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Welcome to know & Share information about Real Estate Market & Opportunity to invest.

This blog is an effort to bring more comprehensive, precise information about the current happening of Global & specially India's Real estate market and can have also professional advise and assistance to invest in "PUNE" city which is a India's Premiere IT Hub, Education Hub added with fantastic weather all the year & Surrounded with scenic beauty of hills. "Navi Mumbai" is also known emerging investment destination.

There will be frash review and open discussion about the specific topic which may interest to you.

EXPERT/PROFESSIONAL ADVISE TO NRI's (NON RESIDENT INDIANS) TO INVEST IN REAL ESTATE/ PROPERTIES IN PUNE, MAHARASHTRA, INDIA

*we are Real Estate Consulting / Brokering & property management company, based in pune and we work in PUNE, MUMBAI & GOA’s premium high ticket price properties and also assist buyers to book or buy/purchase suitable property as per their requirements and budget and can also offer any underconstruction propery from all recognized developers in pune. It\'s like saving time and getting our expertise & knowledge to search property for interested buyer\'s.

Resale/leasing, property management will involve service / brokering Fees. (We Believe in Quality)

RERA REGISTRATION NO. A52100002438

(reach directly on my cell No. 91-7498829332, +91-9822052388, Email: deepaksundrani@thegururealty.com

PLEASE ALSO VISIT OUR NEW WEBSITE ON SPECIFICALLY DEDICATED FOR PROPERTY MANAGEMENT SERVICES website http://punepropertymanagementservices.com/


It's always right or good time to invest in properties in rapidly developing INDIA

Dear freinds, it has quite sometime that i am again writing as has been very busy in my core business of consulting property buyers to purchase properties in Pune, India. here, just thought to write topic of right or good time for investing properties in India as from last few years or months, lot of ups & downs are happening in the world economy and indian economy so many people are asking this question continuously.. first i strongly believe that investing in Indian real estate will reap great appreciation for next 10 years, if investors can hold their investment till this period or till right time.
Now, here are reasons to back or support my point that indian real estate has great potential to give handsome returns are
1) One Of the fastest Developing Country
2) Real Demand
3) Inflation
4) Income Growth

1) India is one of the fastest growing country in world currently which makes it more attractive as when country is developing, it will never get fall in longer run as everything will be required ie. infrastructure, industries, residences, education etc.

2) Real Demand refers to huge requirement of Residential and commercial spaces in millions required in india's cities as already it's predicted that millions of units will be required for endusing in urban areas which gives great optimism that india's real estate market is based upon real demand and as we can now check and know with our past experiences of international market of dubai, europe and USA that if there is no real enduser demand then real estate growth will not sustain in long term so we can surely say that india with huge population and demand can surely will give great appreciation.

3) Inflation is one of the most talked phrase in india currently as it's affecting every aspect of life in india. i wish to highlight impact of inflation upon real estate investment because if even we say that there is no appreciation for next 3-5 years, still inflation will make it impossible for developers to offer any real estate property on same price what one can purchase it today..It is very valid point as whatever you can buy now for Rs. 1 will get you half in next 3-5 years so forget about appreciation, still whatever purchased today will get double in next few years due to inflation...another example is that money value is getting devalue everyday so keeping money in bank will not be good idea in current scenario.

4) Recently thanks to IT and corporate world where salaries are increased handsomely given lot of ready cash to young working professionals who are highly educated and understand very well that investing in properties will give them maximum returns in future and great financial support in future.

All above points and many more positive aspect of India and indian economy indicates one thing that it's time to invest in indian properties to get great appreciation in coming years..

However it's very important to understand that nowadays, real estate market is not such that buy any property anywhere and expect good returns for it and may end up no return dead investment therefore it requires proper research and after surveying on the ground, one should decide for it as an opportunities always change with the time. for that, an expert needs to be consulted & hired which will not only benefit in finding right opportunity for buying property but also to manage it professionally at the later stage as it will involve many aspect of managing, leasing / renting and selling the property at the later stage to make earning & profit out of it.

About Pune City, Maharashtra State, India.

Pune hardly a distance from mumbai commercial hub of india, also known as the Oxford of east has shown impressive economic growth in the past few decades. Pune boasts of some excellent educational institutes along with key defence institutions. In the last decade a large number of companies have also made their presence felt in the city and several manufacturing and software companies have set up their development centres in this city. The rapid real estate growth in the city is reflected through the several residential as well as commercial properties that are mushrooming within the city. Along with excellent employment and educational opportunities, good weather and cosmopolitan population are some of the factors that have cause this phenomenal growth in the real estate sector. Industry experts indicate that residential space of around 1.76 million square feet is needed with the real estate sector recording compound annual growth of 51 percent. Residential spaces in prime areas like Camp, Koregaon Park, Aundh and Baner continue to be in demand. However lack of space in these areas has prompted many property developers to shift their focus to the fringe areas of the city which include Mundhwa, wagholi, Wanowrie, Nagar Road and Hinjewadi areas. The Maharashtra government has granted approval to private property developers to establish townships in Pune as a part of the Public Private Participation model and this has resulted in development of several integrated townships. The Pune real estate market encompasses low cost properties comprising of one or two bedroom dwellings as well as sophisticated opulent villas and duplex apartments. The properties are designed to reflect the contemporary lifestyles of people with many of them having excellent modern amenities like club house, swimming pool, gym and gardens. There are a large number of projects underway in upcoming areas like Wakad, Balewadi, Hinjewadi, Pimple Nilakh etc. The residential spaces in these projects are also quite affordable. The eastern belt of Pune has developed at a very fast pace and is much in demand because of its close proximity to the airport as well as IT parks. With the development of infrastructure particularly roads, areas like Magarpatta, Kalyani nagar, Viman nagar, Kharadi & wagholi have been well connected with the city and this has resulted in a great deal of demand for properties in these areas. one more location in South pune named NIBM is also a very good investment destination as having best schools name in this area. With the rapid infrastructural development and economic growth buying a property in Pune has become an excellent investment option. The real estate prices in Pune have consistently recorded an appreciation of around 25 to 30 percent each year. There is a greater demand for intelligent living spaces that provide upscale amenities. Over the past two years high rise towers have been permitted to be developed in some areas in Pune and many real estate developers have capitalised on this thereby transforming the Pune skyline. Investing in residential property in Pune can be fruitful. However some of the variables or factors that should be taken before buying the property include the location or area, the facilities offered in the project, infrastructural development in the location and quality of construction among others.

