector is working towards finding its balance, especially in the residential segment, steps by the government have kept the sector stable in 2019. However, we expect the market to remain cautious and sensitive to even the smallest change as large-scale demand is yet to pick pace," he added. The sector's optimism is far pronounced for the office sector, which has grown from strength to strength in the past few years, reaching historic highs in 2019. "In the next 8-10 quarters, if the office, other commercial including retail, warehouse and logistics and the residential sector continue to show positive growth, despite the pace of growth of Indian economy, we can expect the real estate sector to show upward curve of revival. The sector, therefore, needs to start making adequate safeguards to ensure that the demand for all segments stays positive," Baijal said. The real estate sector has been under pressure for over three years now. Weak demand, inventory overhang, developer defaults coupled with worsening of NBFC crisis has dried up funding for the sector, which in turn has increased borrowing cost and impacted finances for the already strained sector, the consultant said. Source: Business Standard Chandigarh

Real estate sector sentiments revive to optimistic zone in Dec quarter: Report

1/15/2020 5:16:00 PM

Real estate sentiments in the country revived in December quarter and turned optimistic after two quarters on the back of several measures taken by the government and the RBI to boost demand, according to a joint report by Knight Frank-FICCI-NAREDCO. After staying in pessimistic zone (below 50 mark) for two consecutive quarters, Knight Frank&ndashFICCI&ndashNAREDCO Real Estate Sentiment Index Q4 2019 survey showed that sentiments of real estate stakeholders in India was in optimistic zone at 53 in October-December quarter of 2019, up from 42 in the previous quarter. The future sentiment score, that had gone in the red for the first time in the preceding July-September 2019 quarter at 49, also bounced back to 59 in Q4 2019. A score over 50 signifies 'optimism' in sentiments, a score of 50 means the sentiment is 'same' or 'neutral', while a score below 50 shows 'pessimism'. Though the sentiment is in optimistic zone now, the qualitative outlook of stakeholders remains cautious, with a majority of them opining that the sector will remain at the same levels as previously even while it will not go down further in the next six months, it added. "The real estate sector sentiments have shown improvement in its current as well as expected outlook for the market in Q4 2019. This optimism is significant in the wake of the continued downslide in India's overall economic performance," Knight Frank India Chairman and Managing Director Shishir Baijal said. "Even while the sector is working towards finding its balance, especially in the residential segment, steps by the government have kept the sector stable in 2019. However, we expect the market to remain cautious and sensitive to even the smallest change as large-scale demand is yet to pick pace," he added. The sector's optimism is far pronounced for the office sector, which has grown from strength to strength in the past few years, reaching historic highs in 2019. "In the next 8-10 quarters, if the office, other commercial including retail, warehouse and logistics and the residential sector continue to show positive growth, despite the pace of growth of Indian economy, we can expect the real estate sector to show upward curve of revival. The sector, therefore, needs to start making adequate safeguards to ensure that the demand for all segments stays positive," Baijal said. The real estate sector has been under pressure for over three years now. Weak demand, inventory overhang, developer defaults coupled with worsening of NBFC crisis has dried up funding for the sector, which in turn has increased borrowing cost and impacted finances for the already strained sector, the consultant said. Source: The Economic Times Chandigarh

Tenants across 6 top metros look to buy houses in 2020

1/10/2020 6:09:00 PM

After living in rented houses for the last 7 years, 29 year old techie Siddharth Rustagi’s top priority in 2020 is to buy and move into a 3 bhk house in Bengaluru in the next few and he is willing to pay upto Rs 1 crore for it. Marketing professional, Tara Shetty is looking for a Vaastu-compliant 2 bhk home for her 3-member family in Hyderabad and has a budget consideration of upto Rs 70 lakh for it this year. Realtors can look forward to a great year ahead as 64 per cent of people living in rented accommodation in Delhi-NCR, Bengaluru, Mumbai, Pune, Chennai and Hyderabad are planning to buy houses in 2020. While 85 per cent of these people prefer to move into ready-to-occupy homes, the top three most important considerations for buying homes are &ndash cost of the house, regular water supply and proximity to the workplace, according to ‘India Real Estate Report 2019’ released by real estate portal NoBroker.com. The portal conducted a survey of 14,562 people across the top 6 cities mentioned above and collated data from tenants, buyers, listings and closures on the platform from its user base of over 7.5 million customers to cull out these trends. Budget is top consideration 71 per cent of these people are looking to buy homes within a budget of Rs 60 lakhs, while 12 per cent have a budget of Rs 60 &ndash 80 lakhs and 10 per cent have a budget of Rs 80 lakh to Rs 1 crore, in 2020. One of the most important amenities that buyers were looking for is car parking with 58 per cent citing it as key. “Stagnant property prices and home loan rate-cuts has boosted consumer confidence. This is the best time to buy a house as there is a lot of unsold inventory in the market as a result of which developers are luring interested buyers with good offers. Majority of the buyers want to buy ready-to-move-in homes because builders have previously delayed delivery of homes by 3-4 years, and buyers don’t have to pay GST on ready-to-move-in properties. We see a sharp decline in preference for broker services with only 11 per cent preferring to use brokers to find houses, a decline from last year’s 14 per cent, while 28 per cent prefer to find houses on real estate websites, up from 15 per cent in 2018” said co-founder and CEO of NoBroker.com, Saurabh Garg. Buyer demographics NoBroker found that 64 per cent of buyers have bought a house before the age of 35 and 65 per cent of buyers are below 45 years of age. While residential is still the preferred choice for investment among a vast majority of the people (86 per cent), commercial properties are gaining ground with 14 per cent evinced interest in commercial properties as rental yield is higher at 8-12 per cent compared to rental yield of 1-3 per cent for residential properties. Vaastu is a major consideration for buying homes with 73 per cent admitting they check for Vaastu compliance before buying, up from 52 per cent last year. While the preference for 2bhk houses dominate, 31 per cent prefer newly constructed properties. Source: The Hindu Business Line Chandigarh

At $3.3 billion, commercial is top real estate draw for PE funds in 2019

1/10/2020 2:22:00 AM

Commercial real estate maintained its numero uno position in attracting $3.3 billion in private equity (PE) funding in 2019, against $3.8 billion in 2018. The retail realty sector was a major draw for PE funds in 2019, receiving total inflows of $970 million, against $355 million in 2018 — a rise of over 170 per cent. The residential sector received PE inflows of $395 million in 2019, against $265 million in 2018. The high potential of logistics and warehousing notwithstanding, this segment attracted about $200 million in PE funds — a drop of nearly 50 per cent against the previous year. Mixed-use developments saw inflows of about $155 million in 2019, against $310 million in 2018. In all, Indian real estate attracted more than $5 billion in PE inflows in 2019, recording a marginal drop of 2 per cent against the preceding year, revealed Anarock’s latest study. Shobhit Agarwal, MD and CEO, Anarock Capital, said: “Among the cities, MMR (Mumbai Metropolitan Region) and NCR (National Capital Region) were the top favourites for PE investors in 2019; together, the two regions received close to $2.7 billion in PE funds, accounting for a whopping 53 per cent of the overall share. In 2018, rather than NCR, it was Hyderabad that was on top in the radar of PE investors.” City-wise trends While MMR retained the top slot, it was NCR that stood out in 2019, becoming the second most attractive real estate destination for PE players. Together, the two regions received realty PE inflows of $2.7 billion in 2019, accounting for a massive 53 per cent of the total. MMR saw a 19 per cent jump in total PE inflows to $1.8 billion, from over $1.5 billion in 2018. NCR saw total PE inflows of over $845 million in 2019, against just $195 million the previous year. The IT hubs of Pune and Bengaluru attracted PE funds of about $390 million and $615 million, up 210 per cent and 47 per cent, respectively. Hyderabad, the showstopper of 2018 with $1.1 billion in PE funds, attracted just $440 million in 2019. This drop was expected as 2018 was a one-hit wonder rather than a steady trend. PE players largely steered clear of the Chennai real estate market in 2019. The city saw inflows decline by 45 per cent, from $675 million in 2018 to $370 million in 2019. Kolkata failed to garner any PE interest in 2019 as well. There were no PE investments in both the years. Source: The Hindu Business line Chandigarh

