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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 specializes in pune real estate market & 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. +91-9822052388, 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.

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.

Monday, February 4, 2019

Sharing INFORMATION: Annual Pune Municipal Tax (property tax) on properties under Pune Jurisdiction, Maharashtra, India.

Greetings......

Wish to share general important information regarding Annual Pune Municipal Tax on properties which comes under Pune Jurisdiction to be paid every year and the bill is generated on every March month and delivered in hard paper bill also to your property address letter box however this receiving bill is not reliable as sometimes not delivered or misplaced by the government postal department. 

Fortunately, you can find the same bill by visiting pune municipal corporation website: www.punecorporation.org  and www.propertytax.punecorporation.org (the site is self explanatory)

you just need your Consumer/property Number to track it. which will be in a format of eg. O/1/20/0123456 (this is just an example so pls fill your property no. on it)

Again this property bill comes once in a year and last date without fine/interest  is 31st may of every year. if you miss to pay for previous years property tax bill then new bill will be the cumulative of all dues.

How to make Payment: It is also very simple as you can pay online by different gateways of online payment so no need to visit any door to pay.

for more assistance, reach us anytime.

Friday, January 18, 2019

WALK THE GREEN MILE

Industry insiders say that the next ten years are key towards transforming our real estate from just concrete to earthy.

A walk through the Garden of Eden, over the lilies of the valley and across the land of milk and honey - that’s what we can have if India ensures that its real estate industry sticks to its guns and builds the next 70 per cent of real estate with mother earth in mind.
Currently, India has only five-six per cent of its real estate built, taking into account the adverse effects of cement and concrete on land. The complete lack of awareness about the positives has been cited as one of the major reasons why the developer community has been hesitant to take on the mantle of building green.

Anuj Puri, chairman, ANAROCK Property Consultant, says, “The general awareness of such homes is minimal in our country. Thus, there is a dire need on the part of the government to create awareness, and above all, incentivise developers. At the local level, state governments have been pushing to make certain mandatory rules favouring sustainability. For example, the BWSSB in Bengaluru has made it mandatory for all buildings (built on and over 1,200 sft of area) to have rainwater harvesting structure within the premises. Similarly, all new buildings with more or equal to 20 flats need to have a sewage treatment plant in the project, while in case of old projects, only those with 50 or more flats need to comply with this rule. Despite these policies, a few builders and societies have been flouting rules to avoid it since it comes at an extra cost, plus there is no proper follow-up done by government bodies. So, while the growth numbers talk big, it is important to keep sustainability in mind.”
As per the Indian Green Building Council (IGBC), nearly 6.63 billion sft of green building footprint has been achieved in India (as on November 2018) spanning 4,981 green projects. Sadly, these numbers represent only five-six per cent of the total building stock in the country.

A few buildings in India which went green:

Suzlon One Earth, Pune - designed by Christopher Charles, which received LEED Platinum rating;
Rajiv Gandhi International Airport (RGIA), Hyderabad-India’s sixth busiest airport, which is situated in downtown Hyderabad;
Jawaharlal Nehru Bhawan, New Delhi;
Infosys Limited, Mysore; ITC Maurya Hotel, New Delhi;
I-Gate Knowledge Centre, Noida;
Bank Of India, Goa;
Cochin International Airport Ltd (CIAL) had been selected for the Champion of Earth Prize - 2018, the highest environmental award instituted by the United Nations, for being fully powered by solar energy

WE MEAN BUSINESS

A strong macro-economic environment, stable yield, robust demand and India’s emergence as a hub for global in-house centres/captive centres, have led to 2018 being a significant year for the commercial real estate sector


“Buoyed by a positive business sentiment and robust growth driven by optimistic prospects indicative of India being the fastest growing economy globally, the commercial sector put in a very strong performance in 2018. In fact, leasing activity registered strong gains at 40-41 mn sft (before the year is over). As per Q3 2018 numbers, Year-To-Date (YTD) leasing was 15 per cent higher y-o-y and the signs of a busy last quarter are already pointing towards this year closing at 48-50 mn sft of leasing volumes, which will make this the best ever year for India’s commercial sector,” says Rohan Sharma, research head, Cushman & Wakefield India.