Pune: Hub of commercial properties for Lease & Rent and Sale Preleased on ROI basis.

Greetings, Pune is rightnow one of the best city of INDIA to attract commercial real estate investment and best suitable to start the business because of presence of many national & international companies having their setup's already.

we are currently having properties, offices for corporates, co-working offices, shops, showrooms, shopping mall spaces, schools, Restaurant, hotels & hospitals for sale and lease/rent in entire pune city starting sale price range of 2 Crores to 200 Crores and preleased properties giving rental returns of more between 5-10% annually.

we are also having office spaces for lease rent near and inside all IT parks of pune full floors, entire building to be offered to reputed brands for long leasing.

for more detail, please contact Deepak Sundrani #9822052388, deepaksundrani@thegururealty.com

Property / Real Estate Investment Opportunity for NRI's (Non Resident Indians)

Pune: from last few months, NRI community will have great chance and more opportunities to invest in india because of sudden appreciation of Dollar against Indian Rupee which is almost 15% therefore if any NRI or PIO from countries of US or any other middle eastern country, have pegged currency with US dollar then they can avail straight 15% discount indirectly because of exchange rate in investing properties in India which is no doubt will give really handsome retruns or profit in near future........Ideal situation NRI's those have spare money to avail this benefit.......another suggestion that NRI's can look for investment in PUNE, Maharashtra in India as it's very fast growing city and having immense potential to give maximum profit/returns in coming years.

Sunday, May 26, 2019

Real estate sector cheers Modi’s victory; says it is a vote for development

Modi's win expected to double institutional investments in real estate to 10 billion dollars in 2019

Source: Vandana Ramnani 
Expressing confidence in the government's real estate initiatives, the sector has hailed the Prime Minister Narendra Modi-led government's victory in the 2019 General Elections as a vote for development.
Citing initiatives such as GST, RERA and the Affordable Housing for All by 2022 scheme, the sector expects institutional investments in the sector to double to $10 billion in 2019.
The impact of reforms has been reflected in the number of investments received by the real estate sector, as of the total institutional investments of $30 billion during 2009-2018, $20 billion was invested in 2014-2018. During the same period, the share of foreign investments more than doubled to 70 percent in 2018 from 31 percent in 2009.
"We are confident that institutional investments in 2019 will nearly double to $10 billion as compared to 2018," said Ramesh Nair, CEO & Country Head, JLL India.
The country is also likely to witness more REIT launches. Constructive REIT reforms since 2014 led to the successful listing of Blackstone-Embassy REIT in India. JLL had estimated that Indian office space holds a potential REIT able space of 294 mn sq ft.
"We expect more REIT launches in 2019. For institutional players, newer business around co-living, flex-spaces and PropTech are opening up, giving much hope and confidence in the India growth story," he said.
During its first term, the government had given a decisive impetus to all-around infrastructure development, major policy overhauls such as DeMo, RERA and GST, amended old Acts like Insolvency & Bankruptcy Code and the Benami Transactions (Prohibition) Act, and envisioned schemes like 100 Smart Cities, Housing for All by 2022, Make in India, AMRUT Cities etc.
"With Modi 2.0, we can expect the steady momentum that the real estate sector has been regaining in recent times to not only maintain its pace but pick up speed. Some of this government's initiatives will now doubtlessly sail through to the final stage of their journey," said Anuj Puri, chairman - ANAROCK Property Consultants.
The much-touted Housing for All by 2022 initiative's viability came under question because if it is to succeed, it needs sustained efforts from a determined government. "This mission could now actually see fruition if not by 2022, then at least towards the end of this new five-year term, he said.
Pradeep Aggarwal, founder and chairman, Signature Global India and chairman, ASSOCHAM National Council on Real Estate, Housing and Urban Development, said that the government has shown that it has good intentions to fulfil PM Modi’s vision of Housing for All by 2020 and that it is not only a slogan.
"The strong and steady government should bring about stability with remedial actions without much delay to revive the shock of last quarter economic growth. The stable government reflects the faith reinforced by the aspirational India which enhances the confidence index domestic as well as globally," said Niranjan Hiranandani, National President - NAREDCO and Managing Director - Hiranandani Group.
The sector hopes that the new government will redress and resolve the prolonged issue of liquidity crisis that the sector is facing currently. Moreover, rationalising the taxes by subsuming stamp duty under GST will grand a big relief to the home buyers.
"We highly recommend the National Housing Policy to boost rental housing in order to fulfil the ambitious target of Housing for All by creating surpluses," he said.
Subodh Runwal, director, Runwal Group is of the view that "this a vote for development and particularly for the real estate industry, it will provide housing for all before the next elections. We are also hopeful that in the ease of doing business related to construction permits and transparency we will be in the top 10 in the world."
The World Bank Doing Business Report (2019) rankings published in the last quarter of 2018 had ranked India 77th among 190 countries assessed on the Index. This had been a significant improvement from the previous performance.
"From policy overhauls to amendments in older acts to ensure that these acts are relevant in today’s times, the foundations laid down by the Government during its last tenure will bear fruit during this term and will further boost the growth of the country," said Anshuman Magazine, chairman and CEO, India, South East Asia, Middle East and Africa, CBRE.
A majority government is a strong point for economic growth as it instils confidence of continuance and unhindered policy decisions. "With the second term, we expect the government to continue with its growth policies including infrastructure development. We are sure the government’s focus on the Housing for All policy will be paramount," said Shishir Baijal, chairman and managing director, Knight Frank India.
"The NDA Government's return to power with a decisive mandate will reassure global and domestic investors of stability, certainty and continued focus on growth. The real estate sector has high expectations from the new Government to improve liquidity, balance fiscal discipline with a stimulus, expedite resolution of stressed projects and streamline implementation of RERA," said Aashish Agarwal, senior director, Valuation and Advisory, Colliers International India.
Prashant Solomon, MD, Chintels India said that the election results have renewed optimism across the country. "For a growing economy like ours, the stability of the government is very important in order to facilitate the implementation of regulations such as RERA, REITs among others for the sector to function transparently and grow organically."