Indian real estate attracts $5 billion PE in 2019, commercial projects lead: Report

1/8/2020 6:07:00 PM

Indian commercial real estate retained its Numero Uno position and continued be a preferred destination for global institutional investors in the backdrop of robust office space take-up, falling vacancy levels and rising rentals. Indian real estate attracted more than $5 billion private equity (PE) inflows in 2019. Of this, over 66% or $3.3 billion was infused in the commercial real estate. Meanwhile, both retail and residential segments saw an uptick in investments in 2019 against the preceding year, showed data from ANAROCK Property Consultants. While the Mumbai Metropolitan Region (MMR) remained the most attractive investment destination for PE funds, it was the National Capital Region (NCR) that stood out in 2019. After Mumbai, the national capital region was the second-most attractive real estate destination for PE players. Together, the two mega regions received PE inflows of $2.7 billion - a 53% overall PE share - in Indian real estate in 2019. “Total PE inflows in Indian real estate remained more or less the same in 2019 against 2018. However, NCR once again emerged as a major hotbed for private equity activity in 2019. Besides office real estate, the retail sector helped NCR gain traction from both foreign and domestic funds,” said Shobhit Agarwal, MD & CEO – ANAROCK Capital. “Residential saw some green shoots of revival in 2019 and this will continue in 2020 as the government’s distress funds are deployed.” In sharp contrast to previous years, investors are now showing a keen interest in last-mile funding for stuck housing projects. This, along with the government support of Rs 25,000 crore for stressed projects, will go a long way in relieving residential real estate from its woes. “Given the government’s involvement, last-mile funding is one of the most sought-after products now preferred by several lenders across geographies. Apart from low execution, land title and sales risk, the segment also stands apart due to faster return of the capital with higher than moderate returns,” said Subhash Udhwani, founder of real estate-focused boutique investment bank, Elysium Capital. Notably in 2019, other than commercial real estate, retail segment also garnered considerable PE attention based on the high demand for organised retail spaces across the country. The retail sector was a major draw for PE funds during the year, receiving nearly $1 billion against $355 million in 2018, an annual rise of over 170%. Interestingly, the residential sector received relatively higher PE inflows of $395 million against $265 million a year ago. Out of major markets, MMR with PE inflows of over $1.8 billion during the year witnessed a 19% on-year jump. NCR stood out with total inflows of over $845 million in 2019 from mere $195 million in 2018. The Information Technology (IT) hubs of Pune and Bangalore attracted PE funds of around $390 million and $615 million respectively in 2019. Both cities saw inflows rise by 210% and 47%, respectively in a year. Hyderabad, the showstopper of 2018, attracted PE funds of just $440 million in 2019 against $1.1 billion a year ago. This drop was expected as 2018 was a one-hit wonder rather than a steady trend, experts said. The high potential of logistics and warehousing notwithstanding, this segment attracted about $200 million in PE funds - a drop of nearly 50% against the previous year. Mixed-use developments saw inflows of around $155 million in 2019, as against $310 million a year ago. Source: Economic Times Chandigarh

Are NRIs the next leg of investors in real estate in India?

1/8/2020 6:04:00 PM

The real estate market in India is poised for the entry of a greater number of Non-Resident Indian (NRI) investors not only because there has been a steady strengthening of the dollar against the rupee over the past few years, but also because the inventory of properties now open for pumping in money is spread across a huge canvas across different categories. The dollar crossed the Rs 70 mark in the year 2019. It had steadily increased from Rs 59 in the year 2014 to the mark of Rs 71.60 in the last week of November last year. Financial indices point towards an even stronger dollar over the next six months with the exchange rate touching anywhere in the range of Rs 75. A strong dollar implies that an NRI investor can purchase more in the Indian market in the year 2019 as compared to five years ago. The Indian real estate market looks alluring for dollar investors because demand for institutional and commercial properties is also set to rise over the next few years with housing hubs in various parts of the country gradually getting occupied by end-users. The concurrent need for malls, shopping complexes, cinema halls, commercial buildings, office complexes and logistic and warehouse spaces is growing in tandem with increasing occupancy in residential apartments in housing hubs. For NRIs, residential projects are, therefore, no longer the only avenues for investment. The NRI can invest in shopping units in malls, office rooms, logistics spaces and other commercial spaces. Investment in co-working spaces &ndash where employees of a diverse range of firms come together to work under one roof &ndash is also an attractive destination for NRI investors. For decades, investing in the real estate sector in India was considered no less than a risk because of the lack of transparency as well as for the fact that there were operations by shady investors in properties. However, the Central government has brought about a great degree of transparency in the real estate sector in India by introducing a slew of laws and legislations. The Real Estate (Regulation & Development) Act of 2016, which is the most important legislation pertaining to the property market in the past few years, not only promises transparency but also ensures security of investments of homebuyers. It has brought to an end the operation of fly-by-night operators in the real estate sector. Each project has to be registered with the government, be it residential, commercial or institutional. There is a fixed timeline for delivery of units booked by investors failing which the developer is liable to be punished. Quality of construction is no longer an issue to be dealt with solely by the investor but each complaint pertaining to this issue has to be meticulously addressed by the developer. The investor’s money is secure in an escrow account that is meant to fund only construction activities in the project in which the investment has been made. A strong and stable government is key to economic prosperity and security from external threats. Thanks to Prime Minister Narendra Modi, at this point India has a stable political dispensation ruling at the centre by commanding an absolute majority in the Lok Sabha, which is necessary for forming the government. The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government at the centre has strengthened the country’s borders against external threats by investing in defence and has also ensured inland security by better mobilisation and deployment of central and state police forces. Any investment made by an NRI in India is safe against both external and internal threats. The services sector in India has been growing at a tremendous pace over the past three decades and has shown the potential for further growth. Growth in services sector industries portends greater demand for real estate, particularly in housing, commercial and institutional categories. Tier II cities, like Hyderabad, Bengaluru, Bhubaneshwar, Pune, Chandigarh or Kochi, where services industries have been flocking, have the potential for growth in these categories of real estate. NRIs are eyeing these cities for investing in under-construction projects here which are projected for very high capital returns after the next few years. Rentals against investments in Tier II cities have also been growing both across residential and commercial properties. The latter category has been offering greater returns in terms of rentals because of huge one-time capital investment on the part of the lessee to hire out a particular property as well as northward revision of rental values every year as compared to residential units where rents are revised once every three years. The influx of numerous foreign retail brands into the country has also ensured that commercial properties offer competitive rates of rents and never go vacant. The Central government has launched the ‘Make in India’ initiative which calls for greater indigenisation of industries. Various initiatives are being offered to indigenous firms to set up manufacturing units within the country with partnerships from foreign investors. If the ambitious Make in India scheme of the BJP-led NDA government fructifies to any extent, it will mean expansion of the real estate market into hitherto unknown destinations of the country. The potential for investment by NRIs grows even further with the Make in India initiative. For the NRI, home is where the heart is! Most NRIs nurse a dream of returning to their motherland and settling comfortably in their homes in the sunset years. A nest in the parent country has always been a dream for NRIs because of the need for security, comfort and attachments with family and relatives. No better time than the near future for NRIs to invest in a nest solely for themselves particularly with the real estate market offering a host of properties in many cities across the country. Source: Financial Express Chandigarh