THE KEY TO SUCCESS:
The commercial real estate sector has been a bullet-proof choice for developers and institutional investors alike for a variety of reasons. According to Bhavin Thakker, country manager – worldwide occupier services, Savills India, here’s why the commercial real estate sector performed well this year:
CONSISTENT DEMAND;
AVAILABILITY OF GOOD QUALITY ASSETS;
GOOD UP-KEEP AND MAINTENANCE OF EXISTING DEVELOPMENTS;
CREATION AND FURTHER DEVELOPMENT OF NEW MICROMARKETS WITHIN MAJOR CITIES;
FOREIGN DIRECT INVESTMENT (FDI) IN THE REAL ESTATE SECTOR.
ÚTALKING POINTS:

The last few years, including 2018, witnessed the Indian commercial real estate sector experiencing stable demand and good quality supply, thus ensuring a lot of economic activity in this sector. “There have been large platformlevel and asset-level deals that were accomplished during the year. Not to forget, Indian office space remains the target choice for institutional investors all along, thereby driving the demand-supply chain,” says Bhairav Dalal, partner – real estate tax, PwC India.
Sharma explains, which cities fared well in the realty landscape this year:
Bengaluru, as usual, dominated leasing activity during the year, having accounted for over 1/3rd of pan-India numbers till date;
Hyderabad has also been a strong performer this year, with nearly 9 mn sft of gross leasing activity with a strong pre-leasing flavour;
Delhi- NCR showed a 23 per cent y-o-y growth in its 2018 YTD leasing numbers. Cities like Mumbai, Chennai and Pune have continued to be steady performers during the year, though Chennai and Pune have also been impacted by a lack of relevant and quality supply during this period.
The key micro-markets, which dominated are: Outer Ring Road in Bengaluru; Hitech City and Gachibowli in Hyderabad; Gurugram in NCR; Navi Mumbai in Mumbai; Eastern SBD and suburbs in Pune and Guindy and OMR in Chennai.
Source: times of india 

Saturday, December 29, 2018

‘Commercial realty market in a sweet spot’

The commercial real estate market has had a good year with demand outstripping supply. As of now, it is expected that the trend will continue into 2019 and prices will remain firm in select markets, says Rajat Gupta, Managing Director — Advisory & Transaction Services, India, CBRE.
Gupta, recently in Kolkata to attend a CII seminar, spoke to BusinessLine on the outlook for 2019, expected price movement and the impact of GST on commercial real estate. Excepts:
How has the year 2018 played out for commercial real estate?
This year (2018) has been a good year for commercial real estate. The seven large cities — Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, Pune and NCR — are expected to report around 42 million square feet of absorption; which is expected to be an all-time high. The incremental supply this year will hit a high of 30 million square feet. So demand outstrips supply. This is also a reason why most preferred office micro-markets in the country have seen an increase in rentals.
Pension funds, international developers and private equities have all taken an interest in the market, and lot of foreign capital has come in.
What is the outlook for the coming year?
Until and unless there are some unforeseen events globally, we expect the demand to hold up.
Among the seven cities, Bengaluru had the highest absorption in 2018 and we expect its strong run to continue. Hyderabad has been an outperformer in terms of both occupied demand and the quantum of supply coming in. The NCR, especially Gurgaon, has been a strong market.
So why is the supply of commercial real estate falling short of the demand, especially over the last few years?
Launches have been slow on the residential front but not so much on the office side.
I believe this slowdown in supply (in commercial real estate) is a result of combination of factors. Our FSI (floor space index) norms are much lower compared with what prevail globally. In the same parcel of land elsewhere, a developer can build something which is twice or thrice the size of what he could put up here. Barring Hyderabad which has unlimited FSI, most cities in India have lower norms.
Second, the pace of construction hasn’t changed over the years. If you were taking 30 months (to complete a construction) around 10 years ago, developers now are taking 24 months. So the level of mechanisation and technology adoption is still not high. We are still a man-power oriented construction industry. So the pace (of construction) which could have gone up leading to shrinkage in timelines has not happened to that extent. Some of it is happening at a much slower pace.
Does this mean that prices will remain firm in 2019?
In the micro-markets where there will be a huge demand-supply gap, the rise will be higher.
Will investments by pension funds or private equities continue into commercial real estate?
India is a safe market and returns are among the highest here. They all see a fantastic opportunity to cater to their clients in their respective markets. Of the 40-odd million square feet of take-up, nearly three-fourths are by multinational firms.
As long as they perceive India to be a politically stable destination and that their capital does not face any policy risk, I don’t see any reason why investments would not come in.
How has the regulatory environment, particularly GST, played out for commercial real estate?
GST has been a game-changer for the logistics industry, which was a highly disorganised sector before the tax. Previously, there were small land-owners who would set up a shed and that was our warehouse. Post GST, whether it is domestic developer or an international one or investors, they are talking about logistics, investing in the sector, and building new-age warehouses that go well beyond the tin-sheds. Corporates are consolidating and e-commerce is expanding its footprint in a big way. And we are strapped for quality warehouse space.
For the commercial real estate, it has been business as usual post GST.