Thursday, May 16, 2019

Indian Real Estate Industry

Introduction

The real estate sector is one of the most globally recognized sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. The real estate sector comprises four sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.
It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term. Bengaluru is expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
India's rank in the Global House Price Index has jumped 13* spots to reach the ninth position among 55 international markets, on the back of increasing prices in mainstream residential sector.

Market Size

The Indian real estate market is expected to touch US$ 180 billion by 2020. Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020. In the period FY2008-2020, the market size of this sector is expected to increase at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India's growing needs.

Investments/Developments

The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces. Private equity investments in real estate are estimated to grow to US$ 100 billion by 2026 with tier 1 and 2 cities being the prime beneficiaries. India stood third in the US Green Building Council's (USGBC) ranking of the top 10 countries for Leadership in Energy and Environmental Design (LEED) certified buildings, with over 752 LEED-certified projects across 20.28 million gross square meters of space. According to data released by Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.67 billion.

Government Initiatives

The Government of India along with the governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies. Below are some of the other major Government Initiatives:
  • In February 2018, creation of National Urban Housing Fund was approved with an outlay of Rs 60,000 crore (US$ 9.27 billion).
  • Under the Pradhan Mantri Awas Yojana (PMAY) Urban 1,427,486 houses have been sanctioned in 2017-18. In March 2018, construction of additional 3,21,567 affordable houses was sanctioned under the scheme. 

Road Ahead

The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform which will help in allowing all kinds of investors to invest in the Indian real estate market. It would create an opportunity worth Rs 1.25 trillion (US$ 19.65 billion) in the Indian market over the years. Responding to an increasingly well-informed consumer base and, bearing in mind the aspect of globalisation, Indian real estate developers have shifted gears and accepted fresh challenges. The most marked change has been the shift from family owned businesses to that of professionally managed ones. Real estate developers, in meeting the growing need for managing multiple projects across cities, are also investing in centralised processes to source material and organise manpower and hiring qualified professionals in areas like project management, architecture and engineering.
The growing flow of FDI into Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards.