Construction community to train, engage local youth

1/7/2020 12:23:00 PM

“Though work hasn’t started in full force since we have to have all our raw materials ready and some suppliers are in areas where transportation is presently not possible, we are keen that we have our workforce ready,” said Agarwal. “When we witnessed this large exodus we realised that it is important to have our workers from nearby areas in Pune. To do that we have launched a training programme where we aim to train our rural youth in different skills like masonry, plumbing, electrician, among others,” said Agarwal. “In any case, we have been doing that over the years all over India. But now our focus is going to be on the men and women from in and around Pune,” he said. To recruit jobless youth from the villages around Pune NAREDCO has tied up with Bharatiya Mazdoor Sangh that has a large network in a majority of the talukas in Maharashtra. Chandrakant (Anna) Dhumal, president, Bharatiya Mazdoor Sangh, Maharashtra, said, “We have always focused on the well being of our contractor workers and we have our presence in more than 70 per cent of all the talukas in Maharashtra as well as India. We have set up help desks in every taluka that aims to help them with legal and other issues that the members may have.” “When NAREDCO informed us of their intention we have now sent out a circular to all the help desks with their offer,” he said. “We think it’s a great idea since in my estimate every taluka has at least 5,000 to 10,000 youths who are jobless. We will put out this offer where they can get training in various constructions fields like electricians, plumbers, tiling, POP work among others and then get employed,” said Dhumal. Despite the construction industry employing on contract workers that the Sangh is not in favour of, Dhumal feels that “They will at least learn a skill. And with that skill, they can find employment easily on other projects or even become entrepreneurs if they so choose. It is a good thing for our young men and women.” For NAREDCO this is a long term plan. Says Agarwal, “The training modules are from one month to three, but we are in no hurry as such. If we can get at least 40 per cent of our workers from near Pune we are happy. At least you don’t get stranded like we are now.” Source: Hindustan Times Chandigarh

Govt measures to boost realty sector, job prospects, say experts

1/6/2020 6:01:00 PM

Buoyed by multiple reform measures undertaken by the government for the realty space, experts feel such steps will help in reviving the sector and generating more employment opportunities. At the same time, some of them also expressed concerns over liquidity situation and said that subdued demand may keep performance of residential realty projects muted. “There was a recent government announcement of Rs 25,000 crore special window to provide funding to stalled housing projects to revive the sector and also to help in terms of incremental jobs, that is, employment generation, revival of demand for logistics, cement, iron and steel industries and many other adjacent industries, Sudeep Sen &ndash head of industrial, manufacturing and engineering vertical, Teamlease ServicesTeamLease Services &ndash told PTI. These measures, he said, will attribute a growth of 11 to 12 per cent in the sector in the next 6 to 8 months. Funds will now be used to provide priority debt financing for the completion of incomplete or stalled housing projects in the affordable and middle-income housing sector, Sen said. On jobs front, he said the main hiring will be a mix of unskilled labour workforce (loaders, carpenters, welders, fitters) and also support function profiles, the likes of site supervisors, tele-callers, account executives, customer support staff and sales executives. Maintaining a negative outlook for residential segment and stable outlook for commercial real estate, rating agency Icra in its report had stated that liquidity crunch and subdued demand is likely to keep performance of residential realty muted. Prices, however, are likely to move on a downtrend, driven not only by the continued focus of developers on keeping average ticket sizes affordable, but also by the high inventory overhang and overall sluggishness in demand, the Icra report added. However, commercial real estate will benefit from robust demand and favourable tailwinds from successful listing of first domestic Real Estate Investment Trust (REIT), the report said. Michael Page India Director Nitin John Abraham said that even as the traditional housing sector is struggling due to a funding crisis and unsold inventories, which should see some movement, but commercial real estate is gaining momentum year on year and will show double digit growth this year as well. Also, he said, models like co-working and co-living spaces are gaining solid traction. Abraham said the traditional centres of real estate including Mumbai, Bangalore and NCR domain will generate maximum employment in the real estate sector. However, cities like Hyderabad, Pune and Ahmedabad will also create jobs in the sector, he added. Executive search organisation GlobalHunt Managing Director Sunil Goel said traditionally the real estate industry used to live and make money on spikes but the policies like RERA and large pool of availability of the units will make the industry consumer driven. “This is good for the sector because this is not beneficial to few developers only, and the sector may get converted from an investor portfolio to an end customer portfolio,” he said. The large number of transactions will create a greater number of jobs and will also bring growth to the sector compared to 2019, Goel added. Source: Financial Express Chandigarh

Investment in India's real estate sector to rise 5 pc to $6.5 bn: Report

1/3/2020 5:08:00 PM

Investment in India's real estate sector is likely to rise by 5 per cent to $6.5 billion (around Rs 46,000 crore) this year, driven mainly by huge demand for commercial office assets from IT firms, according to global property consultant Colliers. Last year, the real estate sector attracted an investment of $6.2 billion, up 8.7 per cent from 2018 as foreign investors bought many office properties. Foreign funds accounted for about 78 per cent of the total investments in 2019. According to Colliers, India's real estate sector has recorded inflows of $56.6 billion (Rs 410,000 crore) since 2008. "During 2019, investments into the real estate sector touched $6.2 billion (Rs 43,780 crore). During 2020, Colliers projects investments inflows of $6.5 billion in the real estate sector," it said in a report. The consultant expects investors to remain committed to commercial office assets over the next three years, with strong demand and outlook for further rental appreciation. "We project that the commercial office sector will account for about 40 per cent of the inflows in 2020," Colliers said. Commercial office assets accounted for 46 per cent of the total inflows during 2019 at $2.8 billion (Rs 19,900 crore). Investors interest have risen because of plethora of reforms such as enforcement of the Real Estate Regulatory Authority, introduction of the Goods and Services Tax (GST), roll-out of the Insolvency and Bankruptcy Code and a relaxation of foreign direct investment norms, the consultant said. Colliers recommended investors to look at opportunistic assets including under construction office assets, supported by strong demand dynamics in information technology (IT)-led markets such as Bengaluru, Hyderabad and Pune. "Due to the prolonged slowdown in the sector, investors should continue to adopt a more conservative approach towards residential assets in general, as compared to commercial assets," the report said. Coliving would draw considerable attention from investors as demand for rental homes rises among professionals relocating to cities having employment opportunities, the consultant said. Warehousing, retail and coworking segments are also on investors' radar. Source: The Economic Times Chandigarh

Investment in real estate up 9% at Rs 43,780 cr in 2019, led by foreign funds: Report

12/20/2019 5:09:00 PM

Investment in Indian real estate sector is estimated to have increased by 9 per cent to Rs 43,780 crore during this calendar year on higher inflow from foreign funds, according to global property consultant Colliers. Office properties attracted 46 per cent of the total inflow and received nearly Rs 20,000 crore this year. "Investment in India's real estate rose 8.7 per cent in 2019 compared to 2018, and touched USD 6.2 billion (Rs 43,780 crore)," Colliers said in a report. Foreign funds accounted for about 78 per cent of the total investments in 2019- the highest share ever. During 2020, Colliers projects inflows of USD 6.5 billion (Rs 46,170 crore) into the real estate sector. "We recommend investors to look at opportunistic assets including under-construction office assets, supported by strong demand dynamics in information technology (IT)-led markets such as Bengaluru, Hyderabad and Pune, offering ample opportunities to investors" said Sankey Prasad, managing director and chairman at Colliers International India. Commercial office assets accounted for 46 per cent of the total inflows during 2019 totaling USD 2.8 billion (Rs 19,900 crore) with the sector backed by strong demand dynamics and rental appreciation. The interest in office assets is backed by robust demand and rental appreciation. The consultants expect investors to remain focused on acquiring commercial office assets over the next three years, backed by strong occupier demand and rental appreciation. Alongside Mumbai and Delhi-NCR, Bengaluru should continue to rank among the most attractive markets. During 2020-2023, Colliers projected an annual average gross absorption at 52 million sq ft across the top seven cities, surpassing the gross absorption of the preceding five years by 12 per cent. "We expect a flurry of commercial investment activity in 2020 and 2021 as funds aggregate assets to list them as real estate investment trusts (REITs)," the report said. While the office sector is recording solid growth in investments, India's residential real estate is experiencing prolonged slowdown in investment volume, accounting for only 9 per cent of the total investments in 2019. Colliers expect investments in the residential segment to remain soft during 2020, as liquidity concerns in non-banking financial companies (NBFCs) remain. "Despite the ongoing economic slowdown, foreign funds are likely to gain a stronger foothold in Indian realty. Foreign private equity, including pension and sovereign funds, are looking at India for the long term, undeterred by the current slowdown," said Megha Maan, senior associate director, Research at Colliers International India. Bengaluru emerged to the second spot overtaking Delhi-NCR in terms of garnering investments with an investment of USD 655 million (Rs 4,650 crore) during 2019. Mumbai continued to be at the forefront of investments with a 25 per cent of the total investment inflows in 2019. The city continues to be the most sought after investment destination in the country due to a wide range of asset classes, providing diversification to investors' portfolio. Colliers has operations in 68 countries and 14,000 employees. In 2018, its revenues were USD 2.8 billion (USD 3.3 billion including affiliates), with more than USD 26 billion of assets under management. MJH SHW SHW. Source: The Economic Times Chandigarh