Co-working becomes the new poster boy of commercial real estate market in 2018

As per data made available by real estate consultants, total office absorption across the top 7 cities is geared to cross 39 mn  sq  ft  in 2018

The year 2018 saw demand for Grade A office stock grow. While co-working emerged as the new poster boy of commercial real estate, logistics and warehousing saw significant growth. Despite minimal new supply in 2018, the retail real estate sector held its own on the back of conducive FDI norms.
Leasing activity: As per Cushman & Wakefield estimates gross leasing activity is expected close to 50 mn sq ft. This has been supported by robust space take-up by IT-BPM sector with global captive centres clocking impressive numbers as well, and the co-working revolution consolidating its gains with a strong showing during the year.
Total investments Of the total investments in the office space during the year, approximately 77 percent of the investors were of foreign origin, cementing foreign investors’ trust in the Indian commercial space. In terms of cities, 42 percent of the total inflows into the office sector were seen in Mumbai, followed by Hyderabad that had a 35 percent share. Bengaluru distantly followed Hyderabad with a share of 6 percent of the inflows in Jan-Sept 2018, as per Cushman & Wakefield estimates.
The year 2018 is likely to close with office inflows of $3.5 billion subject to closure of some key transactions with investors like Blackstone, GIC and CPPIB in Mumbai, and Hyderabad.
Quality supply continues to draw in occupiers who are willing to pre-commit to such projects if the current vacancy is constrained. The top seven cities are expected to see over 32 mn sq ft of fresh office supply, basis 26.1 mn sq ft absorption till the third quarter of 2018.
Bengaluru retained its top position in 2018, with more than 8 mn sq ft of new supply in 2018. Office absorption in Bengaluru is expected to cross 11 mn sq ft by the end of the fourth quarter of 2018, denoting a massive annual increase of 37 percent. The city’s large talent pool, its vibrant start-up culture, ample Grade A office stock, relatively affordable rents and steady demand from the IT/ITeS sectors, BFSI and co-working spaces prompted this growth.
Office absorption As per ANAROCK data, total office absorption across the top 7 cities is geared to cross 39 mn  sq  ft  in 2018, given that 28.2 mn sq ft were absorbed until the third quarter. This denotes an annual increase of 19 percent in absorption.
Co-working/flex spaces are here to stay and operators are smartly aligning themselves to target large enterprises and transform in to managed space operators while retaining the form for start-ups and smaller firms.
The stock of flexible space market in India increased from nearly 10 million sq ft in 2017 to about 15 million sq ft by the third quarter of 2018, making it among the biggest markets in the APAC region, says a new report.
Co-working operators are expected to lease about 7-9 million sq ft by 2020 from over 5 million sq ft estimated this year, according to property consultant CBRE. Bengaluru and Delhi-NCR were the largest markets for flexible spaces in India, with a combined share of almost 55 percent in overall leasing by flexible space operators.
In terms of market traction, commercial real estate retained its status as the most buoyant sector in 2018 across major cities. Demand for Grade A office space saw new highs and vacancy levels declined in prime locales. India’s first REIT listings, now expected to happen in early 2019, will result in massive liquidity infusions into commercial office spaces. This, in turn, will prompt commercial property developers to focus more on this segment to fulfil demand from occupiers across the IT/ITeS, BFSI, manufacturing and co-working sectors, says Anuj Puri, Chairman, ANAROCK Property Consultants.
A grade office space was a ‘big boys’ game in 2018. Market was relatively stable and only players with deep pockets entered the segment, says Anckur Srivasttava of GenReal Advisers.
Where should HNIs put in their money?
Investors do not look for small office spaces anymore, they have shifted to co-working spaces. In such a scenario, owners with investments in small office spaces will have to redefine their objectives as they will find it hard to get quality tenants. REITs, when it is introduced, could be a good avenue for them to invest in. Also, assured returns are no longer permissible, advises Srivasttava.
There’s also been a trend wherein ultra HNIs are buying into large floor plates and handing them over to co-working players to manage such spaces on a revenue share model. Their gains work out to be around 13-14 percent IRR, he says.
In case of warehousing too, it was observed that investors typically outsourced it to a third party to manage the facilities. Debt was relatively cheaper because warehousing has been given infrastructure status. Loans under priority sector lending are at 9.5 percent. So, if you an HNI investor and are keen to invest in the warehousing space, look at investing in warehousing facilities that are not less than 30-40 acres. The IRR that this option is likely to fetch is around 18 percent, he says.
Student housing is yet another option as it is a resilient and a risk averse segment. I case you wish to invest in this asset class, look for at least an option of 100 rooms. IRR expected to be around 12-13 percent, says Srivasttava.
Retail Real Estate 2018 review
Cities that saw maximum retail growth in 2018 included MMR, NCR, Bengaluru and Kolkata. PE investment inflow in the segment grew 54 percent in the first half of 2018. As many as 32 new malls spanning nearly 13.5 million sq ft area are slated to be operational in 2019
Among the major policy overhauls, the Government further liberalized FDI policies early in the year. These policy interventions repositioned the Indian retail sector on the global map of investments, attracting a large number of global retailers into India and further fuelling growth of organized retail in the country, says Anuj Kejriwal, MD & CEO – ANAROCK Retail.
The government’s decision to allow 51 percent FDI in multi-brand retail and 100 percent FDI in single-brand retail under the automatic route was a definite crowd-pleaser that attracted giants like Walmart to make forays into the country.
The retail sector is now projected to grow from USD 672 billion in 2017 to USD 1.3 trillion in 2020. This is definitely an attainable figure if we consider one of the clearest measures of growth - namely the increasing focus on the retail sector by private equity (PE) players who invested close to $300 million in Indian retail in the first half of 2018, as per ANAROCK estimates.