Thursday, May 9, 2019

Top 10 Tallest Buildings In India

The metro cities in India are undergoing massive construction boom, with hundreds of high-rises and more than 100 super tall skyscrapers under construction. Mumbai has more than 4000 high-rise buildings and has the 6th highest number of skyscrapers in the world. Tall buildings and monumental landmarks determine how urbanized a country is. Here are 10 of the tallest buildings in India that serve as landmark to the respective cities.
1) Omkar 1973, Mumbai
Rising majestically above the city and the Arabian Sea, Omkar 1973 is set to have three high rise towers after its completion. For now Tower A & B are complete and stand tall at 76-storey and 75-storey, respectively. There are 400-plus sky bungalows, ranging from 2,500 sq. ft. to 18,200 sq. ft. area in this project. It has been constructed over a height of over 450 meters.
omkar 1973
2) Palais Royale, Mumbai
A sky scrapper with 88 floors is located in Lower Parel of Mumbai; its height is 320 m. The luxury building was designed keeping sustainability and responsible consumption in mind from the onset of the project. The development team has successfully achieved a LEEDS platinum rating – it is one the first residential buildings in the world to do so. The building has 120 apartments with amenities like a cinema house, spa, cricket pitch, badminton court, football pitch and three swimming pools.
Palais Royale
The 42 is a residential skyscraper and the tallest building in Kolkata. The 42 with a height of 268 metres (879 ft), comprises of 56 residential apartments and one duplex at the top of two floors. The 63 storeyed building offers ultra-premium luxury apartment and 360-degree panoramic view of the city.
The 42
4) Imperial Towers, Mumbai
With a height of 254 meters, the Imperial Towers are twin residential skyscrapers located in Tardeo, Mumbai. The building has a landscaped podium on the ninth floor which offers green space amenity for the residents. The 60 floored Imperial offers an excellent lifestyle and luxury apartments to live.
imperial tower
5) Ahuja Towers, Mumbai
It offers exclusive 4BHK apartments and limited edition 6BHK penthouses. The Ahuja Towers were crowned among World’s Top 50 High Rises, built in 2015. The 53 storeyed homes with a height of 250 meters come equipped with home automation.
Ahuja Tower
6) One Avighna Park, Mumbai
One Avighna Park is located in the heart of Lower Parel, Mumbai with 60 floors. The twin towers stand at the height of 246 meters. It has won 7 international awards apart from 32 other national awards. The project was pre-certified as a platinum rated green building by IGBC. It has received a 7 Star Rating by CARE in the Real Estate Category – 2014 and has also acquired an Environmental Clearance – 2014.
One Avighna Park
7) Bayview, House of Hiranandani, Chennai
These 3 BHK luxury apartments are located off Old Mahabalipuram Road, Egattur. Bayview is a 40 storeyed tower and with a height of 204 meters, it is known as the tallest building of South India. The homes overlook the Bay of Bengal and the backwaters.
bayview hiranandani
8) Ireo Victory Valley Tower, Gurugram
Ireo Victory Valley is a new residential destination embellishing the address of Sector 67, Gurgaon. It is a 51 floors residential complex with the height of 178 meters and spread on an area of 25 acres and has more than 750 apartments. This residential township exudes great architectural designing and an indulging modern lifestyle.
Ireo Victory Valley Tower
9) Mantri Pinnacle, Bengaluru
Mantri Pinnacle rises in the skyline of Bengaluru with 46 floors and offers 3, 4, & 5 BHK homes. Located at Banerghatta Road, Bengaluru, Mantri Pinnacle has 133 residences and a breath taking view of the city. Crowning the tower and commanding the most impressive views are a Sky Lounge on the 41st floor and an observatory on the 42nd. Residents can also avail a helipad on the 46th floor. Height is 153 metres.
Mantri Pinnacle
10) Lodha Bellezza 3 & 4 Towers, Hyderabad
Located in Kukatpally, Lodha Bellezza is the tallest building in Hyderabad with a height of 125 meters. The skyscraper with 40 floors offers luxury apartments along with yoga and meditation platform, techno-luxury spa, helipad and other required facilities.
Lodha Bellezza

Saturday, May 4, 2019

HELLO HOME, GOODBYE TAX

Selling your property can be taxing. However, you can now skirt the Capital Gain Tax (CGT) and profit from your property decision.
Here’s how...

With the festive season having commenced for the sector, realty transactions are taking place at a brisk pace. Hence, if you are looking to buy another apartment by selling your existing property, bear in mind: you will have to pay the Capital Gain Tax (CGT) on it as well. After all, every property transaction is scrutinised by the tax department.

WHAT IS CAPITAL GAIN?

Capital gain is of two types: Short Term Capital Gain (STCG) and Long Term Capital Gain (LTCG).
So, if you have bought property and you sell it in less than two years (24 months) of the purchase date, your STCG is calculated by deducting the cost of acquisition, including the money spent on renovating the property, and the transfer cost (from the sale price). “STCG is taxed as per your normal income tax slab of the relevant year of sale,” informs Nagesh Sharma, founder, Mera Loan Doctor.
LTCG is calculated when you hold the property for more than two years and then sell it. It is taxable at 20 per cent of the gains earned from the sale. Here, while the calculation is the same as that for short-term gain, the cost of acquisition and improvement is adjusted for inflation. This is called indexation.
TAXATION PROCESS:
“Taxation on gains is computed after indexation of the property price at the time of purchase. Indexation is a method for adjusting for inflation and hence, increases the tax value of the property each year. Once the index value of the property is arrived at, then the gains on sale above this value is subject to tax,” shares Amit Goenka, MD and CEO, Nisus Finance Services Co Pvt Ltd.
GIFTED OR INHERITED?
Remember, even if you have not bought property, but have inherited or received property as a gift, you are still liable for taxation. Here, capital gains will be computed on the basis of the cost to the previous owner, and indexed to the year of purchase.
STAY INVESTED:
Goenka suggests, “As per section 54 of the Income Tax Act, any person who has to sell off old property and buy or build a new property of equal or greater value, is exempt from paying the CGT. Also as per section 54F, if a person sells a non-residential land to buy a residential one, then the CGT is also exempted. This relief can be obtained, even if the new house was bought before selling the current house. It is imperative to hold on to the new property for at least three years, else it will attract taxes with penalties.” So, if you have been eyeing a bigger house, go for it!