Investments in Indian real estate jump 9% in 2019

12/20/2019 1:25:00 PM

Investments into Indian real estate rose nearly 9 per cent in 2019 to $6.2 billion (Rs 43,780 crore) as foreign private equity (PE) investors, including pension and sovereign funds, pumped in money despite the economic slump. Foreign funds accounted for about 78 per cent of the overall investments in 2019, the highest share ever, a new research from Colliers International shows. There is more growth ahead in 2020, albeit at a slower pace. Colliers predicts that in 2020, investments inflows would total $6.5 billion (Rs 46,170 crore) or a growth of about 5 per cent. The $6.2 billion investment in 2019, however, is lower than what Indian real estate received in 2017 - $8 billion. According to Colliers, since 2008, India's real estate sector recorded overall inflows of $56.6 billion (Rs 4,10,000 crore). "After 2014, a slew of reforms included enforcement of the Real Estate Regulatory Authority, introduction of the Goods and Services Tax (GST), roll-out of the Insolvency and Bankruptcy Code, and a relaxation of foreign direct investment norms. Taken together, these have boosted investor interest in Indian real estate," the firm says. Mumbai led the investments with a 25 per cent share of the inflows in 2019. "The city continues to be the most sought after investment destination in the country due to a wide range of asset classes, providing diversification to investors' portfolio," the firm states. Meanwhile, Bengaluru toppled Delhi-NCR to claim the second spot with inflows of $655 million (Rs 4,650 crore) in 2019. "We note that the strong appetite for office assets has catapulted Bengaluru's position to the second spot in 2019. We believe that over the next two years, Bengaluru should continue to be among the top two most attractive markets for investors, as funds continue to remain concentrated in commercial office assets," Colliers states. Commercial or office real estate is booming for several reasons. The supply is steadily increasing, so have the absorption rates. Vacancies are down for the top grade buildings while rents in many markets have risen. Unlike the residential side, the office market is characterised by transparency, and in most cases, on-time delivery. "While the office sector is recording solid growth in investments, India's residential real estate is experiencing prolonged slowdown in investment volume, accounting for only 9 per cent of the total investments in 2019," Colliers states in the report. "We expect investments in the residential segment to remain soft during 2020, as liquidity concerns in non-banking financial companies (NBFCs) remain. Over the last few years, residential developers, including those with weak credit lines, were heavily reliant upon NBFCs to fund their projects. We believe that investors should continue to adopt a conservative approach towards residential assets, barring a few top-tier developers, as the demand in the sector has not fully recovered yet," the firm advises. Source: Business Today Chandigarh

Market size of co-living segment to double at nearly USD 14bn in 30 major cities by 2025: Report

12/18/2019 1:23:00 PM

Co-living segment in India is growing at a rapid pace and its market size is estimated to double by 2025 at nearly USD 14 billion across top 30 cities, according to a global property consultant Cushman & Wakefield. The demand for co-living in terms of beds is slated to grow to 5.7 million by 2025 from 4.19 million this year. In its report 'Co-living-Redefining urban rental living', Cushman & Wakefield has pegged the market size is USD 6.67 billion in 2019 and, this will grow to USD 13.92 billion by 2025 across top 30 cities. The market will witness a compound annual growth rate (CAGR) of 11.2 per cent. "Co-living is an evolving sector and is expected to grow more than two times by 2025 in the top 30 cities which are the major economic centres in the country. Within India, the co-living model is currently catering to mostly millennials comprising single, young working professionals and student population," said Anshul Jain, Country Head & MD-India, Cushman and Wakefield. Furthermore as the business evolves, co-living would transform the face of the rental housing market in urban centres, similar to what flexible working space has done to the office rental space, he added. "Co-living market in India is evolving at a rapid pace, with investments from national and international institutional investors bringing in much-needed seed capital as well as future rounds of funding thereby allowing a new business model to thrive and aim towards achieving scale," the report said. Co-living operators are tying up with developers for built-to-suit property options, an upcoming trend likely to prevail in the sector. Operators opting for ready to move in properties which are refurbished and renovated as per their requirements are showing preference for properties having at least 50-60 rooms. Pan India capacity of major co-living players as of fourth quarter 2019 stood at over 2 lakh beds and, the same is estimated to reach to 6 lakh beds by 2021. With more millennials entering the workforce and continuing to contribute towards a major proportion of the population, their lifestyle choices will contribute towards a greater need for organised rental housing. Further, limited accommodation capacity within academic institutions for students in higher education is also likely to act as a demand driver for such rent accommodation. However, the consultant said, the concept of shared rental accommodation in cities or locations offering employment and academic opportunities is not a new one. The migrant workforce and students have been availing such shared rental accommodation options for the last 3 to 4 decades. "Millennials moving into new cities for work or education are left to deal with negative perceptions harboured by landlords and home owners' about those who are single or students. "This coupled with the limited availability of quality accommodation that meets the basic requirements, makes the stay in these unorganised set-ups, (PGs/ dorms/hostels) a not so favourable option for millennials, who having higher disposable incomes are even ready to spend a little more to enjoy better lifestyle standards with experience," the report said. Cushman & Wakefield is a leading global real estate services firm with 48,000 employees in about 400 offices and 70 countries. In 2017, the firm had revenue of USD 6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. Source: The Times of India Chandigarh