Property registrations surge in 2018, income surpasses Rs 25,000 crore-mark

PUNE: The property registration department has earned over Rs 25,317 crore in revenue between January and November this year — over Rs 3,000 crore more when compared to Rs 21,950 crore income in the same period last year.

1


The department managed to process 19.34 lakh documents between January and November this year as against 20.72 lakh documents registered between January-December last year. “Since 2013, we have been registering an average of 22 lakh documents ever year, barring 2017 and 2016 when the registrations dipped to 21.49 lakh and 20.46 lakh, respectively,” department officials said. Deputy IGR Supriya Karmarkar said the department was hopeful of achieving the Rs 25,000 crore financial year (April to March) target with steady rise in registrations. “When it comes to the financial year, we have already achieved 70% of the revenue target and expect to earn the rest in the remaining months,” she said. State Credai president Shantilal Kataria said the numbers were good, especially for the affordable housing segment. The Knight Frank Affordability Index, a measure of how expensive the housing market is, pointed at rising affordability in several prominent cities. “In Pune, Kolkata and Ahmedabad, the Index is well within the comfort level of the benchmark,” chairman and managing director of Knight Frank India Shishir Baijal said. ANAROCK Property Consultants chairman Anuj Puri said, “The data suggests an annual rise of 10% in housing sales in 2018 as against 2017. This rise is largely due to the increased commercial activity and demand from IT/ITeS and co-working spaces.” He added that the housing sales numbers may increase by as much as 15% in 2019. National president CREDAI Jaxay Shah said there were highly encouraging signs that the growth in the sector will continue in 2019 as well.