Picture

AVOID CAPITAL GAIN:

THERE ARE OPTIONS TO REDUCE THE BURDEN OF TAXATION ON YOUR PROPERTY SALE. NAGESH SHARMA SHARES A FEW TIPS:
Option 1: Within three years from the date of sale of your property, purchase another house in India or construct another house. If you wish to upgrade to a better or bigger house, this option suits you well. This way you can not only save the tax, but also fulfill your desire of moving to a bigger or better home;
Option 2: Invest the capital gain amount in certain eligible government bonds, which have a mandatory lock-in period of five years. The interest earned through this is around five per cent; however, the maximum amount you can invest here is only Rs 50 lakh;
Option 3: This is not tax-saving, but could be a profitable option if invested in the open market after paying the CGT. This option does come with some sort of risks, but if done precisely, you can earn much more than what you might save towards paying tax. You can utilise the gain funds by either investing in the capital market, which can provide not less than 15 per cent return in long-term, or invest the same in commercial property, which can fetch around eight-ten per cent return with a possibility of capital appreciation. These two options of investing in either the capital market or in commercial property can recover the gain tax paid initially and eventually result into a profitable option.

HOW IT WORKS:

PICTURE THIS: IF RS 50 LAKH IS THE CAPITAL GAIN AMOUNT AND YOU WORK ON THE THREE OPTIONS ( REFER TO THE YELLOW BOX), HERE’S HOW IT IS BENEFICIAL TO YOU:
OPTION 1: By purchasing another house, you can save Rs 10 lakh;
Option 2: This option can save you Rs 10 lakh and earn you approx. Rs 15 lakh in five years by investing in certain eligible government bonds if the five-year lock-in period is taken into consideration;
Option 3: This option will have an outflow of Rs 10 lakh tax initially, but the remaining amount of Rs 40 lakh (i.e. capital gain amount of Rs 50 lakh less Rs 10 lakh CGT) is invested in the capital market, which brings approx. 15 per cent return average per year in five years. Hence, the corpus can become around Rs 70 lakh, which is more than what you made in option 2. Also, if this Rs 40 lakh is invested in purchase of commercial property, which brings in an approx. return of eight per cent post tax, you can earn approx. Rs 16 lakh in five years with a capital appreciation of approx. 20 per cent. In this case, this option can get you a total corpus value of Rs 64 lakh (i.e. Rs 16 lakh rental return + Rs 8 lakh property appreciation + Rs 40 lakh initial value).
Source: pune property times.

Saturday, April 27, 2019

About 200 US companies seeking to move manufacturing base from China to India

The US-India Strategic and Partnership Forum's (USISPF) President Mukesh Aghi said that the companies are talking to them about how to set up an alternative to China by investing in India.  

Washington: About 200 American companies are seeking to move their manufacturing base from China to India post the general elections, a top US-based advocacy group has said, observing that there is a fantastic opportunity with firms looking at alternatives to the Communist giant.
The US-India Strategic and Partnership Forum's (USISPF) President Mukesh Aghi said that the companies are talking to them about how to set up an alternative to China by investing in India.
Aghi said that USISPF's recommendation to the new government would be to accelerate the reforms and bring transparency in the decision-making process.
''I think that's critical. We would advise to bring more transparency in the process and to make it more consultative because in the last 12 to 18 months, we are seeing US companies look at some of the decisions being made, either e-commerce or data localisation, as more domestic-oriented than global,'' he told PTI in an interview.
In his reply to what the agenda of the new Indian government should be to attract investment, Aghi suggested that New Delhi needs to accelerate reforms, be more transparent in the process and engage more.
''We need to understand how we can attract those companies. And that means all the way from land issues to customs issues to being part of the global supply chain. Those are critical issues. There's a whole plethora of reforms that need to go further down, and I think that is also going to create a lot of jobs,'' he said.
He said that Mark Linscott, the former Assistant US Trade Representative for South and Central Asian Affairs, is working with USISPF member companies to come up with a recommendation as to what India needs to do to enhance its exports and work up from that perspective.
One recommendation, which I strongly believe is going to help India is that we should now start thinking of a Free Trade Agreement (FTA) between India and the US" Aghi said. 
"I think if India is concerned about cheap goods coming from China, an FTA will eliminate that need. You can put barriers to Chinese goods and still have the US providing access to the Indian market and Indian companies having more access to the US market, and issues like GSP would diminish, he said.
Aghi said that they have formed a high-level manufacturing council within the member companies, led by John Kern, Senior Vice President of Supply Chain Operations at Cisco who are putting a document together detailing what India needs to do to turn it into a manufacturing hub. 
"We plan to have the document ready by the time elections are over as part of the recommendation,'' he said.
''What they're saying is we want a backup strategy to start manufacturing in India. There are small-small issues, which can slow them down. And at the moment most of them are waiting for elections to be over. But there's a large deluge of companies keen to not only manufacture in India but also who want to go after the domestic market,'' he said.
On the amount of investment these companies would bring to India, he said the number in question is substantial. ''If you look at, our member companies in the last four years have invested over USD 50 billion,'' he added. 

Sunday, April 7, 2019

REITS a new fuel for commercial real estate

Niranjan Hiranandani New Delhi

REIT is a company that owns, operates or finances income-producing real estate.