Housing sales may rise marginally by 4% in 2019: Report

12/17/2019 1:20:00 PM

Housing sales are estimated to rise by mere 4 per cent to 2.58 lakh units across seven major cities during this calendar year on subdued demand because of liquidity crunch and overall economic slowdown, according to property brokerage firm Anarock. "Indian real estate was devoid of any appreciable forward momentum in 2019. Dwindling consumption, lacklustre investment appetite and the global slowdown overshadowed all possibilities for growth," Anarock Property Consultants Chairman Anuj Puri said. India's GDP growth rate slumped to a six-year low of 4.5 per cent in Q2 FY20. In its yearly round-up for the real estate sector, Anarock said that collectively, all four quarters of 2019 are likely to see housing sales of 2,58,410 units (assuming 56,200 units in Q4 2019) as against 2,48,300 units sold in entire 2018. Sales were better in the first half of this year but demand fell in the third quarter. Anarock tracks seven major cities Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Pune, Hyderabad, Chennai and Kolkata. "The real estate sector's performance - a reliable barometer of India's overall economic health - painfully reflected the macro-economic state of affairs. The liquidity crisis did not relent and dented any 'real' growth during the year," Puri said. "Multiple developers fell off the grid while others still struggle to stay viable. However, strong players with healthy balance sheets - in many cases diversified beyond real estate - sailed through 2019 and recorded decent housing sales and revenue growth," he added. For the housing sector, 2019 was a non-event in terms of sales growth and investor interest. "Sentiments remained subdued, sustaining almost solely on end-user activity focused on ready-to-move-in or almost-complete homes. Branded developers gained ground, with some listed players performing exceptionally well on sales and commensurate revenue growth," he said. For the housing sector, Puri said the only light at the end of the dark financial tunnel was the announcement of the alternative investment fund (AIF) of Rs 25,000 crore to facilitate the completion of stuck affordable and mid-segment homes. In fact, affordable housing remained upbeat in 2019 thanks to multiple government sops throughout the year. First-time homebuyers were given further tax deductions (now amounting to Rs 3.5 lakh in a year) on interest amount of home loans below Rs 45 lakh availed within FY 2020-end. Luxury and ultra-luxury segments remained limited to end-user interest, with no serious investor activity. Co-living and student housing gained momentum during the year. In the organised housing brokerage business, Noida-based Investors Clinic, Anarock, News Corp-backed PropTiger, Anil Ambani-led Reliance group-backed Square Yards, Quikr Realty, Gurugram-based 360 Realtors and Wealth Clinic are the leading players. Source: The Economic Times Chandigarh

Now, high-end millennials investing in second homes both in India and abroad

12/12/2019 1:16:00 PM

Are millennials purchasing properties or are they preferring to stay on rent, especially co-live in apartment blocks close to their workplace or continue to live with their parents? Several international property consultants have said that in 2020 as many as 65 percent of the global population will be under the age of 35 and would make up half of the global workforce. A CBRE report has revealed that one-third or 35 percent of the millennial respondents identify 'investment' as the key driver for buying a property. Overall, a majority of millennials aim to buy a home, and while placing the utmost importance on quality of life, they also refuse to compromise on the quality, size and location. There is also a category of high networth millennials, second generation business families or startup honchos who have made mega bucks from their startups or divesting their stake at high valuations. They too have started investing in second homes spread across the country in Goa, Alibaug or even outside India in countries such as Italy, Thailand, Sri Lanka, United Kingdom and even New York. The price of properties generally range from Rs 4 crore to all the way up to Rs 50 crore and more. "There are around 3 million millennials today and demand for second homes among them is growing by 10 to 15 percent across cities. Overall, there has been a 30 percent increase in the number of sales across the holiday home segment. Majority of them are from HNI families and they are buying second home properties across India and abroad with accessibility being the main factor," said Amit Goyal, CEO at India Sotheby's International Realty. There is also a sizeable population who have made their money through start-ups and some of them who have been divesting their stake at high valuation. Italy, Thailand and Sri Lanka are easily accessible destinations and perhaps the most popular among this segment scouting for second home properties. In Italy, these are available for anything between Rs 10 crore to 18 crore. In Thailand, these cost Rs 4 crore to Rs 6 crore in areas such as Phuket and Kho Samui and properties in Sri Lanka's Bentota, Balpatiya and Galle cost anything between Rs 5 crore to Rs 8 crore. Within India, these second generation business promoters, generally look for second homes in Goa, Alibag, Kasauli and even Rishikesh. The price range of properties in Goa is between Rs 5 crore and Rs 12 crore. In Alibag, these range from Rs 10 crore to Rs 15 crore. In Kasauli and Rishikesh, these are available for Rs 4 crore to Rs 6 crore but these are mostly villas. Millennials prefer new developments, he says. Most of these high-networth buyers have been educated overseas and are now back in the country to look after their family businesses. This segment therefore, may also be interested in buying into second homes in New York and London. Apartments in New York cost Rs 12 crore onwards and a 2 BHK in London anything around Rs 8 to Rs 9 crore. "When I was looking for a second home - the purpose was more experiential than actually owning a property. I decided to invest in a second home abroad due to play on currency fluctuations, capital appreciation, great rental yield and to diversify," said a buyer who has invested in a property in London. These buyers are also open to putting their houses on rent for most part of the year. Rentals in these markets has not appreciated much except perhaps in Canada. In UK, the rental yield is anything between 2.5 percent to 4 percent in Canada it is anything between 4 percent to 5 percent, in Dubai it is 6 percent to 7 percent and in Singapore it is 3 percent to 4 percent, says Goyal. Source: Moneycontrol.com Chandigarh

SC allows construction work to resume during the day in Delhi-NCR

12/12/2019 1:14:00 PM

The Supreme Court on Monday partially lifted its ban on construction activities in the Delhi-NCR region, allowing work to continue between 6 AM and 6 PM, after the Central Pollution Control Board said that air quality index (AQI) level is not severe. The Apex court, which had on November 4 stopped construction and demolition in Delhi-national capital region (NCR), lifted the ban partially following an affidavit filed by CPCB. The CPCB said the ban could be partially lifted by allowing these activities during the day time subject to criteria stipulated in Graded Response Action Plan (GRAP) which mandates strict enforcement of rules for dust control at construction activities and closure of non-compliant sites during moderate to poor AQI category days. “Presently, the situation not being severe, CPCB is of considered opinion that partial ban could be in place for construction activities in as much as no construction should be permitted during night time (6 PM to 6 AM),” said the affidavit, which was perused by a bench of Justices Arun Mishra and Deepak Gupta. Additional Solicitor General (ASG) ANS Nadkarni told the bench that in pursuance of the court’s November 25 order, the Centre had constituted a high-level committee to examine the feasibility of using technology like smog towers to combat air pollution. Nadkarni said the committee has already held a meeting and is scheduled to meet next on December 11. “What about the use of technology? When will it be implemented?,” the bench asked. The ASG said that after holding meeting, the committee would give its report to the Ministry of Environment, Forest and Climate Change (MoEF&CC). The ASG said he would file it by December 13. The bench said that secretaries for environment of Delhi, Uttar Pradesh, Haryana and Punjab should also be associated with the high-level committee so that they could sit together and come out with feasible solution on the issue. Stubble burning On stubble burning, the bench asked the governments of Uttar Pradesh, Punjab and Haryana to furnish before it the updated report up to December 11. The court said it would hear the pollution matter on December 16. Regarding de-congestion at metro stations in Delhi, senior advocate Aparajita Singh, amicus curiae in the pollution matter, said though Delhi Metro Rail Corporation (DMRC) has said that it would decongest the stations, it has not yet submitted a plan. The bench asked the DMRC to place before the court the plan on how it proposes to de-congest traffic at metro stations. Source: The Hindustan Business Line Chandigarh

I want to assure homebuyers, says Nirmala Sitharaman on govt’s real estate push

12/10/2019 10:02:00 AM

Union finance minister on Saturday assured homebuyers whose houses are stuck in stalled projects that the government understands their problems and is pulling out all the stops to solve them. “I want to assure homebuyers, who have been left in the lurch for a very long time, who have taken EMIs, borrowed from the banks, who are also paying rents. We understand your problems and you are getting the results for your long-pending demands,” she said at the 17th Hindustan Times leadership Summit. “Even as we announced the last-mile connectivity money to be given by an alternative investment mechanism that we brought in, there were more than 150 projects which approached. They have all been vetted for what they are, for how much they would need, they have all been vetted to make sure that RERA compliance and everything else is in right place” she said. On November 6, Sitharaman had announced a plan to set up a Rs 25,000 crore alternative investment fund (AIF) to revive 1,600 housing projects and 458,000 housing units that are stalled to provide relief to distressed homebuyers and boost sentiments in the ailing realty sector. While the government will invest Rs 10,000 crore in the fund, the remaining Rs15,000 crore will come in from State Bank of India, Life Insurance Corporation of India and other institutions. “By December 15, which is ‘T plus 40th day’, T is the time that I announced, money will go to escrow account towards completing these projects,” she said on Saturday. Around 200,000 of the stalled housing units are in the National Capital Region (NCR) alone, around 100,000 in Mumbai and the rest in smaller cities, according to analyst estimates. By February she hopes that the process of channeling funds to distressed housing projects will be comprehensive. “We start with 5, we start with 10 and then we go on. Hopefully, by February and this is not just Delhi and Mumbai we have got list from Hyderabad, Bengaluru, Guwahati and Patna, so all over the country list of incomplete projects are coming,” Sitharaman said. Property developers have been struggling with dwindling sales, piling inventory and falling prices, even as funding for projects has dried up, with banks reluctant to lend to real estate projects fearing defaults. The prospects of the industry have turned worse since demonetization in November 2016 and the implementation of the goods and services tax in July the following year. Source: Hindustan Times Chandigarh