Friday, December 7, 2018

Hilton’s Conrad checks in to the sleepy pensioners' town of Pune


The city of Peshwas, once known for its wada-style housing and traditional bazaars, is now home to luxury hotels, fine dine restaurants and fancy apartments.
Luxury real estate was the early entrant into the traditional market and the segment has seen a jump of 10 percent in prices in the past year, states Cushman and Wakefield.
Hotels such as Conrad Pune brought global hospitality experiences to Pune. Fine dining restaurants and fashion businesses followed suit.
My first reaction when I heard that the country’s first Conrad was opening in Pune, was, “Why Pune?” The India debut of Hilton Worldwide’s luxury flagship was much-awaited by its patrons and those who track the hospitality industry. Conrad had been planning its India foray for quite a while, on the back of its growing GDP and the interest from the local market in fresh hospitality experiences.
Pune, then, seemed a rather offbeat choice. Given the way the luxury market in Mumbai’s neighbouring city has evolved, the choice seems apt. A vibrant metropolis of academia, startups and the still-surviving Osho Ashram, Pune — a city settled by the Peshwas — is home to expats and people from across India who works in its automobile, hospitality, real estate and IT industries.
Conrad Pune.
Conrad Pune was one of the first luxury hospitality properties to open in 2016, in its central business district. While it continues to host high-paying business travellers, it also attracts expats and locals with its eclectic experiences that blend business and pleasure, especially revolving around food, spa and the city itself.
Its sun-infused Coriander Kitchen hosts expansive brunches with live cooking centres and market-style displays. Its restaurant, Zeera, serves an innovative Malvani thali, which is coveted by both vegetarians (think slow-stewed aubergine stuffed with peanuts and different kinds of Maharashtrian chatnis) and meat lovers (traditional sukha mutton, Malvani chicken curry and Kolambi Shenga Batata or curried prawns with potatoes). And with its other food experiences — cooking masterclasses with chefs (at Koji, you can learn how to make sushi); its pastry chef hosts extensive baking sessions); mixology sessions with the head bartenders — there is a lot going on within the Art Deco-inspired portals of Conrad Pune.
The city is now home to several big hospitality brands such as J W Marriott and Hyatt Regency, besides boutique luxury properties like The Corinthians Resort and Club. Daniel Welk, Vice President Luxury and Lifestyle, Asia Pacific, Hilton Hospitality, analyses the Pune market as one dominated by “expats and locals in touch with global trends. To me, Pune seemed like a natural choice: it is maturing into a luxury market that attracts business travellers, who also love to experience the city, which increasingly offers several choices, including some non-traditional ones such as a pub or breweries crawl. I have seen it grow and evolve into a global destination.”
The Real Estate Industry Changed It All
Even before the hotels got here, it was the luxury real estate industry that recognised the potential of the city known more for its Maratha-era ruins, students and the Mercedes Benz Centre of Excellence in Chakan, the largest R&D centre for the carmaker outside of Germany. “Mercedes global team were regular visitors and they contributed a lot towards giving Pune some sort of gravitas as a serious business destination early on,” says Paul Salnikow, chairman, The Executive Centre, a company that runs a global network of centres, which provide flexible office space for entrepreneurs not looking to make capital investments at the start. “We opened in Pune because of the opportunities provided by the global brands, boundary-pushing innovation and diversity of businesses.”
Marque real estate brands seized the opportunity and Pune saw a flurry of development over the past five years. Yoo, the London-origin boutique luxury housing company, chose Pune as the first Indian city to debut in (the second was Mumbai). The exclusive 22 residences, brought to the city by Panchshil Developers, are designed by French designer Philippe Starck (known for his work with Italian design companies and residences across the world). YooPune, designed as a whimsical space, is now occupied by expats and Indians looking for a second home in the city.
“YOO Pune was designed as a paradise island, lost in the beauty of India’s old gardens. It’s a place where people can gather and feel more creative,” says Starck. “It reflected the community culture that existed in old neighbourhoods of Pune, even as it was global in design.”
The project was launched almost 10 years ago, and since then, Pune has seen a rash of luxury development. According to PropTiger DataLabs 2017 survey, Pune was among the top performing markets in India in 2016-17, especially in the luxury segment. Sanjay Dutt, executive managing director – South Asia, Cushman and Wakefield, says that luxury real estate prices have moved up by about 10 percent “and people are buying properties from reputed builders who deliver on time. The advantage Pune has is its great weather, decent infrastructure and manageable traffic, besides its growing leisure options. There are golf courses, there are interesting restaurants and hotels, there is a lot you can do in the city now.”