Commercial real estate in India has a new hope on the horizon after seeing the success of it first real estate investment trust (REIT). The Embassy Office Parks REIT, a joint venture between the Bangalore-based property developer and private equity firm Blackstone was oversubscribed and successfully raised Rs 4,750 crore from the primary market last week and has been listed finally. 
One can say that this is an opportune time for REITs to make a grand entry in India. Thanks to the aggressive plans of businesses - both, local and global - commercial real estate in India is doing very well right now.
Done correctly, it may prove to be an answer to the liquidity crunch that has been crushing the sector for the past years.
REIT is a company that owns, operates or finances income-producing real estate. Modeled after mutual funds, REITs provide all investors the chance to own valuable real estate, present the opportunity to access dividend-based income and total returns.
REITs allow anyone to invest in portfolios of real estate assets the same way they invest in other industries - through the purchase of individual company stock or through a mutual fund or exchange traded fund (ETF). The stockholders of a REIT earns a share of the income produced through real estate investment - without actually having to go out and buy, manage or finance property.
There are various advantages that REITs offer to the investors: it has a low entry point - around Rs. 2 lakh - so that a common investor can add real estate to its portfolio at a much lower investment. The return on investment projection is between 8-14% in the short-to-medium term with considerable low risk. As regulations maintain that 80% of the REITs listings must be from rent-generating assets, it is less volatile than other asset classes like stock market, mutual funds and gold. REITs guidelines maintain that at least 90% of the net distributable income after tax will be distributed to investors at least twice a year.
Advantage India
In countries like UK, Canada, Singapore and Australia, REITs is a market proven model with proper regulations that gave fair returns over a period of time. As per reports, in Canada, the average return for REITs investor was around 10% in 2017, whereas in UK, it was somewhere around 8-10%. In India, as Grade 'A' commercial real estate had such a good run in the last two years in spite of various regulations that the projected five-year returns on commercial assets is a good 14%.
Data from a leading research firm in India indicates that approximately 50% of the total office stock in India can qualify for REITs - a definite improvement over the 30% two years ago. Clearly, the market is gearing up for the launch of REITs by developing investable commercial assets. Office space absorption remained steady with top 7 cities, witnessing an increase of almost 5% in 2017 as against 2016, and a 19% increase in 2018 as compared to 2017. 
Demand for Grade 'A' office space has been growing and vacancy levels have been sliding south in prime locales. The success of Indian REITs will be based on growth prospects of a market that is still maturing, unlike developed countries (including in the Asia Pacific region) which are already mature. India is currently seeing a lot of new construction, so the average age of office buildings is lower than in cities in Australia or even Hong Kong. The report says this is why NRIs and domestic HNIs have shifted their erstwhile focus from residential properties to commercial real estate.
Support from the Government
To open the gates for foreign funding in the domestic real estate markets, REITs needs to be made attractive through various tax sops. Currently, there are various taxes that can repel investors from investing in REITs in India like sale of shares of assets attracts capital gains tax. Also, in some countries if a REIT is functional for a longer period then it is exempted from stamp duty. Such tax benefits will certainly make this asset class more attractive to investors who want to invest for a longer run.
We can say that global investors who have been bullish on Indian commercial real estate and the industry which was waiting with bated breath can heave a sigh of relief post the success of the first REITs IPO as the channels have been finally opened.
(The writer is National President, NAREDCO)

Sunday, March 31, 2019

Diego Graffi says "I like the spirit of Pune"

Pune:
Diego Graffi, the managing director and CEO of Piaggio Vehicles Pvt Ltd, has been living in the city for two years and as much as he has come to embrace it, he says it has embraced him as well.

The Italian loves everything about Pune except that he feels a dedicated airport, even if only for better domestic connectivity, will serve the city well. “When we have to go to another city for meetings, we have to plan a day in advance or come back a day later because of the restricted flight timings in Pune. Even for leisure trips to places such as Goa, a weekend getaway spills over to a day more.”

For now, much of his flight trips happen from Mumbai. He rues the long travel to and from the Mumbai airport.
Graffi moved to Pune two years ago and chose to stay in an apartment complex in the Magarpatta township for its proximity to his workplace and also because of easy access to all modern amenities.
His acceptance of the city and country is evident in the Hindi ringtone that plays as his phone rings midway through the conversation. Paneer is another thing he has grown fond of. In restaurants here, he prefers to have authentic Indian food over mixed Italian food.

“I like the city. I have been to Delhi, Bengaluru, Mumbai, but I like the spirit of Pune. It is a lively city as many youngsters stay here. It is also a good place for business. If I have to select one city to live in India, Pune is definitely one of them,” he says.

“I particularly like how people are open here. It is easy for Europeans to deal with Indians as the mentality and approach to life is very similar. It is easy to start talking about business and leisure with people here. Even in the club where I play tennis, they treat me like an Indian and that is really nice,” he says.

Pune in particular, Graffi observes, is a relatively ‘safe world city’. “I have observed that young girls go out in the evening and it seems like a safe city. It is not so easy in some other cities in the world,” he says.

For Graffi, Pune just got easier as time passed by. Figuratively, he got used to the traffic rules and multiple ‘invisible’ speed-breakers on the roads. He is elated that his travel time is cut short by a new bridge connecting Magarpatta to Koregaon Park Annexe. “The bridge has changed my life. It saves me a good 15 minutes one-way,” he says.

The Italian automaker’s India chief does indulge in a bit of riding and driving on weekends. He prefers to ride a bike than drive a car. “When I drive here, my wife keeps looking at me as my driving is different here from Italy. I like to drive here, just that you have to be more aware. It is more crowded but the average speed is very low. In Italy, no lane-cutting happens but the speed is high,” he says.

For Graffi, the summers in Pune are more manageable than monsoons. He says he is still getting used to it and people’s perspective here about rains. “For Indians, rain is good weather, for us it is bad. My Indian friends find rains romantic but I still do not love it. On the brighter side, Lonavla looks beautiful when it rains,” he says.