Despite slowdown, housing sales see steady growth in tier-II cities

11/29/2019 12:53:00 PM

Amid the slump in residential sales across India, particularly in the metros, housing demand in smaller towns and cities have seen a steady growth in the last five years driven by the government's push for affordable housing. Share of over 20 tier-II cities, including Jaipur, Vadodara, Nashik and Nagpur, in the total housing sales has increased to 25% till the end of last financial year 2018-2019 as compared to 16% five years ago, according to data compiled by real estate advisory firm Liases Foras. In the second quarter of this fiscal year, these smaller cities accounted 26% to the overall sales, a marginal jump from 25% recorded in the year-ago period. However, overall housing sales across the country including major cities like Mumbai Metropolitan Region (MMR), Delhi-National Capital Region (NCR), Bengaluru, Chennai, Hyderabad and Pune declined by 2% to 91,115 units in the September quarter, as per Liases Foras. "If you look from 2014, sales of tier-II cities have jumped by 112% while tier-I cities have grown by 28%. Contribution of these smaller cities to the overall housing market is increasing. The push for affordable housing is driving this growth," said Pankaj Kapoor, manager director, Liases Foras. Apart from the government's initiatives like Pradhan Mantri Awas Yojana (PMAY), which has helped push demand in the affordable housing segment to certain extent, smaller towns and cities offer a "more conducive land" to develop low cost housing, Kapoor said. While most of the cities in the country saw a decline in housing sales in the September quarter, few cities such as Jaipur, Nashik and Ahmedabad saw a jump of 22%, 25% and 4% respectively during the period. Real estate developers and consultants said that while big cities and metros are seeing a huge supply overhang, smaller towns and cities have been less affected by any speculative activities or downturn in the past. "While the growth in the smaller cities is nothing prominent as of now, these places were less affected by the bubble which were there in the market. Some of these cities have remained very stable and have not been affected by the downturn. That’s why these cities are showing a relatively healthier position," said Sourabh Mehrotra, national director, Knight FrankFrank, a property consultant firm. According to him, lower land prices have helped developers execute low housing projects in smaller towns as they are able to bring down the capital cost by as much as 25-30%. "The mega affordable projects like 7-10 lakh have come up in smaller towns. Reasonable land prices along with government's subsidies have helped local developers to build low cost housing projects such places," Mehrotra said. However, developers feel that growth in last five years in tier-II cities is only "a green shoot" as job markets expand beyond the metros but would take few more years to similar demand in the major cities like Mumbai and NCR. "Many smaller cities in India are likely to see incremental development because of the kind of thrust that the government is giving on creating smart cities. But it is a long term story. However, some of the smaller cities in south like Mangalore or Kochi have seen significant changes in the last few years. More jobs and development will lead to offtake of residential housing in these cities," said a spokesperson with property developer Puravankara Ltd. The Bengaluru-based has ongoing affordable housing projects under the brand Provident in cities like Kochi, Coimbatore and Mangalore apart from others. Source: Live Mint Chandigarh

Affordable housing policy spurs home sales in small towns

11/29/2019 12:48:00 PM

Property markets in top metros may be caught in a grinding slowdown, but there is cheer in smaller cities. Driven by the government’s push for affordable housing, home sales in smaller towns and cities have steadily grown in the last five years, shows data from real estate advisor Liases Foras. Sales in 20 tier-II cities including Jaipur, Vadodara, Nashik and Nagpur made up 25% of nationwide sales at the end of 2018-19, up from 16% five years ago. By the end of the September quarter of 2019-20, the share of tier-II cities had risen further to 26%. In the same quarter, overall housing sales across the country including major cities like Mumbai Metropolitan Region (MMR), Delhi-National Capital Region (NCR), Bengaluru, Chennai, Hyderabad and Pune fell by 2% to 91,115 units, as per Liases Foras. “If you look from 2014, sales of tier-II cities have jumped by 112% while tier-I cities have grown by 28%. Contribution of these smaller cities to the overall housing market is increasing. The push for affordable housing is driving this growth," said Pankaj Kapoor, managing director, Liases Foras. Apart from government’s initiatives like Pradhan Mantri Awas Yojana (PMAY) which has helped push demand in the affordable housing segment, smaller towns and cities offer “more conducive land" to develop low-cost homes, Kapoor said. While most cities saw a decline in home sales in the September quarter, some such as Jaipur, Nashik and Ahmedabad saw jumps of 22%, 25% and 4%. While big cities creak under a huge supply overhang, smaller towns and cities where there is little speculative buying has seen no downturn, real estate developers and consultants said. “While the growth in the smaller cities is nothing prominent as of now, these places were less affected by the bubble which was there in the market. Some of these cities have remained very stable and have not been affected by the downturn. That’s why these cities are showing a relatively healthier position," said Saurabh Mehrotra, national director, Knight Frank, a property consultant firm. Cheaper land helps developers in smaller cities execute low cost projects as they can reduce capital cost by 25-30%, he said. “Mega affordable projects (like those costing below Rs 10 lakh) have come up in smaller towns. Reasonable land prices along with government’s subsidies have helped local developers to build low cost housing projects such places, “ Mehrotra said. However, developers say growth in the last five years in tier II cities is only “a green shoot" as job markets expand beyond the metros but would take few more years to reach similar demand in the major cities like Mumbai and NCR. “Many smaller cities in India are likely to see incremental development because of the kind of thrust that the government is giving on creating smart cities. But it is a long-term story. However, some of the smaller cities in the south like Mangalore and Kochi have seen significant changes in the last few years. More jobs and development will lead to offtake of residential housing in these cities," said a spokesperson with property developer Puravankara Ltd. The Bengaluru-based developer has ongoing affordable housing projects under the brand Provident in cities like Kochi, Coimbatore and Mangalore. Source: Live Mint Chandigarh