Other Luxury Businesses Follow Suit
The influx of well-travelled Indians and expats into Pune laid the foundation for other luxury businesses — fashion to fine dining. Arth, the adventurous Mumbai restaurant, opened a Pune iteration in June this year. Chef Amninder Sandhu headlines Arth (she competed with Michelin-starred chefs for the now-streaming Netflix show, The Last Table), slow cooks’ modern Indian cuisine on wood and charcoal-fired sigris, iron grills, and by lowering meats into a sandpit.
“I find Pune residents are far more adventurous, receptive and chilled out. They value what you offer them in terms of innovative dining experiences. Some dishes that don’t do very well in Mumbai, like Australian lamb shanks, do well in Pune because of the expat population. The biggest seller is the Hay-smoked Jungli Murgi or wild chicken smoked with hay, cooked in a chunky onion-tomatoes gravy and served with jawar rotis,” she says.
Pune is also home to a slew of fine dining restaurants and breweries run by young food entrepreneurs — Independence Brewing Company offers a variety of gourmet craft beers made from grains such as jawar, bajra and ragi; a host of lounge-bars such as Euriska are hang-out zones; High Spirits Café is popular for its champagne-soaked Sunday brunches and live music.

Pune could be called India’s ‘New Metro’: home to young professionals and entrepreneurs open to exploring the luxury lifestyle, which attracts all the right brands and ready-to-innovate young entrepreneurs.
Deepali Nandwani is a journalist who keeps a close watch on the world of luxury.
Source: Cnbc

Saturday, December 1, 2018

Reasons to not give up on Indian real estate

A well-regulated real estate market will spur the world’s biggest asset managers to look at India more seriously over the long-term
Mumbai: Real estate may be down in the dumps right now. But even so, compared with most other big businesses,  real estate remains one of the best to put your money into. At its core, real estate is the coolest even in failure. You build an airline on leased planes and if it fails all that the lenders are left with is a brand with which they can have ‘Good Times’ while humming Oo La La, La, La, Le, Oo. If real estate fails, lenders to the project still have the land and nothing as an asset gets as real as this.
Yet, it’s been a business that most respectable entrepreneurs have so far shied away from because it’s a trade vilified—mostly for the right reasons. For one, real estate has been the coolest way to generate and park slush funds for political parties. Much of the surging value of real estate springs from picking obscure land on the cheap and watching the location turn into gold after everyone else realizes it’s right next to a Metro station. Political interests in the sector and the need for cash in the business to pay bribes in order to get the dozens of required approvals gave real estate in India a bad image.
If real estate fails, lenders to the project still have the land and nothing as an asset gets as real as that
The change agent
That’s changing now with the implementation of The Real Estate (Regulation and Development) Act, 2016 or RERA. RERA has a requirement that no project can go to market without approvals and that 70% of the money received from customers has to be spent only on projects for which they have been received. This has knocked the bottom out of the earlier realty business model, which if transposed to another industry would look ridiculous.
In the automobile business, for instance, car manufacturers are the big boys with deep pockets and their rivals are other companies with similar traits, not roadside garage owners. But in real estate, until RERA, anyone with enough gumption could turn a “builder”.

In the short-term, RERA is bringing more pain than joy just as a major surgery does until convalescence and a journey to full recovery. The pain is being felt mainly by homebuyers whose projects fall into default as their borderline builders are unable to cope with the stringent conditions of the Real Estate Act.
Once this phase is over, real estate in India will reflect its true place in the country’s economy. Real estate accounts for about 7% of India’s gross domestic product (GDP) which is now at about $2.5 trillion, which means the sector creates $180 billion in wealth annually. In China, real estate accounts for 14% of the country’s GDP and India will follow that pattern in a market well-regulated by RERA.