The maker of Vespa and Aprillia two-wheelers also has a word of advice for Puneites, some of whom have protested the helmet mandate. “Helmets are compulsory whatever the speed and distance. In 99.9% of the time nothing will happen, but the 0.1% can be dangerous,” he says. 

Thursday, March 14, 2019

Tax sop available even if capital gains not used for new house

Mumbai:
The Income-Tax Appellate Tribunal (ITAT)’s Mumbai bench has held that the investment-linked capital gains tax exemption, available on purchase of a new house, cannot be denied to a taxpayer merely for not investing the capital gain proceeds.
The I-T officer had denied the tax benefit as the investment made towards purchase of the new house “was not out of the taxpayer’s own funds”. The commission (appeals) agreed with this stand. The taxpayer thereafter approached the ITAT, which passed an order in her favour.
Capital gains are taxable under the I-T Act. If a taxpayer makes a profit on the sale of a residential house held for at least two years, then such profit is treated as a longterm capital gain (LTCG). This gain is taxable at 20% with an adjustment for inflation, referred to as indexation benefit.
Ishita Sengupta, tax partner, PwC India, says: “This beneficial order will help taxpayers as practically there could be time gaps in real estate deals between the sale and purchase of a new house property and other funds could be deployed for the new investment. However, it is vital that the new house is purchased within the prescribed time limits.”
Similarly, in April last year, the ITAT’s Kolkata bench had ruled that the tax benefit cannot be denied merely because the taxpayer has used the proceeds of a housing loan and not the capital gain funds itself.
I-T Act’s Section 54 provides for an investment-linked capital gains tax exemption. If an investment is made in another house in India, within the stipulated period of time, then the cost of the new house is deducted and only the balance component of the LTCGs is taxable. Such deduction results in a lower tax outgo. Thus, if the amount of capital gain is equal to or less than the cost of the new house, the entire sum of LTCG is not taxable (which was the case heard by the ITAT).
The new house needs to be purchased either within a period of one year prior to or two years from the date of the sale of the old house. This tax benefit is also available if the taxpayer constructs a new residence within three years from the date of the old house’s sale.
In this case, which was decided by the ITAT on March 8, taxpayer Neelam Nananni had invested nearly Rs 69 lakh in a new house. The LTCG computed by the I-T officer was much lower at Rs 58 lakh. In other words, the quantum of investment towards purchase of the new house was much more than the LTCG.
The I-T department submitted to the ITAT that if the investment is not made out of capital gain proceeds, the taxpayer’s claim of deduction under Section 54 is not allowable.
The ITAT differed and held: “On a careful reading of Section 54, as a whole, we do not find any restriction or condition imposed mandating investment of the capital gain or sale proceeds towards purchase of new house for claiming deduction.”
As the investment towards purchase of the new house was made within the stipulated time, it held that the taxpayer was entitled to claim the benefit.
“As Section 54 even permits purchase of a new residential house, up to one year, prior to the sale of the old house, when obviously the capital gain would not yet have arisen, it is clear that other funds can be used,” says Sengupta. 

Thursday, February 28, 2019

GST on under-construction housing properties cut to 5%, affordable houses to 1%

  • GST rate on affordable housing projects too has been lowered from an effective 8% to 1%
  • Now, any house built on an area of 60 square metres or less in metros will now be categorised as affordable housing

New Delhi: Union and state governments on Sunday decided to lower Goods and Services Tax (GST) on under construction housing properties to 5% from an effective 12% in a pro-consumer decision ahead of national polls due by April-May.
GST rate on affordable housing projects too has been lowered from an effective 8% to 1%. Under-construction properties priced upto Rs. 45 lakh will qualify as affordable housing projects for the purpose of GST relief in both metro cities as well as non-metro cities, finance minister Arun Jaitley told reporters.
"We wanted to give a boost to the real estate sector as well as give relief to the middle class, neo-middle class and the aspirational middle class class. This will come into effect 1 April 2019," said Jaitley.
Although the cap on price of the property is 45 lakh for both metro and non-metro projects to get the 1% tax rate, they have to meet different carpet area requirements. Only those with the carpet area of 60 square metre in metros and 90 square metre in non-metros falling under the Rs. 45 lakh cap will be eligible for the 1% rate, explained Jaitley.
In both the cases, builders will not be able to adjust the taxes paid on raw materials like cement and steel against the final tax liability on under-construction properties. This was not the case earlier. The composition scheme announced for properties, like those applicable to restaurants and traders, consists of a small flat tax rate without input tax credits.
A videoconference of the Council's meeting held last Wednesday was adjourned as several states suggested a face to face meeting on Sunday was needed to discuss the issue thoroughly.
Sunday's decision was broadly based on recommendations of a ministerial panel led by Gujarat deputy chief minister Nitin Patel which favoured lowering the GST rate on under-construction properties.
The idea is to boost the real estate sector which is struggling with record inventories. At present, the effective rate of GST on under-construction properties is 12% after allowing for the cost of land, which is out of the purview of GST. Properties where the construction has been completed attract stamp duty, not GST.
The GST Council has been slashing tax rates to give relief to consumers despite the impact it has on the exchequer. Revenue secretary Ajay Bhushan Pandey said in an interview in Mintearlier this month that because of the rate reductions, benefit amounting to almost Rs. 90,000 crore a year has been given to consumers.
Builder lobbies, including the Confederation of Real Estate Developers’ Association of India (Credai) and the National Real Estate Development Council have been demanding a reduction in the GST rate for a while now.