Rate boost for global property markets starting to wane: Reuters poll

11/27/2019 12:43:00 PM

The combined findings of the latest Reuters polls, taken this month, have implications for the effectiveness of future monetary policy in one of the most typically rate-sensitive sectors of most developed and developing economies. The era of rock-bottom interest rates is not yet over, but the powerful boost given to global property prices by easy policy since the financial crisis appears to be ending, according to Reuters polls of over 100 housing market experts. More than a decade of easy money has pushed most asset prices to record highs, including house prices, which have climbed each year at many multiples of consumer price inflation and wage gains, making many markets unaffordable for first-time buyers. The change in sensitivity to interest rates is not universal. But it is particularly notable in the United States, where the Federal Reserve has cut rates three times this year with no major boost to the housing market outlook. The combined findings of the latest Reuters polls, taken this month, have implications for the effectiveness of future monetary policy in one of the most typically rate-sensitive sectors of most developed and developing economies. That may be all the more relevant given many central banks had made scant progress in raising rates back to what would have been considered normal levels before the global financial crisis erupted more than a decade ago. "Monetary policy's ability to stimulate housing demand is far less effective than earlier in the cycle," said Scott Anderson, chief economist at the Bank of the West. Of the seven closely-watched housing markets polled by Reuters - the US, Britain, China, India, Canada, Australia, and Dubai - none were rated by analysts as fairly priced, and particularly in big cities. Broadly speaking, where house prices are rising, analysts expect them to be tame next year and to be more reliant on incomes rather than the cheap cost of borrowing. "I think the issue really in most markets is: we've had a big upward price adjustment over the past 10 years because of ultra-low rates, and that process is sort of hitting its natural limits...what needs to happen is, you need to have prices driven by wage inflation," said Liam Bailey, global head of research at Knight Frank. Analysts expect house prices in the US and the UK to rise over the next two years but at a slower pace than what was predicted three months ago. And Dubai property prices are expected to tumble further until 2021. TRADE FRICTION While each property market is naturally facing its own set of domestic challenges, a common concern is a renewed global slowdown and trade friction stemming from the US-China trade war. Part of the extra froth in property markets since the crisis has been founded in easy cross-border investment. "(Over) the last few months, we've started hearing a lot more from firms about that uncertainty having a negative impact, even if firms aren't dealing directly with China," said Scott Brown, chief economist at Raymond James, referring to how trade friction has hit the US economy. US house price inflation has slowed over the past year and a half, roughly coinciding with the opening salvos of the ongoing US-China trade conflict. Property prices and turnover in the UK have taken a knock, particularly in London, since the shock vote in 2016 to leave the European Union, and any price rises in the coming year are expected to lag inflation. In China and India, which together make up about 40% of the world's population and have some of its fastest growth rates, house prices are expected to rise by about 3% next year - barely above consumer price inflation in one and below it in the other. But the trade war and an ongoing liquidity crisis in India's banking sector will likely drag on those respective property markets. Until recent years, they were booming and made significant contributions to economic growth both through construction and transactions as well as household wealth. Median 2020 house price forecasts for Canada and India were upgraded modestly. Australia was a notable exception, where expectations for next year doubled to 5% over the last three months following a burst of activity thanks in part to Reserve Bank of Australia interest rate cuts. But even analysts there were sceptical about how long the rebound would carry on. Despite the current global economic slowdown affecting most economies, oversupply seems to be an issue largely confined to emerging markets. In advanced economies like the US and Britain, the opposite is true, most notably in the US where a dearth of new homes has been an issue for years and despite strong demand supply is not expected to improve significantly anytime soon. "The US is pretty advanced in its cycle, construction levels are peaking now but demand is pretty robust," said Jeremy Kelly, director of global research at JLL. Source: Moneycontrol.com Chandigarh

Realty attracts $14 billion foreign PE investments since 2015: Report

11/25/2019 12:40:00 PM

Foreign institutional investors have shown more confidence in Indian real estate, especially commercial real estate over the past five years, while domestic investors continued to invest largely in the residential space. Indian real estate attracted nearly $14 billion of foreign private equity between 2015 and September 2019, showed data from ANAROCK Capital. Around 63 per cent or $ 8.8 billion of this inflow of the total foreign investments backed commercial real estate. The residential sector attracted $1.5 billion of foreign private equity in the same period, trailing behind even the retail sector which saw cumulative inflows of $1.7 billion. “Foreign investors are largely attracted towards commercial real estate because this segment has been far more organized, disciplined, documented and transparent. Also, the returns on investments in commercial are fairly steady. Even though reformatory changes within the residential real estate (like RERA, GST, etc.,) over the past few years are bringing in positive changes, several other issues still loom large. Hence, commercial reale state seems to be a safer bet for them,” said Shobhit Agarwal, MD & CEO, Anarock Capital. In contrast, domestic private equity funds infused nearly $2.4 billion into Indian real estate since 2015, of which nearly 71 per cent or $1.7 billion went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult. The commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. An additional infusion of $1.6 billion between 2015 and September 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. Source: ET Realty Chandigarh

Realty attracts $14 billion foreign PE investments since 2015: Report

11/25/2019 12:36:00 PM

Foreign institutional investors have shown more confidence in Indian real estate, especially commercial real estate over the past five years, while domestic investors continued to invest largely in the residential space. Indian real estate attracted nearly $14 billion of foreign private equity between 2015 and September 2019, showed data from ANAROCK Capital. Around 63 per cent or $ 8.8 billion of this inflow of the total foreign investments backed commercial real estate. The residential sector attracted $1.5 billion of foreign private equity in the same period, trailing behind even the retail sector which saw cumulative inflows of $1.7 billion. “Foreign investors are largely attracted towards commercial real estate because this segment has been far more organized, disciplined, documented and transparent. Also, the returns on investments in commercial are fairly steady. Even though reformatory changes within the residential real estate (like RERA, GST, etc.,) over the past few years are bringing in positive changes, several other issues still loom large. Hence, commercial reale state seems to be a safer bet for them,” said Shobhit Agarwal, MD & CEO, Anarock Capital. In contrast, domestic private equity funds infused nearly $2.4 billion into Indian real estate since 2015, of which nearly 71 per cent or $1.7 billion went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult. The commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. An additional infusion of $1.6 billion between 2015 and September 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. Source: ET Realty Chandigarh

Indian real estate: $14 bn Foreign PE Flows in 5 Years, says ANAROCK report

11/22/2019 12:32:00 PM

Indian real estate attracted nearly $14 bn of foreign private equity (PE) between 2015 and Q3 2019, says the latest ANAROCK data. 63 per cent (around $8.8 bn) of the total foreign investments backed commercial real estate. Of the total $14 bn foreign investments in Indian real estate between 2015 and Q3 2019, nearly $8.8 bn went into commercial realty, followed by $1.7 bn in the retail sector and $1.5 bn into the housing sector. Logistics & warehousing drew over $1 bn, and the remaining investments went into mixed-use developments. Speaking on the findings, Shobhit Agarwal, MD & CEO at ANAROCK Capital said, "In stark contrast, domestic PE funds pumped nearly $2.4 bn into Indian real estate since 2015, of which nearly 71 per cent (approx. $1.7 bn) went to the housing sector. This was a period of considerable stress for the residential segment; domestic funds invested heavily into a sector plagued by issues like delayed/stalled units, low sales and fairly lower yields. This made exiting investments with substantial gains difficult." Shobhit went on to add that the commercial real estate segment, on the other hand, delivered a comparatively stellar performance in the last five years. Steady demand and rising rentals gave foreign investors a decisive edge. Moreover, the overwhelming response to Embassy Office Parks’ REIT launch - and its superlative performance - saw commercial real estate segments emerge as the bigger draw for investors. Several other large developers are also keen on listing their commercial assets under REITs. On commercial real estate attracting more foreign PE, Shobhit said, "Indian commercial real estate will continue to attract PE funds as there is high demand for Grade A office spaces across the top Indian cities. Earlier data indicated that the first three quarters of 2019 alone saw inflows of USD 3 bn in the commercial segment - an increase of 43 per cent over the corresponding period in 2018." He said that logistics, warehousing and retail will continue to witness considerable growth on the back of recently-eased policy norms for the retail sector, aimed at boosting growth and attracting more investments. An additional infusion of $1.6 bn between 2015 and Q3 2019 was a mix of foreign private equity and funding by Indian developers or investors who collaborated either at project or entity levels. For instance, in 2018, Canada’s CPPIB and India’s Phoenix Group together invested nearly $100 mn into a mall project in Bangalore. The top 5 foreign investors — Blackstone, Brookfield, GIC, Ascendas and Xander — alone contributed 75 per cent of the net foreign PE flow into Indian real estate. Interestingly, their focus was not limited to the top 7 cities and extended into tier 2 cities like Indore, Ahmedabad and Amritsar. The top 5 domestic funds — Motilal Oswal, HDFC Venture, Kotak Realty, ASK Group and Aditya Birla PE — invested nearly 54 per cent or around $1.3 bn into Indian real estate. They focused exclusively on the top 7 cities. Source: Zee Business Chandigarh