Political vested interests
It’s clear that the vested interests of political parties in real estate delayed for decades the formation of a regulator. India’s stock markets were opened to foreign investors for the first time in 1992 and the Securities and Exchange Board of India (Sebi) was given teeth to tackle insider trading in the same year. The Telecom Regulatory Authority of India (Trai), to control voice and internet connectivity, was formed 20 years ago in 1997; the Insurance Regulatory and Development Authority of India (Irda) came to life in 1999.
Political interests gave real estate a bad image. But all that is changing now with the implementation of RERA
The size of India’s insurance market is currently about $60 billion, the telecom market is half of that. Real estate generates twice as much as both telecom and the insurance industries put together. The learning from this is that successive governments have preached reform to all sectors, except those where their funding is tied. The flip side of this coin is the belated and half-hearted efforts to make political funding transparent.



RERA and the consequent sweeping away of unprofessional builders will help the entire ecosystem, including the non-banking financial companies (NBFCs) whose stocks are in a meltdown since 21 September after Infrastructure Leasing and Financial Services (IL&FS) loan defaults and the sale of Dewan Housing Finance Corp. Ltd’s (DHFL) commercial paper by DSP Mutual Fund at a deep discount.

Analysts have mostly laid the blame for investor concern on the asset-liability mismatches at these NBFCs. It’s worth looking at how many of these NBFC loans been given to developers who had little capital, no risk management practices and existed only because they could play the perverted system—getting land, using that as leverage to get advance booking money, diverting most of it to buy yet another plot of land and doing that cycle all over again. That sustained in an irrationally exuberant market where potential homeowners rushed to book flats at current prices in the belief that prices would keep rising.
The bubble blown by Y2K
Until 2014, surging prices that almost doubled the value of an apartment every five years was not just a belief but a fact. That happened for two reasons—Y2K, the Year 2000 problem, and the opening of foreign direct investment (FDI) in 2004 with the first flow of dollars coming in two years later.

Once the clean-up phase of RERA is over, real estate will reflect its true place in the country’s economy
Y2K was a simple problem to fix, changing vintage computer programmes that abbreviated four-digit years as two digits to save memory space. These computers could recognize ‘98’ as ‘1998’ and it caused hysteria for the world to think that at the midnight stroke of the millennium computers around the world would assume we were back in 1900. It needed hordes of programmers to fix it in systems around the world. Indian software companies, which had those millions of workers, got a foot into the door at Fortune 500 companies. Moving on to higher and more complex jobs was a natural evolution.
Indian information technology (IT) caused a tectonic shift as millions of 20-plus girls and boys chose to leave their parents’ homes to take up jobs in the tech cities of Bengaluru, Pune, Hyderabad, Mumbai and Delhi. They needed places to stay and they had the high salaries to back them in their quest. That was also a time when the benefits of India’s 1991 economic liberalization had filtered through and finance companies began lending money freely to buy new homes.

The lunatic overdrive
The entry of foreign investments into the real estate sector sent the market into lunatic overdrive and some big global names made hurried investment decisions that ended up in dismal failure. Elbit Imaging Ltd, Israel’s leading developer in the early part of the millennium, which had big investments across Eastern Europe picked large land parcels in Bengaluru, Chennai and Pune at inflated prices. The firm barely managed to complete a shopping mall at its Pune site and exited all of its assets at distress value. The company went bankrupt in 2014.
New York-based Tishman Speyer Properties bought land in Hyderabad for a 2.5 million sq. ft complex called WaveRock designed by the firm of legendary architect I.M. Pei. That was Tishman Speyer’s only project in the country and the company is now trying to exit it.
Until 2014, surging prices that almost doubled the value of an apartment every five years was not just a belief but a fact
But subsequent waves of foreign investors such as Singapore’s sovereign wealth fund GICBlackstone Group LpJPMorgan and Chase Co. have been more prudent. They brought in more than just money into India’s real estate business. They brought in governance systems, professional managements and business models that will in the long-term create India’s biggest cities—world-class business districts of the kind seen in New York, Singapore and London.