Sunday, February 24, 2019

The rise and rise of Indian commercial real estate

The latest IMF growth forecast declares India as the fastest growing major economy, ahead of China. India’s GDP is set to accelerate after the transitory shocks of demonetization and GST.

As the service sector is one of the primary drivers of this growth, urban commercial centers will see the concentrated effects of this accelerated GDP.


Commercial hubs like Bangalore, Hyderabad, Pune, Mumbai, and Delhi NCR are at the heart of the upcoming boom, catering to demand across a range of sectors. Office space vacancy is at an all-time low in many of these cities, between 3-7%, sparking a rush for space that is expected to cross 700 million sq ft of absorption in Grade-A office space by 2022. With its higher capital intensity, commercial property has emerged as one of the most lucrative investment destinations, offering opportunities to profit from sectors like co-working spaces, the fastest growing asset class within real estate.

Friday, February 15, 2019

54EC BONDS - CAPITAL GAIN BONDS ISSUED UNDER SECTION 54EC


Capital Gain Bonds:

Long-term capital gain is the gain that is derived out of a sale of an asset that has been held for more than 2 years in case of immovable property and 3 years in case of debt funds or jewelry. You can invest the gain in certain specified bonds to claim tax exemption within 6 months of the date of sale of the asset. Save tax on long-term capital gains by investing in 54EC bonds such as REC Capital Gain Bonds, NHAI Capital Gain Bonds, IRFC Capital Gain Bonds & PFC Capital Gain Bonds respectively. Budget 2018 has proposed to amend the 54EC section of the Income Tax Act wherein capital gains arising only from the sale of assets such as land or building or both will be considered for tax exemption. It has also proposed to increase the lock-in period to 5 years from 3 years. This amendment will take effect from 1st April 2018.

Key Features of Capital Gain Bonds specified under Section 54EC:
1. Non transferable and non negotiable bonds
2. No TDS but interest earned is taxed 
3. AAA credit rating by ICRA, CRISIL and India Ratings and Research Private Limited
4. Maximum investment is Rs. 50 lakh
5. Maximum of 500 bonds can be bought at Rs. 10000 per bond
6. Annual interest rate at 5.75%
7. Tenure of the bond is 5 years
8. Available in Physical as well as demat form

The Analysis
According to section 54EC of I.T., any person (individuals, HUFs, partnership firms, companies etc.) can avail exemption in respect of long-term capital gains (arising from the sale of a long-term capital asset other than equity shares and securities), if the capital gain is invested in Capital Gain bonds. The exemption will be the amount of capital gain or the amount of investment made, whichever is less.

The interest rate offered on these bonds is 5.75% per annum. The exemption is subject to:
• The investment is made within a period of 6 months from the date of transfer of the asset
• Lock-in period to 5 years from 3 years. This amendment will take effect from 1st April 2018
• Bonds sold, transferred or converted into money or any loan or advance taken on the security of such bond within a period of 3 years from the date of       acquisition, the capital gains earlier exempt are taxable in the year of sale or transfer of the bonds
• Maximum investment limit of up to Rs. 50 Lakhs in a Financial Year per individual.
• If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax.

Those who wish to save taxes on LTCG can invest the amount in the capital gains bonds within six months from the date of arising profit. By investing in 54 ec Capital gain bond one can save up to Rs 50 Lakh in a single financial year. These instruments are not only capital protected instruments, but they also provide a steady stream of income to you. At Karvy,  you can invest in Capital Gain Bonds. 

Bond offered (under sec 54 EC):

REC Long-term bond 
Rate of Interest
5.75% pa  (effective – April 02, 2018)
Tenure
The tenure of the Bonds will be 60 Months and Bonds will be automatically matured at the end of the period, from the deemed date of allotment.

Power Finance Corporation (PFC) 
Rate of Interest
5.75% pa
Tenure
The tenure of the Bonds will be 60 Months and Bonds will be automatically matured at the end of the period, from the deemed date of allotment.

NHAI
Rate of Interest
5.75% p.a.

INDIAN RAILWAY FINANCE CORPORATION
Rate of Interest
5.75% p.a.

TAX Exemption under Section 54 EC:

1. Section 54 EC bonds can be used to save tax only when the capital gain is derived from land or building or both. 
2. It cannot be used to save tax on capital gain arising from the sale of non-equity mutual funds, debentures, gold jewelry or gold ETFs. 
3. The maximum investment in these bonds is Rs. 50 lakh only. As the property prices have soared high, this provision does not provide adequate relief for the investor.

54EC BONDS FAQs:
Q: Which bonds are eligible under the Section 54 EC?
A: REC (Rural Electrification Corporation), NHAI (National Highways Authority of India), IRFC (Indian Railway Finance Corporation) & PFC (Power Finance Corporation Ltd) are the bonds eligible under Section 54 EC.

Q: What is the maximum investment limit for the Section 54 EC- Capital Gain Bonds?
A: Rs. 50 lakh is the maximum amount that can be invested in these bonds.

Q: What is the rate of interest for these bonds?
A: 5.75% is the interest rate offered by these bonds.

Q: What is the lock-in period for investment?
A: The lock-in period will be 5 years with effect from April 1, 2018.