Centre urges states to get housing proposals under PMAY sanctioned by 2020

11/21/2019 12:29:00 PM

The Centre has requested states and Union territories to get their housing proposals sanctioned by March next year under PMAY (U) for their remaining demand, a move aimed at meeting the deadline of 'Housing for All' in 2022. In written reply to a question in Lok Sabha on Thursday, Union Housing and Urban Affairs Minister Hardeep Singh Puri said that the validated demand reported by states and UTs so far is around 1.12 crore. The minister said that based on the project proposals received so far from the states and UTs, central assistance of Rs 1,45,949 crore has been sanctioned for construction of nearly 93 lakh houses. According to the government, 55,40,801 houses have been grounded for construction of which 28,06,465 houses have been completed under the Pradhan Mantri Awas Yojana (Urban). "States/UTs have been requested to get their project proposals for all their remaining demand of houses sanctioned by March 2020 so that construction of all houses may progressively be completed by 2022," Puri said. Last month, the Union Housing and Urban Affairs Minister had told that all the 1.12 crore houses being constructed under the PMAY (Urban) would be occupied by beneficiaries by early 2021. "By March 2020, all the 1.12 crore houses will be sanctioned and 75 lakh houses will be grounded. Fifty lakh houses will be completed and 40-45 lakh houses occupied by beneficiaries in next five to six months. "We are fully confident that by early 2021, all houses will be occupied by beneficiaries," Puri had said. PMAY (Urban) has four components - 'Credit Linked Subsidy Scheme' (CLSS), In Situ Slum Redevelopment (ISSR), Affordable Housing in Partnership (AHP) and Beneficiary Led Construction (BLC) under which the ministry provides central assistance to beneficiaries to construct their own houses. Under CLSS, Centre provides interest subsidy of up to around Rs 2.67 lakh on home loans to individuals, which reduces the principal outstanding amount of the loan. Source: ET Realty Chandigarh

Panchkula emerging top destination for IT firms

11/20/2019 12:12:00 PM

After Chandigarh and Mohali, Panchkula is emerging as a preferred destination for IT companies. In the past six months, companies such as Click Labs (P) Ltd, Frontizo Business Services, a joint venture between Patni Group and Amazon Asia Pacific, and Esri India have commenced their commercial operations. The three companies put together would employ over 2,000 IT/ITeS professionals by the end of this year. Established in 2008, Panchkula IT Park is spread over 79 acres and has 28 plots for the IT companies besides land earmarked for commercial establishments, institutions and shops. Out of the total plots earmarked for IT companies, nine are still vacant. With entrepreneurs preferring Chandigarh and Mohali because of better connectivity, the IT Park at Panchkula had been suffering. “Out of total allotted sites, 10 companies have already started operations while the rest are at different stages of completion,” sources said. The major companies which are having operations in the IT Park include Altruist Technologies, Stylum Industries and erstwhile Idea Cellular besides over two dozen firms in the MSME space which have taken space on lease. Around May this year, Chandigarh-based technology solution provider Click Labs shifted to Panchkula IT Park. The company is employing around 800 people. Similarly, Frontizo Business Services recently set up their new contact centre in Panchkula. The new centre will see Frontizo Business Services hiring up to 1,000 people in different roles by the end of FY 2019-20. Frontizo will service Amazon’s customers in Hindi from the Panchkula site thus enabling Amazon to service Hindi-speaking customers who constitute a sizeable number of their customer base in India. After Frontizo, Esri India — the Indian arm of California-based Esri and leading Geographic Information System (GIS) Software and Solutions provider — has announced the inauguration of its latest Global Delivery Centre for GIS Data Management in Panchkula. It will provide GIS Data Management Services to global customers in sectors such as power, telecom and to government. The centre will employ data scientists, domain experts, data quality specialists and GIS analysts who will deliver GIS Data Management Services. Agendra Kumar, president, Esri India, said, “When we started looking for location for our next facility, we found the IT Park in Panchkula was most suitable in terms of infrastructure availability. This centre will also provide a good opportunity for local talent to work on global GIS projects.” This facility will hire around 150 employees and the company plans to double this number in the next 2-3 years. The launch of this centre will further encourage other GIS organisations to set up offices in this region given Esri’s global leadership position. Source: The Tribune Chandigarh

After medi-city, IT-city: Bio-Technology park to come up near Mohali

11/19/2019 12:51:00 PM

Following the setting up of medi-city, an ancillary site comprising multispeciality hospitals, in New Chandigarh (Mullanpur Garibdas) and IT-city, a site for IT companies, near airport road, the state government is set to establish a Bio-Technology park near Mohali. The government will be offering land to Bio-Technology companies, for setting up the park, in the Progressive Punjab Investors Summit 2019, scheduled to be held in December. The government has planned to acquire 84.1 acre land in Chao Majra, Chilla, Raipur Khurd and Mauli Baidwan villages for the same. The project will be located at a distance of 9 km from the international airport and 13 km from Chandigarh. A Greater Mohali Area Development Authority (GMADA) told Chandigarh Newsline that the land would be offered for companies to set up Bio-Technology park as private and state universities were also coming up in the area, which would provide ample workforce for the companies. National Institute of Pharmaceutical Education and Research (NIPER) is also near the project site. “The government has allowed setting up a mixed land use zone in Rajpura, near Mohali and the Bio-Technology park is being planned in a way that the requirements of the industry can be met at one go. A green industry is also coming up at Rajpura, which will boost the new project,” the officer added. On being asked about the response of the companies to the project, the officer said that during investors summit, a Memorandum of Understanding (MoUs) would be signed with the Bio-Technology companies, however, at present, there was no company which had showed interest. The officer said, “We have estimated that the establishment of a Bio-Technology park will generate employment for more than 50,000 youths of the state and will also provide business to hundreds of people and Small and Medium Enterprises (SMEs). The state government is working to promote medical tourism and Bio-Technology park is a part of this plan.” At present, the IT city is in its nascent stages of development, while the work for medi-city has almost reached its completion. However, the state government has not yet declared a dedicated zone for setting up the Bio-Technology park. Source: Indian Express Chandigarh

REITs to give a boost to commercial real estate in India

11/12/2019 2:05:00 PM

The launch of REIT symbolizes that the Indian realty market has become more professional and transparent. April 1, 2019 will always be remembered as a red letter day for the Indian realty sector as on this day the very first Indian REIT was listed by the Blackstone-Embassy Group. REIT or the Real Estate Investment Trust is a boon to the commercial real estate sector and is facilitating growth avenues to it. REITs have a proven and successful track record in several Asian countries such as Japan, Singapore, Malaysia, Thailand, etc. REITs enable small and mid-level investors to invest in Grade-A commercial assets. Minimum annual returns of these investments range from 7-8% and can go up to as high as 12-13%, depending on the quality of the underlying assets. The commercial sector has started showing green shoots of recovery with liquidity crisis clearing out. With REITs, the biggest advantage to the retail investors is the ease of investment. Investing in REITs is just like investing in direct equity and can be done through a DEMAT account. The other big benefit is getting an opportunity to invest in commercial properties that will earn rental income. This is a big advantage as commercial properties yield higher rental returns than residential properties. Further, REIT regulations mandate the distribution of 90% of the rental income to unit holders, while the remaining 10% can be utilized for the business purpose. Apart from the rental income, any increase in the value of units also adds to overall capital appreciation. The introduction of REITs has also promoted professionalism throughout the commercial real estate sector. Considering the increasing demand, NRI investments and interest in the sector have risen with the introduction of REITs. REITs, if encouraged for individual retail investors in India, are capable of changing the nature of property investment. They may give retail investors an easy access to the high-value property, which was a domain previously reserved for large institutional investors. Overall it can be said, being in a nascent stage in India, REITs might face a few early challenges, but in the long term, the success of REITs will have a direct impact on the success of the commercial real estate sector in India. Chandigarh