GIC and Blackstone have acquired millions of square feet of commercial space and are holding it for the long-term. The ability to be patient for 10 years, or even longer, will allow them to exit their investments when they see the following three factors in favour:
■ A fall in the capitalization rate, which has already started to happen.
■ When the rupee appreciates versus the dollar, giving them more bang for every buck.
■ When their Real Estate Investment Trusts (REITs) are formed and listed, which will yield them the wholesale to retail premium.
Bengaluru-based Embassy Office Parks Pvt. Ltd, in which Blackstone is an investor, filed an offer document with Sebi on 24 September to raise ₹5,000 crore and expects to list its REIT next year.
Reality of turtle bets
Reading about these marquee global investors bets on India imparts a good feel to real estate here. But the reality is the size of their investments so far have been a pittance and the flow of foreign funds can easily go up by three to four times once RERA is fully implemented. FDI in real estate in 17 years from April 2000 to December 2017 has totalled just $24.67 billion, data from the Department of Industrial Policy and Promotion (DIPP) shows.

RERA is a rare win for all concerned. Good for the investors and end consumers because it will clear away the clutter of small robbers
Blackstone has over the past eight years invested about $5 billion in Indian real estate, which is a tad more than 1% of the $449.6 billion it manages worldwide. JPMorgan has over the past 10 years invested $600 million in Indian real estate—that is 0.04% of the $1.68 trillion of assets it manages worldwide.
As a bet the size of these investments by Blackstone and JPMorgan are as insignificant as someone wagering on a turtle hatching exercise. For the sea turtles, it’s a big day—they break out of their shells on the banks and dash across the sand to reach the waters before they turn prey to the predators aplenty—wild dogs, foxes and raccoons among mammals and gulls and vultures among birds. Only one out of 1,000 turtles make it to the sea that day.
A cleaner, transparent and well-regulated market will spur the world’s biggest asset managers to look at India more seriously than a turtle on a beach. For now to the world’s biggest investors, earmarking 1%, or less, of what they have to real estate in India is just having a foot in the door. It doesn’t mean they don’t care about these investments, but if they make no profit…no big deal!

Rupee, risk and reward
JPMorgan and Blackstone’s bets on India would yield Internal rates of return of about 15%, which are rich by any standards. But those are Indian rupee gains—If they were to convert their profit into dollars and take it home today, their gains would whittle down to zero. For now there has been no reward and the risk has been huge—any bean counting investment committee sitting in New York would pull the plug on any further investments into real estate in India. Only perceptive business leaders would see the huge intangible benefits that these foreign investors have gained so far. They have built on ground experience and relationships that will yield rich returns once the Indian economy and rupee turn stable and they decide to increase their bets in a well-regulated and transparent real estate market.
In real estate, investors put their money on the people running it rather than on the project. That’s because of the quirkiness at the execution level. Development Control Regulations in Thane Municipal Corporation are different from the Mumbai Municipal Corporation, just as it varies widely between Delhi, Noida and Gurugram. Area-specialist developers such as DLF Ltd in the National Capital Region (NCR); Raheja Developers, Hiranandani Group and Wadhwa Group in Mumbai; Panchsheel Realty in Pune and Embassy Group in Bengaluru know how to deal with these nuances.
In conclusion, RERA is a rare win for all concerned. Good for the investors and end consumers because it will clear away the clutter of small robbers. Good for the big-time politicians too because RERA doesn’t have jurisdiction over long-term price-sensitive information. For example, a new international airport or a multi-modal transport network conceived in connecting main cities like Delhi to somewhere beyond Manesar, or Mumbai to way beyond Palghar and Panvel. These plans are mooted much ahead of the actual execution. A few fattened folk, told about these plans, could buy hundreds of acres of land on the cheap to build vaunted townships of the future. That can be the subject of another piece titled: What they don’t teach you at Harvard Business School.

Uday Khandeparkar is a columnist and an independent investment banker.